Filing
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000-33219
(Commission File Number) |
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84-1318182
(IRS Employer Identification No.) |
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As of 12/31/03 | ||
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Actual |
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Pro Forma (1) |
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Assets |
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Current asset - cash and cash equivalents |
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Cash and cash equivalents |
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$ |
4,226,397 |
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18,379,025 | ||
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Prepaid insurance |
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28,376 |
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28,376 | |
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Total current assets |
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4,254,773 |
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18,407,401 | |
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Property and equipment, net |
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20,840 |
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20,840 | ||
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Other assets |
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7,743 |
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7,743 | ||
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Total assets |
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$ |
4,283,356 |
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18,435,984 | |
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Liabilities and Shareholders’ Equity (Deficit) |
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Current liabilities: |
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Accounts payable and accrued liabilities |
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$ |
90,243 |
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90,243 | |||
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Accrued dividends payable |
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72,800 |
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72,800 | ||
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Total liabilities |
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163,043 |
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163,043 | |
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Commitments and contingencies |
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— |
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— | |||
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Shareholders’ equity / (deficit): |
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Series A cumulative convertible preferred stock, $0.01 par value. |
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Authorized 8,000 shares; issued and outstanding, 473 |
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shares (aggregate involuntary liquidation preference |
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$473,000 at December 30, 2003) |
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— | |||||
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Series B convertible preferred series stock, $0.01 par value. |
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Authorized 200,000 shares; issued and outstanding, 200,000 |
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shares in 2003 (no liquidation preference) |
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2,000 |
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Common stock, $0.001 par value. Authorized 100,000,000 shares; |
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issued and outstanding 42,491,708 in 2003 |
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42,492 |
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53,180 | |||
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Additional paid-in capital |
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32,556,963 |
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46,700,907 | ||
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Deficit accumulated during the development stage |
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(28,481,146) |
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(28,481,146) | ||||
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Total shareholders’ equity / (deficit) |
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4,120,313 |
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18,272,941 | ||
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Total liabilities and shareholders’ equity / (deficit) |
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$ |
4,283,356 |
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18,435,984 | |||
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| ADVENTRX Pharmaceuticals, Inc. | ||
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| By: | /s/ Steven M. Plumb | |
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| Title: Chief Financial Officer | ||
| Date: April 12, 2004 | ||
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Exhibit |
Description |
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4.1 |
Common Stock and Warrant Purchase Agreement, dated as of April 5, 2004, among the Company and the Investors named therein
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4.2 |
Common Stock and Warrant Purchase Agreement, dated April 8, 2004, between the Company and CD Investment Partners, Ltd.
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4.3 |
Form of A-1 Warrant to Purchase Common Stock issued to Investors pursuant to the Common Stock and Warrant Purchase Agreement
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4.4 |
Form of A-2 Warrant to Purchase Common Stock issued to Investors pursuant to the Common Stock and Warrant Purchase Agreement
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4.5 |
A-1 Warrant to Purchase Common Stock issued to CD Investment Partners, Ltd.
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4.6 |
A-2 Warrant to Purchase Common Stock issued to CD Investment Partners, Ltd.
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4.7 |
Warrant to Purchase Common Stock issued on April 8, 2004 to Burnham Hill Partners
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4.8 |
Warrant to Purchase Common Stock issued on April 8, 2004 to Ernest Pernet
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4.9 |
Warrant to Purchase Common Stock issued on April 8, 2004 to W.R. Hambrecht + Co., LLC
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4.10 |
Registration Rights Agreement, dated as of April 5, 2004, among the Company and the Investors named therein
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4.11 |
Registration Rights Agreement, dated as of April 8, 2004, between the Company and CD Investment Partners, Ltd.
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99.1 |
Press Release of the Company dated April 5, 2004. |
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COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (this "AGREEMENT"), dated as of
April 5, 2004 (the "AGREEMENT DATE"), is among ADVENTRX Pharmaceuticals, Inc., a
Delaware corporation (the "COMPANY"), and each of the persons and entities
listed on Schedule 1 hereto (each, an "INVESTOR").
1. SUBSCRIPTION.
(a) SHARES OF COMMON STOCK. On the terms and subject to the conditions set
forth in this Agreement, at the Closing (as defined below), the Company will
sell and each Investor will purchase the number of shares of Common Stock, par
value $0.001 per share, of the Company ("COMMON STOCK") set forth opposite such
Investor's name on Schedule 1 hereto at a purchase price of $1.50 per share (the
"SHARE PRICE"). For purposes of this Agreement, the term "SHARES" refers to the
shares of Common Stock purchased by the Investors pursuant to this Agreement.
(b) WARRANTS. In consideration of each Investor's purchase of shares of
Common Stock pursuant to this Agreement, the Company shall also issue to each
Investor (i) a warrant, in the form of Exhibit A-1 hereto, to purchase a number
of shares of Common Stock equal to the product of (x) 30% and (y) the number of
Shares purchased by such Investor (an "A-1 WARRANT") and (ii) a warrant, in the
form of Exhibit A-2 hereto, to purchase a number of shares of Common Stock equal
to the product of (x) 20% and (y) the number of Shares purchased by such
Investor (an "A-2 WARRANT"). The A-1 Warrants and A-2 Warrants issuable to the
Investors pursuant to this Agreement are collectively referred to herein as the
"WARRANTS."
2. CLOSING; CONDITIONS TO CLOSING.
(a) CLOSING. The closing of the purchase and sale of the Shares and the
issuance of the Warrants (the "CLOSING") will take place as promptly as
practicable, but no later than five business days after satisfaction or waiver
of all of the conditions set forth in Sections 2(c) and (d) (other than those
conditions which by their terms are not to be satisfied or waived until the
Closing), at the offices of Wiggin and Dana LLP ("WIGGIN"), 400 Atlantic Street,
Stamford, Connecticut 06901. The date on which the Closing occurs is referred to
herein as the "CLOSING DATE."
(b) DELIVERY OF PURCHASE PRICE. Each Investor shall deliver or cause to be
delivered by wire transfer of immediately available funds an amount in cash
equal to the aggregate Share Price payable by such Investor at the Closing to
Wiggin, counsel to SDS Management, LLC, an affiliate of an Investor ("SDS"), to
be held and distributed by Wiggin pursuant to terms of the Closing Escrow
Agreement in the form of Exhibit B hereto (the "ESCROW AGREEMENT").
(c) CONDITIONS TO OBLIGATIONS OF INVESTORS TO EFFECT THE CLOSING. The
obligations of an Investor to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing, of each of the following conditions, any of which may be waived,
in writing, by an Investor:
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(i) The Company shall deliver or cause to be delivered to each of
the Investors the following:
(1) Evidence of delivery to the Company's transfer agent of
irrevocable instructions to issue certificates evidencing the aggregate
number of Shares to be purchased by such Investor registered in the name
of such Investor, in such denominations as is indicated on Schedule 1 for
such Investor;
(2) The Registration Rights Agreement in the form of Exhibit C
hereto (the "REGISTRATION RIGHTS AGREEMENT") executed by the Company;
(3) One or more Warrants, each registered in the name of such
Investor, in such denominations as is indicated on Schedule 1 for such
Investor executed by the Company;
(4) A legal opinion of Bingham McCutchen LLP ("COMPANY'S COUNSEL"),
counsel to the Company, in the form attached hereto as Exhibit D.
(5) A wire transfer representing SDS's reasonable, documented legal
fees and other expenses as described in Section 10(l) hereof.
(6) A certificate signed by an officer of the Company either (i)
evidencing that the Company has applied to each U.S. securities exchange,
interdealer quotation system and other trading market where its Common
Stock is currently listed or qualified for trading or quotation for the
listing or qualification of the Shares and the Warrant Shares for trading
or quotation thereon or (ii) certifying that no such application is
necessary for the listing of such shares.
(7) The Escrow Agreement executed by the Company.
(d) CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE CLOSING. The
obligations of the Company to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by the Company:
(i) Each Investor shall have executed and delivered to the Company
this Agreement;
(ii) Each Investor shall have executed and delivered to the Company
the Registration Rights Agreement;
(iii) Each Investor shall have executed and delivered to the Company the
Investor Suitability Questionnaire attached hereto as Exhibit E and the
Company shall be reasonably satisfied, through the responses of each
Investor, that the sale of the Shares and the Warrants shall not require
registration thereof under the Securities Act of 1933, as amended (the
"SECURITIES ACT") or under the blue sky or securities laws of any
jurisdiction;
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(iv) Each Investor shall have deposited in escrow with Wiggin pursuant
to the Escrow Agreement an amount equal to the aggregate Share Price for
the Shares and Warrants purchased by such Investor by wire transfer or by
such other form of payment as may be mutually agreed upon by the Company
and such Investor;
(v) Wiggin shall have executed and delivered to the Company the
Escrow Agreement; and
(vi) Burnham Hill Partners (a division of Pali Capital Inc.) (the
"PLACEMENT AGENT") shall have delivered a certificate, executed by a
managing director of the Placement Agent, dated as of the Closing,
certifying the amounts deposited in escrow with Wiggin pursuant to the
Escrow Agreement and the names of the Investors that have deposited such
amounts in escrow with Wiggin.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants as of the Agreement Date to the Investors that, except as set
forth on the Disclosure Schedule attached as Schedule 3:
(a) CORPORATE EXISTENCE AND POWER; SUBSIDIARIES. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state in which it is incorporated, and has all corporate powers
required to carry on its business as now conducted. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not have a
Material Adverse Effect. For purposes of this Agreement, the term "MATERIAL
ADVERSE EFFECT" means, with respect to the Company, a material adverse effect on
the Company's condition (financial or other), business, properties, assets,
liabilities (including contingent liabilities), results of operations or current
prospects, taken as a whole. True and complete copies of the Company's
Certificate of Incorporation, as amended (the "CERTIFICATE"), and Bylaws, as
amended (the "BYLAWS"), as currently in effect and as will be in effect on the
Closing Date, have previously been made available to the Investors. For purposes
of this Agreement, the term "SUBSIDIARY" or "SUBSIDIARIES" means, with respect
to any entity, any corporation or other organization of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are
directly or indirectly owned by such entity or of which such entity is a partner
or is, directly or indirectly, the beneficial owner of 50% or more of any class
of equity securities or equivalent profit participation interests. The Company
has no Subsidiaries.
(b) CORPORATE AUTHORIZATION. The execution, delivery and performance by
the Company of this Agreement, the Registration Rights Agreement, the Warrants,
the Escrow Agreement and each of the other documents executed by the Company
pursuant to and in connection with this Agreement (collectively, the
"TRANSACTION AGREEMENTS"), and the consummation of the transactions contemplated
hereby and thereby (including, but not limited to, the sale and delivery of the
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Shares and the Warrants and the subsequent issuance of the Warrant Shares upon
exercise of the Warrants) (the "TRANSACTIONS") have been duly authorized, and no
additional corporate or stockholder action is required for the approval thereof.
The shares issuable upon exercise of the Warrants (the "WARRANT SHARES") have
been duly reserved for issuance by the Company. The Transaction Agreements have
been or, to the extent contemplated hereby or by the Transaction Agreements,
will be duly executed and delivered and constitute the legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with
their terms, except as may be limited by bankruptcy, reorganization, insolvency,
moratorium and similar laws of general application relating to or affecting the
enforcement of rights of creditors, and except as enforceability of its
obligations hereunder are subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(c) NON-CONTRAVENTION. The execution, delivery and performance by the
Company of the Transaction Agreements, and the consummation by the Company of
the Transactions do not and will not (a) violate any term of the Certificate and
Bylaws or any material agreement to which the Company is a party or by which it
is bound; (b) constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the Company;
(c) constitute a default (or would constitute a default with notice or lapse of
time or both) or breach under or give rise to a right of termination,
cancellation or acceleration or loss of any benefit under any material
agreement, contract or other instrument binding upon the Company or under any
material license, franchise, permit or other similar authorization held by the
Company; or (d) result in the creation or imposition of any Lien (as defined
below) on any asset of the Company. For purposes of this Agreement, the term
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, claim or encumbrance of any kind in respect of such asset.
(d) SEC DOCUMENTS. The Company is obligated under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), to file reports pursuant to
Sections 13 or 15(d) thereof (all such reports filed or required to be filed by
the Company with the Securities and Exchange Commission (the "COMMISSION"),
including all exhibits thereto or incorporated therein by reference, and all
documents filed by the Company under the Securities Act, hereinafter called the
"SEC DOCUMENTS"). Since December 31, 2002, the Company has timely filed all SEC
Documents required to be filed under the Exchange Act. All SEC Documents filed
on or after October 31, 2000 (i) were prepared in all material respects in
accordance with the requirements of the Exchange Act and (ii) did not at the
time they were filed (or, if amended or superseded by a filing prior to the
Agreement Date, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. A correct and complete
copy of each of the SEC Documents for any period ending on or after December 31,
2002 (the "RECENT REPORTS") are currently available to each Investor at the
Commission's main public website at
http://www.sec.gov/cgi-bin/browse-edgar?company=adventrx+pharma&CIK=&
filenum=&State=&SIC=&owner=include&action=getcompany. None of the information
about the Company or any of its Subsidiaries which has been disclosed to the
Investors herein or in the course of discussions and negotiations with respect
hereto which is not disclosed in the Recent Reports is or was required to be so
disclosed.
4
(e) FINANCIAL STATEMENTS. Each of the Company's audited consolidated
balance sheet and related consolidated statements of income, cash flows and
changes in stockholders' equity (including the related notes) as of and for the
years ended December 31, 2003 and December 31, 2002, as contained in the Recent
Reports (both of (i) and (ii), collectively, the "FINANCIAL STATEMENTS") (x)
present fairly in all material respects the financial position of the Company
and its Subsidiaries on a consolidated basis as of the dates thereof and the
results of operations, cash flows and stockholders' equity as of and for each of
the periods then ended and (y) were prepared in accordance with United States
generally accepted accounting principals ("GAAP") applied on a consistent basis
throughout the periods involved, in each case, except as otherwise indicated in
the notes thereto.
(f) COMPLIANCE WITH LAW. The Company is in compliance and has conducted
its business so as to comply with all laws, rules and regulations, judgments,
decrees or orders of any court, administrative agency, commission, regulatory
authority or other governmental authority or instrumentality, domestic or
foreign, applicable to its operations, the violation of which would cause a
Material Adverse Affect. There are no judgments or orders, injunctions, decrees,
stipulations or awards (whether rendered by a court or administrative agency or
by arbitration), including any such actions relating to affirmative action
claims or claims of discrimination, against the Company or against any of its
properties or businesses.
(g) ABSENCE OF CERTAIN CHANGES. Since December 31, 2003, the Company has
conducted its business only in the ordinary course and there has not occurred,
except as set forth in the Recent Reports or any exhibit thereto or incorporated
by reference therein, any event the could reasonably be expected to have a
Material Adverse Effect on the Company or any of its Subsidiaries.
(h) NO UNDISCLOSED LIABILITIES. Except as set forth in the Recent Reports,
and except for liabilities and obligations incurred in the ordinary course of
business since December 31, 2003, as of the Agreement Date, to the Company's
knowledge, (i) the Company does not have any material liabilities or obligations
(absolute, accrued, contingent or otherwise) which, and (ii) there has not been
any aspect of the prior or current conduct of the business of the Company or its
Subsidiaries which may form the basis for any material claim by any third party
which, if asserted could result in any such material liabilities or obligations
which, are not fully reflected, reserved against or disclosed in the balance
sheet of the Company as at December 31, 2003.
(i) CAPITALIZATION. The authorized capital stock of the Company consists
of 100,000,000 shares of Common Stock of which 42,833,830 shares are issued and
42,810,665 are outstanding as of the Agreement Date and 1,000,000 shares of
preferred stock, par value $0.01 per share, of which none are issued and
outstanding as of the Agreement Date. All issued and outstanding shares of the
Company's capital stock have been duly authorized and were validly issued, and
are fully paid and nonassessable. No securities issued by the Company from
October 31, 2000 to the date hereof were issued in violation of any statutory or
common law preemptive rights. Upon issuance pursuant to the terms of this
Agreement, all Shares and Warrant Shares shall be duly authorized, validly
issued and outstanding, and fully paid and nonassessable and such shares shall
not have been issued in violation of any statutory or contractual preemptive
rights. There are no dividends which have accrued or been declared but are
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unpaid on the capital stock of the Company. All taxes required to be paid by
Company in connection with the issuance and any transfers of the Company's
capital stock have been paid. All permits or authorizations required to be
obtained from or registrations required to be effected with any person or entity
in connection with any and all issuances of securities of the Company from
October 31, 2000 to the Agreement Date have been obtained or effected, and all
securities of the Company have been issued and are held in accordance with the
provisions of all applicable securities or other laws. A true and complete
capitalization table of the Company as of the Agreement Date is set forth in
Schedule 3(i). No shares of capital stock of the Company are subject to
preemptive rights or any other similar rights of the stockholders of the Company
or any liens or encumbrances imposed through the actions or failure to act of
the Company. Except as disclosed in Schedule 3(i), as of the effective date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for any shares of
capital stock of the Company, or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company, (ii)
there are no agreements or arrangements under which the Company is obligated to
register the sale of any of its or their securities under the 1933 Act and (iii)
there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to security
holders) that will be triggered by the issuance of the Shares, Warrants or
Warrant Shares (including the issuance of the Warrant Shares upon exercise of
the Warrants).
(j) GOVERNMENT AUTHORIZATIONS. Except as disclosed in the Recent Reports,
the Company holds all material authorizations, consents, approvals, franchises,
licenses and permits required under applicable law or regulation for the
operation of the business of the Company as presently operated (the
"GOVERNMENTAL AUTHORIZATIONS"). All the Governmental Authorizations have been
duly issued or obtained and are in full force and effect, and the Company is in
material compliance with the terms of all the Governmental Authorizations. The
Company has not engaged in any activity that, to its knowledge, would cause
revocation or suspension of any such Governmental Authorizations. The Company
has no knowledge of any facts which could reasonably be expected to cause the
Company to believe that the Governmental Authorizations will not be renewed by
the appropriate governmental authorities in the ordinary course. Neither the
execution, delivery nor performance of this Agreement shall adversely affect the
status of any of the Governmental Authorizations.
(k) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement, based upon any arrangement made by
or on behalf of the Company, which would make the Company or any Investor liable
for any fees or commissions.
(l) SECURITIES LAWS. Neither the Company nor any agent acting on behalf of
the Company has taken any action which might cause this Agreement or the Shares
or Warrants to violate the Securities Act or the Exchange Act or any rules or
regulations promulgated thereunder, as in effect on the Closing Date. Assuming
that all of the representations and warranties of the Investors set forth in
Section 4 are true and correct, the offer, sale and issuance of the Shares and
Warrants in conformity with the terms of this Agreement are exempt from the
registration requirements of Section 5 of the Securities Act and from the
qualification or registration requirements of applicable "blue sky" laws.
6
(m) ISSUANCE OF SHARES. The Shares are duly authorized and, upon issuance
in accordance with the terms of this Agreement will be validly issued, fully
paid, and non-assessable and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of stockholders of the Company and will not impose
personal liability on the holder thereof. The Warrant Shares are duly authorized
and reserved for issuance, and, when issued upon exercise of or otherwise
pursuant to the Warrants, respectively, in accordance with the terms thereof,
will be validly issued, fully paid and non-assessable, and free from all taxes,
liens, claims and encumbrances and will not be subject to preemptive rights or
other similar rights of stockholders of the Company and will not impose personal
liability upon the holder thereof.
(n) INTERNAL ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient, in the judgment of the Company's board
of directors, to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(o) NO INVESTMENT COMPANY. The Company is not, and upon the issuance and
sale of the Shares and Warrants as contemplated by this Agreement will not be,
an "investment company" required to be registered under the Investment Company
Act of 1940 (an "INVESTMENT COMPANY"). The Company is not controlled by an
Investment Company.
(p) SARBANES-OXLEY ACT. The Company is in substantial compliance with the
applicable provisions of the Sarbanes-Oxley Act of 2002 (the "SARBANES-OXLEY
ACT"), and the rules and regulations promulgated thereunder, that are effective
and intends to comply substantially with other applicable provisions of the
Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder, upon
the effectiveness of such provisions.
(q) BENEFICIAL HOLDINGS OF BURNHAM HILL PARTNERS. Burnham Hill Partners
("BHP"), a division of Pali Capital, Inc. and the Company's placement agent with
respect to the purchase and sale of the Shares and the issuance of the Warrants,
has advised the Company that certain employees of BHP and their family members
(acting separately and not as a group) own approximately 12% of the outstanding
shares of Common Stock as of the Agreement Date and without giving effect to the
purchase and sale of the Shares.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. Each Investor, for
itself only, hereby severally and not jointly, represents and warrants to the
Company as follows:
(a) EXEMPT TRANSACTION; UNREGISTERED SHARES AND WARRANTS. The Investor
understands that the Shares and Warrants are being offered and sold in reliance
on one or more exemptions from registration provided for under the Securities
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Act, and that the Company's reliance upon such exemptions is predicated, in
part, upon the Investor's representations and warranties set forth in this
Agreement. The Investor acknowledges that it is purchasing the Shares and
Warrants without being offered or furnished any offering literature or
prospectus. The Investor understands that neither the Commission, nor any
governmental agency charged with the administration of the securities laws of
any jurisdiction nor any other governmental agency has passed upon or reviewed
the merits or qualifications of, or recommended or approved the offer and sale
of the Shares and Warrants pursuant to the terms of this Agreement.
(b) INVESTMENT INTENT; ACCREDITATION; AUTHORITY. The Investor is acquiring
the Shares and Warrants for investment for the Investor's own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act; provided, however, that by making the representations
herein, the Investor reserves the right to dispose of the Shares, Warrants or
Warrant Shares at any time in accordance with this Agreement or the Warrant, as
applicable, and in accordance with or pursuant to a registration statement or an
exemption under the Securities Act. The Investor is an "accredited investor"
within the meaning of the Securities Act. The Investor has the full right,
power, authority and capacity to enter into and perform this Agreement, the
terms of this Agreement constitute valid and binding obligations of the Investor
enforceable in accordance with their terms, except as the same may be limited by
equitable principles and by bankruptcy, insolvency, moratorium, and other laws
of general application affecting the enforcement of creditors' rights.
(c) KNOWLEDGE AND EXPERIENCE. The Investor (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the Investor's prospective investment in the Shares and
Warrants; (ii) has the ability to bear the economic risks of the Investor's
prospective investment; (iii) has been furnished with and has had access to such
information as the Investor has considered necessary to make a determination as
to the purchase of the Shares and Warrants together with such additional
information as is necessary to verify the accuracy of the information supplied;
and (iv) has had all questions which have been asked by the Investor
satisfactorily answered by the Company.
(d) RESTRICTED SECURITIES. The Investor understands that the Shares and
Warrants are "restricted securities" as such term is defined in Rule 144 of
Regulation D promulgated under the Securities Act ("RULE 144") and must be held
indefinitely unless they are subsequently registered or qualified under
applicable state and federal securities laws or an exemption from such
registration or qualification is available. The Investor understands that he,
she or it may resell the Shares and Warrant Shares pursuant to Rule 144 only
after the satisfaction of certain requirements, including the requirement that
the Shares and Warrants Shares be held for at least one year prior to resale.
(e) NO OBLIGATION TO REGISTER. The Investor further acknowledges and
understands that, except as provided in the Registration Rights Agreement, the
Company is under no obligation to register the Shares, Warrants or Warrant
Shares. The Investor understands that the certificate evidencing the Shares,
Warrants and Warrant Shares will be imprinted with a legend which prohibits the
8
transfer of the Shares, Warrants and Warrant Shares unless they are registered
or such registration is not required in the opinion of counsel in form and
substance satisfactory to the Company.
(f) FOREIGN INVESTOR REPRESENTATION. If the Investor is not a "U.S.
person" (as such term is defined in Rule 902(k) of Regulation S promulgated
under the Securities Act), such Investor hereby represents that it has satisfied
itself as to the full observance of the laws of its jurisdiction in connection
with any invitation to subscribe for the Shares and Warrants or any use of this
Agreement, including (i) the legal requirements within its jurisdiction for the
purchase of the Shares and Warrants, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may
need to be obtained, and (iv) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale or transfer of
the Shares and Warrants. Such Investor's subscription and payment for, and its
continued beneficial ownership of the Shares and Warrants, will not violate any
applicable securities or other laws of its jurisdiction.
(g) DOMICILE. The Investor is a bona fide resident and domiciliary (not a
temporary or transient resident) of the state indicated on Schedule 1 hereto and
he, she or it has no present intention of becoming a resident of any other state
or jurisdiction.
(h) NO NEED FOR LIQUIDITY. The Investor's aggregate holding of securities
that are "restricted securities" or otherwise not readily marketable is not
excessive in view of the Investor's net worth and financial circumstances and
the purchase of the Shares and Warrants will not cause such commitment to become
excessive.
(i) INDEPENDENT ADVICE. The Investor understands that the Company urges
the Investor to seek independent advice from professional advisors relating to
the suitability for the Investor of an investment in the Company in view of the
Investor's overall financial needs and with respect to legal and tax
implications of such an investment.
5. RELIANCE. The Investor understands that the Company may rely on the
representations and warranties in Section 4 in determining whether to permit the
Investor to purchase the Shares and Warrants. If for any reason any
representations and warranties are no longer true and accurate prior to the
Closing Date, the Investor will give the Company prompt written notice of the
inaccuracy. By signing below, the Investor represents that the Investor has read
and confirmed the truth and accuracy of each of the foregoing representations
and warranties.
6. ADDITIONAL COVENANTS OF THE PARTIES.
(a) INDEMNIFICATION. Each party agrees to indemnify and hold harmless the
other parties hereto and each of its directors, officers, agents and affiliates
(as applicable) from and against any and all loss, damage or liability due to or
arising out of a breach of any representation, warranty or covenant of contained
in this Agreement and made by the indemnifying party, provided however, that
this Section 6 shall not be construed to require any Investor (i) to so
indemnify and hold harmless any other Investor or (ii) to so indemnify and hold
harmless the Company for any such breach by any other Investor. The liability of
any Investor to provide indemnification pursuant to this Section 6 shall be
limited to the amount such Investor paid to the Company for the purchase of such
Investor's Shares and Warrants.
9
(b) PLEDGE OF SECURITIES. The Company acknowledges and agrees that the
Shares, Warrants and Warrant Shares may be pledged by an Investor in connection
with a bona fide margin agreement or other loan or financing arrangement that is
secured by the Shares Warrants or Warrant Shares. The pledge of the Shares,
Warrants or Warrant Shares shall not be deemed to be a transfer, sale or
assignment of the Shares, Warrants or Warrant Shares hereunder, and no Investor
effecting a pledge of Shares, Warrants or Warrant Shares shall be required to
provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Agreement. The
Company hereby agrees to execute and deliver such documentation as a pledgee of
the Shares, Warrants or Warrant Shares may reasonably request in connection with
a pledge of the thereof to such pledgee by an Investor.
(c) SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall (i) on or
promptly after the Closing Date, issue a press release acceptable to SDS
disclosing the transactions contemplated hereby, and (ii) promptly after the
Closing Date, file with the Commission a Report on Form 8-K disclosing the
transactions contemplated hereby. Except as provided in the preceding sentence,
neither the Company nor the Investors shall make any press release or other
publicity about the terms of this Agreement or the transactions contemplated
hereby without the prior approval of the other unless otherwise required by law,
regulation or the rules of the Commission. In addition, the Company agrees that
it shall not disclose, and shall not include in any public filing or other
announcement, the name of any Investor, unless expressly agreed to in writing by
such Investor or unless and until such disclosure is, in the reasonable opinion
of counsel to the Company, required by law or applicable regulation, and then
only to the extent of such requirement.
(d) LISTING. The Company shall promptly secure the listing of the Shares
and Warrant Shares (and any Registrable Securities (as defined in the
Registration Rights Agreement) that may from time to time be issued or issuable)
upon each national securities exchange or automated quotation system or bulletin
board, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and, so long as any of the Investors owns any of
the Registrable Securities (as defined in the Registration Rights Agreement),
shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all Shares issued pursuant to this Agreement and Warrant Shares
issuable upon exercise of or otherwise pursuant to the Warrants, and any
Registrable Securities (as defined in the Registration Rights Agreement) that
may from time to time be issued or issuable. To the extent that any Common Stock
is so listed, the Company will obtain and, so long as the Investor owns any of
the Registrable Securities (as defined in the Registration Rights Agreement),
maintain the listing and trading of its Common Stock on the Nasdaq SmallCap, the
Nasdaq National Market, the New York Stock Exchange, or the American Stock
Exchange and will comply in all respects with the Company's reporting, filing
and other obligations under the bylaws or rules of any exchanges or automated
quotation systems on which the Common Stock is then listed.
10
7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGEND. The instruments representing the Shares, Warrants and, if
applicable, Warrant Shares shall bear the following legend or similar legend (as
well as any legends required by applicable state and federal corporate and
securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 7 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Shares or Warrant
Shares if (i) such Shares or Warrant Shares are resold pursuant to a
registration statement under the Securities Act, and a prospectus meeting the
requirements of Section 11 of the Securities Act is delivered or deemed
delivered to the purchaser of such Shares or Warrant Shares, (ii) if such holder
satisfies the requirements of Rule 144(k) or (iii) if such holder provides the
Company with an opinion of counsel for such holder of the Shares or Warrant
Shares, reasonably satisfactory to the Company, to the effect that a sale,
transfer or assignment of such Shares or Warrant Shares may be made without
registration.
8. PRICE PROTECTION. If the Company issues or sells any shares of its Common
Stock or Common Stock Equivalents, other than Excluded Shares (as that term is
defined below) ("ADDITIONAL SHARES") at any time after the Closing Date and
prior to June 30, 2004 (the "ADJUSTMENT PERIOD") for a consideration per share
(the "DILUTIVE PRICE") (a) less than the Share Price (as adjusted for stock
splits, stock dividends and the like) and (b) if Additional Shares have been
previously issued during the Adjustment Period with respect to which the Company
has fully complied with this Section 8, then also less than the lowest Dilutive
Price (as adjusted for stock splits, stock dividends and the like) at which such
Additional Shares have been previously issued during the Adjustment Period, then
the Company will issue to each Investor a number of shares, if positive, of
Common Stock to such Investor determined by the following formula:
X = (A * B / C) - (A + D)
Where: X = the number of shares of Common Stock to be issued to
the Investor, rounded to the nearest whole number;
A = the number of Shares (as adjusted for stock splits,
stock dividends and the like) then held by such
Investor;
11
B = the Share Price (as adjusted for stock splits, stock
dividends and the like);
C = the applicable Dilutive Price; and
D = the aggregate number of shares of Common Stock (as
adjusted for stock splits, stock dividends and the
like) issued to the Investor pursuant to this
Section 8 prior to the date of such determination.
For purposes of this Agreement, the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the date of this Agreement, (b) conversion of
shares of the Company's Preferred Stock, par value $0.01 per share outstanding
on the date of this Agreement or (c) exchange of promissory notes issued by the
Company outstanding on the date of this Agreement; (iv) capital stock or
warrants or options to purchase capital stock issued in connection with bona
fide acquisitions, mergers or similar transactions, the terms of which are
approved by the Board; (v) shares of Common Stock issued or issuable to
licensors of technology of the Company to pay expenses, royalties or milestone
payments for which the Company is obligated under any licensing or related
agreement; (vi) shares of Common Stock issuable or issued pursuant to stock
splits, stock dividends and the like, or (vii) shares of Common Stock issued or
issuable by way of dividend or other distribution on Excluded Shares.
If the Company shall issue or sell any warrants or other rights to subscribe for
or purchase any additional shares of Common Stock or any securities convertible
into shares of Common Stock (collectively, "COMMON STOCK EQUIVALENTS") during
the Adjustment Period, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the effective price per share for
which Common Stock is issuable upon the exercise, exchange or conversion of such
Common Stock Equivalents shall be less than (i) the Share Price (as adjusted for
stock splits, stock dividends and the like) and (ii) if Additional Shares have
been previously issued during the Adjustment Period with respect to which the
Company has fully complied with this Section 8, then also less than the lowest
Dilutive Price (as adjusted for stock splits, stock dividends and the like) at
which such Additional Shares have been previously issued during the Adjustment
Period, then the Company shall issue to the Investor that number of shares of
Common Stock that would be issuable pursuant to this Section 8 on the basis that
the maximum number of additional shares of Common Stock issuable pursuant to all
such Common Stock Equivalents shall be deemed to have been issued and
outstanding and the Company shall have received all of the consideration payable
therefor, if any, as of the date of the actual issuance of such Common Stock
Equivalents. No further issuances shall be made under this Section 8 upon the
actual issue of such Common Stock upon the exercise, conversion or exchange of
such Common Stock Equivalents, unless such actual issue is at a per share
consideration lower than the Dilutive Price used for purposes of the initial
adjustment pursuant to this Section 8.
12
9. PARTICIPATION RIGHTS.
(a) Subject to the terms and conditions specified in this Section 9, the
Company hereby grants to each Investor a right of first offer with respect to
sales by the Company of Additional Shares, which in no event shall include
Excluded Shares, on the same terms and conditions as offered by the Company to
the other purchasers of such Additional Shares. If the Company proposes to offer
any Additional Shares for sale at any time after June 30, 2004 and before the
first anniversary of the Closing Date, the Company shall make an offering of
such Additional Shares to each Investor in accordance with the following
provisions:
(i) The Company shall deliver a notice (the "ISSUANCE NOTICE") to each
Investor stating (A) its bona fide intention to offer such Additional
Shares, (B) the number of such Additional Shares to be offered, (C)
the price and terms, if any, upon which it proposes to offer such
Additional Shares, and (D) the anticipated closing date of the sale of
such Additional Shares.
(ii) By written notification received by the Company, within five
trading days after giving of the Issuance Notice (the "RESPONSE
PERIOD"), any Investor may elect to purchase or obtain, at the price
and on the terms specified in the Issuance Notice, up to its Pro Rata
Amount (as defined below) of such Additional Shares. The "PRO RATA
AMOUNT" for any given Investor shall equal that portion of the
Additional Securities the price of which is equal to 50% of the
aggregate purchase price that such Investor paid to the Company upon
the Closing under this Agreement, and in such event the Company shall
be obligated to sell such number of Additional Securities to each such
Investor, even if the aggregate Pro Rata Amount for all such Investors
exceeds the aggregate amount of Additional Securities that the Company
had initially proposed to offer. Any such purchase shall be completed
at the same closing as that of any third party purchasers or at an
additional closing thereunder.
(iii) The Company may, during the 75-day period following the
expiration of the Response Period, offer the remaining unsubscribed
portion of such Additional Shares to any person or persons on
substantially similar terms to those specified in the Issuance Notice.
If the Company does not consummate the sale of such Additional Shares
within such period or if such Additional Shares are offered on terms
not substantially similar to the terms of the offer specified in the
Issuance Notice, the right provided hereunder shall be deemed to be
revived and such Additional Shares shall not be offered or sold unless
first reoffered to the Investors in accordance herewith.
(b) The participation right set forth in this Section 9 may not be
assigned or transferred, except that such right is assignable by each Investor
to any wholly-owned subsidiary or parent of, or to any corporation or entity
that is, within the meaning of the Securities Act, controlling, controlled by or
under common control with, any such Investor, provided in any event that such
assignee is an "accredited investor" as such term is defined in Rule 501(a)
promulgated under the Securities Act.
13
10. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement, all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the state of
California, without giving effect to principles of choice of law.
(b) JURISDICTION AND VENUE. Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
shall be brought or otherwise commenced in any state or federal court located in
the County of San Diego, California. Each party to this Agreement: (i) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the County of San Diego, California and each appellate
court located in the state of California, in connection with any such legal
proceeding; (ii) agrees that each state and federal court located in the County
of San Diego, California shall be deemed to be a convenient forum; and (iii)
agrees not to assert, by way of motion, as a defense or otherwise, in any such
legal proceeding commenced in any state or federal court located in the County
of San Diego, California any claim that such party is not subject personally to
the jurisdiction of such court, that such legal proceeding has been brought in
an inconvenient forum, that the venue of such proceeding is improper or that
this Agreement or the subject matter of this Agreement may not be enforced in or
by such court.
(c) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
(d) NOTICES. All notices and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person or facsimile transmission (received at the
facsimile machine to which it is transmitted prior to 5:00 p.m., local time, on
a business day in the State of California, for the party to which it is sent),
by courier or express delivery service or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section):
if to the Company: ADVENTRX Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
Attention: Nicholas J. Virca
Facsimile: (858) 271-9678
14
with a copy to (not to constitute notice): Bingham McCutchen LLP
3 Embarcadero Center
San Francisco, CA 94111-4067
Attention: Henry D. Evans, Jr.
Facsimile: (415) 393-2286
if to the Investor: To the address set forth in Schedule 1 hereto.
(e) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended,
waived or departed from only with the written consent of the Company and the
holders of a majority of the Shares then held by Investors. Any amendment or
waiver effected in accordance with this Section 10(e) shall be binding upon each
party to this Agreement, whether or not such party has signed such amendment or
waiver. No such waiver or consent shall be deemed to be or shall constitute a
waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent. No such
amendment shall be effective to the extent that it applies to less than all of
the Investors or their Shares, Warrants and Warrant Shares then outstanding. No
consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of this Agreement, the Registration
Rights Agreement or the Warrants unless the same consideration also is offered
to all the parties to this Agreement or the Registration Rights Agreement or
holders of the Warrants, as the case may be. The Company shall give prompt
written notice to an Investor of any amendment hereof or waiver hereunder that
was effected without the Investor's written consent.
(f) SUCCESSORS AND ASSIGNS. This Agreement is personal to each of the
parties and may not be assigned without the written consent of the other
parties; provided, however, that any of the Investors shall be permitted to
assign this Agreement to any person to whom it assigns or transfers securities
issued or issuable pursuant to this Agreement in compliance with applicable
securities laws and this Agreement. Any assignee must be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act.
(g) SEVERABILITY. In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained in this
Agreement shall be unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it enforceable, and as so
limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
(h) INTERPRETATION. The parties hereto acknowledge and agree that: (i)
each party and such party's counsel has reviewed the terms and provisions of
this Agreement; (ii) the rule of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to the parties hereto and not in favor of
or against any party, regardless of which party was generally responsible for
15
the preparation of this Agreement. Whenever used herein, the singular number
shall include the plural, the plural shall include the singular, the use of any
gender shall include all persons.
(i) HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify, or affect the meaning or construction of any of the terms or
provisions hereof.
(j) NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a
party hereto in exercising any right, power or remedy under this Agreement, and
no course of dealing between the parties hereto, shall operate as a waiver of
any such right, power or remedy of the party. No single or partial exercise of
any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
(k) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the parties hereto in this Agreement, shall survive (i) the
execution and delivery hereof, (ii) any investigations made by or on behalf of
the parties and (iii) the closing of the transaction contemplated hereby.
(l) EXPENSES. Except as otherwise provided in any other Transaction
Agreement, the Company and each Investor shall each be responsible for the
payment of and bear their own expenses and legal fees relating to the
preparation and negotiation of the Transaction Agreements and the consummation
of the Transactions, provided, however, that in the event of the successful
consummation of the transactions contemplated by this Agreement, the Company
shall pay the reasonable legal fees and other third-party expenses, up to
$45,000, of SDS incurred with respect to the preparation and negotiation of the
Transaction Agreements and the consummation of the transactions hereunder.
(m) COUNTERPARTS AND FACSIMILE DELIVERY. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature page
delivered by facsimile or other electronic image transmission shall be binding
to the same extent as an original signature page, with regard to any agreement
subject to the terms hereof or any amendment thereto. Any party who delivers
such a signature page agrees to later deliver an original counterpart to any
party who requests it.
(n) SECURITIES LAW COMPLIANCE.
(i) SECURITIES ACT. The Company shall timely prepare and file with the
Commission the form of notice of the sale of securities pursuant to
16
the requirements of Regulation D regarding the sale of the Shares and
Warrants under this Agreement.
(ii) STATE SECURITIES LAW COMPLIANCE -- SALE. The Company shall timely
prepare and file such applications, consents to service of process
(but not including a general consent to service of process) and
similar documents and take such other steps and perform such further
acts as shall be required by the state securities law requirements of
each jurisdiction where an Investor resides, as indicated on Schedule
1, with respect to the sale of the Shares and Warrants under this
Agreement.
(iii) STATE SECURITIES LAW COMPLIANCE --RESALE. Beginning no later
than June 30, 2004 and continuing until (i) the purchasers have sold
all of their Registrable Securities under a Registration Statement
pursuant to Section 8 or (ii) the Common Stock becomes a "covered
security" under Section 18(b)(1)(A) of the Securities Act, the Company
shall maintain within either Moody's Industrial Manual or Standard and
Poor's Standard Corporation Descriptions (or any successors to these
manuals which are similarly qualified as "recognized securities
manuals" under state Blue Sky laws) an updated listing containing (i)
the names of the officers and directors of the Company, (ii) a balance
sheet of the Company as of a date that is at no time older than
eighteen months and (iii) a profit and loss statement of the Company
for either the preceding fiscal year or the most recent year of
operations. Capitalized terms used in this Section 10(n)(iii), but not
otherwise defined in this Agreement, shall have the meanings assigned
in the Registration Rights Agreement.
(o) INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS. The
obligations of each Investor under the Transaction Agreements are several and
not joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any such agreement. Nothing contained in any Transaction
Agreement, and no action taken by any Investor pursuant thereto, shall be deemed
to constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
Transactions. Each Investor shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of the
Transaction Agreements, and it shall not be necessary for any other Investor to
be joined as an additional party in any proceeding for such purpose. Each
Investor represents that it has been represented by its own separate legal
counsel in its review and negotiation of the Transaction Agreements. For reasons
of administrative convenience only, the Investors acknowledge and agree that
they and their respective counsel have chosen to communicate with the Company
and its counsel through Wiggin, but neither Wiggin nor the Company's counsel
represent any of the Investors in this transaction, except that Wiggin
represents SDS.
[Signature page follows.]
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ADVENTRX PHARMACEUTICALS, INC.
By:
---------------------------------------------------
Name:
-------------------------------------------------
Title:
------------------------------------------------
[Investor signature pages follow.]
OMNIBUS SIGNATURE PAGE
ADVENTRX PHARMACEUTICALS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Common Stock and Warrant
Purchase Agreement (the "AGREEMENT") to which this signature page is attached,
which, together with all counterparts of the Agreement and signature pages of
the other parties named in the Agreement, shall constitute one and the same
document in accordance with the terms of the Agreement.
Print Name:
----------------------------------------------
By:
------------------------------------------------------
Name:
----------------------------------------------------
Title:
---------------------------------------------------
Address:
-------------------------------------------------
Telephone:
-----------------------------------------------
Facsimile:
-----------------------------------------------
SSN/EIN#:
------------------------------------------------
Number of Shares of Common Stock
Purchased
-----------------------------------------------
Number of A-1 Warrants Purchased
-------------------------
Number of A-2 Warrants Purchased
-------------------------
Aggregate Purchase Price
--------------------------------
SCHEDULE 1
Adventrx Pharmaceuticals, Inc.
Common Stock and Warrant Purchase Agreement
Investors and Shares of Common Stock and Warrants
- -------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock Common Stock
Name, Address and Fax Copies of Common Stock Underlying Underlying
Number of Investor Notices to Purchased A-1 Warrants A-2 Warrants Purchase Price
- -------------------------------------------------------------------------------------------------------------------------
$
- -------------------------------------------------------------------------------------------------------------------------
SCHEDULE 3
DISCLOSURE SCHEDULE
EXHIBIT A-1
Form of A-1 Common Stock Purchase Warrant
EXHIBIT A-2
Form of A-2 Common Stock Purchase Warrant
EXHIBIT B
Form of Closing Escrow Agreement
EXHIBIT C
Form of Registration Rights Agreement
EXHIBIT D
Form of Opinion of Company's Counsel
EXHIBIT E
INVESTOR SUITABILITY QUESTIONNAIRE
ADVENTRX PHARMACEUTICALS, INC. (THE "COMPANY")
I. INDIVIDUAL INVESTORS ONLY
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
A. PERSONAL INFORMATION
Name:
----------------------------------------------------------------
(Exact name as it should appear on stock certificate.)
Residence Address:
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Home Telephone Number:
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Fax Telephone Number: _________________________________________________
Email Address:
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Social Security Number:
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B. DELIVERY INFORMATION (Applicable only if different than residence.)
Name of Institution or Destination:
-------------------------------------
Contact Name:
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Delivery Address:
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Account Reference (if applicable):
--------------------------------------
Contact Telephone Number:
-----------------------------------------------
Contact Fax Telephone Number:
-------------------------------------------
Contact Email Address:
--------------------------------------------------
C. EMPLOYMENT INFORMATION
Occupation:
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Number of Years:
-----------------------------------------------------
Present Employer:
----------------------------------------------------
Position/Title:
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Business Address:
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Business Telephone:
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D. RESIDENT INFORMATION
Set forth in the space provided below the state(s)/country(ies) in
which you have maintained your principal residence during the past
three years and the date during which you resided in each
state/country.
Are you registered to vote in, or do you have a driver's license issued
by, or do you maintain a residence in any other state? If yes, in which
state(s)?
Yes _____ No _____
E. INCOME
Do you reasonably expect either your own income from all sources during
the current year to exceed $200,000 or the joint income of you and your
spouse (if married) from all sources during the current year to exceed
$300,000?
Yes _____ No _____
If not, please specify the amount:
What percentage of your income as shown above is anticipated to be
derived form sources other than salary?
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Was either your yearly income from all sources during each of the last
two years in excess of $200,000 or was the joint income of you and your
spouse (if married) from all sources during each of such years in
excess of $300,000?
Yes _____ No _____
If no, please specify the amount for:
Last Year:
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Year Before Last:
-------------------------------------------
F. NET WORTH
Will your net worth* as of the date you purchase securities of the
Company, together with the net worth of your spouse, be in excess of
$1,000,000?
Yes _____ No _____
If not, please specify amount:
* As used in this questionnaire the term "net worth" means the amount
by which total assets exceed total liabilities. In computing net worth
for purposes of this Item 5, you should value your principal residence
at cost, including cost of improvements, or at that value recently
appraised by an institutional lender making a secured loan or otherwise
by a certified appraiser, net of encumbrances.
G. EDUCATION
Please describe your educational background and degrees obtained, if
any.
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H. AFFILIATION
If you have any pre-existing personal or business relationship with the
Company or any of its officers, directors or controlling persons,
please describe the nature and duration of such relationship.
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I. BUSINESS AND FINANCIAL EXPERIENCE
Please describe in reasonable detail the nature and extent of your
business, financial and investment experience which you believe give
you the capacity to evaluate the merits and risks of the proposed
investment and the capacity to protect your interests.
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Are you purchasing the securities offered for your own account and for
investment purposes only?
Yes _____ No _____
If no, please state for whom you are investing and/or the
reason for investing.
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DATE:_________________________
INDIVIDUAL INVESTOR:
By:
-----------------------------------------
(signature)
Name: __________________
(please print)
II. ENTITY INVESTORS ONLY
A. ENTITY NAME AND CONTACT INFORMATION
Name:
-----------------------------------------------------------------
(Exact name as it should appear on stock certificate.)
Name of Institution or Destination: __________________________________
(Include if different from
stock certificate.)
Address:
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Account Reference (if applicable): ____________________________________
Tax Identification Number (if applicable):
---------------------------
Contact Name:
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Contact Telephone Number:
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Contact Fax Number: ___________________________________________________
Contact Email Address:
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B. GENERAL INFORMATION
Under the laws of what jurisdiction was the Investor formed?
Was the Investor formed for the purpose of investing in the securities
being offered?
Yes _____ No _____
Set forth in the space provided below the (i) state(s), if any, in the
United States in which you maintained your principal office during the
past two years and the dates during which you maintained your office in
each state, (ii) the state(s), if any, in which you are incorporated or
otherwise organized, and (iii) the state(s), if any, in which you still
pay income taxes:
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C. ACCREDITED INVESTOR INFORMATION
(i) Is the Investor a national bank or a banking institution organized
under the laws of any state or any territory of the United States or
the District of Columbia?
Yes _____ No _____
(ii) Is the Investor a savings and loan association, building and loan
association, cooperative bank, homestead association, or similar
institution, which is supervised and examined by any state or federal
authority having supervision over such institution?
Yes _____ No _____
(iii) Is the Investor a broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934?
Yes _____ No _____
(iv) Is the Investor a company (i) whose primary and predominant
business is underwriting insurance and subject to the supervision by a
regulatory agency under the laws of any state or territory, or (ii)
registered as an investment company under the Investment Company Act of
1940, or (iii) a Small Business Investment Company licensed by the U.S.
Small Business Administration?
Yes _____ No _____
(v) Is the Investor a "business development company" within the meaning
of the Investment Company Act of 1940 or the Investment Advisers Act of
1940?
Yes _____ No _____
(vi) Is the Investor an employee benefit plan under the Employee
Retirement Income Security Act of 1974 (a "PLAN") with assets in excess
of $5,000,000?
Yes _____ No _____
(a) If the Investor is such a Plan, but if the Plan's total
assets do not exceed $5,000,000, are investment decisions for
the Plan made by a bank, savings and loan association,
insurance company or registered investment adviser acting as
fiduciary? (If yes, please specify the name of the fiduciary.)
Yes _____ No _____
Name of Fiduciary:
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(b) If the Investor is a self-directed Plan, but if the Plan's
total assets do not exceed $5,000,000, are investment
decisions made solely by (1) a person or entity that can
answer "yes" to one or more questions under paragraphs (i) -
(ix) of this Item C; (2) persons whose net worth, or joint net
worth with their spouses, exceeds $1,000,000; (3) persons
whose income without regard to that of their spouses exceeded
$200,000, or whose joint income with their spouses exceeded
$300,000, in each of the last two years and who reasonably
expect such person income to exceed $200,000 or such joint
income to exceed $300,000 this year; or (4) persons who are
brokers or dealers registered pursuant to Section 15 of the
Securities Exchange Act of 1934? (If yes, please specify the
applicable subpart of this question or Item.)
Yes _____ No _____
Subpart or Item: ___________
(vii) Is the Investor (A)(1) a tax exempt organization which is
qualified under Section 501(c)(3) of the Internal Revenue Code of 1986
as amended, or (2) a corporation, or (3) a Massachusetts or similar
business trust, or (4) a partnership, not formed for the specific
purpose of acquiring the securities offered, and (B) which has assets
in excess of $5,000,000?
Yes _____ No _____
(viii) Is the Investor a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a person who has such
knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment?
Yes _____ No _____
If yes, please attach a memorandum describing such person's
educational background, professional memberships or licenses,
current employment, principal business and professional
activities during the last five years, and experience as an
investor in securities. Include any additional information
evidencing that such person has sufficient knowledge and
experience in financial matters that such person would be
capable of evaluating the merits and risks of investing in the
securities being offered.
(ix) Is the Investor an entity in which all of the equity owners are
persons who are either (1) entities described in paragraphs (i) through
(viii) above; (2) persons whose net worth, or joint net worth with
their spouses, exceeds $1,000,000; (3) persons whose income without
regard to that of their spouses exceeded $200,000, or whose joint
income with their spouses exceeded $300,000, in each of the last two
years and who reasonably expect such person income to exceed $200,000
or such joint income to exceed $300,000 this year; or (4) persons who
are brokers or dealers registered pursuant to Section 15 of the
Securities Exchange Act of 1934?
Yes _____ No _____
If an equity owner is an entity described in paragraph (vi)
under this Item C, please provide the information required by
such paragraph.
The above information has been requested by the Company and will be used
solely to confirm that the Company is complying with certain securities
regulations. In furnishing the above information, the undersigned acknowledges
that the Company will be relying thereon in assessing the requirements of the
Securities Act of 1933, as amended, and other applicable securities laws.
The information contained in this questionnaire is true and complete,
and the undersigned understands that the Company and its counsel will rely on
such information for the purpose of complying with all applicable securities
laws, as discussed above. The undersigned agrees to notify the Company promptly
of any change in the foregoing information which may occur prior to any purchase
by the undersigned of stock from the Company.
Date:
-----------------------------
ENTITY INVESTOR:
By:
-----------------------------------------
(signature)
Name:
--------------------------------------
(please print)
Title:
-------------------------------------
(please print)
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (this "AGREEMENT"), dated April
8, 2004 (the "AGREEMENT DATE"), is between ADVENTRX Pharmaceuticals, Inc., a
Delaware corporation (the "COMPANY"), and CD Investment Partners, Ltd. (the
"INVESTOR").
1. SUBSCRIPTION.
(a) SHARES OF COMMON STOCK. On the terms and subject to the conditions set
forth in this Agreement, at the Closing (as defined below), the Company will
sell and the Investor will purchase two hundred fifty thousand (250,000) shares
of Common Stock, par value $0.001 per share, of the Company ("COMMON STOCK") at
a purchase price of $1.50 per share (the "SHARE PRICE"). For purposes of this
Agreement, the term "SHARES" refers to the shares of Common Stock purchased by
the Investor pursuant to this Agreement.
(b) WARRANTS. In consideration of the Investor's purchase of the Shares,
the Company shall also issue to the Investor (i) a warrant, in the form of
Exhibit A-1 hereto, to purchase seventy-five thousand (75,000) shares of Common
Stock and (ii) a warrant, in the form of Exhibit A-2 hereto, to purchase fifty
thousand (50,000) shares of Common Stock (an "A-2 WARRANT"). The A-1 Warrants
and A-2 Warrants issuable to the Investor pursuant to this Agreement are
collectively referred to herein as the "WARRANTS."
2. CLOSING; CONDITIONS TO CLOSING.
(a) CLOSING. The closing of the purchase and sale of the Shares and the
issuance of the Warrants (the "CLOSING") will take place as promptly as
practicable, but no later than five business days after satisfaction or waiver
of all of the conditions set forth in Sections 2(c) and (d) (other than those
conditions which by their terms are not to be satisfied or waived until the
Closing), at the offices of the Company's Counsel (as defined herein), located
at 3 Embarcadero Center, San Francisco, CA 94111-4067. The date on which the
Closing occurs is referred to herein as the "CLOSING DATE" (it is understood and
agreed that the Closing Date shall be the Agreement Date).
(b) DELIVERY OF PURCHASE PRICE. The Investor shall deliver or cause to be
delivered to the Company by wire transfer of immediately available funds an
amount in cash equal to $375,000 (the "PURCHASE PRICE").
(c) CONDITIONS TO OBLIGATIONS OF THE INVESTOR TO EFFECT THE CLOSING. The
obligations of the Investor to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing, of each of the following conditions, any of which may be waived,
in writing, by the Investor:
(i) The Company shall deliver or cause to be delivered to the Investor
the following:
(1) A copy of the letter to be delivered to the Company's transfer
agent containing irrevocable instructions to issue a certificate
evidencing the Shares, registered in the name of the Investor (it
being understood and agreed that the original of such letter shall
be delivered to the transfer agent upon the Company's receipt of
the Purchase Price);
1
(2) The Registration Rights Agreement in the form of Exhibit B
hereto (the "REGISTRATION RIGHTS AGREEMENT") executed by the
Company;
(3) The Warrants, each registered in the name of the Investor and
executed by the Company;
(4) A legal opinion of Bingham McCutchen LLP ("COMPANY'S
COUNSEL"), counsel to the Company, in the form attached hereto as
Exhibit C;
(5) A certificate signed by an officer of the Company either (i)
evidencing that the Company has applied to each U.S. securities
exchange, interdealer quotation system and other trading market
where its Common Stock is currently listed or qualified for
trading or quotation for the listing or qualification of the
Shares and the Warrant Shares for trading or quotation thereon or
(ii) certifying that no such application is necessary for the
listing of such shares; and
(6) Simultaneously with or prior to the Closing Date, the Company
shall have sold securities to third party purchasers, who are not
acting in concert with the Investor, for an aggregate amount of a
minimum of seven million dollars ($7,000,000). The securities sold
to any such third party purchaser shall be on, and have, such
terms and conditions as the Company shall determine in its sole
discretion.
(d) CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE CLOSING. The
obligations of the Company to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by the Company:
(i) The Investor shall have executed and delivered to the Company
this Agreement;
(ii) The Investor shall have executed and delivered to the Company the
Registration Rights Agreement;
(iii)The Investor shall have executed and delivered to the Company the
Investor Suitability Questionnaire attached hereto as Exhibit D and
the Company shall be reasonably satisfied, through the responses of
the Investor, that the sale of the Shares and the Warrants shall not
require registration thereof under the Securities Act of 1933, as
amended (the "SECURITIES ACT") or under the blue sky or securities
laws of any jurisdiction;
(iv) The Investor shall have delivered the Purchase Price to the
Company; and
2
(v) Simultaneously with or prior to the Closing Date, the Company
shall have sold securities (the "Contemporaneous Offering") to third
party purchasers, who are not acting in concert with the Investor, for
an aggregate amount of a minimum of seven million dollars
($7,000,000). The securities sold to any such third party purchaser
shall be on, and have, such terms and conditions as the Company shall
determine in its sole discretion.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants as of the Agreement Date to the Investor that, except as set forth
on the Disclosure Schedule attached as Schedule 3:
(a) CORPORATE EXISTENCE AND POWER; SUBSIDIARIES. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state in which it is incorporated, and has all corporate powers
required to carry on its business as now conducted. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not have a
Material Adverse Effect. For purposes of this Agreement, the term "MATERIAL
ADVERSE EFFECT" means, with respect to the Company, a material adverse effect on
the Company's condition (financial or other), business, properties, assets,
liabilities (including contingent liabilities), results of operations or current
prospects, taken as a whole. True and complete copies of the Company's
Certificate of Incorporation, as amended (the "CERTIFICATE"), and Bylaws, as
amended (the "BYLAWS"), as currently in effect and as will be in effect on the
Closing Date, have previously been made available to the Investor. For purposes
of this Agreement, the term "SUBSIDIARY" or "SUBSIDIARIES" means, with respect
to any entity, any corporation or other organization of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are
directly or indirectly owned by such entity or of which such entity is a partner
or is, directly or indirectly, the beneficial owner of 50% or more of any class
of equity securities or equivalent profit participation interests. The Company
has no Subsidiaries.
(b) CORPORATE AUTHORIZATION. The execution, delivery and performance by
the Company of this Agreement, the Registration Rights Agreement, the Warrants
and each of the other documents executed by the Company pursuant to and in
connection with this Agreement (collectively, the "TRANSACTION AGREEMENTS"), and
the consummation of the transactions contemplated hereby and thereby (including,
but not limited to, the sale and delivery of the Shares and the Warrants to the
Investor and the subsequent issuance of the Warrant Shares to the Investor upon
exercise of the Warrants) (the "TRANSACTIONS") have been (and will be, in the
case of the issuance of the Warrant Shares) duly authorized, and no additional
corporate or stockholder action is required for the approval thereof. The shares
issuable upon exercise of the Warrants (the "WARRANT SHARES") have been duly
reserved for issuance by the Company. The Transaction Agreements have been or,
to the extent contemplated hereby or by the Transaction Agreements, will be duly
executed and delivered and constitute the legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with their terms,
except as may be limited by bankruptcy, reorganization, insolvency, moratorium
and similar laws of general application relating to or affecting the enforcement
3
of rights of creditors, and except as enforceability of its obligations
hereunder are subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(c) NON-CONTRAVENTION. The execution, delivery and performance by the
Company of the Transaction Agreements, and the consummation by the Company of
the Transactions do not and will not (a) violate any term of the Certificate,
the Bylaws or any material agreement to which the Company is a party or by which
it is bound; (b) constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the Company;
(c) constitute a default (or would constitute a default with notice or lapse of
time or both) or breach under or give rise to a right of termination,
cancellation or acceleration or loss of any benefit under any material
agreement, contract or other instrument binding upon the Company or under any
material license, franchise, permit or other similar authorization held by the
Company; or (d) result in the creation or imposition of any Lien (as defined
below) on any asset of the Company. For purposes of this Agreement, the term
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, claim or encumbrance of any kind in respect of such asset.
(d) SEC DOCUMENTS. The Company is obligated under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), to file reports pursuant to
Sections 13 or 15(d) thereof (all such reports filed or required to be filed by
the Company with the Securities and Exchange Commission (the "COMMISSION"),
including all exhibits thereto or incorporated therein by reference, and all
documents filed by the Company under the Securities Act, hereinafter called the
"SEC DOCUMENTS"). Since December 31, 2002, the Company has timely filed all SEC
Documents required to be filed under the Exchange Act. All SEC Documents filed
on or after October 31, 2000 (i) were prepared in all material respects in
accordance with the requirements of the Exchange Act and (ii) did not at the
time they were filed (or, if amended or superseded by a filing prior to the
Agreement Date, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. A correct and complete
copy of each of the SEC Documents for any period ending on or after December 31,
2002 (the "RECENT REPORTS") is currently available to the Investor at the
Commission's main public website at
http://www.sec.gov/cgi-bin/browse-edgar?company=adventrx+pharma&CIK=&
filenum=&State=&SIC=&owner=include&action=getcompany. None of the information
about the Company or any of its Subsidiaries which has been disclosed to the
Investor herein or in the course of discussions and negotiations with respect
hereto which is not disclosed in the Recent Reports is or was required to be so
disclosed. There is no information which has not been publicly disclosed which,
in the good faith judgment of the Company, would cause a reasonable investor to
not make the investment contemplated hereby.
(e) FINANCIAL STATEMENTS. Each of the Company's audited consolidated
balance sheet and related consolidated statements of income, cash flows and
changes in stockholders' equity (including the related notes) as of and for the
years ended December 31, 2003 and December 31, 2002, as contained in the Recent
Reports (both of (i) and (ii), collectively, the "FINANCIAL STATEMENTS") (x)
present fairly in all material respects the financial position of the Company
and its Subsidiaries on a consolidated basis as of the dates thereof and the
4
results of operations, cash flows and stockholders' equity as of and for each of
the periods then ended and (y) were prepared in accordance with United States
generally accepted accounting principals ("GAAP") applied on a consistent basis
throughout the periods involved, in each case, except as otherwise indicated in
the notes thereto.
(f) COMPLIANCE WITH LAW. The Company is in compliance and has conducted
its business so as to comply with all laws, rules and regulations, judgments,
decrees or orders of any court, administrative agency, commission, regulatory
authority or other governmental authority or instrumentality, domestic or
foreign, applicable to its operations, the violation of which would cause a
Material Adverse Affect. There are no judgments or orders, injunctions, decrees,
stipulations or awards (whether rendered by a court or administrative agency or
by arbitration), including any such actions relating to affirmative action
claims or claims of discrimination, against the Company or against any of its
properties or businesses.
(g) ABSENCE OF CERTAIN CHANGES. Since December 31, 2003, the Company has
conducted its business only in the ordinary course and there has not occurred,
except as set forth in the Recent Reports or any exhibit thereto or incorporated
by reference therein, any event that could reasonably be expected to have a
Material Adverse Effect on the Company or any of its Subsidiaries.
(h) NO UNDISCLOSED LIABILITIES. Except as set forth in the Recent Reports,
and except for liabilities and obligations incurred in the ordinary course of
business since December 31, 2003, as of the Agreement Date, to the Company's
knowledge, (i) the Company does not have any material liabilities or obligations
(absolute, accrued, contingent or otherwise) which, and (ii) there has not been
any aspect of the prior or current conduct of the business of the Company or its
Subsidiaries which may form the basis for any material claim by any third party
which, in each case, if asserted could result in any such material liabilities
or obligations which are not fully reflected, reserved against or disclosed in
the balance sheet of the Company as at December 31, 2003.
(i) CAPITALIZATION. The authorized capital stock of the Company consists
of 100,000,000 shares of Common Stock of which 42,833,830 shares are issued and
42,810,665 are outstanding as of the Agreement Date and 1,000,000 shares of
preferred stock, par value $0.01 per share, of which none are issued and
outstanding as of the Agreement Date. All issued and outstanding shares of the
Company's capital stock have been duly authorized and were validly issued, and
are fully paid and nonassessable. No securities issued by the Company from
October 31, 2000 to the date hereof were issued in violation of any statutory or
common law preemptive rights. Upon issuance pursuant to the terms of this
Agreement or the Warrants, as the case may be, all Shares and Warrant Shares
shall be duly authorized, validly issued and outstanding, and fully paid and
nonassessable and such shares shall not have been issued in violation of any
statutory or contractual preemptive rights. There are no dividends which have
accrued or been declared but are unpaid on the capital stock of the Company. All
taxes required to be paid by Company in connection with the issuance and any
transfers of the Company's capital stock have been paid. All permits or
authorizations required to be obtained from or registrations required to be
effected with any person or entity in connection with any and all issuances of
securities of the Company from October 31, 2000 through the Agreement Date have
been obtained or effected, and all securities of the Company have been issued
5
and are held in accordance with the provisions of all applicable securities or
other laws. A true and complete capitalization table of the Company as of the
date hereof is set forth in Schedule 3(i). No shares of capital stock of the
Company are subject to preemptive rights or any other similar rights of the
stockholders of the Company or any liens or encumbrances imposed through the
actions or failure to act of the Company. Except as disclosed in Schedule 3(i),
as of the Agreement Date, (i) there are no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company, or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company, (ii) there are no agreements or arrangements under which the
Company is obligated to register the sale of any of its securities under the
Securities Act, other than as contemplated by the Contemporaneous Offering and
(iii) there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to security
holders) that will be triggered by the issuance of the Shares, Warrants or
Warrant Shares (including the issuance of the Warrant Shares upon exercise of
the Warrants).
(j) GOVERNMENT AUTHORIZATIONS. Except as disclosed in the Recent Reports,
the Company holds all material authorizations, consents, approvals, franchises,
licenses and permits required under applicable law or regulation for the
operation of the business of the Company as presently operated (the
"GOVERNMENTAL AUTHORIZATIONS"). All the Governmental Authorizations have been
duly issued or obtained and are in full force and effect, and the Company is in
material compliance with the terms of all the Governmental Authorizations. The
Company has not engaged in any activity that, to its knowledge, would cause
revocation or suspension of any such Governmental Authorizations. The Company
has no knowledge of any facts which could reasonably be expected to cause the
Company to believe that the Governmental Authorizations will not be renewed by
the appropriate governmental authorities in the ordinary course. Neither the
execution, delivery nor performance of this Agreement shall adversely affect the
status of any of the Governmental Authorizations.
(k) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement, based upon any arrangement made by
or on behalf of the Company, which would make the Company or the Investor liable
for any fees or commissions.
(l) SECURITIES LAWS. Neither the Company nor any agent acting on behalf of
the Company has taken any action (or will take any action, in the case of the
Warrant Shares) which might cause this Agreement or the Shares or Warrants (or
the Warrant Shares, as the case may be) to violate the Securities Act or the
Exchange Act or any rules or regulations promulgated thereunder, as in effect on
the Closing Date. Assuming that all of the representations and warranties of the
Investor set forth in Section 4 are true and correct, the offer, sale and
issuance of the Shares and Warrants in conformity with the terms of this
Agreement are (and, assuming there is no material change in the securities laws
of the United States, the issuance of the Warrant Shares in conformity with the
terms of the Warrants will be) exempt from the registration requirements of
Section 5 of the Securities Act and from the qualification or registration
requirements of applicable "blue sky" laws.
6
(m) ISSUANCE OF SHARES. The Shares are duly authorized and, upon issuance
in accordance with the terms of this Agreement will be validly issued, fully
paid, and non-assessable and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of stockholders of the Company and will not impose
personal liability on the holder thereof. The Warrant Shares are duly authorized
and reserved for issuance, and, when issued upon exercise of or otherwise
pursuant to the Warrants, respectively, in accordance with the terms thereof,
will be validly issued, fully paid and non-assessable, and free from all taxes,
liens, claims and encumbrances and will not be subject to preemptive rights or
other similar rights of stockholders of the Company and will not impose personal
liability upon the holder thereof.
(n) INTERNAL ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient, in the judgment of the Company's board
of directors, to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(o) NO INVESTMENT COMPANY. The Company is not, and upon the issuance and
sale of the Shares and Warrants as contemplated by this Agreement will not be,
an "investment company" required to be registered under the Investment Company
Act of 1940 (an "INVESTMENT COMPANY"). The Company is not controlled by an
Investment Company.
(p) SARBANES-OXLEY ACT. The Company is in substantial compliance with the
applicable provisions of the Sarbanes-Oxley Act of 2002 (the "SARBANES-OXLEY
ACT"), and the rules and regulations promulgated thereunder, that are effective
and intends to comply substantially with other applicable provisions of the
Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder, upon
the effectiveness of such provisions.
(q) INDEPENDENT NATURE OF THE INVESTOR. The Company acknowledges that the
obligations of the Investor under the Transaction Agreements are several and not
joint with the obligations of any other third party purchasers of the Company's
securities, and the Investor shall not be responsible in any way for the
performance of the obligations of any other third party purchasers of the
Company's securities. Each of the Investor and the Company agrees and
acknowledges that (i) the decision of the Investor to purchase the Shares and
the Warrants pursuant to this Agreement has been made (and the decision of the
Investor to purchase the Warrant Shares pursuant to the terms of the Warrant
will be made) by the Investor independently of any other third party purchasers
of the Company's securities and (ii) no other third party purchasers of the
Company's securities have acted as agent for the Investor in connection with the
Investor making its investment hereunder and that no such other third party
purchasers will be acting as agent of the Investor in connection with monitoring
its investment hereunder. Nothing contained herein or in any other Transaction
Agreement or any agreement of any such other third party purchaser, and no
action taken by the Investor pursuant hereto or any other third party purchaser
pursuant thereto, shall be deemed to constitute the Investor or any such other
7
third party purchasers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Investor or any such
other third party purchasers are in any way acting in concert or as a group with
respect to any matters. The Investor shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of any of the other Transaction Agreements, and it shall
not be necessary for any such other third party purchasers to be joined as an
additional party in any proceeding for such purpose. To the extent that any such
other third party purchasers purchase the same or similar securities as the
Investor hereunder or on the same or similar terms and conditions or pursuant to
the same or similar documents, all such matters are solely in the control of the
Company, not the action or decision of the Investor and are not done with the
knowledge of the Investor hereunder, and would be solely for the convenience of
the Company and not because it was required or requested to do so by the
Investor or any such other third party purchaser.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants to the Company as follows:
(a) EXEMPT TRANSACTION; UNREGISTERED SHARES AND WARRANTS. The Investor
understands that the Shares and Warrants are being offered and sold in reliance
on one or more exemptions from registration provided for under the Securities
Act, and that the Company's reliance upon such exemptions is predicated, in
part, upon the Investor's representations and warranties set forth in this
Agreement. The Investor acknowledges that it is purchasing the Shares and
Warrants without being offered or furnished any offering literature or
prospectus. The Investor understands that neither the Commission, nor any
governmental agency charged with the administration of the securities laws of
any jurisdiction nor any other governmental agency has passed upon or reviewed
the merits or qualifications of, or recommended or approved the offer and sale
of the Shares and Warrants pursuant to the terms of this Agreement.
(b) INVESTMENT INTENT; ACCREDITATION; AUTHORITY. The Investor is acquiring
the Shares and Warrants for investment for the Investor's own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act; provided, however, that by making the representations
herein, the Investor reserves the right to dispose of the Shares, Warrants or
Warrant Shares at any time in accordance with this Agreement or the Warrant, as
applicable, and in accordance with or pursuant to a registration statement or an
exemption from registration under the Securities Act. The Investor is an
"accredited investor" within the meaning of the Securities Act. The Investor has
the full right, power, authority and capacity to enter into and perform this
Agreement, the terms of this Agreement constitute valid and binding obligations
of the Investor enforceable in accordance with their terms, except as the same
may be limited by equitable principles and by bankruptcy, insolvency,
moratorium, and other laws of general application affecting the enforcement of
creditors' rights.
(c) KNOWLEDGE AND EXPERIENCE. The Investor (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the Investor's prospective investment in the Shares and
Warrants; (ii) has the ability to bear the economic risks of the Investor's
8
prospective investment; (iii) has been furnished with and has had access to such
information as the Investor has considered necessary to make a determination as
to the purchase of the Shares and Warrants together with such additional
information as is necessary to verify the accuracy of the information supplied;
and (iv) has had all questions which have been asked by the Investor
satisfactorily answered by the Company.
(d) RESTRICTED SECURITIES. The Investor understands that the Shares and
Warrants are "restricted securities" as such term is defined in Rule 144 of
Regulation D promulgated under the Securities Act ("RULE 144") and must be held
indefinitely unless they are subsequently registered or qualified under
applicable state and federal securities laws or an exemption from such
registration or qualification is available. Except as contemplated by the
Registration Rights Agreement, the Investor understands that it may resell the
Shares and Warrant Shares pursuant to Rule 144 only after the satisfaction of
certain requirements, including the requirement that the Shares and Warrants
Shares be held for at least one year prior to resale.
(e) NO OBLIGATION TO REGISTER. The Investor further acknowledges and
understands that, except as provided in the Registration Rights Agreement, the
Company is under no obligation to register the Shares, Warrants or Warrant
Shares. The Investor understands that the certificate evidencing the Shares,
Warrants and Warrant Shares will be imprinted with a legend which prohibits the
transfer of the Shares, Warrants and Warrant Shares unless they are registered
or such registration is not required in the opinion of counsel in form and
substance satisfactory to the Company.
(f) FOREIGN INVESTOR REPRESENTATION. The Investor is not a "U.S. person"
(as such term is defined in Rule 902(k) of Regulation S promulgated under the
Securities Act), and the Investor hereby represents that it has satisfied itself
as to the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares and Warrants or any use of this
Agreement, including (i) the legal requirements within its jurisdiction for the
purchase of the Shares and Warrants, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may
need to be obtained, and (iv) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale or transfer of
the Shares and Warrants. The Investor's subscription and payment for, and its
continued beneficial ownership of the Shares and Warrants, will not violate any
applicable securities or other laws of its jurisdiction.
(g) DOMICILE. The Investor is a Cayman Islands corporation and has no
offices located in the United States.
(h) NO NEED FOR LIQUIDITY. The Investor's aggregate holding of securities
that are "restricted securities" or otherwise not readily marketable is not
excessive in view of the Investor's net worth and financial circumstances and
the purchase of the Shares and Warrants will not cause such commitment to become
excessive.
(i) INDEPENDENT ADVICE. The Investor understands that the Company urges
the Investor to seek independent advice from professional advisors relating to
the suitability for the Investor of an investment in the Company in view of the
9
Investor's overall financial needs and with respect to legal and tax
implications of such an investment.
5. RELIANCE. The Investor understands that the Company may rely on the
representations and warranties in Section 4 in determining whether to permit the
Investor to purchase the Shares and Warrants. If for any reason any
representations and warranties are no longer true and accurate prior to the
Closing Date, the Investor will give the Company prompt written notice of the
inaccuracy. By signing below, the Investor represents that the Investor has read
and confirmed the truth and accuracy of each of the foregoing representations
and warranties.
6. ADDITIONAL COVENANTS OF THE PARTIES.
(a) INDEMNIFICATION. Each party (an "indemnifying party") agrees to
indemnify and hold harmless the other party hereto and each of its directors,
officers, members, managers, agents and affiliates (as applicable) from and
against any and all loss, damage or liability due to or arising out of a breach
by such indemnifying party of any representation, warranty or covenant contained
in this Agreement and made by such indemnifying party. The liability of the
Investor to provide indemnification pursuant to this Section 6 shall be limited
in the aggregate to $375,000.
(b) PLEDGE OF SECURITIES. The Company acknowledges and agrees that the
Shares, Warrants and Warrant Shares may be pledged by the Investor in connection
with a bona fide margin agreement or other loan or financing arrangement that is
secured by the Shares Warrants or Warrant Shares. The pledge of the Shares,
Warrants or Warrant Shares shall not be deemed to be a transfer, sale or
assignment of the Shares, Warrants or Warrant Shares hereunder, and the Investor
shall not be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Agreement. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Shares, Warrants or Warrant Shares may
reasonably request in connection with a pledge of the thereof to such pledgee by
the Investor.
(c) SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall (i) if
required by applicable law, on or promptly after the Closing Date issue a press
release disclosing the transactions contemplated hereby, and (ii) promptly after
the Closing Date, file with the Commission a Report on Form 8-K disclosing the
transactions contemplated hereby. Except as provided in the preceding sentence,
neither the Company nor the Investor shall make any press release or other
publicity about the terms of this Agreement or the transactions contemplated
hereby without the prior approval of the other unless otherwise required by law,
regulation or the rules of the Commission. In addition, the Company agrees that
it shall not disclose, and shall not include in any public filing or other
announcement, the name of the Investor, unless expressly agreed to in writing by
the Investor or unless and until such disclosure is, in the reasonable opinion
of counsel to the Company, required by law or applicable regulation, and then
only to the extent of such requirement.
(d) LISTING. The Company shall promptly secure the listing of the Shares
and Warrant Shares (and any Registrable Securities (as defined in the
Registration Rights Agreement) that may from time to time be issued or issuable)
upon each national securities exchange or automated quotation system or bulletin
10
board, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and, so long as the Investor owns any of the
Registrable Securities (as defined in the Registration Rights Agreement), shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Shares issued pursuant to this Agreement and Warrant Shares
issuable upon exercise of or otherwise pursuant to the Warrants, and any
Registrable Securities (as defined in the Registration Rights Agreement) that
may from time to time be issued or issuable. To the extent that any Common Stock
is so listed, the Company will obtain and, so long as the Investor owns any of
the Registrable Securities (as defined in the Registration Rights Agreement),
maintain the listing and trading of its Common Stock on the Nasdaq SmallCap, the
Nasdaq National Market, the New York Stock Exchange, or the American Stock
Exchange and will comply in all respects with the Company's reporting, filing
and other obligations under the bylaws or rules of any exchanges or automated
quotation systems on which the Common Stock is then listed.
7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGEND. The instruments representing the Shares, Warrants and, if
applicable, Warrant Shares shall bear the following legend or similar legend (as
well as any legends required by applicable corporate law and state and federal
securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend
endorsed on a certificate pursuant to this Section 7 shall be
removed, and the Company shall issue a certificate without such
legend to the holder of such Shares, Warrants or Warrant Shares, as
applicable, if (i) such Shares or Warrant Shares are resold pursuant
to a registration statement under the Securities Act, and a
prospectus meeting the requirements of Section 11 of the Securities
Act is delivered or deemed delivered to the purchaser of such Shares
or Warrant Shares, (ii) if such holder satisfies the requirements of
Rule 144(k) or (iii) if such holder provides the Company with an
opinion of counsel for such holder of the Shares, Warrants or
Warrant Shares, reasonably satisfactory to the Company, to the
effect that a sale, transfer or assignment of such Shares, Warrants
or Warrant Shares may be made without registration.
8. PRICE PROTECTION. If the Company issues or sells any shares of
its Common Stock or Common Stock Equivalents, other than Excluded
Shares (as that term is defined below) ("ADDITIONAL SHARES") at any
time after the Closing Date and prior to June 30, 2004 (the
"ADJUSTMENT PERIOD") for a consideration per share (as to any such
issuance, the "DILUTIVE PRICE") (a) less than the Share Price (as
adjusted for stock splits, stock dividends and the like) and (b) if
11
Additional Shares have been previously issued during the Adjustment
Period with respect to which the Company has fully complied with
this Section 8, then also less than the lowest Dilutive Price (as
adjusted for stock splits, stock dividends and the like) at which
such Additional Shares have been previously issued during the
Adjustment Period, then the Company will issue to each Investor a
number of shares, if positive, of Common Stock to such Investor
determined by the following formula:
X = (A * B / C) - (A + D)
Where: X = the number of shares of Common Stock to
be issued to the Investor, rounded to
the nearest whole number;
A = the number of Shares (as adjusted for
stock splits, stock dividends and the
like) then held by the Investor;
B = the Share Price (as adjusted for stock
splits, stock dividends and the like);
C = the applicable Dilutive Price; and
D = the aggregate number of shares of Common
Stock (as adjusted for stock splits,
stock dividends and the like) issued to
the Investor pursuant to this Section 8
prior to the date of such determination.
For purposes of this Agreement, the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the Agreement Date, (b) conversion of shares of the
Company's Preferred Stock, par value $0.01 per share outstanding on the
Agreement Date or (c) exchange of promissory notes issued by the Company
outstanding on the Agreement Date; (iv) capital stock or warrants or options to
purchase capital stock issued in connection with bona fide acquisitions, mergers
or similar transactions, the terms of which are approved by the Board; (v)
shares of Common Stock issued or issuable to licensors of technology of the
Company to pay expenses, royalties or milestone payments for which the Company
is obligated under any licensing or related agreement; (vi) shares of Common
Stock issuable or issued pursuant to stock splits, stock dividends and the like,
or (vii) shares of Common Stock issued or issuable by way of dividend or other
distribution on any shares of Common Stock issued pursuant to clauses (i)- (vi)
above.
12
If the Company shall issue or sell any warrants or other rights to subscribe for
or purchase any additional shares of Common Stock or any securities convertible
into shares of Common Stock (collectively, "COMMON STOCK EQUIVALENTS") during
the Adjustment Period, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the effective price per share for
which Common Stock is issuable upon the exercise, exchange or conversion of such
Common Stock Equivalents shall be less than (i) the Share Price (as adjusted for
stock splits, stock dividends and the like) and (ii) if Additional Shares have
been previously issued during the Adjustment Period with respect to which the
Company has fully complied with this Section 8, then also less than the lowest
Dilutive Price (as adjusted for stock splits, stock dividends and the like) at
which such Additional Shares have been previously issued during the Adjustment
Period, then the Company shall issue to the Investor that number of shares of
Common Stock that would be issuable pursuant to this Section 8 on the basis that
the maximum number of additional shares of Common Stock issuable pursuant to all
such Common Stock Equivalents shall be deemed to have been issued and
outstanding and the Company shall have received all of the consideration payable
therefor, if any, as of the date of the actual issuance of such Common Stock
Equivalents. No further issuances shall be made under this Section 8 upon the
actual issue of such Common Stock upon the exercise, conversion or exchange of
such Common Stock Equivalents, unless such actual issue is at a per share
consideration lower than the Dilutive Price used for purposes of the initial
adjustment pursuant to this Section 8.
9. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement, all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the state of
California, without giving effect to principles of choice of law, except that
corporate matters shall be governed by Delaware law.
(b) JURISDICTION AND VENUE. Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
shall be brought or otherwise commenced in any state or federal court located in
the County of San Diego, California. Each party to this Agreement: (i) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the County of San Diego, California and each appellate
court located in the state of California, in connection with any such legal
proceeding; (ii) agrees that each state and federal court located in the County
of San Diego, California shall be deemed to be a convenient forum; and (iii)
agrees not to assert, by way of motion, as a defense or otherwise, in any such
legal proceeding commenced in any state or federal court located in the County
of San Diego, California any claim that such party is not subject personally to
the jurisdiction of such court, that such legal proceeding has been brought in
an inconvenient forum, that the venue of such proceeding is improper or that
this Agreement or the subject matter of this Agreement may not be enforced in or
by such court.
(c) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
13
(D) NOTICES. All notices and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person or facsimile transmission (received at the
facsimile machine to which it is transmitted prior to 5:00 p.m., local
time, on a business day in the State of California, for the party to which
it is sent), by courier or express delivery service or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this
Section):
if to the Company: ADVENTRX Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
Attention: Nicholas J. Virca
Facsimile: (858) 271-9678
with a copy to (not to constitute notice): Bingham McCutchen LLP
3 Embarcadero Center
San Francisco, CA 94111-4067
Attention: Henry D. Evans, Jr.
Facsimile: (415) 393-2286
if to the Investor: CD Investment Partners, Ltd.
c/o CD Capital Management LLC
Two North Riverside Plaza
Suite 600
Chicago, Illinois 60601
Attn: John Ziegelman
Facsimile: (312) 559-1288
with a copy to (not to constitute notice): Greenberg Traurig, LLP
77 West Wacker
Suite 2500
Chicago, Illinois 60601
Attn: Peter H. Lieberman and Todd A . Mazur
Facsimile: (312) 456-8435
(e) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended,
waived or departed from only with the written consent of the Company and the
Investor. No such waiver or consent shall be deemed to be or shall constitute a
waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
(f) SUCCESSORS AND ASSIGNS. This Agreement is personal to each of the
parties and may not be assigned without the written consent of the other party;
provided, however, that the Investor shall be permitted to assign this Agreement
14
to any person to whom it assigns or transfers securities issued or issuable
pursuant to this Agreement in compliance with applicable securities laws and
this Agreement. Any assignee must be an "accredited investor" as defined in Rule
501(a) promulgated under the Securities Act.
(g) SEVERABILITY. In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained in this
Agreement shall be unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it enforceable, and as so
limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
(h) INTERPRETATION. The parties hereto acknowledge and agree that: (i)
each party and such party's counsel has reviewed the terms and provisions of
this Agreement; (ii) the rule of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to the parties hereto and not in favor of
or against any party, regardless of which party was generally responsible for
the preparation of this Agreement. Whenever used herein, the singular number
shall include the plural, the plural shall include the singular, the use of any
gender shall include all persons.
(i) HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify, or affect the meaning or construction of any of the terms or
provisions hereof.
(j) NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a
party hereto in exercising any right, power or remedy under this Agreement, and
no course of dealing between the parties hereto, shall operate as a waiver of
any such right, power or remedy of the party. No single or partial exercise of
any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
(k) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the parties hereto in this Agreement, shall survive (i) the
execution and delivery hereof, (ii) any investigations made by or on behalf of
the parties and (iii) the closing of the transaction contemplated hereby.
(l) EXPENSES. Except as otherwise provided in any other Transaction
Agreement, the Company and the Investor shall each be responsible for the
payment of and bear their own expenses and legal fees relating to the
preparation and negotiation of the Transaction Agreements and the consummation
of the Transactions.
15
(m) COUNTERPARTS AND FACSIMILE DELIVERY. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature page
delivered by facsimile or other electronic image transmission shall be binding
to the same extent as an original signature page, with regard to any agreement
subject to the terms hereof or any amendment thereto. Any party who delivers
such a signature page agrees to later deliver an original counterpart to any
party who requests it.
(n) SECURITIES LAW COMPLIANCE.
(i) SECURITIES ACT. The Company shall timely prepare and file with the
Commission the form of notice of the sale of securities pursuant to
the requirements of Regulation D regarding the sale of the Shares and
Warrants under this Agreement.
(ii) STATE SECURITIES LAW COMPLIANCE -- SALE. The Company shall timely
prepare and file such applications, consents to service of process
(but not including a general consent to service of process) and
similar documents and take such other steps and perform such further
acts as shall be required by the State of Illinois, with respect to
the sale of the Shares and Warrants under this Agreement.
(iii) STATE SECURITIES LAW COMPLIANCE --RESALE. Beginning no later
than June 30, 2004 and continuing until (i) the Investor has sold all
of its Registrable Securities under a Registration Statement or (ii)
the Common Stock becomes a "covered security" under Section
18(b)(1)(A) of the Securities Act, the Company shall maintain within
either Moody's Industrial Manual or Standard and Poor's Standard
Corporation Descriptions (or any successors to these manuals which are
similarly qualified as "recognized securities manuals" under state
Blue Sky laws) an updated listing containing (i) the names of the
officers and directors of the Company, (ii) a balance sheet of the
Company as of a date that is at no time older than eighteen months and
(iii) a profit and loss statement of the Company for either the
preceding fiscal year or the most recent year of operations.
Capitalized terms used in this Section 10(n)(iii), but not otherwise
defined in this Agreement, shall have the meanings assigned in the
Registration Rights Agreement.
(o) INDEPENDENT NATURE OF THE INVESTOR'S OBLIGATIONS AND RIGHTS. The
obligations of the Investor under the Transaction Agreements are several and not
joint with the obligations of any other third party purchaser of the Company's
securities, and the Investor shall not be responsible in any way for the
performance of the obligations of any other third party purchaser. Each of the
Investor and the Company agrees and acknowledges that (i) the decision of the
Investor to purchase securities pursuant to this Agreement has been made by the
Investor independently of any other third party purchasers of the Company's
securities and (ii) no other third party purchasers of the Company's securities
have acted as agent for the Investor in connection with the Investor making its
investment hereunder and that no such other third party purchasers will be
16
acting as agent of the Investor in connection with monitoring its investment
hereunder. Nothing contained herein or in any Transaction Agreement or any
agreement of any such other third party purchaser, and no action taken by the
Investor pursuant hereto or any other third party purchaser pursuant thereto,
shall be deemed to constitute the Investor or any other third party purchasers
as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Investor and any other third party purchaser
are in any way acting in concert or as a group with respect to any matters. The
Investor shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of the Transaction
Agreements, and it shall not be necessary for any other third party purchaser to
be joined as an additional party in any proceeding for such purpose. To the
extent that any such other third party purchasers purchase the same or similar
securities as the Investor hereunder or on the same or similar terms and
conditions or pursuant to the same or similar documents, all such matters are
solely in the control of the Company, not the action or decision of the Investor
and are not done with the knowledge of the Investor hereunder, and would be
solely for the convenience of the Company and not because it was required or
requested to do so by the Investor or any such other third party purchaser.
[Signature page follows.]
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Nicholas J. Virca
Name: Nicholas J. Virca
Title: President
CD INVESTMENT PARTNERS, LTD.
By: CD Capital Management LLC
Its: Investment Manager
By: /s/ John Zeigelman
Name: John Zeigelman
Title: President
SCHEDULE 3
DISCLOSURE SCHEDULE
EXHIBIT A-1
Form of A-1 Common Stock Purchase Warrant
EXHIBIT A-2
Form of A-2 Common Stock Purchase Warrant
EXHIBIT B
Form of Registration Rights Agreement
EXHIBIT C
Form of Opinion of Company's Counsel
EXHIBIT D
INVESTOR SUITABILITY QUESTIONNAIRE
ADVENTRX PHARMACEUTICALS, INC. (THE "COMPANY")
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
A. ENTITY NAME AND CONTACT INFORMATION
Name:
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(Exact name as it should appear on stock certificate.)
Name of Institution or Destination: ___________________________________
(Include if different from
stock certificate.)
Address:
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Account Reference (if applicable): ____________________________________
Tax Identification Number (if applicable):
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Contact Name:
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Contact Telephone Number:
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Contact Fax Number: ___________________________________________________
Contact Email Address:
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B. GENERAL INFORMATION
Under the laws of what jurisdiction was the Investor formed?
Was the Investor formed for the purpose of investing in the securities
being offered?
Yes _____ No _____
Set forth in the space provided below the (i) state(s), if any, in the
United States in which you maintained your principal office during the
past two years and the dates during which you maintained your office in
each state, (ii) the state(s), if any, in which you are incorporated or
otherwise organized, and (iii) the state(s), if any, in which you still
pay income taxes:
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C. ACCREDITED INVESTOR INFORMATION
(i) Is the Investor a national bank or a banking institution organized
under the laws of any state or any territory of the United States or
the District of Columbia?
Yes _____ No _____
(ii) Is the Investor a savings and loan association, building and loan
association, cooperative bank, homestead association, or similar
institution, which is supervised and examined by any state or federal
authority having supervision over such institution?
Yes _____ No _____
(iii) Is the Investor a broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934?
Yes _____ No _____
(iv) Is the Investor a company (i) whose primary and predominant
business is underwriting insurance and subject to the supervision by a
regulatory agency under the laws of any state or territory, or (ii)
registered as an investment company under the Investment Company Act of
1940, or (iii) a Small Business Investment Company licensed by the U.S.
Small Business Administration?
Yes _____ No _____
(v) Is the Investor a "business development company" within the meaning
of the Investment Company Act of 1940 or the Investment Advisers Act of
1940?
Yes _____ No _____
(vi) Is the Investor an employee benefit plan under the Employee
Retirement Income Security Act of 1974 (a "PLAN") with assets in excess
of $5,000,000?
Yes _____ No _____
(a) If the Investor is such a Plan, but if the Plan's total
assets do not exceed $5,000,000, are investment decisions for
the Plan made by a bank, savings and loan association,
insurance company or registered investment adviser acting as
fiduciary? (If yes, please specify the name of the fiduciary.)
Yes _____ No _____
Name of Fiduciary:
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(b) If the Investor is a self-directed Plan, but if the Plan's
total assets do not exceed $5,000,000, are investment
decisions made solely by (1) a person or entity that can
answer "yes" to one or more questions under paragraphs (i) -
(ix) of this Item C; (2) persons whose net worth, or joint net
worth with their spouses, exceeds $1,000,000; (3) persons
whose income without regard to that of their spouses exceeded
$200,000, or whose joint income with their spouses exceeded
$300,000, in each of the last two years and who reasonably
expect such person income to exceed $200,000 or such joint
income to exceed $300,000 this year; or (4) persons who are
brokers or dealers registered pursuant to Section 15 of the
Securities Exchange Act of 1934? (If yes, please specify the
applicable subpart of this question or Item.)
Yes _____ No _____
Subpart or Item: ___________
(vii) Is the Investor (A)(1) a tax exempt organization which is
qualified under Section 501(c)(3) of the Internal Revenue Code of 1986
as amended, or (2) a corporation, or (3) a Massachusetts or similar
business trust, or (4) a partnership, not formed for the specific
purpose of acquiring the securities offered, and (B) which has assets
in excess of $5,000,000?
Yes _____ No _____
(viii) Is the Investor a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a person who has such
knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment?
Yes _____ No _____
If yes, please attach a memorandum describing such person's
educational background, professional memberships or licenses,
current employment, principal business and professional
activities during the last five years, and experience as an
investor in securities. Include any additional information
evidencing that such person has sufficient knowledge and
experience in financial matters that such person would be
capable of evaluating the merits and risks of investing in the
securities being offered.
(ix) Is the Investor an entity in which all of the equity owners are
persons who are either (1) entities described in paragraphs (i) through
(viii) above; (2) persons whose net worth, or joint net worth with
their spouses, exceeds $1,000,000; (3) persons whose income without
regard to that of their spouses exceeded $200,000, or whose joint
income with their spouses exceeded $300,000, in each of the last two
years and who reasonably expect such person income to exceed $200,000
or such joint income to exceed $300,000 this year; or (4) persons who
are brokers or dealers registered pursuant to Section 15 of the
Securities Exchange Act of 1934?
Yes _____ No _____
If an equity owner is an entity described in paragraph (vi)
under this Item C, please provide the information required by
such paragraph.
The above information has been requested by the Company and will be used
solely to confirm that the Company is complying with certain securities
regulations. In furnishing the above information, the undersigned acknowledges
that the Company will be relying thereon in assessing the requirements of the
Securities Act of 1933, as amended, and other applicable securities laws.
The information contained in this questionnaire is true and complete,
and the undersigned understands that the Company and its counsel will rely on
such information for the purpose of complying with all applicable securities
laws, as discussed above. The undersigned agrees to notify the Company promptly
of any change in the foregoing information which may occur prior to any purchase
by the undersigned of stock from the Company.
Date:
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ENTITY INVESTOR:
By:
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(signature)
Name:
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(please print)
Title:
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(please print)
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS.
NO. WA1- ISSUED: APRIL 8, 2004
A-1 WARRANT TO PURCHASE COMMON STOCK
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THIS CERTIFIES THAT, for good and valuable consideration, ___________ (the
"HOLDER") is entitled to purchase from Adventrx Pharmaceuticals, Inc., a
Delaware corporation (the "COMPANY"), [30% Coverage]_______________ (________)
fully paid and nonassessable shares of Common Stock, par value $0.001 per share
("COMMON STOCK"), of the Company (as adjusted pursuant to Section 3 hereof) (the
"WARRANT SHARES") at a price per share equal to Two Dollars ($2.00) (as adjusted
pursuant to Section 3 hereof) (the "EXERCISE PRICE"), subject to the provisions
and upon the terms and conditions hereinafter set forth.
1. METHOD OF EXERCISE; PAYMENT.
(a) Exercise Period. The purchase right represented by this Warrant may be
exercised in whole or part by the Holder during the term of this Warrant (as set
forth in Section 9 hereof) at any time after the Commencement Date, as defined
below, by the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A (the "NOTICE OF EXERCISE") duly executed) at the
principal office of the Company. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price multiplied by
(y) the total number of Warrant Shares purchased pursuant to this Warrant, by
wire transfer or certified check payable to the order of the Company or, at any
time following the first anniversary of the Warrant Date, if there is not an
effective Registration Statement (as defined in the Registration Rights
Agreement) with respect to all of the Warrant Shares, then at the option
of the Holder, such amount may be paid by the surrender of a portion of shares
of Common Stock then held by the Holder or issuable upon such exercise of this
Warrant, which shall be valued and credited toward such amount due to the
Company for the exercise of the Warrant based upon the Current Market Price of
the Common Stock. The person or persons in whose name(s) any certificate(s)
representing the Warrant Shares shall be issuable upon exercise of this Warrant
shall be deemed to have become the holder(s) of record of, and shall be treated
for all purposes as the record holder(s) of, the Warrant Shares represented
thereby (and such Warrant Shares shall be deemed to have been issued)
immediately prior to the close of business on the date upon which this Warrant
is exercised.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock on
any date herein specified,
(1) if there shall not then be a public market for the Common Stock, the
higher of
(a) the book value per share of Common Stock at such date, and
(b) the value per share of Common Stock at such date as determined
in good faith by the Board,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 10 consecutive trading days
immediately before such date. The daily market price (the "DAILY MARKET PRICE")
for each such trading day shall be (i) the closing price on such day on the
principal stock exchange (including Nasdaq) on which such Common Stock is then
listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
place on such day on any such exchange, the last reported closing price on such
day as officially quoted on any such exchange (including Nasdaq), (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the last reported closing bid price on such day in the over-the-counter market,
as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. (the "NASD") selected mutually by the holder of this
Warrant and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
holder of this Warrant and one of which shall be selected by the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time after exercise, but in no case later than the
date that is three business days following receipt by the Company of a Notice of
Exercise duly completed and executed.
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all preemptive rights, rights of first
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refusal or first offer, taxes, liens and charges with respect to the issuance
thereof. During the period within which the rights represented by this Warrant
may be exercised, the Company shall at all times have authorized and reserved
for issuance a sufficient number of shares of its Common Stock to provide for
the exercise of the rights represented by this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a Change of
Control, as defined below) (any of which is a "REORGANIZATION TRANSACTION"), the
Company, or such successor corporation as the case may be, shall execute a new
warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant Shares theretofore issuable upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property as would be payable for the Warrant Shares issuable upon exercise
of this Warrant as if such Warrant Shares were outstanding on the consummation
of the Reorganization Transaction. For purposes of this Warrant, the term
"CHANGE OF CONTROL" shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or parent (other than a reincorporation transaction or change of
domicile) and pursuant to which the holders of the outstanding voting securities
of the Company immediately prior to such consolidation, merger or other
transaction fail to hold equity securities representing a majority of the voting
power of the Company or surviving entity immediately following such
consolidation, merger or other transaction (excluding voting securities of the
acquiring corporation held by such holders prior to such transaction) or (ii) a
sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.
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(c) Issuance of Additional Shares.
(i) If at any time while this Warrant is outstanding and after June
30, 2004, the Company shall issue or sell any shares of its Common
Stock (other than Excluded Shares (as that term is defined below),
"ADDITIONAL SHARES") in exchange for consideration in an amount per
Additional Share less than the Exercise Price at the time the
Additional Shares are issued or sold, then the Exercise Price
immediately prior to such issue or sale shall be reduced to a price
determined by dividing:
(1) an amount equal to the sum of (a) the number of shares of Common
Stock outstanding immediately prior to such issue or sale multiplied
by the then existing Exercise Price, plus (b) the consideration, if
any, received by the Company upon such issue or sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(ii) The provisions of Section 3(c)(i) shall not apply to any deemed
issuance of Additional Shares for which an adjustment is provided
under Section 3(a) or 3(b). No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made
under Section 3(c) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities, if any
such adjustment shall previously have been made upon the issuance of
such warrants or other rights or upon the issuance of such convertible
securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 3(d).
For purposes of this Warrant the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the issuance date of this Warrant (the "WARRANT
DATE"), (b) conversion of shares of the Company's Preferred Stock, par value
$0.01 per share, outstanding on the Warrant Date, (c) exchange of promissory
notes issued by the Company outstanding on the Warrant Date, (iv) the Shares (as
such term is defined Common Stock and Warrant Purchase Agreement, dated as of
the Warrant Date, among the Company and the persons and entities listed on
Schedule 1 thereto (the "PURCHASE AGREEMENT")); (v) the Warrants (as such term
is defined in the Purchase Agreement); (vi) capital stock or warrants or options
to purchase capital stock issued in connection with bona fide acquisitions,
mergers or similar transactions, the terms of which are approved by the Board;
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shares of Common Stock issued or issuable to licensors of technology of the
Company to pay expenses, royalties or milestone payments for which the Company
is obligated under any licensing or related agreement; (viii) shares of Common
Stock issuable or issued pursuant to stock splits, stock dividends and the like,
or (ix) shares of Common Stock issued or issuable by way of dividend or other
distribution on Excluded Shares.
(d) Issuance of Common Stock Equivalents.
(i) If at any time while this Warrant is outstanding the Company shall
issue or sell any warrants or other rights to subscribe for or
purchase any additional shares of Common Stock or any securities
convertible into shares of Common Stock (other than the Additional
Shares) (collectively, "COMMON STOCK EQUIVALENTS"), whether or not the
rights to exchange or convert thereunder are immediately exercisable,
and the effective price per share for which Common Stock is issuable
upon the exercise, exchange or conversion of such Common Stock
Equivalents shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the Exercise
Price shall be adjusted as provided in Section 3(c) on the basis that
the maximum number of additional shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have
been issued and outstanding and the Company shall have received all of
the consideration payable therefor, if any, as of the date of the
actual issuance of such Common Stock Equivalents. No further
adjustments to the current Warrant Price shall be made under this
Section 3(d) upon the actual issue of such Common Stock upon the
exercise, conversion or exchange of such Common Stock Equivalents.
(ii) Upon the expiration or termination of any such Common Stock
Equivalents, the Exercise Price, to the extent in any way affected by
or computed using such Common Stock Equivalents, shall be recomputed
to reflect the issuance of the total number of shares of Common Stock
(and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise, exchange or conversion of such
Common Stock Equivalents to the extent that this Warrant is then
outstanding.
(e) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than the payment of dividends permitted by Section 3 or any other action
described in Section 3, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock into which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Exercise Price, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and
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showing in detail the facts upon which such adjustment or readjustment is based.
The Company shall, upon the written request at any time of the Holder of this
Warrant, furnish or cause to be furnished to such Holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the Exercise Price at
the time in effect and (iii) the number of shares of Common Stock and the
amount, if any, or other property which at the time would be received upon the
exercise of Warrants owned by such Holder.
(g) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a
cash dividend payable out of earnings or earned surplus legally
available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Company) or other distribution,
or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger of the Company with, or any
sale, transfer or other disposition of all or substantially all the
property, assets or business of the Company to, another corporation,
or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 10-days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10-days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
(h) Adjustment if Registration Statement Not Effective. If a Registration
Statement (as defined in the Registration Rights Agreement, dated as of the
Warrant Date, among the Company and the persons and entities listed on Schedule
1 thereto (the "REGISTRATION RIGHTS
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AGREEMENT")) is not effective with respect to all the Registrable Securities (as
defined in the Registration Rights Agreement), other than Regisrtable Securities
held by holders (i) which have not complied with the Registration Rights
Agreement, including, without limitation, Section 4 thereof, or (ii) have
otherwise not permitted the Company to include such Registrable Securities on
the Registration Statement, on or prior to November 12, 2004, then the Exercise
Price shall be adjusted to equal $1.50 (subject to adjustment for stock splits,
reverse splits, stock dividends and the like, and subject to adjustment in
proportion to any adjustment pursuant to Section 3(c)).
4. TRANSFER OF WARRANT. This Warrant may only be transferred in compliance with
federal and state securities laws; provided, however, that the Company may
withhold its consent to transfer or assignment of this Warrant to any person or
entity who is deemed to be a competitor or prospective competitor of the
Company, such determination to be made in the reasonable judgment of the Board.
If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Stock, this Warrant or the Warrant
Stock, as applicable, shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant or the Warrant Stock as the case may be,
furnish to the Company a written opinion of counsel that is reasonably
acceptable to the Company to the effect that such transfer may be made without
registration under the Securities Act, (ii) that the Holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and substantially in the form attached as Exhibit B
hereto and (iii) that the transferee be an "accredited investor" as defined in
Rule 501(a) promulgated under the Securities Act. Transfer of this Warrant and
all rights hereunder, in whole or in part, in accordance with the foregoing
provisions, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company or the office or agency designated by the Company, together with a
written assignment of this Warrant substantially in the form of Exhibit C hereto
duly executed by the Holder or its attorney-in-fact 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 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. Following a transfer that complies
with the requirements of this Section 4, the Warrant may be exercised by a new
Holder for the purchase of shares of Common Stock regardless of whether the
Company issued or registered a new Warrant on the books of the Company. This
Section 4 shall survive the exercise or expiration of the Warrant.
5. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of
this Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED
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UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
IN COMPLIANCE THEREWITH.
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 5 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act of 1933, as amended, and a prospectus meeting the
requirements of Section 10 of the Securities Act is delivered or deemed
delivered to the purchaser of such Warrant Shares, (ii) if such holder satisfies
the requirements of Rule 144(k) or (iii) if such holder provides the Company
with an opinion of counsel for such holder of the Warrant Shares, reasonably
satisfactory to the Company, to the effect that a sale, transfer or assignment
of such Warrant Shares may be made without registration. This paragraph shall
survive any exercise of this Warrant.
(c) RESTRICTIONS ON EXERCISE AMOUNT. Unless a Holder delivers to the
Company irrevocable written notice (x) prior to the date of issuance hereof or
61 days prior to the effective date of such notice that this Section 5(c) shall
not apply to such Holder or (y) prior to a Change of Control, the Holder may not
acquire a number of Warrant Shares to the extent that, upon such exercise, the
number of shares of Common Stock then beneficially owned by such Holder and its
affiliates and any other persons or entities whose beneficial ownership of
Common Stock would be aggregated with the Holder's for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 9.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities Exchange
Commission (the "COMMISSION"), and the percentage held by the holder shall be
determined in a manner consistent with the provisions of Section 13(d) of the
Exchange Act. Each delivery of a notice of exercise by a Holder will constitute
a representation by such Holder that it has evaluated the limitation set forth
in this paragraph and determined, based on the most recent public filings by the
Company with the Commission, that the issuance of the full number of Warrant
Shares requested in such notice of exercise is permitted under this paragraph.
6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.
7. REGISTRATION RIGHTS. The Holder shall have the registration rights described
in the Registration Rights Agreement.
8. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled, as a Warrant holder, to
vote or receive dividends or be deemed the holder of Warrant Shares or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose, nor shall
-8-
anything contained herein be construed to confer upon the Holder any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance, or otherwise) or to receive dividends
or subscription rights or otherwise with respect to the Warrant Shares until
this Warrant shall have been exercised and the Warrant Shares purchasable upon
the exercise hereof shall have become deliverable, as provided herein.
9. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., San
Diego, California local time, on the date that is the five-year anniversary of
the Warrant Date; and (ii) upon consummation of a Change of Control.
10. REDEMPTION AT COMPANY'S ELECTION. The Company may at the option of the
Board, by at least seven-days' prior written notice to the Holder (the
"REDEMPTION NOTICE"), redeem this Warrant, in whole or in part, at any time
after June 30, 2004, provided that (i) the Daily Market Price for twenty
consecutive trading days is equal to or greater than the product of (x) 2
multiplied by (y) the Exercise Price, (ii) either (A) all of the Warrant Shares
underlying this Warrant to be redeemed are then registered under an effective
registration statement or (B) may be sold pursuant to Rule 144 during a
three-month period without registration under the Securities Act, (iii)
sufficient shares of Common Stock of the Company are authorized and reserved for
issuance upon the full exercise of this Warrant, (iv) all of the Warrant Shares
issuable upon exercise of this Warrant are then listed on every stock exchange,
market or bulletin board on which any Common Stock of the Company is then listed
and (v) the Company is not in default of any material provision of any
Transaction Agreement (as defined in the Purchase Agreement). The Redemption
Notice shall set forth a date, not less than seven days after the date of the
Redemption Notice, on which the redemption of this Warrant shall occur (the
"REDEMPTION DATE"). On the Redemption Date, (i) the Company shall pay the Holder
by certified check an amount equal to the product of (x) $0.01 (as adjusted in
proportion to any adjustment to the Exercise Price pursuant to Section 3 hereof)
multiplied by (y) the number of Warrant Shares so redeemed; and (ii) the Holder
shall deliver the original copy of this Warrant marked "REDEEMED" to the
Company. If the Company shall redeem this Warrant in part, the Company shall, at
the Redemption Date, provided that the Holder shall have delivered the original
copy of this Warrant marked "REDEEMED" to the Company, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the unredeemed
shares of Common Stock called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant. Nothing in this Section 10
shall prevent the exercise of the Warrants at any time prior to the Redemption
Date.
11. MISCELLANEOUS.
(a) This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by the laws of the
State of California, without giving effect to principles of conflicts of laws.
-9-
(b) The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise hereof.
(d) Any notice provided for or permitted under this Warrant shall be
treated as having been given (a) upon receipt, when delivered personally or sent
by confirmed facsimile or telecopy, (b) one day after sending, when sent by
commercial overnight courier with written verification of receipt, or (c) three
business days after deposit with the United States Postal Service, when mailed
postage prepaid by certified or registered mail, return receipt requested,
addressed (a) if to the Company, at 9948 Hibert Street, Suite 100, San Diego, CA
92131, facsimile: (858) 271-9678, Attention: Nicholas J. Virca, or, if to the
Holder, at such address or facsimile number as the Holder shall have furnished
to the Company in writing, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11(d).
(e) This Warrant constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company at
the Holder's expense will execute and deliver to the holder of record, in lieu
thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to the foregoing terms and conditions.
[SIGNATURE PAGE FOLLOWS]
-10-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued: April __, 2004
ADVENTRX PHARMACEUTICALS, INC.
By: _________________________________________
Nicholas J. Virca
President & CEO
SIGNATURE PAGE TO THE A-1 WARRANT TO PURCHASE COMMON STOCK
EXHIBIT A
NOTICE OF EXERCISE
TO: Adventrx Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
1. The undersigned hereby elects to purchase ____________ shares of
Common Stock, par value $0.001 per share, of the Company ("COMMON STOCK")
pursuant to the terms of Section 1(b) of the A-1 Warrant to Purchase Common
Stock dated ___________ 2004 (the "WARRANT"), and tenders herewith payment of
the purchase price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of Adventrx Pharmaceuticals, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the Shares covered by the Warrant.
Please issue a certificate or certificates representing said _________
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
Name: _________________________________
Address: _________________________________
_________________________________
The undersigned hereby represents and warrants that the aforesaid
shares of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares, and that all representations and
warranties of the undersigned with respect to the Warrant and Warrant Shares (as
defined in the Warrant) set forth in Section 4 of the Purchase Agreement (as
defined in the Warrant) were true and correct as of the Warrant Date (as defined
in the Warrant) and are true and correct as of the date hereof.
- - - - - - - - - -
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
Date: _______________________________________
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
In connection with the acquisition of [warrants (the "Warrants") to purchase
_______ shares of Common Stock of Adventrx Pharmaceuticals, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock")][________ shares of
Common Stock of Adventrx Pharmaceuticals, Inc. (the "Company"), par value $0.001
per share (the "Common Stock")], by _______________ (the "Holder") from
_____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of Common Stock of Adventrx Pharmaceuticals, Inc. hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
common stock set forth below:
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(Name and Address of Assignee)
- ---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
- --------------------------------------
(Print Name and Title)
- --------------------------------------
(Signature)
- --------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS.
NO. WA2- ISSUED: APRIL 8, 2004
A-2 WARRANT TO PURCHASE COMMON STOCK
----------
THIS CERTIFIES THAT, for good and valuable consideration, ___________ (the
"HOLDER") is entitled to purchase from Adventrx Pharmaceuticals, Inc., a
Delaware corporation (the "COMPANY"), [20% Coverage]_______________ (________)
fully paid and nonassessable shares of Common Stock, par value $0.001 per share
("COMMON STOCK"), of the Company (as adjusted pursuant to Section 3 hereof) (the
"WARRANT SHARES") at a price per share equal to Two Dollars and Fifty Cents
($2.50) (as adjusted pursuant to Section 3 hereof) (the "EXERCISE PRICE"),
subject to the provisions and upon the terms and conditions hereinafter set
forth.
1. METHOD OF EXERCISE; PAYMENT.
(a) Exercise Period. The purchase right represented by this Warrant may be
exercised in whole or part by the Holder during the term of this Warrant (as set
forth in Section 9 hereof) at any time after the Commencement Date, as defined
below, by the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A (the "NOTICE OF EXERCISE") duly executed) at the
principal office of the Company. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price multiplied by
(y) the total number of Warrant Shares purchased pursuant to this Warrant, by
wire transfer or certified check payable to the order of the Company or, at any
time following the first anniversary of the Warrant Date, if there is not an
effective Registration Statement (as defined in the Registration Rights
Agreement, dated as of the Warrant Date, among the Company and the persons and
entities listed on Schedule 1 thereto (the "REGISTRATION RIGHTS AGREEMENT") with
respect to all of the Warrant Shares, then at the option of the Holder, such
amount may be paid by the surrender of a portion of shares of Common Stock then
held by the Holder or issuable upon such exercise of this Warrant, which shall
be valued and credited toward such amount due to the Company for the exercise of
the Warrant based upon the Current Market Price of the Common Stock. The person
or persons in whose name(s) any certificate(s) representing the Warrant Shares
shall be issuable upon exercise of this Warrant shall be deemed to have become
the holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the Warrant Shares represented thereby (and such Warrant Shares
shall be deemed to have been issued) immediately prior to the close of business
on the date upon which this Warrant is exercised.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock on
any date herein specified,
(1) if there shall not then be a public market for the Common Stock, the
higher of
(a) the book value per share of Common Stock at such date, and
(b) the value per share of Common Stock at such date as determined in good
faith by the Board,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 10 consecutive trading days
immediately before such date. The daily market price (the "DAILY MARKET PRICE")
for each such trading day shall be (i) the closing price on such day on the
principal stock exchange (including Nasdaq) on which such Common Stock is then
listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
place on such day on any such exchange, the last reported closing price on such
day as officially quoted on any such exchange (including Nasdaq), (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the last reported closing bid price on such day in the over-the-counter market,
as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. (the "NASD") selected mutually by the holder of this
Warrant and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
holder of this Warrant and one of which shall be selected by the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time after exercise, but in no case later than the
date that is three business days following receipt by the Company of a Notice of
Exercise duly completed and executed.
-2-
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares
issuable upon the exercise of the rights represented by this Warrant will, upon
issuance and receipt of the Exercise Price therefor, be fully paid and
nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges with respect to the issuance thereof.
During the period within which the rights represented by this Warrant may be
exercised, the Company shall at all times have authorized and reserved for
issuance a sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind
of Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a Change of
Control, as defined below) (any of which is a "REORGANIZATION TRANSACTION"), the
Company, or such successor corporation as the case may be, shall execute a new
warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant Shares theretofore issuable upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property as would be payable for the Warrant Shares issuable upon exercise
of this Warrant as if such Warrant Shares were outstanding on the consummation
of the Reorganization Transaction. For purposes of this Warrant, the term
"CHANGE OF CONTROL" shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or parent (other than a reincorporation transaction or change of
domicile) and pursuant to which the holders of the outstanding voting securities
of the Company immediately prior to such consolidation, merger or other
transaction fail to hold equity securities representing a majority of the voting
power of the Company or surviving entity immediately following such
consolidation, merger or other transaction (excluding voting securities of the
acquiring corporation held by such holders prior to such transaction) or (ii) a
sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
-3-
outstanding shares of Common Stock, the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.
(c) Issuance of Additional Shares.
(i) If at any time while this Warrant is outstanding and after June
30, 2004, the Company shall issue or sell any shares of its Common
Stock, other than Excluded Shares (as that term is defined below)
("ADDITIONAL SHARES"), in exchange for consideration in an amount per
Additional Share less than the Exercise Price at the time the
Additional Shares are issued or sold, then the Exercise Price
immediately prior to such issue or sale shall be reduced to a price
determined by dividing:
(1) an amount equal to the sum of (a) the number of shares of
Common Stock outstanding immediately prior to such issue or
sale multiplied by the then existing Exercise Price, plus (b)
the consideration, if any, received by the Company upon such
issue or sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(ii) The provisions of Section 3(c)(i) shall not apply to any deemed
issuance of Additional Shares for which an adjustment is provided
under Section 3(a) or 3(b). No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made
under Section 3(c) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities, if any
such adjustment shall previously have been made upon the issuance of
such warrants or other rights or upon the issuance of such convertible
securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 3(d).
For purposes of this Warrant the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the issuance date of this Warrant (the "WARRANT
DATE"), (b) conversion of shares of the Company's Preferred Stock, par value
$0.01 per share, outstanding on the Warrant Date, (c) exchange of promissory
notes issued by the Company outstanding on the Warrant Date, (iv) the Shares (as
such term is defined in the Common Stock and Warrant Purchase Agreement, dated
as of the Warrant Date, among the Company and the persons and entities listed on
-4-
Schedule 1 thereto (the "PURCHASE AGREEMENT")); (v) the Warrants (as such term
is defined in the Purchase Agreement); (vi) capital stock or warrants or options
to purchase capital stock issued in connection with bona fide acquisitions,
mergers or similar transactions, the terms of which are approved by the Board;
(vii) shares of Common Stock issued or issuable to licensors of technology of
the Company to pay expenses, royalties or milestone payments for which the
Company is obligated under any licensing or related agreement; (viii) shares of
Common Stock issuable or issued pursuant to stock splits, stock dividends and
the like, or (ix) shares of Common Stock issued or issuable by way of dividend
or other distribution on Excluded Shares.
(d) Issuance of Common Stock Equivalents.
(i) If at any time while this Warrant is outstanding the Company shall
issue or sell any warrants or other rights to subscribe for or
purchase any additional shares of Common Stock or any securities
convertible into shares of Common Stock (other than the Additional
Shares) (collectively, "COMMON STOCK EQUIVALENTS"), whether or not the
rights to exchange or convert thereunder are immediately exercisable,
and the effective price per share for which Common Stock is issuable
upon the exercise, exchange or conversion of such Common Stock
Equivalents shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the Exercise
Price shall be adjusted as provided in Section 3(c) on the basis that
the maximum number of additional shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have
been issued and outstanding and the Company shall have received all of
the consideration payable therefor, if any, as of the date of the
actual issuance of such Common Stock Equivalents. No further
adjustments to the current Warrant Price shall be made under this
Section 3(d) upon the actual issue of such Common Stock upon the
exercise, conversion or exchange of such Common Stock Equivalents.
(ii) Upon the expiration or termination of any such Common Stock
Equivalents, the Exercise Price, to the extent in any way affected by
or computed using such Common Stock Equivalents, shall be recomputed
to reflect the issuance of the total number of shares of Common Stock
(and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise, exchange or conversion of such
Common Stock Equivalents to the extent that this Warrant is then
outstanding.
(e) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than the payment of dividends permitted by Section 3 or any other action
described in Section 3, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock into which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
-5-
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Exercise Price, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request at any time of the Holder of this Warrant, furnish or cause to
be furnished to such Holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, or other
property which at the time would be received upon the exercise of Warrants owned
by such Holder.
(g) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of the
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 10-days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10-days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
-6-
4. TRANSFER OF WARRANT. This Warrant may only be transferred in compliance with
federal and state securities laws; provided, however, that the Company may
withhold its consent to transfer or assignment of this Warrant to any person or
entity who is deemed to be a competitor or prospective competitor of the
Company, such determination to be made in the reasonable judgment of the Board.
If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Stock, this Warrant or the Warrant
Stock, as applicable, shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant or the Warrant Stock as the case may be,
furnish to the Company a written opinion of counsel that is reasonably
acceptable to the Company to the effect that such transfer may be made without
registration under the Securities Act, (ii) that the Holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and substantially in the form attached as Exhibit B
hereto and (iii) that the transferee be an "accredited investor" as defined in
Rule 501(a) promulgated under the Securities Act. Transfer of this Warrant and
all rights hereunder, in whole or in part, in accordance with the foregoing
provisions, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company or the office or agency designated by the Company, together with a
written assignment of this Warrant substantially in the form of Exhibit C hereto
duly executed by the Holder or its attorney-in-fact 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 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. Following a transfer that complies
with the requirements of this Section 4, the Warrant may be exercised by a new
Holder for the purchase of shares of Common Stock regardless of whether the
Company issued or registered a new Warrant on the books of the Company. This
Section 4 shall survive the exercise or expiration of the Warrant.
5. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of
this Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
-7-
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 5 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act of 1933, as amended, and a prospectus meeting the
requirements of Section 10 of the Securities Act is delivered or deemed
delivered to the purchaser of such Warrant Shares, (ii) if such holder satisfies
the requirements of Rule 144(k) or (iii) if such holder provides the Company
with an opinion of counsel for such holder of the Warrant Shares, reasonably
satisfactory to the Company, to the effect that a sale, transfer or assignment
of such Warrant Shares may be made without registration. This paragraph shall
survive any exercise of this Warrant.
(c) RESTRICTIONS ON EXERCISE AMOUNT. Unless a Holder delivers to the
Company irrevocable written notice (x) prior to the date of issuance hereof or
61 days prior to the effective date of such notice that this Section 5(c) shall
not apply to such Holder or (y) prior to a Change of Control, the Holder may not
acquire a number of Warrant Shares to the extent that, upon such exercise, the
number of shares of Common Stock then beneficially owned by such Holder and its
affiliates and any other persons or entities whose beneficial ownership of
Common Stock would be aggregated with the Holder's for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 9.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Commission, and the
percentage held by the holder shall be determined in a manner consistent with
the provisions of Section 13(d) of the Exchange Act. Each delivery of a notice
of exercise by a Holder will constitute a representation by such Holder that it
has evaluated the limitation set forth in this paragraph and determined, based
on the most recent public filings by the Company with the Commission, that the
issuance of the full number of Warrant Shares requested in such notice of
exercise is permitted under this paragraph.
6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
7. REGISTRATION RIGHTS. The Holder shall have the registration rights
described in the Registration Rights Agreement.
8. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled, as a Warrant
holder, to vote or receive dividends or be deemed the holder of Warrant Shares
or any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive dividends or subscription rights or
-8-
otherwise with respect to the Warrant Shares until this Warrant shall have been
exercised and the Warrant Shares purchasable upon the exercise hereof shall have
become deliverable, as provided herein.
9. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., San
Diego, California local time, on the date that is the five-year anniversary of
the Warrant Date; and (ii) upon consummation of a Change of Control.
10. REDEMPTION AT COMPANY'S ELECTION. The Company may at the option of the
Board, by at least seven-days' prior written notice to the Holder (the
"REDEMPTION NOTICE"), redeem this Warrant, in whole or in part, at any time,
provided that (i) the Daily Market Price for twenty consecutive trading days is
equal to or greater than the product of (x) 2 multiplied by (y) the Exercise
Price, (ii) either (A) all of the Warrant Shares underlying this Warrant to be
redeemed are then registered under an effective registration statement or (B)
may be sold pursuant to Rule 144 during a three-month period without
registration under the Securities Act, (iii) sufficient shares of Common Stock
of the Company are authorized and reserved for issuance upon the full exercise
of this Warrant, (iv) all of the Warrant Shares issuable upon exercise of this
Warrant are then listed on every stock exchange, market or bulletin board on
which any Common Stock of the Company is then listed and (v) the Company is not
in default of any material provision of any Transaction Agreement (as defined in
the Purchase Agreement). The Redemption Notice shall set forth a date, not less
than seven days after the date of the Redemption Notice, on which the redemption
of this Warrant shall occur (the "REDEMPTION DATE"). On the Redemption Date, (i)
the Company shall pay the Holder by certified check an amount equal to the
product of (x) $0.001 (as adjusted in proportion to any adjustment to the
Exercise Price pursuant to Section 3 hereof) multiplied by (y) the number of
Warrant Shares so redeemed; and (ii) the Holder shall deliver the original copy
of this Warrant marked "REDEEMED" to the Company. If the Company shall redeem
this Warrant in part, the Company shall, at the Redemption Date, provided that
the Holder shall have delivered the original copy of this Warrant marked
"REDEEMED" to the Company, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the unredeemed shares of Common Stock called
for by this Warrant, which new Warrant shall in all other respects be identical
with this Warrant. Nothing in this Section 10 shall prevent the exercise of the
Warrants at any time prior to the Redemption Date.
11. MISCELLANEOUS.
(a) This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by the laws of the
State of California, without giving effect to principles of conflicts of laws.
(b) The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise hereof.
-9-
(d) Any notice provided for or permitted under this Warrant shall be
treated as having been given (a) upon receipt, when delivered personally or sent
by confirmed facsimile or telecopy, (b) one day after sending, when sent by
commercial overnight courier with written verification of receipt, or (c) three
business days after deposit with the United States Postal Service, when mailed
postage prepaid by certified or registered mail, return receipt requested,
addressed (a) if to the Company, at 9948 Hibert Street, Suite 100, San Diego, CA
92131, facsimile: (858) 271-9678, Attention: Nicholas J. Virca, or, if to the
Holder, at such address or facsimile number as the Holder shall have furnished
to the Company in writing, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11(d).
(e) This Warrant constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company at
the Holder's expense will execute and deliver to the holder of record, in lieu
thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to the foregoing terms and conditions.
[Signature page follows.]
-10-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued: April __, 2004
ADVENTRX PHARMACEUTICALS, INC.
By: ________________________________
Nicholas J. Virca
President & CEO
SIGNATURE PAGE TO THE A-2 WARRANT TO PURCHASE COMMON STOCK
EXHIBIT A
NOTICE OF EXERCISE
TO: Adventrx Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
1. The undersigned hereby elects to purchase ____________ shares of Common
Stock, par value $0.001 per share, of the Company ("COMMON STOCK") pursuant to
the terms of Section 1(b) of the A-2 Warrant to Purchase Common Stock dated
___________ 2004 (the "WARRANT"), and tenders herewith payment of the purchase
price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of Adventrx Pharmaceuticals, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the Shares covered by the Warrant.
Please issue a certificate or certificates representing said _________
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
Name: _________________________________
Address: _________________________________
---------------------------------
The undersigned hereby represents and warrants that the aforesaid shares
of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares, and that all representations and
warranties of the undersigned with respect to the Warrants and Warrant Shares
(as defined in the Warrant) set forth in Section 4 of the Purchase Agreement (as
defined in the Warrant) were true and correct as of the Warrant Date (as defined
in the Warrant) and are true and correct as of the date hereof.
--------------
By: _________________________________
Name: _________________________________
Title: _________________________________
Date: _________________________________
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
In connection with the acquisition of [warrants (the "Warrants") to purchase
_______ shares of Common Stock of Adventrx Pharmaceuticals, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock")][________ shares of
Common Stock of Adventrx Pharmaceuticals, Inc. (the "Company"), par value $0.001
per share (the "Common Stock")], by _______________ (the "Holder") from
_____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of Common Stock of Adventrx Pharmaceuticals, Inc. hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
common stock set forth below:
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(Name and Address of Assignee)
- ---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
- --------------------------------------
(Print Name and Title)
- --------------------------------------
(Signature)
- --------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS.
NO. WA1-60 ISSUED: APRIL 8, 2004
A-1 WARRANT TO PURCHASE COMMON STOCK
----------
THIS CERTIFIES THAT, for good and valuable consideration, CD Investment
Partners, Ltd. (the "HOLDER") is entitled to purchase from Adventrx
Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"), seventy-five
thousand (75,000) fully paid and nonassessable shares of Common Stock, par value
$0.001 per share ("COMMON Stock"), of the Company (as adjusted pursuant to
Section 3 hereof) (the "WARRANT SHARES") at a price per share equal to Two
Dollars ($2.00) (as adjusted pursuant to Section 3 hereof) (the "EXERCISE
PRICE"), subject to the provisions and upon the terms and conditions hereinafter
set forth.
1. METHOD OF EXERCISE; PAYMENT.
(a) Exercise Period. The purchase right represented by this Warrant may be
exercised in whole or part by the Holder during the term of this Warrant (as set
forth in Section 9 hereof) at any time after the Commencement Date, as defined
below, by the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A (the "NOTICE OF EXERCISE") duly executed) to the
principal office of the Company. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price multiplied by
(y) the total number of Warrant Shares purchased pursuant to this Warrant, by
wire transfer or certified check payable to the order of the Company or, at any
time following the first anniversary of the Warrant Date, if there is not an
effective Registration Statement (as defined in the Registration Rights
Agreement, dated as of the Warrant Date, between the Company and the Holder (the
"REGISTRATION RIGHTS AGREEMENT")) with respect to all of the Warrant Shares,
then at the option of the Holder, such amount may be paid by the surrender of a
portion of shares of Common Stock then held by the Holder or issuable upon such
exercise of this Warrant, which shall be valued and credited toward such amount
due to the Company for the exercise of the Warrant based upon the Current Market
Price of the Common Stock. The person or persons in whose name(s) any
certificate(s) representing the Warrant Shares shall be issuable upon exercise
of this Warrant shall be deemed to have become the holder(s) of record of, and
shall be treated for all purposes as the record holder(s) of, the Warrant Shares
represented thereby (and such Warrant Shares shall be deemed to have been
issued) immediately prior to the close of business on the date upon which this
Warrant is exercised.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock on
any date herein specified,
(1) if there shall not then be a public market for the Common Stock, the
higher of
(a) the book value per share of Common Stock at such date, and
(b) the value per share of Common Stock at such date as determined in good
faith by the Board,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 10 consecutive trading days
immediately before such date. The daily market price (the "DAILY MARKET PRICE")
for each such trading day shall be (i) the closing price on such day on the
principal stock exchange (including Nasdaq) on which such Common Stock is then
listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
place on such day on any such exchange, the last reported closing price on such
day as officially quoted on any such exchange (including Nasdaq), (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the last reported closing bid price on such day in the over-the-counter market,
as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. (the "NASD") selected mutually by the holder of this
Warrant and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
holder of this Warrant and one of which shall be selected by the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time after exercise, but in no case later than the
date that is three business days following receipt by the Company of a Notice of
Exercise duly completed and executed.
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
-2-
free from all preemptive rights, rights of first refusal or first offer, taxes,
liens and charges with respect to the issuance thereof. During the period within
which the rights represented by this Warrant may be exercised, the Company shall
at all times have authorized and reserved for issuance a sufficient number of
shares of its Common Stock to provide for the exercise of the rights represented
by this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a Change of
Control, as defined below) (any of which is a "REORGANIZATION TRANSACTION"), the
Company, or such successor corporation as the case may be, shall execute a new
warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant Shares theretofore issuable upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property as would be payable for the Warrant Shares issuable upon exercise
of this Warrant as if such Warrant Shares were outstanding on the consummation
of the Reorganization Transaction. For purposes of this Warrant, the term
"CHANGE OF CONTROL" shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or parent (other than a reincorporation transaction or change of
domicile) and pursuant to which the holders of the outstanding voting securities
of the Company immediately prior to such consolidation, merger or other
transaction fail to hold equity securities representing a majority of the voting
power of the Company or surviving entity immediately following such
consolidation, merger or other transaction (excluding voting securities of the
acquiring corporation held by such holders prior to such transaction) or (ii) a
sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.
-3-
(c) Issuance of Additional Shares.
(i) If at any time after June 30, 2004, the Company shall issue or
sell any shares of its Common Stock (other than Excluded Shares (as
that term is defined below), "ADDITIONAL SHARES") in exchange for
consideration in an amount per Additional Share less than the Exercise
Price at the time the Additional Shares are issued or sold, then the
Exercise Price immediately prior to such issue or sale shall be
reduced to a price determined by dividing:
(1) an amount equal to the sum of (a) the number of shares of
Common Stock outstanding immediately prior to such issue or sale
multiplied by the then existing Exercise Price, plus (b) the
consideration, if any, received by the Company upon such issue or
sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(ii) The provisions of Section 3(c)(i) shall not apply to any deemed
issuance of Additional Shares for which an adjustment is provided
under Section 3(a) or 3(b). No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made
under Section 3(c) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities, if any
such adjustment shall previously have been made upon the issuance of
such warrants or other rights or upon the issuance of such convertible
securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 3(d).
For purposes of this Warrant the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date (as defined in the
Purchase Agreement) to officers, employees, consultants or directors of the
Company directly or pursuant to a stock purchase, stock option, restricted stock
or other written compensation plan or agreement approved by the Board of
Directors of the Company (the "BOARD"); (ii) shares of Common Stock issued or
issuable after the Closing Date, primarily for non-equity financing purposes and
as approved by the Board, to financial institutions or lessors in connection
with commercial credit arrangements, equipment financings or similar
transactions or to vendors of goods or services or customers; (iii) shares of
Common Stock issuable upon (a) exercise of warrants, options, notes or other
rights to acquire securities of the Company, in each case, outstanding on the
issuance date of this Warrant (the "WARRANT DATE"), (b) conversion of shares of
the Company's Preferred Stock, par value $0.01 per share, outstanding on the
Warrant Date, (c) exchange of promissory notes issued by the Company which are
outstanding on the Warrant Date, (iv) the Shares (as such term is defined in the
Common Stock and Warrant Purchase Agreement, dated as of the Warrant Date,
between the Company and the Holder (the "PURCHASE AGREEMENT")); (v) the Warrants
(as such term is defined in the Purchase Agreement); (vi) capital stock or
warrants or options to purchase capital stock issued in connection with bona
fide acquisitions, mergers or similar transactions, the terms of which are
approved by the Board; (vii) shares of Common Stock issued or issuable to
-4-
licensors of technology of the Company to pay expenses, royalties or milestone
payments for which the Company is obligated under any licensing or related
agreement; (viii) shares of Common Stock issuable or issued pursuant to stock
splits, stock dividends and the like, or (ix) shares of Common Stock issued or
issuable by way of dividend or other distribution on shares of Common Stock
issued pursuant to clauses (i) - (viii) above.
(d) Issuance of Common Stock Equivalents.
(i) If at any time while this Warrant is outstanding the Company shall
issue or sell any warrants or other rights to subscribe for or
purchase any additional shares of Common Stock or any securities
convertible into shares of Common Stock (other than the Additional
Shares) (collectively, "COMMON STOCK EQUIVALENTS"), whether or not the
rights to exchange or convert thereunder are immediately exercisable,
and the effective price per share for which Common Stock is issuable
upon the exercise, exchange or conversion of such Common Stock
Equivalents shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the Exercise
Price shall be adjusted as provided in Section 3(c) on the basis that
the maximum number of additional shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have
been issued and outstanding and the Company shall have received all of
the consideration payable therefor, if any, as of the date of the
actual issuance of such Common Stock Equivalents. No further
adjustments to the current Warrant Price shall be made under this
Section 3(d) upon the actual issue of such Common Stock upon the
exercise, conversion or exchange of such Common Stock Equivalents.
(ii) Upon the expiration or termination of any such Common Stock
Equivalents, the Exercise Price, to the extent in any way affected by
or computed using such Common Stock Equivalents, shall be recomputed
to reflect the issuance of the total number of shares of Common Stock
(and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise, exchange or conversion of such
Common Stock Equivalents to the extent that this Warrant is then
outstanding.
(e) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than the payment of dividends permitted by Section 3 or any other action
described in Section 3, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock into which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Exercise Price, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
-5-
written request at any time of the Holder of this Warrant, furnish or cause to
be furnished to such Holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, or other
property which at the time would be received upon the exercise of Warrants owned
by such Holder.
(g) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of the
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 10-days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10-days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
(h) Adjustment if Registration Statement Not Effective. If a Registration
Statement (as defined in the Registration Rights Agreement, dated as of the
Warrant Date, between the Company and the Holder (the "REGISTRATION RIGHTS
AGREEMENT")) is not effective with respect to all the Registrable Securities (as
defined in the Registration Rights Agreement)other than Registrable Securities
-6-
held by holders (i) which have not complied with the Registration Rights
Agreement, including, without limitation, Section 4 thereof, or (ii) have
otherwise not permitted the Company to include such Registrable Securities on
the Registration Statement, on or prior to November 12, 2004,, then the Exercise
Price shall be adjusted to equal $1.50 (subject to adjustment for stock splits,
reverse splits, stock dividends and the like, and subject to adjustment in
proportion to any adjustment pursuant to Section 3(c)).
4. TRANSFER OF WARRANT. This Warrant may only be transferred in compliance with
federal and state securities laws; provided, however, that the Company may
withhold its consent to transfer or assignment of this Warrant to any person or
entity who is deemed to be a competitor or prospective competitor of the
Company, such determination to be made in the reasonable judgment of the Board.
If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Shares, this Warrant or the Warrant
Shares, as applicable, shall not be registered under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this Warrant or the
Warrant Shares as the case may be, furnish to the Company a written opinion of
counsel that is reasonably acceptable to the Company to the effect that such
transfer may be made without registration under the Securities Act, (ii) that
the Holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and substantially in the form
attached as Exhibit B hereto and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act.
Transfer of this Warrant and all rights hereunder, in whole or in part, in
accordance with the foregoing provisions, shall be registered on the books of
the Company to be maintained for such purpose, upon surrender of this Warrant to
the principal office of the Company or the office or agency designated by the
Company, together with a written assignment of this Warrant substantially in the
form of Exhibit C hereto duly executed by the Holder or its attorney-in-fact 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 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. Following
a transfer that complies with the requirements of this Section 4, the Warrant
may be exercised by a new holder for the purchase of shares of Common Stock
regardless of whether the Company issued or registered a new Warrant on the
books of the Company. This Section 4 shall survive the exercise or expiration of
the Warrant.
5. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of
this Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
-7-
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 5 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act, and a prospectus meeting the requirements of Section 10 of
the Securities Act is delivered or deemed delivered to the purchaser of such
Warrant Shares, (ii) if such holder satisfies the requirements of Rule 144(k) or
(iii) if such holder provides the Company with an opinion of counsel for such
holder of the Warrant Shares, reasonably satisfactory to the Company, to the
effect that a sale, transfer or assignment of such Warrant Shares may be made
without registration. This paragraph shall survive any exercise of this Warrant.
(c) RESTRICTIONS ON EXERCISE AMOUNT. The Company shall not effect any
exercise of this Warrant, and the Holder shall not have the right to exercise
any portion of this Warrant, to the extent that, after giving effect to such
issuance, the number of shares of Common Stock beneficially owned by such Holder
and its affiliates and any other persons or entities whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
and the rules and regulations promulgated thereunder, (including shares held by
any "group" of which the Holder is a member, but excluding shares beneficially
owned by virtue of the ownership of securities or rights to acquire securities
that have limitations on the right to convert, exercise or purchase similar to
the limitation set forth herein) would exceed 4.99% (the "APPLICABLE
PERCENTAGE") of the total number of shares of Common Stock of the Company issued
and outstanding immediately after giving effect to such exercise. For purposes
hereof, "group" has the meaning set forth in Section 13(d) of the Exchange Act
and applicable rules and regulations of the Securities and Exchange Commission
(the "COMMISSION"), and the percentage held by the Holder shall be determined in
a manner consistent with the provisions of Section 13(d) of the Exchange Act.
Each delivery of a notice of exercise by a Holder will constitute a
representation by such Holder that it has evaluated the limitation set forth in
this paragraph and determined, based on the most recent public filings by the
Company with the Commission, that the issuance of the full number of Warrant
Shares requested in such notice of exercise is permitted under this paragraph.
The provisions of this paragraph shall be implemented in a manner otherwise than
in strict conformity with the terms of this Section 5(c) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Applicable Percentage beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable to properly
give effect to such Applicable Percentage limitation. The holders of Common
Stock of the Company shall be third party beneficiaries of this Section 5(c) and
the Company may not waive this Section 5(c) without the consent of holders of a
majority of its Common Stock.
6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.
-8-
7. REGISTRATION RIGHTS. The Holder shall have the registration rights described
in the Registration Rights Agreement.
8. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled, in its capacity as a
Warrant holder, to vote or receive dividends or be deemed the holder of Warrant
Shares or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive dividends or subscription rights or
otherwise with respect to the Warrant Shares until this Warrant shall have been
exercised and the Warrant Shares purchasable upon the exercise hereof shall have
become deliverable, as provided herein.
9. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., San
Diego, California local time, on the date that is the five-year anniversary of
the Warrant Date; and (ii) upon consummation of a Change of Control.
10. REDEMPTION AT COMPANY'S ELECTION. The Company may at the option of the
Board, by at least seven-days' prior written notice to the Holder (the
"REDEMPTION NOTICE"), redeem this Warrant, in whole or in part, at any time
after June 30, 2004, provided that (i) the Daily Market Price for twenty
consecutive trading days is equal to or greater than the product of (x) 2
multiplied by (y) the Exercise Price, (ii) either (A) all of the Warrant Shares
underlying this Warrant to be redeemed are then registered under an effective
registration statement or (B) may be sold pursuant to Rule 144 during a
three-month period without registration under the Securities Act, (iii)
sufficient shares of Common Stock of the Company are authorized and reserved for
issuance upon the full exercise of this Warrant, (iv) all of the Warrant Shares
issuable upon exercise of this Warrant are then listed on every stock exchange,
market or bulletin board on which any Common Stock of the Company is then listed
and (v) the Company is not in default of any material provision of any
Transaction Agreement (as defined in the Purchase Agreement). The Redemption
Notice shall set forth a date, not less than seven days after the date of the
Redemption Notice, on which the redemption of this Warrant shall occur (the
"REDEMPTION DATE"). On the Redemption Date, (i) the Company shall pay the Holder
by certified check an amount equal to the product of (x) $0.01 (as adjusted in
proportion to any adjustment to the Exercise Price pursuant to Section 3 hereof)
multiplied by (y) the number of Warrant Shares so redeemed; and (ii) the Holder
shall deliver the original copy of this Warrant marked "REDEEMED" to the
Company. If the Company shall redeem this Warrant in part, the Company shall, at
the Redemption Date, provided that the Holder shall have delivered the original
copy of this Warrant marked "REDEEMED" to the Company, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the unredeemed
shares of Common Stock called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant. Nothing in this Section 10
shall prevent the exercise of the Warrants at any time prior to the Redemption
Date.
-9-
11. MISCELLANEOUS.
(a) This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by the laws of the
State of California, without giving effect to principles of conflicts of laws,
except that corporate matters shall be governed by Delaware law.
(b) The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise hereof.
(d) Any notice provided for or permitted under this Warrant shall be
treated as having been given (a) upon receipt, when delivered personally or sent
by confirmed facsimile or telecopy, (b) one day after sending, when sent by
commercial overnight courier with written verification of receipt, or (c) three
business days after deposit with the United States Postal Service, when mailed
postage prepaid by certified or registered mail, return receipt requested,
addressed (a) if to the Company, at 9948 Hibert Street, Suite 100, San Diego, CA
92131, facsimile: (858) 271-9678, Attention: Nicholas J. Virca, or, if to the
Holder, at such address or facsimile number as the Holder shall have furnished
to the Company in writing, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11(d).
(e) Except as may otherwise be provided herein, this Warrant constitutes
the full and entire understanding and agreement between the parties with regard
to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company at
the Holder's expense will execute and deliver to the holder of record, in lieu
thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to the foregoing terms and conditions.
[Signature page follows.]
-10-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued : April 8,2004.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Nicholas J. Virca
Name: Nicholas J. Virca
Title: President & CEO
-11-
EXHIBIT A
NOTICE OF EXERCISE
TO: Adventrx Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
1. The undersigned hereby elects to purchase ____________ shares of Common
Stock, par value $0.001 per share, of the Company ("COMMON STOCK") pursuant to
the terms of Section 1(b) of the A-1 Warrant to Purchase Common Stock dated
___________ 2004 (the "WARRANT"), and tenders herewith payment of the purchase
price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of Adventrx Pharmaceuticals, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the Shares covered by the Warrant.
Please issue a certificate or certificates representing said _________
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
Name: _________________________________
Address: _________________________________
---------------------------------
By: ____________________________________________
Name: ____________________________________________
Title: ____________________________________________
Date: ____________________________________________
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
In connection with the acquisition of [warrants (the "Warrants") to purchase
_______ shares of Common Stock of Adventrx Pharmaceuticals, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock")][________ shares of
Common Stock of Adventrx Pharmaceuticals, Inc. (the "Company"), par value $0.001
per share (the "Common Stock")], by _______________ (the "Holder") from
_____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of Common Stock of Adventrx Pharmaceuticals, Inc. hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
common stock set forth below:
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(Name and Address of Assignee)
- ---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
- --------------------------------------
(Print Name and Title)
- --------------------------------------
(Signature)
- --------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS.
NO. WA2-60 ISSUED: APRIL 8, 2004
A-2 WARRANT TO PURCHASE COMMON STOCK
----------
THIS CERTIFIES THAT, for good and valuable consideration, CD Investment
Partners, Ltd. (the "HOLDER") is entitled to purchase from Adventrx
Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"), fifty thousand
(50,000) fully paid and nonassessable shares of Common Stock, par value $0.001
per share ("COMMON STOCK"), of the Company (as adjusted pursuant to Section 3
hereof) (the "WARRANT SHARES") at a price per share equal to Two Dollars and
Fifty Cents ($2.50) (as adjusted pursuant to Section 3 hereof) (the "EXERCISE
PRICE"), subject to the provisions and upon the terms and conditions hereinafter
set forth.
1. METHOD OF EXERCISE; PAYMENT.
(a) Exercise Period. The purchase right represented by this Warrant may be
exercised in whole or part by the Holder during the term of this Warrant (as set
forth in Section 9 hereof) at any time after the Commencement Date, as defined
below, by the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A (the "NOTICE OF EXERCISE") duly executed) to the
principal office of the Company. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price multiplied by
(y) the total number of Warrant Shares purchased pursuant to this Warrant, by
wire transfer or certified check payable to the order of the Company or, at any
time following the first anniversary of the Warrant Date, if there is not an
effective Registration Statement (as defined in the Registration Rights
Agreement, dated as of the Warrant Date, between the Company and the Holder (the
"REGISTRATION RIGHTS AGREEMENT")) with respect to all of the Warrant Shares,
then at the option of the Holder, such amount may be paid by the surrender of a
portion of shares of Common Stock then held by the Holder or issuable upon such
exercise of this Warrant, which shall be valued and credited toward such amount
due to the Company for the exercise of the Warrant based upon the Current Market
Price of the Common Stock. The person or persons in whose name(s) any
certificate(s) representing the Warrant Shares shall be issuable upon exercise
of this Warrant shall be deemed to have become the holder(s) of record of, and
shall be treated for all purposes as the record holder(s) of, the Warrant Shares
represented thereby (and such Warrant Shares shall be deemed to have been
issued) immediately prior to the close of business on the date upon which this
Warrant is exercised.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock on
any date herein specified,
(1) if there shall not then be a public market for the Common Stock, the
higher of
(a) the book value per share of Common Stock at such date, and
(b) the value per share of Common Stock at such date as determined in good
faith by the Board,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 10 consecutive trading days
immediately before such date. The daily market price (the "DAILY MARKET PRICE")
for each such trading day shall be (i) the closing price on such day on the
principal stock exchange (including Nasdaq) on which such Common Stock is then
listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
place on such day on any such exchange, the last reported closing price on such
day as officially quoted on any such exchange (including Nasdaq), (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the last reported closing bid price on such day in the over-the-counter market,
as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. (the "NASD") selected mutually by the holder of this
Warrant and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
holder of this Warrant and one of which shall be selected by the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time after exercise, but in no case later than the
date that is three business days following receipt by the Company of a Notice of
Exercise duly completed and executed.
-2-
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all preemptive rights, rights of first refusal or first offer, taxes,
liens and charges with respect to the issuance thereof. During the period within
which the rights represented by this Warrant may be exercised, the Company shall
at all times have authorized and reserved for issuance a sufficient number of
shares of its Common Stock to provide for the exercise of the rights represented
by this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a Change of
Control, as defined below) (any of which is a "REORGANIZATION TRANSACTION"), the
Company, or such successor corporation as the case may be, shall execute a new
warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant Shares theretofore issuable upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property as would be payable for the Warrant Shares issuable upon exercise
of this Warrant as if such Warrant Shares were outstanding on the consummation
of the Reorganization Transaction. For purposes of this Warrant, the term
"CHANGE OF CONTROL" shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or parent (other than a reincorporation transaction or change of
domicile) and pursuant to which the holders of the outstanding voting securities
of the Company immediately prior to such consolidation, merger or other
transaction fail to hold equity securities representing a majority of the voting
power of the Company or surviving entity immediately following such
consolidation, merger or other transaction (excluding voting securities of the
acquiring corporation held by such holders prior to such transaction) or (ii) a
sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.
-3-
(c) Issuance of Additional Shares.
(i) If at any time after June 30, 2004, the Company shall issue or
sell any shares of its Common Stock, other than Excluded Shares (as
that term is defined below) ("ADDITIONAL SHARES"), in exchange for
consideration in an amount per Additional Share less than the Exercise
Price at the time the Additional Shares are issued or sold, then the
Exercise Price immediately prior to such issue or sale shall be
reduced to a price determined by dividing:
(1) an amount equal to the sum of (a) the number of shares of
Common Stock outstanding immediately prior to such issue or sale
multiplied by the then existing Exercise Price, plus (b) the
consideration, if any, received by the Company upon such issue or
sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(ii) The provisions of Section 3(c)(i) shall not apply to any deemed
issuance of Additional Shares for which an adjustment is provided
under Section 3(a) or 3(b). No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made
under Section 3(c) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities, if any
such adjustment shall previously have been made upon the issuance of
such warrants or other rights or upon the issuance of such convertible
securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 3(d).
For purposes of this Warrant the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date (as defined in the
Purchase Agreement) to officers, employees, consultants or directors of the
Company directly or pursuant to a stock purchase, stock option, restricted stock
or other written compensation plan or agreement approved by the Board of
Directors of the Company (the "BOARD"); (ii) shares of Common Stock issued or
issuable after the Closing Date, primarily for non-equity financing purposes and
as approved by the Board, to financial institutions or lessors in connection
with commercial credit arrangements, equipment financings or similar
transactions or to vendors of goods or services or customers; (iii) shares of
Common Stock issuable upon (a) exercise of warrants, options, notes or other
rights to acquire securities of the Company, in each case, outstanding on the
issuance date of this Warrant (the "WARRANT DATE"), (b) conversion of shares of
the Company's Preferred Stock, par value $0.01 per share, outstanding on the
Warrant Date, (c) exchange of promissory notes issued by the Company which are
outstanding on the Warrant Date, (iv) the Shares (as such term is defined in the
Common Stock and Warrant Purchase Agreement, dated as of the Warrant Date,
between the Company and the Holder (the "PURCHASE AGREEMENT")); (v) the Warrants
(as such term is defined in the Purchase Agreement); (vi) capital stock or
warrants or options to purchase capital stock issued in connection with bona
fide acquisitions, mergers or similar transactions, the terms of which are
approved by the Board; (vii) shares of Common Stock issued or issuable to
-4-
licensors of technology of the Company to pay expenses, royalties or milestone
payments for which the Company is obligated under any licensing or related
agreement; (viii) shares of Common Stock issuable or issued pursuant to stock
splits, stock dividends and the like, or (ix) shares of Common Stock issued or
issuable by way of dividend or other distribution on shares of Common Stock
issued pursuant to clauses (i) - (viii) above.
(d) Issuance of Common Stock Equivalents.
(i) If at any time while this Warrant is outstanding the Company shall
issue or sell any warrants or other rights to subscribe for or
purchase any additional shares of Common Stock or any securities
convertible into shares of Common Stock (other than the Additional
Shares) (collectively, "COMMON STOCK EQUIVALENTS"), whether or not the
rights to exchange or convert thereunder are immediately exercisable,
and the effective price per share for which Common Stock is issuable
upon the exercise, exchange or conversion of such Common Stock
Equivalents shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the Exercise
Price shall be adjusted as provided in Section 3(c) on the basis that
the maximum number of additional shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have
been issued and outstanding and the Company shall have received all of
the consideration payable therefor, if any, as of the date of the
actual issuance of such Common Stock Equivalents. No further
adjustments to the current Warrant Price shall be made under this
Section 3(d) upon the actual issue of such Common Stock upon the
exercise, conversion or exchange of such Common Stock Equivalents.
(ii) Upon the expiration or termination of any such Common Stock
Equivalents, the Exercise Price, to the extent in any way affected by
or computed using such Common Stock Equivalents, shall be recomputed
to reflect the issuance of the total number of shares of Common Stock
(and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise, exchange or conversion of such
Common Stock Equivalents to the extent that this Warrant is then
outstanding.
(e) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than the payment of dividends permitted by Section 3 or any other action
described in Section 3, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock into which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Exercise Price, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
-5-
written request at any time of the Holder of this Warrant, furnish or cause to
be furnished to such Holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, or other
property which at the time would be received upon the exercise of Warrants owned
by such Holder.
(g) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of the
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 10-days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10-days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
4. TRANSFER OF WARRANT. This Warrant may only be transferred in compliance with
federal and state securities laws; provided, however, that the Company may
withhold its consent to transfer or assignment of this Warrant to any person or
entity who is deemed to be a competitor or prospective competitor of the
Company, such determination to be made in the reasonable judgment of the Board.
-6-
If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Shares, this Warrant or the Warrant
Shares, as applicable, shall not be registered under the Securities Act of 1933,
as amended (the SECURITIES ACT"), the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this Warrant or the
Warrant Shares as the case may be, furnish to the Company a written opinion of
counsel that is reasonably acceptable to the Company to the effect that such
transfer may be made without registration under the Securities Act, (ii) that
the Holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and substantially in the form
attached as Exhibit B hereto and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act.
Transfer of this Warrant, and all rights hereunder, in whole or in part, in
accordance with the foregoing provisions, shall be registered on the books of
the Company to be maintained for such purpose, upon surrender of this Warrant to
the principal office of the Company or the office or agency designated by the
Company, together with a written assignment of this Warrant substantially in the
form of Exhibit C hereto duly executed by the Holder or its attorney-in-fact 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 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. Following
a transfer that complies with the requirements of this Section 4, the Warrant
may be exercised by a new holder for the purchase of shares of Common Stock
regardless of whether the Company issued or registered a new Warrant on the
books of the Company. This Section 4 shall survive the exercise or expiration of
the Warrant.
5. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of
this Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 5 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act, and a prospectus meeting the requirements of Section 10 of
the Securities Act is delivered or deemed delivered to the purchaser of such
Warrant Shares, (ii) if such holder satisfies the requirements of Rule 144(k) or
(iii) if such holder provides the Company with an opinion of counsel for such
holder of the Warrant Shares, reasonably satisfactory to the Company, to the
-7-
effect that a sale, transfer or assignment of such Warrant Shares may be made
without registration. This paragraph shall survive any exercise of this Warrant.
(c) RESTRICTIONS ON EXERCISE AMOUNT. The Company shall not effect any
exercise of this Warrant, and the Holder shall not have the right to exercise
any portion of this Warrant, to the extent that, after giving effect to such
issuance, the number of shares of Common Stock beneficially owned by such Holder
and its affiliates and any other persons or entities whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
and the rules and regulations promulgated thereunder, (including shares held by
any "group" of which the Holder is a member, but excluding shares beneficially
owned by virtue of the ownership of securities or rights to acquire securities
that have limitations on the right to convert, exercise or purchase similar to
the limitation set forth herein) would exceed 4.99% (the "APPLICABLE
PERCENTAGE") of the total number of shares of Common Stock of the Company issued
and outstanding immediately after giving effect to such exercise. For purposes
hereof, "group" has the meaning set forth in Section 13(d) of the Exchange Act
and applicable rules and regulations of the Securities and Exchange Commission
(the "COMMISSION"), and the percentage held by the Holder shall be determined in
a manner consistent with the provisions of Section 13(d) of the Exchange Act.
Each delivery of a notice of exercise by a Holder will constitute a
representation by such Holder that it has evaluated the limitation set forth in
this paragraph and determined, based on the most recent public filings by the
Company with the Commission, that the issuance of the full number of Warrant
Shares requested in such notice of exercise is permitted under this paragraph.
The provisions of this paragraph shall be implemented in a manner otherwise than
in strict conformity with the terms of this Section 5(c) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Applicable Percentage beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable to properly
give effect to such Applicable Percentage limitation. The holders of Common
Stock of the Company shall be third party beneficiaries of this Section 5(c) and
the Company may not waive this Section 5(c) without the consent of holders of a
majority of its Common Stock.
6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.
7. REGISTRATION RIGHTS. The Holder shall have the registration rights described
in the Registration Rights Agreement.
8. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled, in its capacity as a
Warrant holder, to vote or receive dividends or be deemed the holder of Warrant
Shares or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive dividends or subscription rights or
-8-
otherwise with respect to the Warrant Shares until this Warrant shall have been
exercised and the Warrant Shares purchasable upon the exercise hereof shall have
become deliverable, as provided herein.
9. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., San
Diego, California local time, on the date that is the five-year anniversary of
the Warrant Date; and (ii) upon consummation of a Change of Control.
10. REDEMPTION AT COMPANY'S ELECTION. The Company may at the option of the
Board, by at least seven-days' prior written notice to the Holder (the
"REDEMPTION NOTICE"), redeem this Warrant, in whole or in part, at any time
after June 30, 2004, provided that (i) the Daily Market Price for twenty
consecutive trading days is equal to or greater than the product of (x) 2
multiplied by (y) the Exercise Price, (ii) either (A) all of the Warrant Shares
underlying this Warrant to be redeemed are then registered under an effective
registration statement or (B) may be sold pursuant to Rule 144 during a
three-month period without registration under the Securities Act, (iii)
sufficient shares of Common Stock of the Company are authorized and reserved for
issuance upon the full exercise of this Warrant, (iv) all of the Warrant Shares
issuable upon exercise of this Warrant are then listed on every stock exchange,
market or bulletin board on which any Common Stock of the Company is then listed
and (v) the Company is not in default of any material provision of any
Transaction Agreement (as defined in the Purchase Agreement). The Redemption
Notice shall set forth a date, not less than seven days after the date of the
Redemption Notice, on which the redemption of this Warrant shall occur (the
"REDEMPTION DATE"). On the Redemption Date, (i) the Company shall pay the Holder
by certified check an amount equal to the product of (x) $0.001 (as adjusted in
proportion to any adjustment to the Exercise Price pursuant to Section 3 hereof)
multiplied by (y) the number of Warrant Shares so redeemed; and (ii) the Holder
shall deliver the original copy of this Warrant marked "REDEEMED" to the
Company. If the Company shall redeem this Warrant in part, the Company shall, at
the Redemption Date, provided that the Holder shall have delivered the original
copy of this Warrant marked "REDEEMED" to the Company, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the unredeemed
shares of Common Stock called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant. Nothing in this Section 10
shall prevent the exercise of the Warrants at any time prior to the Redemption
Date.
11. MISCELLANEOUS.
(a) This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by the laws of the
State of California, without giving effect to principles of conflicts of laws,
except that corporate matters shall be governed by Delaware law.
(b) The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise hereof.
-9-
(d) Any notice provided for or permitted under this Warrant shall be
treated as having been given (a) upon receipt, when delivered personally or sent
by confirmed facsimile or telecopy, (b) one day after sending, when sent by
commercial overnight courier with written verification of receipt, or (c) three
business days after deposit with the United States Postal Service, when mailed
postage prepaid by certified or registered mail, return receipt requested,
addressed (a) if to the Company, at 9948 Hibert Street, Suite 100, San Diego, CA
92131, facsimile: (858) 271-9678, Attention: Nicholas J. Virca, or, if to the
Holder, at such address or facsimile number as the Holder shall have furnished
to the Company in writing, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11(d).
(e) Except as may otherwise be provided herein, this Warrant constitutes
the full and entire understanding and agreement between the parties with regard
to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company at
the Holder's expense will execute and deliver to the holder of record, in lieu
thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to the foregoing terms and conditions.
[Signature page follows.]
-10-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued : April 8,2004.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Nicholas J. Virca
Name: Nicholas J. Virca
Title: President & CEO
-11-
EXHIBIT A
NOTICE OF EXERCISE
TO: Adventrx Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
1. The undersigned hereby elects to purchase ____________ shares of
Common Stock, par value $0.001 per share, of the Company ("COMMON STOCK")
pursuant to the terms of Section 1(b) of the A-2 Warrant to Purchase Common
Stock dated ___________ 2004 (the "WARRANT"), and tenders herewith payment of
the purchase price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of Adventrx Pharmaceuticals, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the Shares covered by the Warrant.
Please issue a certificate or certificates representing said _________
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
Name: _________________________________
Address: _________________________________
---------------------------------
--------------
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
Date: ____________________________________
-12-
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
In connection with the acquisition of [warrants (the "Warrants") to purchase
_______ shares of Common Stock of Adventrx Pharmaceuticals, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock")][________ shares of
Common Stock of Adventrx Pharmaceuticals, Inc. (the "Company"), par value $0.001
per share (the "Common Stock")], by _______________ (the "Holder") from
_____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of Common Stock of Adventrx Pharmaceuticals, Inc. hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
common stock set forth below:
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(Name and Address of Assignee)
- ---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
- --------------------------------------
(Print Name and Title)
- --------------------------------------
(Signature)
- --------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS.
NO. WA1-61 ISSUED: APRIL 8, 2004
WARRANT TO PURCHASE COMMON STOCK
----------
THIS CERTIFIES THAT, for good and valuable consideration, BURNHAM HILL
PARTNERS, A DIVISION OF PALI CAPITAL, INC. (the "HOLDER"), is entitled to
purchase from Adventrx Pharmaceuticals, Inc., a Delaware corporation (the
"COMPANY"), SIX HUNDRED TWELVE THOUSAND FIVE HUNDRED FORTY-SEVEN (612,547) fully
paid and nonassessable shares of Common Stock, par value $0.001 per share
("COMMON STOCK"), of the Company (as adjusted pursuant to Section 3 hereof) (the
"WARRANT SHARES") at a price per share equal to Two Dollars ($2.00) (as adjusted
pursuant to Section 3 hereof) (the "EXERCISE PRICE"), subject to the provisions
and upon the terms and conditions hereinafter set forth.
1. METHOD OF EXERCISE; PAYMENT.
(a) Exercise Period. The purchase right represented by this Warrant may be
exercised in whole or part by the Holder during the term of this Warrant (as set
forth in Section 10 hereof) at any time after the Commencement Date, as defined
below, by the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A (the "NOTICE OF EXERCISE") duly executed) at the
principal office of the Company. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price multiplied by
(y) the total number of Warrant Shares purchased pursuant to this Warrant, by
wire transfer or certified check payable to the order of the Company or, at the
option of the Holder, such amount may be paid by the surrender of a portion of a
whole number of shares of Common Stock then held by the Holder or issuable upon
such exercise of this Warrant, which shall be valued and credited toward such
amount due to the Company for the exercise of the Warrant based upon the Current
Market Price of the Common Stock. The person or persons in whose name(s) any
certificate(s) representing the Warrant Shares shall be issuable upon exercise
of this Warrant shall be deemed to have become the holder(s) of record of, and
shall be treated for all purposes as the record holder(s) of, the Warrant Shares
represented thereby (and such Warrant Shares shall be deemed to have been
issued) immediately prior to the close of business on the date upon which this
Warrant is exercised.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock on
any date herein specified,
(1) if there shall not then be a public market for the Common Stock, the
higher of
(a) the book value per share of Common Stock at such date, and
(b) the value per share of Common Stock at such date as determined in good
faith by the Board,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 10 consecutive trading days
immediately before such date. The daily market price (the "DAILY MARKET PRICE")
for each such trading day shall be (i) the closing price on such day on the
principal stock exchange (including Nasdaq) on which such Common Stock is then
listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
place on such day on any such exchange, the last reported closing price on such
day as officially quoted on any such exchange (including Nasdaq), (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the last reported closing bid price on such day in the over-the-counter market,
as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. (the "NASD") selected mutually by the holder of this
Warrant and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
holder of this Warrant and one of which shall be selected by the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time after exercise, but in no case later than the
date that is three business days following receipt by the Company of a Notice of
Exercise duly completed and executed.
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all preemptive rights, rights of first refusal or first offer, taxes,
liens and charges with respect to the issuance thereof. During the
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period within which the rights represented by this Warrant may be exercised, the
Company shall at all times have authorized and reserved for issuance a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights represented by this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a Change of
Control, as defined below) (any of which is a "REORGANIZATION TRANSACTION"), the
Company, or such successor corporation as the case may be, shall execute a new
warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant Shares theretofore issuable upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property as would be payable for the Warrant Shares issuable upon exercise
of this Warrant as if such Warrant Shares were outstanding on the consummation
of the Reorganization Transaction. For purposes of this Warrant, the term
"CHANGE OF CONTROL" shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or parent (other than a reincorporation transaction or change of
domicile) and pursuant to which the holders of the outstanding voting securities
of the Company immediately prior to such consolidation, merger or other
transaction fail to hold equity securities representing a majority of the voting
power of the Company or surviving entity immediately following such
consolidation, merger or other transaction (excluding voting securities of the
acquiring corporation held by such holders prior to such transaction) or (ii) a
sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.
(c) Issuance of Additional Shares.
(i) If at any time while this Warrant is outstanding and after June
30, 2004, the Company shall issue or sell any shares of its Common
Stock (other than Excluded Shares (as that term is defined below),
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"ADDITIONAL SHARES") in exchange for consideration in an amount per
Additional Share less than the Exercise Price at the time the
Additional Shares are issued or sold, then the Exercise Price
immediately prior to such issue or sale shall be reduced to a price
determined by dividing:
(1) an amount equal to the sum of (a) the number of shares of
Common Stock outstanding immediately prior to such issue or sale
multiplied by the then existing Exercise Price, plus (b) the
consideration, if any, received by the Company upon such issue or
sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(ii) The provisions of Section 3(c)(i) shall not apply to any deemed
issuance of Additional Shares for which an adjustment is provided
under Section 3(a) or 3(b). No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made
under Section 3(c) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities, if any
such adjustment shall previously have been made upon the issuance of
such warrants or other rights or upon the issuance of such convertible
securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 3(d).
For purposes of this Warrant the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the issuance date of this Warrant (the "WARRANT
DATE"), (b) conversion of shares of the Company's Preferred Stock, par value
$0.01 per share, outstanding on the Warrant Date, (c) exchange of promissory
notes issued by the Company outstanding on the Warrant Date, (iv) the Shares (as
such term is defined Common Stock and Warrant Purchase Agreement, dated as of
the Warrant Date, among the Company and the persons and entities listed on
Schedule 1 thereto (the "PURCHASE AGREEMENT")) or (v) the Warrants (as such term
is defined in the Purchase Agreement); (vi) capital stock or warrants or options
to purchase capital stock issued in connection with bona fide acquisitions,
mergers or similar transactions, the terms of which are approved by the Board;
(vii) shares of Common Stock issued or issuable to licensors of technology of
the Company to pay expenses, royalties or milestone payments for which the
Company is obligated under any licensing or related agreement; (viii) shares of
Common Stock issuable or issued pursuant to stock splits, stock dividends and
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the like, or (ix) shares of Common Stock issued or issuable by way of dividend
or other distribution on Excluded Shares.
(d) Issuance of Common Stock Equivalents.
(i) If at any time while this Warrant is outstanding the Company shall
issue or sell any warrants or other rights to subscribe for or
purchase any additional shares of Common Stock or any securities
convertible into shares of Common Stock (other than the Additional
Shares) (collectively, "COMMON STOCK EQUIVALENTS"), whether or not the
rights to exchange or convert thereunder are immediately exercisable,
and the effective price per share for which Common Stock is issuable
upon the exercise, exchange or conversion of such Common Stock
Equivalents shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the Exercise
Price shall be adjusted as provided in Section 3(c) on the basis that
the maximum number of additional shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have
been issued and outstanding and the Company shall have received all of
the consideration payable therefor, if any, as of the date of the
actual issuance of such Common Stock Equivalents. No further
adjustments to the current Warrant Price shall be made under this
Section 3(d) upon the actual issue of such Common Stock upon the
exercise, conversion or exchange of such Common Stock Equivalents.
(ii) Upon the expiration or termination of any such Common Stock
Equivalents, the Exercise Price, to the extent in any way affected by
or computed using such Common Stock Equivalents, shall be recomputed
to reflect the issuance of the total number of shares of Common Stock
(and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise, exchange or conversion of such
Common Stock Equivalents to the extent that this Warrant is then
outstanding.
(e) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than the payment of dividends permitted by Section 3 or any other action
described in Section 3, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock into which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Exercise Price, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request at any time of the Holder of this Warrant, furnish or cause to
be furnished to such Holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, or other
property which at the time would be received upon the exercise of Warrants owned
by such Holder.
-5-
(g) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of the
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 10-days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10-days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
(h) Adjustment if Registration Statement Not Effective. If a Registration
Statement (as defined in the Registration Rights Agreement, dated as of the
Warrant Date, among the Company and the persons and entities listed on Schedule
1 thereto (the "REGISTRATION RIGHTS AGREEMENT")) is not effective with respect
to all the Registrable Securities (as defined in the Registration Rights
Agreement), other than Regisrtable Securities held by holders (i) which have not
complied with the Registration Rights Agreement, including, without limitation,
Section 4 thereof, or (ii) have otherwise not permitted the Company to include
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such Registrable Securities on the Registration Statement, on or prior to
November 12, 2004, then the Exercise Price shall be adjusted to equal $1.50
(subject to adjustment for stock splits, reverse splits, stock dividends and the
like, and subject to adjustment in proportion to any adjustment pursuant to
Section 3(c)).
4. TRANSFER OF WARRANT. This Warrant may only be transferred in compliance with
federal and state securities laws; provided, however, that the Company may
withhold its consent to transfer or assignment of this Warrant to any person or
entity who is deemed to be a competitor or prospective competitor of the
Company, such determination to be made in the reasonable judgment of the Board.
If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Stock, this Warrant or the Warrant
Stock, as applicable, shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant or the Warrant Stock as the case may be,
furnish to the Company a written opinion of counsel that is reasonably
acceptable to the Company to the effect that such transfer may be made without
registration under the Securities Act, (ii) that the Holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and substantially in the form attached as Exhibit B
hereto and (iii) that the transferee be an "accredited investor" as defined in
Rule 501(a) promulgated under the Securities Act. Transfer of this Warrant and
all rights hereunder, in whole or in part, in accordance with the foregoing
provisions, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company or the office or agency designated by the Company, together with a
written assignment of this Warrant substantially in the form of Exhibit C hereto
duly executed by the Holder or its attorney-in-fact 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 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. Following a transfer that complies
with the requirements of this Section 4, the Warrant may be exercised by a new
Holder for the purchase of shares of Common Stock regardless of whether the
Company issued or registered a new Warrant on the books of the Company. This
Section 4 shall survive the exercise or expiration of the Warrant.
5. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of
this Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
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(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 5 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act of 1933, as amended, and a prospectus meeting the
requirements of Section 10 of the Securities Act is delivered or deemed
delivered to the purchaser of such Warrant Shares, (ii) if such holder satisfies
the requirements of Rule 144(k) or (iii) if such holder provides the Company
with an opinion of counsel for such holder of the Warrant Shares, reasonably
satisfactory to the Company, to the effect that a sale, transfer or assignment
of such Warrant Shares may be made without registration. This paragraph shall
survive any exercise of this Warrant.
(c) RESTRICTIONS ON EXERCISE AMOUNT. Unless a Holder delivers to the
Company irrevocable written notice (x) prior to the date of issuance hereof or
61 days prior to the effective date of such notice that this Section 5(c) shall
not apply to such Holder or (y) prior to a Change of Control, the Holder may not
acquire a number of Warrant Shares to the extent that, upon such exercise, the
number of shares of Common Stock then beneficially owned by such Holder and its
affiliates and any other persons or entities whose beneficial ownership of
Common Stock would be aggregated with the Holder's for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 9.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities and
Exchange Commission (the "COMMISSION"), and the percentage held by the holder
shall be determined in a manner consistent with the provisions of Section 13(d)
of the Exchange Act. Each delivery of a notice of exercise by a Holder will
constitute a representation by such Holder that it has evaluated the limitation
set forth in this paragraph and determined, based on the most recent public
filings by the Company with the Commission, that the issuance of the full number
of Warrant Shares requested in such notice of exercise is permitted under this
paragraph.
6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.
7. REGISTRATION RIGHTS. The Holder shall have the registration rights described
in the Registration Rights Agreement.
8. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled, as a Warrant holder, to
vote or receive dividends or be deemed the holder of Warrant Shares or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive dividends or
-8-
subscription rights or otherwise with respect to the Warrant Shares until this
Warrant shall have been exercised and the Warrant Shares purchasable upon the
exercise hereof shall have become deliverable, as provided herein.
9. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., San
Diego, California local time, on the date that is the five-year anniversary of
the Warrant Date; and (ii) upon consummation of a Change of Control.
10. MISCELLANEOUS.
(a) This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by the laws of the
State of California, without giving effect to principles of conflicts of laws.
(b) The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise hereof.
(d) Any notice provided for or permitted under this Warrant shall be
treated as having been given (a) upon receipt, when delivered personally or sent
by confirmed facsimile or telecopy, (b) one day after sending, when sent by
commercial overnight courier with written verification of receipt, or (c) three
business days after deposit with the United States Postal Service, when mailed
postage prepaid by certified or registered mail, return receipt requested,
addressed (a) if to the Company, at 9948 Hibert Street, Suite 100, San Diego, CA
92131, facsimile: (858) 271-9678, Attention: Nicholas J. Virca, or, if to the
Holder, at such address or facsimile number as the Holder shall have furnished
to the Company in writing, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11(d).
(e) This Warrant constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company at
the Holder's expense will execute and deliver to the holder of record, in lieu
thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to the foregoing terms and conditions.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued: April 8, 2004.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Nicholas J. Virca
Nicholas J. Virca
President & CEO
SIGNATURE PAGE TO THE WARRANT TO PURCHASE COMMON STOCK
EXHIBIT A
NOTICE OF EXERCISE
TO: Adventrx Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
1. The undersigned hereby elects to purchase ____________ shares of
Common Stock, par value $0.001 per share, of the Company ("COMMON STOCK")
pursuant to the terms of Section 1(b) of the Warrant to Purchase Common Stock
dated ___________ 2004 (the "WARRANT"), and tenders herewith payment of the
purchase price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of Adventrx Pharmaceuticals, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the Shares covered by the Warrant.
Please issue a certificate or certificates representing said _________
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
Name: _________________________________
Address: _________________________________
---------------------------------
The undersigned hereby represents and warrants that the aforesaid
shares of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares.
--------------
By: ______________________________________
Name: ______________________________________
Title: ______________________________________
Date: ______________________________________
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
In connection with the acquisition of [warrants (the "Warrants") to purchase
_______ shares of Common Stock of Adventrx Pharmaceuticals, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock")][________ shares of
Common Stock of Adventrx Pharmaceuticals, Inc. (the "Company"), par value $0.001
per share (the "Common Stock")], by _______________ (the "Holder") from
_____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of Common Stock of Adventrx Pharmaceuticals, Inc. hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
common stock set forth below:
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(Name and Address of Assignee)
- ---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
- --------------------------------------
(Print Name and Title)
- --------------------------------------
(Signature)
- --------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS.
NO. WA1-62 ISSUED: APRIL 8, 2004
WARRANT TO PURCHASE COMMON STOCK
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THIS CERTIFIES THAT, for good and valuable consideration, ERNEST PERNET
(the "HOLDER"), is entitled to purchase from Adventrx Pharmaceuticals, Inc., a
Delaware corporation (the "COMPANY"), TWENTY THOUSAND (20,000) fully paid and
nonassessable shares of Common Stock, par value $0.001 per share ("COMMON
STOCK"), of the Company (as adjusted pursuant to Section 3 hereof) (the "WARRANT
SHARES") at a price per share equal to Two Dollars ($2.00) (as adjusted pursuant
to Section 3 hereof) (the "EXERCISE PRICE"), subject to the provisions and upon
the terms and conditions hereinafter set forth.
1. METHOD OF EXERCISE; PAYMENT.
(a) Exercise Period. The purchase right represented by this Warrant may be
exercised in whole or part by the Holder during the term of this Warrant (as set
forth in Section 10 hereof) at any time after the Commencement Date, as defined
below, by the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A (the "NOTICE OF EXERCISE") duly executed) at the
principal office of the Company. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price multiplied by
(y) the total number of Warrant Shares purchased pursuant to this Warrant, by
wire transfer or certified check payable to the order of the Company or, at the
option of the Holder, such amount may be paid by the surrender of a portion of a
whole number of shares of Common Stock then held by the Holder or issuable upon
such exercise of this Warrant, which shall be valued and credited toward such
amount due to the Company for the exercise of the Warrant based upon the Current
Market Price of the Common Stock. The person or persons in whose name(s) any
certificate(s) representing the Warrant Shares shall be issuable upon exercise
of this Warrant shall be deemed to have become the holder(s) of record of, and
shall be treated for all purposes as the record holder(s) of, the Warrant Shares
represented thereby (and such Warrant Shares shall be deemed to have been
issued) immediately prior to the close of business on the date upon which this
Warrant is exercised.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock on
any date herein specified,
(1) if there shall not then be a public market for the Common Stock, the
higher of
(a) the book value per share of Common Stock at such date, and
(b) the value per share of Common Stock at such date as determined in good
faith by the Board,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 10 consecutive trading days
immediately before such date. The daily market price (the "DAILY MARKET PRICE")
for each such trading day shall be (i) the closing price on such day on the
principal stock exchange (including Nasdaq) on which such Common Stock is then
listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
place on such day on any such exchange, the last reported closing price on such
day as officially quoted on any such exchange (including Nasdaq), (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the last reported closing bid price on such day in the over-the-counter market,
as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. (the "NASD") selected mutually by the holder of this
Warrant and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
holder of this Warrant and one of which shall be selected by the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time after exercise, but in no case later than the
date that is three business days following receipt by the Company of a Notice of
Exercise duly completed and executed.
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all preemptive rights, rights of first refusal or first offer, taxes,
liens and charges with respect to the issuance thereof. During the period within
which the rights represented by this Warrant may be exercised, the Company shall
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at all times have authorized and reserved for issuance a sufficient number of
shares of its Common Stock to provide for the exercise of the rights represented
by this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a Change of
Control, as defined below) (any of which is a "REORGANIZATION TRANSACTION"), the
Company, or such successor corporation as the case may be, shall execute a new
warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant Shares theretofore issuable upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property as would be payable for the Warrant Shares issuable upon exercise
of this Warrant as if such Warrant Shares were outstanding on the consummation
of the Reorganization Transaction. For purposes of this Warrant, the term
"CHANGE OF CONTROL" shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or parent (other than a reincorporation transaction or change of
domicile) and pursuant to which the holders of the outstanding voting securities
of the Company immediately prior to such consolidation, merger or other
transaction fail to hold equity securities representing a majority of the voting
power of the Company or surviving entity immediately following such
consolidation, merger or other transaction (excluding voting securities of the
acquiring corporation held by such holders prior to such transaction) or (ii) a
sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.
(c) Issuance of Additional Shares.
(i) If at any time while this Warrant is outstanding and after June
30, 2004, the Company shall issue or sell any shares of its Common
Stock (other than Excluded Shares (as that term is defined below),
"ADDITIONAL SHARES") in
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exchange for consideration in an amount per Additional Share less than
the Exercise Price at the time the Additional Shares are issued or
sold, then the Exercise Price immediately prior to such issue or sale
shall be reduced to a price determined by dividing:
(1) an amount equal to the sum of (a) the number of shares of
Common Stock outstanding immediately prior to such issue or
sale multiplied by the then existing Exercise Price, plus (b)
the consideration, if any, received by the Company upon such
issue or sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(ii) The provisions of Section 3(c)(i) shall not apply to any deemed
issuance of Additional Shares for which an adjustment is provided
under Section 3(a) or 3(b). No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made
under Section 3(c) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities, if any
such adjustment shall previously have been made upon the issuance of
such warrants or other rights or upon the issuance of such convertible
securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 3(d).
For purposes of this Warrant the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the issuance date of this Warrant (the "WARRANT
DATE"), (b) conversion of shares of the Company's Preferred Stock, par value
$0.01 per share, outstanding on the Warrant Date, (c) exchange of promissory
notes issued by the Company outstanding on the Warrant Date, (iv) the Shares (as
such term is defined Common Stock and Warrant Purchase Agreement, dated as of
the Warrant Date, among the Company and the persons and entities listed on
Schedule 1 thereto (the "PURCHASE AGREEMENT")) or (v) the Warrants (as such term
is defined in the Purchase Agreement); (vi) capital stock or warrants or options
to purchase capital stock issued in connection with bona fide acquisitions,
mergers or similar transactions, the terms of which are approved by the Board;
(vii) shares of Common Stock issued or issuable to licensors of technology of
the Company to pay expenses, royalties or milestone payments for which the
Company is obligated under any licensing or related agreement; (viii) shares of
Common Stock issuable or issued pursuant to stock splits, stock dividends and
the like, or (ix) shares of Common Stock issued or issuable by way of dividend
or other distribution on Excluded Shares.
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(d) Issuance of Common Stock Equivalents.
(i) If at any time while this Warrant is outstanding the Company shall
issue or sell any warrants or other rights to subscribe for or
purchase any additional shares of Common Stock or any securities
convertible into shares of Common Stock (other than the Additional
Shares) (collectively, "COMMON STOCK EQUIVALENTS"), whether or not the
rights to exchange or convert thereunder are immediately exercisable,
and the effective price per share for which Common Stock is issuable
upon the exercise, exchange or conversion of such Common Stock
Equivalents shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the Exercise
Price shall be adjusted as provided in Section 3(c) on the basis that
the maximum number of additional shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have
been issued and outstanding and the Company shall have received all of
the consideration payable therefor, if any, as of the date of the
actual issuance of such Common Stock Equivalents. No further
adjustments to the current Warrant Price shall be made under this
Section 3(d) upon the actual issue of such Common Stock upon the
exercise, conversion or exchange of such Common Stock Equivalents.
(ii) Upon the expiration or termination of any such Common Stock
Equivalents, the Exercise Price, to the extent in any way affected by
or computed using such Common Stock Equivalents, shall be recomputed
to reflect the issuance of the total number of shares of Common Stock
(and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise, exchange or conversion of such
Common Stock Equivalents to the extent that this Warrant is then
outstanding.
(e) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than the payment of dividends permitted by Section 3 or any other action
described in Section 3, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock into which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Exercise Price, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request at any time of the Holder of this Warrant, furnish or cause to
be furnished to such Holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Price at the time in effect and
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(iii) the number of shares of Common Stock and the amount, if any, or other
property which at the time would be received upon the exercise of Warrants owned
by such Holder.
(g) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of the
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 10-days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10-days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
(h) Adjustment if Registration Statement Not Effective. If a Registration
Statement (as defined in the Registration Rights Agreement, dated as of the
Warrant Date, among the Company and the persons and entities listed on Schedule
1 thereto (the "REGISTRATION RIGHTS AGREEMENT")) is not effective with respect
to all the Registrable Securities (as defined in the Registration Rights
Agreement), other than Regisrtable Securities held by holders (i) which have not
complied with the Registration Rights Agreement, including, without limitation,
Section 4 thereof, or (ii) have otherwise not permitted the Company to include
such
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Registrable Securities on the Registration Statement, on or prior to November
12, 2004, then the Exercise Price shall be adjusted to equal $1.50 (subject to
adjustment for stock splits, reverse splits, stock dividends and the like, and
subject to adjustment in proportion to any adjustment pursuant to Section 3(c)).
4. TRANSFER OF WARRANT. This Warrant may only be transferred in compliance with
federal and state securities laws; provided, however, that the Company may
withhold its consent to transfer or assignment of this Warrant to any person or
entity who is deemed to be a competitor or prospective competitor of the
Company, such determination to be made in the reasonable judgment of the Board.
If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Stock, this Warrant or the Warrant
Stock, as applicable, shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant or the Warrant Stock as the case may be,
furnish to the Company a written opinion of counsel that is reasonably
acceptable to the Company to the effect that such transfer may be made without
registration under the Securities Act, (ii) that the Holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and substantially in the form attached as Exhibit B
hereto and (iii) that the transferee be an "accredited investor" as defined in
Rule 501(a) promulgated under the Securities Act. Transfer of this Warrant and
all rights hereunder, in whole or in part, in accordance with the foregoing
provisions, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company or the office or agency designated by the Company, together with a
written assignment of this Warrant substantially in the form of Exhibit C hereto
duly executed by the Holder or its attorney-in-fact 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 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. Following a transfer that complies
with the requirements of this Section 4, the Warrant may be exercised by a new
Holder for the purchase of shares of Common Stock regardless of whether the
Company issued or registered a new Warrant on the books of the Company. This
Section 4 shall survive the exercise or expiration of the Warrant.
5. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of
this Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
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(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 5 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act of 1933, as amended, and a prospectus meeting the
requirements of Section 10 of the Securities Act is delivered or deemed
delivered to the purchaser of such Warrant Shares, (ii) if such holder satisfies
the requirements of Rule 144(k) or (iii) if such holder provides the Company
with an opinion of counsel for such holder of the Warrant Shares, reasonably
satisfactory to the Company, to the effect that a sale, transfer or assignment
of such Warrant Shares may be made without registration. This paragraph shall
survive any exercise of this Warrant.
(c) RESTRICTIONS ON EXERCISE AMOUNT. Unless a Holder delivers to the
Company irrevocable written notice (x) prior to the date of issuance hereof or
61 days prior to the effective date of such notice that this Section 5(c) shall
not apply to such Holder or (y) prior to a Change of Control, the Holder may not
acquire a number of Warrant Shares to the extent that, upon such exercise, the
number of shares of Common Stock then beneficially owned by such Holder and its
affiliates and any other persons or entities whose beneficial ownership of
Common Stock would be aggregated with the Holder's for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 9.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities and
Exchange Commission (the "COMMISSION"), and the percentage held by the holder
shall be determined in a manner consistent with the provisions of Section 13(d)
of the Exchange Act. Each delivery of a notice of exercise by a Holder will
constitute a representation by such Holder that it has evaluated the limitation
set forth in this paragraph and determined, based on the most recent public
filings by the Company with the Commission, that the issuance of the full number
of Warrant Shares requested in such notice of exercise is permitted under this
paragraph.
6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.
7. REGISTRATION RIGHTS. The Holder shall have the registration rights described
in the Registration Rights Agreement.
8. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled, as a Warrant holder, to
vote or receive dividends or be deemed the holder of Warrant Shares or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive dividends or subscription rights or
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otherwise with respect to the Warrant Shares until this Warrant shall have been
exercised and the Warrant Shares purchasable upon the exercise hereof shall have
become deliverable, as provided herein.
9. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., San
Diego, California local time, on the date that is the five-year anniversary of
the Warrant Date; and (ii) upon consummation of a Change of Control.
10. MISCELLANEOUS.
(a) This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by the laws of the
State of California, without giving effect to principles of conflicts of laws.
(b) The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise hereof.
(d) Any notice provided for or permitted under this Warrant shall be
treated as having been given (a) upon receipt, when delivered personally or sent
by confirmed facsimile or telecopy, (b) one day after sending, when sent by
commercial overnight courier with written verification of receipt, or (c) three
business days after deposit with the United States Postal Service, when mailed
postage prepaid by certified or registered mail, return receipt requested,
addressed (a) if to the Company, at 9948 Hibert Street, Suite 100, San Diego, CA
92131, facsimile: (858) 271-9678, Attention: Nicholas J. Virca, or, if to the
Holder, at such address or facsimile number as the Holder shall have furnished
to the Company in writing, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11(d).
(e) This Warrant constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company at
the Holder's expense will execute and deliver to the holder of record, in lieu
thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to the foregoing terms and conditions.
-9-
SIGNATURE PAGE TO THE WARRANT TO PURCHASE COMMON STOCK
SF:21556237.1
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued: April 8, 2004.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Nicholas J. Virca
Nicholas J. Virca
President & CEO
Exhibit A
Notice of Exercise
TO: Adventrx Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
1. The undersigned hereby elects to purchase ____________ shares of
Common Stock, par value $0.001 per share, of the Company ("Common Stock")
pursuant to the terms of Section 1(b) of the Warrant to Purchase Common Stock
dated ___________ 2004 (the "Warrant"), and tenders herewith payment of the
purchase price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of Adventrx Pharmaceuticals, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the Shares covered by the Warrant.
Please issue a certificate or certificates representing said _________
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
Name: _________________________________
Address: _________________________________
---------------------------------
The undersigned hereby represents and warrants that the aforesaid
shares of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares.
--------------
By: _________________________________
Name: _________________________________
Title: _________________________________
Date: _________________________________
SIGNATURE PAGE TO THE WARRANT TO PURCHASE COMMON STOCK
Exhibit B
Form Of Investment Representation Letter
In connection with the acquisition of [warrants (the "Warrants") to purchase
_______ shares of Common Stock of Adventrx Pharmaceuticals, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock")][________ shares of
Common Stock of Adventrx Pharmaceuticals, Inc. (the "Company"), par value $0.001
per share (the "Common Stock")], by _______________ (the "Holder") from
_____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
BINGHAM COMMENTS 03/22/04.
Exhibit C
Assignment Form
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of Common Stock of Adventrx Pharmaceuticals, Inc. hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
common stock set forth below:
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(Name and Address of Assignee)
- ---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
- --------------------------------------
(Print Name and Title)
- --------------------------------------
(Signature)
- --------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS.
NO. WA1-63 ISSUED: APRIL 8, 2004
WARRANT TO PURCHASE COMMON STOCK
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THIS CERTIFIES THAT, for good and valuable consideration, W.R. HAMBRECHT +
CO., LLC (the "HOLDER") is entitled to purchase from Adventrx Pharmaceuticals,
Inc., a Delaware corporation (the "COMPANY"), ONE HUNDRED SEVENTY-FIVE THOUSAND
(175,000) fully paid and nonassessable shares of Common Stock, par value $0.001
per share ("COMMON STOCK"), of the Company (as adjusted pursuant to Section 3
hereof) (the "WARRANT SHARES") at a price per share equal to Two Dollars ($2.00)
(as adjusted pursuant to Section 3 hereof) (the "EXERCISE PRICE"), subject to
the provisions and upon the terms and conditions hereinafter set forth.
1. METHOD OF EXERCISE; PAYMENT.
(a) Exercise Period. The purchase right represented by this Warrant may be
exercised in whole or part by the Holder during the term of this Warrant (as set
forth in Section 10 hereof) at any time after the Commencement Date, as defined
below, by the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A (the "NOTICE OF EXERCISE") duly executed) at the
principal office of the Company. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price multiplied by
(y) the total number of Warrant Shares purchased pursuant to this Warrant, by
wire transfer or certified check payable to the order of the Company or, at the
option of the Holder, such amount may be paid by the surrender of a portion of a
whole number of shares of Common Stock then held by the Holder or issuable upon
such exercise of this Warrant, which shall be valued and credited toward such
amount due to the Company for the exercise of the Warrant based upon the Current
Market Price of the Common Stock. The person or persons in whose name(s) any
certificate(s) representing the Warrant Shares shall be issuable upon exercise
of this Warrant shall be deemed to have become the holder(s) of record of, and
shall be treated for all purposes as the record holder(s) of, the Warrant Shares
represented thereby (and such Warrant Shares shall be deemed to have been
issued) immediately prior to the close of business on the date upon which this
Warrant is exercised.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock on
any date herein specified,
(1) if there shall not then be a public market for the Common Stock, the
higher of
(a) the book value per share of Common Stock at such date, and
(b) the value per share of Common Stock at such date as determined in good
faith by the Board,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 10 consecutive trading days
immediately before such date. The daily market price (the "DAILY MARKET PRICE")
for each such trading day shall be (i) the closing price on such day on the
principal stock exchange (including Nasdaq) on which such Common Stock is then
listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
place on such day on any such exchange, the last reported closing price on such
day as officially quoted on any such exchange (including Nasdaq), (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the last reported closing bid price on such day in the over-the-counter market,
as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. (the "NASD") selected mutually by the holder of this
Warrant and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
holder of this Warrant and one of which shall be selected by the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time after exercise, but in no case later than the
date that is three business days following receipt by the Company of a Notice of
Exercise duly completed and executed.
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all preemptive rights, rights of first refusal or first offer, taxes,
liens and charges with respect to the issuance thereof. During the
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period within which the rights represented by this Warrant may be exercised, the
Company shall at all times have authorized and reserved for issuance a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights represented by this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a Change of
Control, as defined below) (any of which is a "REORGANIZATION TRANSACTION"), the
Company, or such successor corporation as the case may be, shall execute a new
warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant Shares theretofore issuable upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property as would be payable for the Warrant Shares issuable upon exercise
of this Warrant as if such Warrant Shares were outstanding on the consummation
of the Reorganization Transaction. For purposes of this Warrant, the term
"CHANGE OF CONTROL" shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or parent (other than a reincorporation transaction or change of
domicile) and pursuant to which the holders of the outstanding voting securities
of the Company immediately prior to such consolidation, merger or other
transaction fail to hold equity securities representing a majority of the voting
power of the Company or surviving entity immediately following such
consolidation, merger or other transaction (excluding voting securities of the
acquiring corporation held by such holders prior to such transaction) or (ii) a
sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.
(c) Issuance of Additional Shares.
(i) If at any time while this Warrant is outstanding and after June
30, 2004, the Company shall issue or sell any shares of its Common
Stock (other than
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Excluded Shares (as that term is defined below), "ADDITIONAL SHARES")
in exchange for consideration in an amount per Additional Share less
than the Exercise Price at the time the Additional Shares are issued
or sold, then the Exercise Price immediately prior to such issue or
sale shall be reduced to a price determined by dividing:
(1) an amount equal to the sum of (a) the number of shares of
Common Stock outstanding immediately prior to such issue or sale
multiplied by the then existing Exercise Price, plus (b) the
consideration, if any, received by the Company upon such issue or
sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(ii) The provisions of Section 3(c)(i) shall not apply to any deemed
issuance of Additional Shares for which an adjustment is provided
under Section 3(a) or 3(b). No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made
under Section 3(c) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities, if any
such adjustment shall previously have been made upon the issuance of
such warrants or other rights or upon the issuance of such convertible
securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 3(d).
For purposes of this Warrant the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the issuance date of this Warrant (the "WARRANT
DATE"), (b) conversion of shares of the Company's Preferred Stock, par value
$0.01 per share, outstanding on the Warrant Date, (c) exchange of promissory
notes issued by the Company outstanding on the Warrant Date, (iv) the Shares (as
such term is defined Common Stock and Warrant Purchase Agreement, dated as of
the Warrant Date, among the Company and the persons and entities listed on
Schedule 1 thereto (the "PURCHASE AGREEMENT")) or (v) the Warrants (as such term
is defined in the Purchase Agreement); (vi) capital stock or warrants or options
to purchase capital stock issued in connection with bona fide acquisitions,
mergers or similar transactions, the terms of which are approved by the Board;
(vii) shares of Common Stock issued or issuable to licensors of technology of
the Company to pay expenses, royalties or milestone payments for which the
Company is obligated under any licensing or related agreement; (viii) shares of
Common Stock issuable or issued pursuant to stock splits, stock dividends and
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the like, or (ix) shares of Common Stock issued or issuable by way of dividend
or other distribution on Excluded Shares.
(d) Issuance of Common Stock Equivalents.
(i) If at any time while this Warrant is outstanding the Company shall
issue or sell any warrants or other rights to subscribe for or purchase
any additional shares of Common Stock or any securities convertible into
shares of Common Stock (other than the Additional Shares) (collectively,
"COMMON STOCK EQUIVALENTS"), whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the effective price
per share for which Common Stock is issuable upon the exercise, exchange
or conversion of such Common Stock Equivalents shall be less than the
Exercise Price in effect immediately prior to the time of such issue or
sale, then the Exercise Price shall be adjusted as provided in Section
3(c) on the basis that the maximum number of additional shares of Common
Stock issuable pursuant to all such Common Stock Equivalents shall be
deemed to have been issued and outstanding and the Company shall have
received all of the consideration payable therefor, if any, as of the date
of the actual issuance of such Common Stock Equivalents. No further
adjustments to the current Warrant Price shall be made under this Section
3(d) upon the actual issue of such Common Stock upon the exercise,
conversion or exchange of such Common Stock Equivalents.
(ii) Upon the expiration or termination of any such Common Stock
Equivalents, the Exercise Price, to the extent in any way affected by or
computed using such Common Stock Equivalents, shall be recomputed to
reflect the issuance of the total number of shares of Common Stock (and
convertible or exchangeable securities which remain in effect) actually
issued upon the exercise, exchange or conversion of such Common Stock
Equivalents to the extent that this Warrant is then outstanding.
(e) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than the payment of dividends permitted by Section 3 or any other action
described in Section 3, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock into which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Exercise Price, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request at any time of the Holder of this Warrant, furnish or cause to
be furnished to such Holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Price at the time in effect and
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(iii) the number of shares of Common Stock and the amount, if any, or other
property which at the time would be received upon the exercise of Warrants owned
by such Holder.
(g) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of the
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 10-days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10-days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
(h) Adjustment if Registration Statement Not Effective. If a Registration
Statement (as defined in the Registration Rights Agreement, dated as of the
Warrant Date, among the Company and the persons and entities listed on Schedule
1 thereto (the "REGISTRATION RIGHTS AGREEMENT")) is not effective with respect
to all the Registrable Securities (as defined in the Registration Rights
Agreement), other than Regisrtable Securities held by holders (i) which have not
complied with the Registration Rights Agreement, including, without limitation,
Section 4 thereof, or (ii) have otherwise not permitted the Company to include
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Registrable Securities on the Registration Statement, on or prior to November
12, 2004, then the Exercise Price shall be adjusted to equal $1.50 (subject to
adjustment for stock splits, reverse splits, stock dividends and the like, and
subject to adjustment in proportion to any adjustment pursuant to Section 3(c)).
4. TRANSFER OF WARRANT. This Warrant may only be transferred in compliance with
federal and state securities laws; provided, however, that the Company may
withhold its consent to transfer or assignment of this Warrant to any person or
entity who is deemed to be a competitor or prospective competitor of the
Company, such determination to be made in the reasonable judgment of the Board.
If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Stock, this Warrant or the Warrant
Stock, as applicable, shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant or the Warrant Stock as the case may be,
furnish to the Company a written opinion of counsel that is reasonably
acceptable to the Company to the effect that such transfer may be made without
registration under the Securities Act, (ii) that the Holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and substantially in the form attached as Exhibit B
hereto and (iii) that the transferee be an "accredited investor" as defined in
Rule 501(a) promulgated under the Securities Act. Transfer of this Warrant and
all rights hereunder, in whole or in part, in accordance with the foregoing
provisions, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company or the office or agency designated by the Company, together with a
written assignment of this Warrant substantially in the form of Exhibit C hereto
duly executed by the Holder or its attorney-in-fact 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 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. Following a transfer that complies
with the requirements of this Section 4, the Warrant may be exercised by a new
Holder for the purchase of shares of Common Stock regardless of whether the
Company issued or registered a new Warrant on the books of the Company. This
Section 4 shall survive the exercise or expiration of the Warrant.
5. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of
this Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
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(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 5 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act of 1933, as amended, and a prospectus meeting the
requirements of Section 10 of the Securities Act is delivered or deemed
delivered to the purchaser of such Warrant Shares, (ii) if such holder satisfies
the requirements of Rule 144(k) or (iii) if such holder provides the Company
with an opinion of counsel for such holder of the Warrant Shares, reasonably
satisfactory to the Company, to the effect that a sale, transfer or assignment
of such Warrant Shares may be made without registration. This paragraph shall
survive any exercise of this Warrant.
(c) RESTRICTIONS ON EXERCISE AMOUNT. Unless a Holder delivers to the
Company irrevocable written notice (x) prior to the date of issuance hereof or
61 days prior to the effective date of such notice that this Section 5(c) shall
not apply to such Holder or (y) prior to a Change of Control, the Holder may not
acquire a number of Warrant Shares to the extent that, upon such exercise, the
number of shares of Common Stock then beneficially owned by such Holder and its
affiliates and any other persons or entities whose beneficial ownership of
Common Stock would be aggregated with the Holder's for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 9.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities and
Exchange Commission (the "COMMISSION"), and the percentage held by the holder
shall be determined in a manner consistent with the provisions of Section 13(d)
of the Exchange Act. Each delivery of a notice of exercise by a Holder will
constitute a representation by such Holder that it has evaluated the limitation
set forth in this paragraph and determined, based on the most recent public
filings by the Company with the Commission, that the issuance of the full number
of Warrant Shares requested in such notice of exercise is permitted under this
paragraph.
6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.
7. REGISTRATION RIGHTS. The Holder shall have the registration rights described
in the Registration Rights Agreement.
8. RIGHTS OF STOCKHOLDERS. No Holder shall be entitled, as a Warrant holder, to
vote or receive dividends or be deemed the holder of Warrant Shares or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
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conveyance, or otherwise) or to receive dividends or such subscription rights or
otherwise with respect to the Warrant Shares until this Warrant shall have been
exercised and the Warrant Shares purchasable upon the exercise hereof shall have
become deliverable, as provided herein.
9. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., San
Diego, California local time, on the date that is the five-year anniversary of
the Warrant Date; and (ii) upon consummation of a Change of Control.
10. MISCELLANEOUS.
(a) This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by the laws of the
State of California, without giving effect to principles of conflicts of laws.
(b) The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise hereof.
(d) Any notice provided for or permitted under this Warrant shall be
treated as having been given (a) upon receipt, when delivered personally or sent
by confirmed facsimile or telecopy, (b) one day after sending, when sent by
commercial overnight courier with written verification of receipt, or (c) three
business days after deposit with the United States Postal Service, when mailed
postage prepaid by certified or registered mail, return receipt requested,
addressed (a) if to the Company, at 9948 Hibert Street, Suite 100, San Diego, CA
92131, facsimile: (858) 271-9678, Attention: Nicholas J. Virca, or, if to the
Holder, at such address or facsimile number as the Holder shall have furnished
to the Company in writing, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11(d).
(e) This Warrant constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company at
the Holder's expense will execute and deliver to the holder of record, in lieu
thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to the foregoing terms and conditions.
-9-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued: April 8, 2004.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Nicholas J. Virca
------------------------------
Nicholas J. Virca
President & CEO
EXHIBIT A
NOTICE OF EXERCISE
TO: Adventrx Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
1. The undersigned hereby elects to purchase ____________ shares of Common
Stock, par value $0.001 per share, of the Company ("COMMON STOCK") pursuant to
the terms of Section 1(b) of the Warrant to Purchase Common Stock dated
___________ 2004 (the "WARRANT"), and tenders herewith payment of the purchase
price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of Adventrx Pharmaceuticals, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the Shares covered by the Warrant.
Please issue a certificate or certificates representing said _________
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
Name: _________________________________
Address: _________________________________
---------------------------------
The undersigned hereby represents and warrants that the aforesaid
shares of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares.
--------------
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
Date: ____________________________________
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
In connection with the acquisition of [warrants (the "Warrants") to purchase
_______ shares of Common Stock of Adventrx Pharmaceuticals, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock")][________ shares of
Common Stock of Adventrx Pharmaceuticals, Inc. (the "Company"), par value $0.001
per share (the "Common Stock")], by _______________ (the "Holder") from
_____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of Common Stock of Adventrx Pharmaceuticals, Inc. hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
common stock set forth below:
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(Name and Address of Assignee)
- ---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
- --------------------------------------
(Print Name and Title)
- --------------------------------------
(Signature)
- --------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT"), dated as of April
5, 2004 (the "AGREEMENT DATE"), is among ADVENTRX Pharmaceuticals, Inc., a
Delaware corporation (the "COMPANY"), each of the persons and entities listed on
Schedule 1 hereto (each, an "INVESTOR").
BACKGROUND
A. The Company and the Investors (other than Burnham Hill Partners) have
entered into a Common Stock and Warrant Purchase Agreement (the "PURCHASE
AGREEMENT") as of the Agreement Date pursuant to which the Company desires to
sell to the Investors and the Investors desire to purchase from the Company
shares of Common Stock, par value $0.001 per share ("COMMON STOCK"), of the
Company (the "SHARES").
B. As additional consideration for the purchase of the Shares, pursuant to
the Purchase Agreement, the Company shall issue to the Investors certain
warrants to purchase shares of Common Stock, and, in consideration of services
as placement agent, the Company shall issue to Burnham Hill Partners certain
warrants to purchase shares of Common Stock (collectively, the "WARRANTS").
C. A condition to the obligations under the Purchase Agreement is that the
Company and the Investors enter into this Agreement in order to provide the
Investors with certain rights to register the resale of the Shares.
AGREEMENT
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, the parties agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, the term:
(a) "REGISTRABLE SECURITIES" means (a) the Shares and the Warrant Shares
or other securities issued or issuable to each Investor or its transferee or
designee (i) upon exercise of the Warrants, or (ii) upon any dividend or
distribution with respect to, any exchange for or any replacement of the Shares,
Warrants or Warrant Shares or (iii) upon any conversion, exercise or exchange of
any securities issued in connection with any such distribution, exchange or
replacement; (b) securities issued or issuable upon any stock split, stock
dividend, recapitalization or similar event with respect to the foregoing; (c)
securities issued pursuant to Section 8 or Section 9 of the Purchase Agreement,
Section 9 or Section 10 of this Agreement or Section 3 of the Warrants and (d)
any other security issued as a dividend or other distribution with respect to,
in exchange for, in replacement or redemption of, or in reduction of the
liquidation value of, any of the securities referred to in the preceding
clauses.
(b) "COMMISSION" means the Securities and Exchange Commission.
(c) "WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the Warrants.
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(d) "SECURITIES ACT" means the Securities Act of 1933, as amended.
2. FILING OF REGISTRATION STATEMENT.
(a) The Company shall prepare and file with the Commission a "shelf"
registration statement (a "REGISTRATION STATEMENT") on Form S-3 (or if such form
is not available to the Company on another form appropriate for such
registration in accordance herewith) covering all Registrable Securities for a
secondary or resale offering to be made on a continuous basis pursuant to Rule
415, such Registration Statement to be filed by no later than June 30, 2004 (the
"TARGET FILING DATE"). The Company shall use its best efforts to cause the
Registration Statement to be declared effective under the Securities Act not
later than 90 days after the Target Filing Date (including filing with the
Commission a request for acceleration of effectiveness in accordance with Rule
461 promulgated under the Securities Act within five business days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that a Registration Statement will not be "reviewed," or not be
subject to further review) and to keep such Registration Statement continuously
effective under the Securities Act until such date as is the earlier of (x) the
date when all Registrable Securities covered by such Registration Statement have
been sold or (y) the second anniversary of the Agreement Date (the
"EFFECTIVENESS PERIOD"). Upon the initial filing thereof, the Registration
Statement shall cover at least 100% of the Shares and 100% of the Warrant
Shares. Such Registration Statement also shall cover, to the extent allowable
under the Securities Act and the Rules promulgated thereunder (including
Securities Act Rule 416), such indeterminate number of additional shares of
Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Registrable Securities. Not less than three
business days prior to the filing of the Registration Statement or any related
prospectus or any amendment or supplement thereto, the Company shall (i) furnish
to counsel to SDS Management, LLC ("SDS"), copies of all such documents proposed
to be filed, which documents (other than those incorporated by reference) will
be subject to the review of such counsel, and (ii) at the request of any holder
of Registrable Securities cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of counsel to such holders, to conduct a
reasonable investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such prospectus or any
amendments or supplements thereto to which the holders of a majority of the
Registrable Securities or counsel to SDS shall reasonably object in writing
within three business days after their receipt thereof.
(b) The Company shall (i) prepare and file with the Commission such
amendments, including post-effective amendments, to the Registration Statement
as may be necessary to keep the Registration Statement continuously effective as
to all Registrable Securities for the Effectiveness Period and to the extent any
Registrable Securities are not included in such Registration Statement for
reasons other than the failure of the Holder to comply with Section 4 hereof,
shall prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all
Registrable Securities; (ii) cause the related prospectus to be amended or
supplemented by any required prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; (iii) respond as promptly as
2
possible, and in no event later than 10 business days, to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible, upon request, provide counsel for SDS true
and complete copies of all correspondence from and to the Commission relating to
the Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Investors thereof set forth in the Registration Statement as
so amended or in such prospectus as so supplemented.
(c) The Company shall notify the holders of Registrable Securities to be
sold and counsel to SDS as promptly as possible (i) when a prospectus or any
prospectus supplement or post-effective amendment to the Registration Statement
is proposed to be filed (but in no event in the case of this subparagraph (i),
less than three business days prior to the date of such filing); (ii) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement; and (iii) with respect to the Registration Statement or
any post-effective amendment, when the same has become effective, and after the
effectiveness thereof: (A) of any request by the Commission or any other Federal
or state governmental authority for amendments or supplements to the
Registration Statement or prospectus or for additional information; (B) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any proceedings for that purpose; (C) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (D) if the financial statements included in the Registration
Statement become ineligible for inclusion therein or of the occurrence of any
event that makes any statement made in the Registration Statement or prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, prospectus or other documents so that, in the case of
the Registration Statement or the prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Without limitation to any remedies to which the Investors may be entitled under
this Agreement, if any of the events described in Section 2(c)(iii) occur, the
Company shall use its best efforts to respond to and correct the event.
(d) Each Investor acknowledges that the Registration Statement shall also
register a significant amount of shares of Common Stock owned by other
stockholders which have "piggy-back" registration rights under various
agreements with the Company.
3
3. PIGGY-BACK REGISTRATION.
(a) RIGHT TO PIGGY-BACK. If (but without any obligation to do so other
than as provided above) the Company proposes to register any of shares of Common
Stock in connection with any offering of shares of Common Stock pursuant to a
registration statement under the Securities Act (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan or a transaction covered by Rule 145 under the Securities Act, or a
registration in which the only stock being registered is Common Stock issuable
upon conversion of debt securities which are also being registered) (a "PUBLIC
OFFERING"), the Company shall promptly give each Investor written notice of such
registration, at least 10 business days prior to the filing of any registration
statement under the Securities Act. Upon the written request of the Investor
given within 5 business days after delivery of such written notice by the
Company, the Company shall, subject to the provisions of Section 3(b) below, use
its best efforts to cause to be registered under the Securities Act on such
registration statement all of the Registrable Securities that the Investor has
requested to be registered.
(b) UNDERWRITING. If the registration statement under which the Company
gives notice under Section 3(a) is for an underwritten Public Offering, the
Company shall so advise the Investor. The right of the Investor to registration
pursuant to Section 3(a) above shall be conditioned upon the Investor's
participation in such underwriting and the inclusion of the Registrable
Securities in the underwriting to the extent provided herein. The Investor shall
(together with the Company and any other holders of Company securities
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
Sections 3(a), if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may
exclude some or all of the Registrable Securities from such registration and
underwriting.
4. FURNISH INFORMATION. It shall be a condition to the Company's obligations to
take any action under this Agreement with respect to the Registrable Securities
of any Investor that the Investor shall promptly furnish to the Company, upon
request, such information regarding itself, the Registrable Securities, and the
intended method of disposition of such securities as shall be necessary to
effect the registration of their Registrable Securities. In that connection,
each selling Investor shall be required to represent to the Company that all
such information which is given is both complete and accurate in all material
respects when made.
5. DELAY OF REGISTRATION. The Investor shall have no right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of the terms of this Agreement.
6. TERMINATION OF REGISTRATION RIGHTS. The Company shall have no obligation to
register the Registrable Securities pursuant to this Agreement or otherwise
following the end of the Effectiveness Period.
4
7. INDEMNIFICATION.
(a) To the extent permitted by law, the Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Investor, the
officers, directors, agents and employees of each of them, each Person who
controls any such Investor (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "LOSSES"), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a
material fact contained or incorporated by reference in the Registration
Statement, any prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
prospectus or form of prospectus or amendment or supplement thereto, in the
light of the circumstances under which they were made) not misleading
(collectively a "VIOLATION"), provided, however, that the indemnity agreement
contained in this Section 7(a) shall not apply to amounts paid in settlement of
any such Loss if such settlement is effected without the prior written consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable to any Investor or officer, director, agent or controlling
person thereof to the extent that any Loss arises out of or is based upon untrue
statements, omissions or violations which occur in reliance upon and in
conformity with information furnished expressly for use in connection with such
registration by any such Investor or officer, director or agent thereof or any
controlling person.
(b) To the extent permitted by law, each Investor shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless the Company, each
of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls the Company (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), any
underwriter, any other stockholder of the Company selling securities in such
Registration Statement and any controlling person of any such underwriter or
other stockholder, against any Losses, as incurred, arising out of or relating
to any Violation in each case to the extent that such Violation occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Investor or officer,
director, agent or controlling person thereof ; provided, however, that the
indemnity agreement contained in this Section 7(b) shall not apply to amounts
paid in settlement of any such Loss if such settlement is effected without the
consent of the Investor, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary contained herein, the Investor shall be
liable under this Section 7(b) for only that amount as does not exceed the net
proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement.
8. LISTING. The Company shall cause all Registrable Securities to be listed on
any United States securities exchange, quotation system, market or
over-the-counter bulletin board on which similar securities issued by the
Company are then listed and use its best efforts to maintain such listing.
5
9. FAILURE TO FILE REGISTRATION STATEMENT. The Company and the Investors agree
that the Investors will suffer damages if the Registration Statement is not
filed on or prior to the Target Filing Date and maintained in the manner
contemplated herein during the Effectiveness Period. The Company and the
Investors further agree that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, if the Registration Statement is not
filed on or prior to the Target Filing Date, the Company shall pay in cash or in
shares of Common Stock (at the Company's option) as liquidated damages for such
failure and not as a penalty to each Investor an amount equal to two percent
(2%) of the total purchase price such Investor paid for the Shares and Warrants
purchased pursuant to the Purchase Agreement (the "TOTAL PURCHASE PRICE") for
each 30-day period until the Registration Statement has been filed with the
Commission, which shall be pro rated for such periods less than 30 days (the
"LATE FILING DAMAGES"). Payments to be made to an Investor pursuant to this
Section 9 shall be due and payable within 5 business days of any demand therefor
by such Investor, but in no event more than once during any 30-day period. The
parties agree that the Late Filing Damages represent a reasonable estimate on
the part of the parties, as of the date of this Agreement, of the amount of
damages that may be incurred by the Investors if the Registration Statement is
not filed on or prior to the Target Filing Date. If the Company elects to pay
the Late Filing Damages in shares of Common Stock, such shares of Common Stock
shall be valued at the average closing price of a share of Common Stock on the
applicable trading market for the Common Stock for the 5-trading-day period
immediately preceding the date of demand of such Late Filing Damages.
10. FAILURE OF REGISTRATION STATEMENT TO BECOME EFFECTIVE. The Company and the
Investors agree that the Investors will suffer damages if the Registration
Statement is not declared effective by the Commission on or prior to the
ninetieth (90th) day following the Target Filing Date (the "EFFECTIVENESS
DEADLINE"). The Company and the Investors further agree that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, if
the Registration Statement is not declared effective by the Commission prior to
the Effectiveness Deadline, the Company shall pay in cash or in shares of Common
Stock (at the Company's option) as liquidated damages for such failure and not
as a penalty to each Investor an amount equal to (a) two percent (2%) of such
Investor's Total Purchase Price for the first 30-day period following the
Effectiveness Deadline (which shall be pro rated for such periods less than 30
days) and (b) one percent (1%) of such Investor's Total Purchase Price for each
subsequent 30-day period (which shall be pro rated for such periods less than 30
days) (the "NON-EFFECTIVENESS DAMAGES") until either (x) the Registration
Statement is declared effective by the Commission or (y) the first anniversary
of the Agreement Date. Payments to be made to an Investor pursuant to this
Section 10 shall be due and payable within 5 business days of any demand
therefor by such Investor, but in no event more than once during any 30-day
period. The parties agree that the Non-Effectiveness Damages represent a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of damages that may be incurred by the Investors if the
Registration Statement is not declared effective on or prior to the ninetieth
(90th) day following the Target Filing Date. If the Company elects to pay the
Non-Effectiveness Damages in shares of Common Stock, such shares of Common Stock
shall be valued at the average closing price of a share of Common Stock on the
applicable trading market for the Common Stock for the 5-trading-day period
immediately preceding the date of demand of such Non-Effectiveness Damages.
6
11. LISTING; EXCHANGE ACT REPORTS.
(a) The Company shall use commercially reasonable best efforts to list its
Common Stock on the American Stock Exchange.
(b) With a view to making available to the Investors the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit the investors to sell securities
of the Company to the public without registration ("RULE 144"), the Company
agrees to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144;
(ii) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended (the "EXCHANGE Act") so
long as the Company remains subject to such requirements and the
filing of such reports and other documents is required for the
applicable provisions of Rule 144; and
(iii)furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company to the extent any such
report is not available on the Commission's website, and (iii) such
other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without
registration.
12. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement, all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the state of
California, without giving effect to principles of choice of law.
(b) JURISDICTION AND VENUE. Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
shall be brought or otherwise commenced in any state or federal court located in
the county of San Diego, California. Each party to this Agreement: (i) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the county of San Diego, California and each appellate
court located in the state of California, in connection with any such legal
proceeding; (ii) agrees that each state and federal court located in the county
of San Diego, California shall be deemed to be a convenient forum; and (iii)
agrees not to assert, by way of motion, as a defense or otherwise, in any such
legal proceeding commenced in any state or federal court located in the county
of San Diego, California any claim that such party is not subject personally to
the jurisdiction of such court, that such legal proceeding has been brought in
an inconvenient forum, that the venue of such proceeding is improper or that
this Agreement or the subject matter of this Agreement may not be enforced in or
by such court.
7
(c) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
(d) NOTICES. All notices and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person or facsimile transmission (received at the
facsimile machine to which it is transmitted prior to 5:00 p.m., local time, on
a business day in the state of California, for the party to which it is sent),
by courier or express delivery service or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section):
if to the Company: ADVENTRX Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
Attention: Nicholas J. Virca
Facsimile: (858) 271-9678
with a copy to (not to constitute notice): Bingham McCutchen LLP
3 Embarcadero Center
San Francisco, CA 94111-4067
Attention: Henry D. Evans, Jr.
Facsimile: (415) 393-2286
if to the Investor: To the address set forth in Schedule 1 hereto.
(e) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended,
waived or departed from only with the written consent of the Company and the
holders of a majority of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this Section 12(e) shall be
binding upon each party to this Agreement, whether or not such party has signed
such amendment or waiver and the Company. No such waiver or consent shall be
deemed to be or shall constitute a waiver or consent with respect to any other
terms or provisions of this Agreement, whether or not similar. Each such waiver
or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or consent.
(f) SUCCESSORS AND ASSIGNS. This Agreement is personal to each of the
parties and may not be assigned without the written consent of the other
parties; provided, however, that any of the Investors shall be permitted to
assign this Agreement to any person to whom it assigns or transfers the Warrants
or Registrable Securities, other than in a public resale, in compliance with
8
applicable securities laws. Any assignee must be an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act.
(g) SEVERABILITY. In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained in this
Agreement shall be unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it enforceable, and as so
limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
(h) INTERPRETATION. The parties hereto acknowledge and agree that: (i)
each party and such party's counsel has reviewed the terms and provisions of
this Agreement; (ii) the rule of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to the parties hereto and not in favor of
or against any party, regardless of which party was generally responsible for
the preparation of this Agreement. Whenever used herein, the singular number
shall include the plural, the plural shall include the singular, the use of any
gender shall include all persons.
(i) HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify, or affect the meaning or construction of any of the terms or
provisions hereof.
(j) NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a
party hereto in exercising any right, power or remedy under this Agreement, and
no course of dealing between the parties hereto, shall operate as a waiver of
any such right, power or remedy of the party. No single or partial exercise of
any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
(k) REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not the Registration Statement is filed or becomes
effective and whether or not any Registrable Securities are sold pursuant to the
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the American Stock Exchange and each other securities
exchange, quotation system, market or over-the-counter bulletin board on which
Registrable Securities are required hereunder to be listed, (B) with respect to
filings required to be made with the Commission, and (C) in compliance with
9
state securities or Blue Sky laws, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing or photocopying prospectuses), (iii) messenger, telephone and delivery
expenses, (iv) Securities Act liability insurance, if the Company so desires
such insurance, (v) fees and expenses of all other persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement, including, without limitation, the Company's independent public
accountants (including, in the case of an underwritten offering, the expenses of
any comfort letters or costs associated with the delivery by independent public
accountants of a comfort letter or comfort letters) and legal counsel, and (vi)
fees and expenses of the counsel to SDS, up to $5,000, in connection with any
Registration Statement hereunder. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
(l) COUNTERPARTS AND FACSIMILE DELIVERY. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature page
delivered by facsimile or other electronic image transmission shall be binding
to the same extent as an original signature page, with regard to any agreement
subject to the terms hereof or any amendment thereto. Any party who delivers
such a signature page agrees to later deliver an original counterpart to any
party who requests it.
(m) INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS. The
obligations of each Investor under this Agreement are several and not joint with
the obligations of any other Investor, and no Investor shall be responsible in
any way for the performance of the obligations of any other Investor under any
such agreement. Nothing contained herein, and no action taken by any Investor
pursuant thereto, shall be deemed to constitute the Investors as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by such
agreement. Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation, the rights arising out of this
Agreement, and it shall not be necessary for any other Investor to be joined as
an additional party in any proceeding for such purpose. Each Investor represents
that it has been represented by its own separate legal counsel in its review and
negotiation of this Agreement. For reasons of administrative convenience only,
the Investors acknowledge and agree that they and their respective counsel have
chosen to communicate with the Company through Wiggin and Dana LLP, but Wiggin
and Dana LLP does not represent any of the Investors in this transaction other
than SDS (an affiliate of an Investor).
[Signature page follows.]
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COMPANY SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ADVENTRX PHARMACEUTICALS, INC.
By:
---------------------------------------------------
Name:
-------------------------------------------------
Title:
------------------------------------------------
[Investor signature pages follow.]
COMPANY SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
INVESTORS:
Print Exact Name:_________________________________
By:_____________________________________________
Name:
Title:
[ADVENTRX Registration Rights Agreement]
SCHEDULE 1
INVESTORS
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT"), dated April 8, 2004
(the "AGREEMENT DATE"), is between ADVENTRX Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY") and CD Investment Partners, Ltd. ("CD").
BACKGROUND
A. The Company and CD have entered into a Common Stock and Warrant
Purchase Agreement (the "PURCHASE AGREEMENT") as of the Agreement Date pursuant
to which the Company desires to sell to CD and CD desires to purchase from the
Company shares of Common Stock, par value $0.001 per share ("COMMON STOCK"), of
the Company (the "SHARES").
B. As additional consideration for the purchase of the Shares, pursuant to
the Purchase Agreement, the Company shall issue to CD certain warrants to
purchase shares of Common Stock (the "WARRANTS").
C. A condition to the obligations under the Purchase Agreement is that the
Company and CD enter into this Agreement in order to provide the Investor (as
defined herein) with certain rights to register the resale of the Shares and the
Warrant Shares (as defined herein).
AGREEMENT
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, the parties agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, the term:
(a) "REGISTRABLE SECURITIES" means (a) the Shares and the Warrant Shares
or other securities issued or issuable to the Investor or its transferees,
assignees or designee (i) upon exercise of the Warrants, or (ii) upon any
dividend or distribution with respect to, any exchange for or any replacement of
the Shares, Warrants or Warrant Shares or (iii) upon any conversion, exercise or
exchange of any securities issued in connection with any such distribution,
exchange or replacement; (b) securities issued or issuable upon any stock split,
stock dividend, recapitalization or similar event with respect to the foregoing;
(c) securities issued pursuant to Section 8 of the Purchase Agreement, Section 9
or Section 10 of this Agreement or Section 3 of the Warrants and (d) any other
security issued as a dividend or other distribution with respect to, in exchange
for, in replacement or redemption of, or in reduction of the liquidation value
of, any of the securities referred to in the preceding clauses. The parties
acknowledge that the Company may choose to include the Registrable Securities
hereunder on a registration statement with other similar securities, but only if
to do so would not materially adversely affect the registration rights of the
Investor (including, without limitation, the ability of the Investor to sell
Registrable Securities freely without liability).
(b) "INVESTOR" means collectively CD and any transferees, assignees or
designees thereof who hold Registrable Securities.
(c) "COMMISSION" means the Securities and Exchange Commission.
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(d) "WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the Warrants.
(e) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(f) "EXCHANGE ACT" means the Exchange Act of 1934, as amended.
2. FILING OF REGISTRATION STATEMENT.
(a) The Company shall prepare and file with the Commission a "shelf"
registration statement (a "REGISTRATION STATEMENT") on Form S-3 (or if such form
is not available to the Company on another form appropriate for such
registration in accordance herewith) covering all Registrable Securities for a
secondary or resale offering to be made on a continuous basis pursuant to Rule
415, such Registration Statement to be filed by no later than June 30, 2004 (the
"TARGET FILING DATE"). The Company shall use its best efforts to cause the
Registration Statement to be declared effective under the Securities Act not
later than 90 days after the Target Filing Date (including filing with the
Commission a request for acceleration of effectiveness in accordance with Rule
461 promulgated under the Securities Act within five business days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that a Registration Statement will not be "reviewed," or not be
subject to further review) and to keep such Registration Statement continuously
effective under the Securities Act until such date as is the earlier of (x) the
date when all Registrable Securities covered by such Registration Statement have
been sold or (y) the second anniversary of the Agreement Date (the
"EFFECTIVENESS PERIOD"). Upon the initial filing thereof, the Registration
Statement shall cover at least 100% of the Shares and 100% of the Warrant
Shares. Such Registration Statement also shall cover, to the extent allowable
under the Securities Act and the rules promulgated thereunder (including
Securities Act Rule 416), such indeterminate number of additional shares of
Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Registrable Securities. Not less than three
business days prior to the filing of the Registration Statement or any related
prospectus or any amendment or supplement thereto, the Company shall (i) furnish
to counsel to the Investor, copies of all such documents proposed to be filed,
which documents (other than those incorporated by reference) will be subject to
the review of such counsel, and (ii) at the request of the Investor of
Registrable Securities cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of counsel to the Investor, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such prospectus or any amendments or
supplements thereto to which the Investor or counsel to the Investor shall
reasonably object in writing within three business days after their receipt
thereof.
(b) The Company shall (i) prepare and file with the Commission such
amendments, including post-effective amendments, to the Registration Statement
as may be necessary to keep the Registration Statement continuously effective as
to all Registrable Securities for the Effectiveness Period and to the extent any
Registrable Securities are not included in such Registration Statement for
reasons other than the failure of the Investor to comply with Section 4 hereof,
shall prepare and file with the Commission such additional Registration
2
Statements in order to register for resale under the Securities Act all
Registrable Securities; (ii) cause the related prospectus to be amended or
supplemented by any required prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; (iii) respond as promptly as
possible, and in no event later than 10 business days, to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible, upon request, provide counsel for the
Investor true and complete copies of all correspondence from and to the
Commission relating to the Registration Statement; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Investor thereof set forth in the
Registration Statement as so amended or in such prospectus as so supplemented.
(c) The Company shall notify the Investor and counsel to the Investor as
promptly as possible (i) when a prospectus or any prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed
(but in no event in the case of this subparagraph (i), less than three business
days prior to the date of such filing); (ii) when the Commission notifies the
Company whether there will be a "review" of such Registration Statement; and
(iii) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, and after the effectiveness
thereof: (A) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to the Registration
Statement or prospectus or for additional information; (B) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any proceedings for that purpose; (C) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (D) if the financial statements included in the Registration
Statement become ineligible for inclusion therein or of the occurrence of any
event that makes any statement made in the Registration Statement or prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, prospectus or other documents so that, in the case of
the Registration Statement or the prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Without limitation to any remedies to which the Investor may be entitled under
this Agreement, if any of the events described in Section 2(c)(iii) occur, the
Company shall use its best efforts to respond to and correct the event.
(d) The Investor acknowledges that the Registration Statement shall also
register a significant amount of shares of Common Stock owned by other
stockholders which have "piggy-back" registration rights under various
agreements with the Company.
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3. PIGGY-BACK REGISTRATION.
(a) RIGHT TO PIGGY-BACK. If (but without any obligation to do so other
than as provided above) the Company proposes to register any shares of Common
Stock in connection with any offering of shares of Common Stock pursuant to a
registration statement under the Securities Act (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan or a transaction covered by Rule 145 under the Securities Act, or a
registration in which the only stock being registered is Common Stock issuable
upon conversion of debt securities which are also being registered) (a "PUBLIC
OFFERING"), the Company shall promptly give the Investor written notice of such
registration, at least 10 business days prior to the filing of any registration
statement under the Securities Act. Upon the written request of the Investor
given within 5 business days after delivery of such written notice by the
Company, the Company shall, subject to the provisions of Section 3(b) below, use
its best efforts to cause to be registered under the Securities Act on such
registration statement all of the Registrable Securities that the Investor has
requested to be registered.
(b) UNDERWRITING. If the registration statement under which the Company
gives notice under Section 3(a) is for an underwritten Public Offering, the
Company shall so advise the Investor. The right of the Investor to registration
pursuant to Section 3(a) above shall be conditioned upon the Investor's
participation in such underwriting and the inclusion of the Registrable
Securities in the underwriting to the extent provided herein. The Investor shall
(together with the Company and any other holders of Company securities
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
Sections 3(a), if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may
exclude some or all of the Registrable Securities from such registration and
underwriting.
4. FURNISH INFORMATION. It shall be a condition to the Company's obligations to
take any action under this Agreement with respect to the Registrable Securities
of the Investor that the Investor shall promptly furnish to the Company, upon
request, such information regarding itself, the Registrable Securities, and the
intended method of disposition of such securities as shall be necessary to
effect the registration of its Registrable Securities. In that connection, the
Investor shall be required to represent to the Company that all such information
which is given is both complete and accurate in all material respects when made.
5. DELAY OF REGISTRATION. The Investor shall have no right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of the terms of this Agreement.
6. TERMINATION OF REGISTRATION RIGHTS. Following the end of the Effectiveness
Period, the Company shall have no obligation to register the Registrable
Securities pursuant to this Agreement or otherwise.
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7. INDEMNIFICATION.
(a) To the extent permitted by law, the Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless the Investor, its
officers, directors, managers, agents and employees, each Person who controls
the Investor (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, managers, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "LOSSES"), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a
material fact contained or incorporated by reference in the Registration
Statement, any prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
prospectus or form of prospectus or amendment or supplement thereto, in the
light of the circumstances under which they were made) not misleading
(collectively a "VIOLATION"), provided, however, that the indemnity agreement
contained in this Section 7(a) shall not apply to amounts paid in settlement of
any such Loss if such settlement is effected without the prior written consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable to the Investor or any officer, director, manager, agent,
employee or controlling person thereof to the extent that any Loss arises out of
or is based upon untrue statements, omissions or violations which occur in
reliance upon and in conformity with information furnished expressly for use in
connection with such registration by the Investor or any officer, director,
manager, agent or employee thereof or any controlling person thereof.
(b) To the extent permitted by law, the Investor shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless the Company, each
of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls the Company (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), any
underwriter, any other stockholder of the Company selling securities in such
Registration Statement and any controlling person of any such underwriter or
other stockholder, against any Losses, as incurred, arising out of or relating
to any Violation in each case to the extent (but only to the extent)that such
Violation occurs in reliance upon and in conformity with written information
furnished in writing expressly for use in connection with such registration by
the Investor or any officer, director, manager, agent or controlling person
thereof; provided, however, that the indemnity agreement contained in this
Section 7(b) shall not apply to amounts paid in settlement of any such Loss if
such settlement is effected without the consent of the Investor, which consent
shall not be unreasonably withheld. Notwithstanding anything to the contrary
contained herein, the Investor shall be liable in the aggregate under this
Section 7(b) for only such amounts, if any, as in the aggregate do not exceed
the net proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
5
8. LISTING. The Company shall cause all Registrable Securities to be listed on
any United States securities exchange, quotation system, market or
over-the-counter bulletin board on which similar securities issued by the
Company are then listed and use its best efforts to maintain such listing.
9. FAILURE TO FILE REGISTRATION STATEMENT. The Company and the Investor agree
that the Investor will suffer damages if the Registration Statement is not filed
on or prior to the Target Filing Date and maintained in the manner contemplated
herein during the Effectiveness Period. The Company and the Investor further
agree that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly, if the Registration Statement is not filed on or prior
to the Target Filing Date, the Company shall pay in cash or in shares of Common
Stock (at the Company's option) as liquidated damages for such failure and not
as a penalty to the Investor an amount equal to two percent (2%) of the purchase
price the Investor paid for the Shares and Warrants purchased pursuant to the
Purchase Agreement (the "PURCHASE PRICE") for each 30-day period until the
Registration Statement has been filed with the Commission, which shall be pro
rated for such periods less than 30 days (the "LATE FILING DAMAGES"). Payments
to be made to the Investor pursuant to this Section 9 shall be due and payable
within 5 business days of any demand therefor by the Investor, but in no event
more than once during any 30-day period. The parties agree that the Late Filing
Damages represent a reasonable estimate on the part of the parties, as of the
date of this Agreement, of the amount of damages that may be incurred by the
Investor if the Registration Statement is not filed on or prior to the Target
Filing Date. If the Company elects to pay the Late Filing Damages in shares of
Common Stock, such shares of Common Stock shall be valued at the average closing
price of a share of Common Stock on the applicable trading market for the Common
Stock for the 5-trading-day period immediately preceding the date of demand of
such Late Filing Damages.
10. FAILURE OF REGISTRATION STATEMENT TO BECOME EFFECTIVE. The Company and the
Investor agree that the Investor will suffer damages if the Registration
Statement is not declared effective by the Commission on or prior to the
ninetieth (90th) day following the Target Filing Date (the "EFFECTIVENESS
DEADLINE"). The Company and the Investor further agree that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, if
the Registration Statement is not declared effective by the Commission prior to
the Effectiveness Deadline, the Company shall pay in cash or in shares of Common
Stock (at the Company's option) as liquidated damages for such failure and not
as a penalty to the Investor an amount equal to (a) two percent (2%) of the
Purchase Price for the first 30-day period following the Effectiveness Deadline
(which shall be pro rated for such periods less than 30 days) and (b) one
percent (1%) of the Purchase Price for each subsequent 30-day period (which
shall be pro rated for such periods less than 30 days) (the "NON-EFFECTIVENESS
DAMAGES") until either (x) the Registration Statement is declared effective by
the Commission or (y) the first anniversary of the Agreement Date. Payments to
be made to the Investor pursuant to this Section 10 shall be due and payable
within 5 business days of any demand therefor by the Investor, but in no event
more than once during any 30-day period. The parties agree that the
Non-Effectiveness Damages represent a reasonable estimate on the part of the
parties, as of the Agreement Date, of the amount of damages that may be incurred
by the Investor if the Registration Statement is not declared effective on or
prior to the ninetieth (90th) day following the Target Filing Date. If the
Company elects to pay the Non-Effectiveness Damages in shares of Common Stock,
such shares of Common Stock shall be valued at the average closing price of a
share of Common Stock on the applicable trading market for the Common Stock for
the 5-trading-day period immediately preceding the date of demand of such
Non-Effectiveness Damages.
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11. LISTING; EXCHANGE ACT REPORTS.
(a) The Company shall use commercially reasonable best efforts to list its
Common Stock on the American Stock Exchange.
(b) With a view to making available to the Investor the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit the Investor to sell securities of
the Company to the public without registration ("RULE 144"), the Company agrees
to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144;
(ii) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended (the "EXCHANGE Act") so
long as the Company remains subject to such requirements and the
filing of such reports and other documents is required for the
applicable provisions of Rule 144; and
(iii)furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule
144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company to the extent any such
report is not available on the Commission's website, and (iii) such
other information as may be reasonably requested to permit the
Investor to sell such securities pursuant to Rule 144 without
registration.
12. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement, all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the state of
California, without giving effect to principles of choice of law, except that
corporate matters shall be governed by Delaware law.
(b) JURISDICTION AND VENUE. Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
shall be brought or otherwise commenced in any state or federal court located in
the county of San Diego, California. Each party to this Agreement: (i) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the county of San Diego, California and each appellate
court located in the state of California, in connection with any such legal
proceeding; (ii) agrees that each state and federal court located in the county
of San Diego, California shall be deemed to be a convenient forum; and (iii)
agrees not to assert, by way of motion, as a defense or otherwise, in any such
legal proceeding commenced in any state or federal court located in the county
of San Diego, California any claim that such party is not subject personally to
7
the jurisdiction of such court, that such legal proceeding has been brought in
an inconvenient forum, that the venue of such proceeding is improper or that
this Agreement or the subject matter of this Agreement may not be enforced in or
by such court.
(c) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
(d) NOTICES. All notices and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person or facsimile transmission (received at the
facsimile machine to which it is transmitted prior to 5:00 p.m., local time, on
a business day in the state of California, for the party to which it is sent),
by courier or express delivery service or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section):
if to the Company: ADVENTRX Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
Attention: Nicholas J. Virca
Facsimile: (858) 271-9678
with a copy to (not to constitute notice): Bingham McCutchen LLP
3 Embarcadero Center
San Francisco, CA 94111-4067
Attention: Henry D. Evans, Jr.
Facsimile: (415) 393-2286
if to the Investor: CD Investment Partners, Ltd.
c/o CD Capital Management LLC
Two North Riverside Plaza
Suite 600
Chicago, Illinois 60601
Attn: John Ziegelman
Facsimile: (312) 559-1288
with a copy to (not to constitute notice): Greenberg Traurig, LLP
77 West Wacker, Suite 2500
Chicago, Illinois 60601
Attn: Peter H. Lieberman and Todd A . Mazur
Facsimile: (312) 456-8435
8
(e) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended,
waived or departed from only with the written consent of the Company and the
Investor. No such waiver or consent shall be deemed to be or shall constitute a
waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
(f) SUCCESSORS AND ASSIGNS. This Agreement is personal to each of the
parties hereto and may not be assigned without the written consent of the other
party; provided, however, that the Investor shall be permitted to assign this
Agreement to any person to whom it assigns or transfers the Warrants or
Registrable Securities, other than in a public resale, in compliance with
applicable securities laws. Any assignee must be an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act.
(g) SEVERABILITY. In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained in this
Agreement shall be unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it enforceable, and as so
limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
(h) INTERPRETATION. The parties hereto acknowledge and agree that: (i)
each party and such party's counsel has reviewed the terms and provisions of
this Agreement; (ii) the rule of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to the parties hereto and not in favor of
or against any party, regardless of which party was generally responsible for
the preparation of this Agreement. Whenever used herein, the singular number
shall include the plural, the plural shall include the singular, the use of any
gender shall include all persons.
(i) HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify, or affect the meaning or construction of any of the terms or
provisions hereof.
(j) NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a
party hereto in exercising any right, power or remedy under this Agreement, and
no course of dealing between the parties hereto, shall operate as a waiver of
any such right, power or remedy of the party. No single or partial exercise of
any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
9
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
(k) REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not the Registration Statement is filed or becomes
effective and whether or not any Registrable Securities are sold pursuant to the
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the American Stock Exchange and each other securities
exchange, quotation system, market or over-the-counter bulletin board on which
Registrable Securities are required hereunder to be listed, (B) with respect to
filings required to be made with the Commission, and (C) in compliance with
state securities or Blue Sky laws), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing or photocopying prospectuses), (iii) messenger, telephone and delivery
expenses, (iv) Securities Act liability insurance, if the Company so desires
such insurance, and (v) fees and expenses of all other persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement, including, without limitation, the Company's independent public
accountants (including, in the case of an underwritten offering, the expenses of
any comfort letters or costs associated with the delivery by independent public
accountants of a comfort letter or comfort letters) and legal counsel. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.
(l) COUNTERPARTS AND FACSIMILE DELIVERY. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature page
delivered by facsimile or other electronic image transmission shall be binding
to the same extent as an original signature page, with regard to any agreement
subject to the terms hereof or any amendment thereto. Any party who delivers
such a signature page agrees to later deliver an original counterpart to any
party who requests it.
[Signature page follows.]
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Nicholas J. Virca
Name: Nicholas J. Virca
Title: President
CD INVESTMENT PARTNERS, LTD.
By: CD Capital Management LLC
Its: Investment Manager
By: /s/ John Ziegelman
Name: John Ziegelman
Title: President
ADVENTRX Pharmaceuticals Announces Definitive Agreement for Sale of Common Stock
SAN DIEGO, April 5 /PRNewswire-FirstCall/ -- ADVENTRX Pharmaceuticals, Inc. (OTC
Bulletin Board: AVRX - News) announced today that it has entered into a
definitive agreement for the sale to certain investors of approximately 10.0
million shares of its Common Stock at a purchase price of $1.50 per share for
gross proceeds of approximately $15.0 million. The Company has also agreed to
issue to the investors approximately 3 million five-year warrants to purchase
shares of Common Stock at a price of $2.00 per share and approximately 2 million
five-year warrants to purchase shares of Common Stock at $2.50 per share. The
Company may redeem the warrants for cash under certain circumstances. Additional
information regarding this transaction will be available through the Company's
8-K filing with the Securities and Exchange Commission.
The Company plans to use the proceeds to finance ongoing clinical development of
its lead cancer drug, CoFactor(TM) and HIV Viral Entry Inhibitor,
BlockAide/CR(TM) and for working capital purposes.
Burnham Hill Partners acted as exclusive placement agent in connection with the
transaction.
About Burnham Hill Partners
Burnham Hill Partners, based in New York City, was formed in August 2003 and is
a division of Pali Capital, Inc., a NASD registered broker dealer. The
professionals at Burnham Hill Partners have extensive experience in providing
comprehensive financing and financial advisor services to publicly traded
companies with market capitalizations of up to $250 million. Burnham Hill
Partners' sector expertise includes telecommunications, electronic equipment and
services, network security and software as well as medical devices and life
sciences.
About ADVENTRX Pharmaceuticals, Inc.
ADVENTRX Pharmaceuticals Inc. is a biopharmaceutical research and development
company whose business strategy is to commercialize leading edge medical
research through licensing agreements with prominent universities and research
institutions. The Company focuses its energy in cancer and antiviral research to
launch products that either extend the usefulness of current therapies or
replace marginal therapies with new approaches to treatment.
This press release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Such statements are made based on management's current expectations and
beliefs. Actual results may vary from those currently anticipated based upon a
number of factors, including uncertainties inherent in the drug development
process, the timing and success of clinical trials, the validity of research
results, and the receipt of necessary approvals from the United States Food and
Drug Administration. The Company undertakes no obligation to release publicly
any revisions, which may be made to reflect events or circumstances after the
date hereof.
Contact:
Company Contact:
Evan Levine, ADVENTRX Pharmaceuticals, Inc. 858-271-9671
Investor Contact:
Stephanie Carrington, The Ruth Group 646-536-7017
Media Contact:
Cynthia Isaac, Ph.D., The Ruth Group 646-536-7028
For more information on Burnham Hill Partners, call 212-980-2200
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