Document:

exv4w7

 

Exhibit 4.7

		
	 	VOID AFTER 5:00 P.M., NEW YORK CITY

TIME, ON December 12, 2007

(UNLESS EXTENDED PURSUANT TO SECTION 2 HEREOF)
	 
	 	THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

	 	Right to Purchase 348,750 Shares of

Common Stock, par value $.01 per share

Date: December 12, 2002

ANTEX BIOLOGICS INC.

STOCK PURCHASE WARRANT

     THIS CERTIFIES THAT, for value received, DMG Legacy Institutional Fund
LLC, or its registered assigns, is entitled to purchase from Antex Biologics
Inc., a corporation organized under the laws of the State of Delaware (the
“Company”), at any time or from time to time during the period specified in
Section 2 hereof, 348,750 fully paid and nonassessable shares of the Company’s
common stock, par value $.01 per share (the “Common Stock”), at an exercise
price per share (the “Exercise Price”) equal to the exercise price of the
warrants issued in Antex Biologics’ proposed Public Offering (the “Public
Offering Warrant Exercise Price”) that is anticipated to close no later then
February 15, 2003 (the “Public Offering”), but in no even shall the Exercise
Price be greater than $1.00 per share. (The Public Warrant Offering Price shall
be based on a premium to the offering price of the Units sold in the Public
Offering.) In the event a Public Offering is not completed, then the Exercise
Price shall be set at $1.00 per share. The number of shares of Common Stock
purchasable hereunder (the “Warrant Shares”) and the Exercise Price are subject
to adjustment as provided in Section 4 hereof. The term “Warrants” means this
Warrant and the other warrants of the Company issued in connection with the
Promissory Note issued and dated December 12, 2002, by and among the Company
and the other signatory thereto (the “Promissory Note”).

This Warrant is subject to the following terms, provisions and conditions:

 

 

     1.     Manner of Exercise; Issuance of Certificates; Payment for
Shares. Subject to the provisions hereof, including, without limitation,
the limitations contained in Section 7 hereof, this Warrant may be exercised by
the holder hereof, in whole or in part, by the surrender of this Warrant,
together with a completed exercise agreement in the form attached hereto (the
“Exercise Agreement”), to the Company during normal business hours on any
business day at the Company’s principal executive offices (or such other office
or agency of the Company as it may designate by notice to the holder hereof),
and upon (i) payment to the Company in cash, by certified or official bank
check or by wire transfer for the account of the Company, of the Exercise Price
for the Warrant Shares specified in the Exercise Agreement or (ii) if the
holder is effectuating a Cashless Exercise (as defined in Section 11(c) hereof)
pursuant to Section 11(c) hereof, delivery to the Company of a written notice
of an election to effect a Cashless Exercise for the Warrant Shares specified
in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to
be issued to the holder hereof or such holder’s designee, as the record owner
of such shares, as of the close of business on the date on which this Warrant
shall have been surrendered, the completed Exercise Agreement shall have been
delivered, and payment shall have been made for such shares as set forth above
or, if such date is not a business date, on the next succeeding business date.
The Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding two business days, after this Warrant
shall have been so exercised (the “Delivery Period”). If the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer program, and so long as the certificates
therefore do not bear a legend and the holder is not obligated to return such
certificate for the placement of a legend thereon, the Company shall cause its
transfer agent to electronically transmit the Warrant Shares so purchased to
the holder by crediting the account of the holder or its nominee with DTC
through its Deposit Withdrawal Agent Commission system (“DTC Transfer”). If
the aforementioned conditions to a DTC Transfer are not satisfied, the Company
shall deliver to the holder physical certificates representing the Warrant
Shares so purchased. Further, the holder may instruct the Company to deliver
to the holder physical certificates representing the Warrant Shares so
purchased in lieu of delivering such shares by way of DTC Transfer. Any
certificates so delivered shall be in such denominations as may be reasonably
requested by the holder hereof, shall be registered in the name of such holder
or such other name as shall be designated by such holder and, following the
date on which the Warrant Shares have been registered under the Securities Act,
pursuant to piggback registration rights or as otherwise may be sold by the
holder pursuant to Rule 144 promulgated under the Securities Act (or a
successor rule), shall not bear any restrictive legend. If this Warrant shall
have been exercised only in part, then the Company shall, at its expense, at
the time of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.

     If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement (including pursuant to a
Cashless Exercise), and the Company fails for any reason (other than the
reasons contemplated by Sections 3(c), 7(f) and (g) hereof) to deliver, on or
prior to the fourth business day following the expiration of the Delivery
Period for such exercise, the number of shares of Common Stock to which the
holder is entitled upon such

 

 

exercise (an “Exercise Default”), then the Company shall pay to the holder
payments (“Exercise Default Payments”) for an Exercise Default in the amount of
(a) (N/365), multiplied by (b) the amount by which the Market Price (as defined
in Section 4(l) hereof) on the date the Exercise Agreement giving rise to the
Exercise Default is transmitted in accordance with this Section 1 (the
“Exercise Default Date”) exceeds the Exercise Price in respect of such Warrant
Shares, multiplied by (c) the number of shares of Common Stock the Company
failed to so deliver in such Exercise Default, multiplied by (d) .24, where N =
the number of days from the Exercise Default Date to the date that the Company
effects the full exercise of this Warrant which gave rise to the Exercise
Default. The accrued Exercise Default Payment for each calendar month shall be
paid in cash or shall be convertible into Common Stock, at the Company’s
option, as follows:

            (a)    In the event Company elects to take such payment in cash, cash payment
shall be made to holder by the fifth day of the month following the month in
which it has accrued; and

            (b)    In the event Company elects to take such payment in Common Stock, the
Company may convert such payment amount into Common Stock at the lower of the
Exercise Price or the Market Price (as in effect at the time of conversion) at
any time after the fifth day of the month following the month in which it has
accrued.

     Nothing herein shall limit the holder’s right to pursue actual damages for
the Company’s failure to maintain a sufficient number of authorized shares of
Common Stock as required pursuant to the terms of Section 3(b) hereof or to
otherwise issue shares of Common Stock upon exercise of this Warrant in
accordance with the terms hereof, and the holder shall have the right to pursue
all remedies available at law or in equity (including a decree of specific
performance and/or injunctive relief).

     2.     Period of Exercise. This Warrant, once listed pursuant to
Section 3(c) hereof, is immediately exercisable, at any time or from time to
time on or after the date of initial issuance of this Warrant (the “Issue
Date”) and before 5:00 p.m., New York City time, on the fifth anniversary of
the Issue Date (the “Exercise Period”). The Exercise Period shall
automatically be extended by one (1) day for (i) each day on which the Company
does not have a number of shares of Common Stock reserved for issuance upon
exercise hereof at least equal to the number of shares of Common Stock issuable
upon exercise hereof, or (ii) by each day for which the Warrant Shares are not
timely delivered in accordance with Section 1 hereof.

     3.     Certain Agreements of the Company. The Company hereby covenants
and agrees as follows:

            (a)    Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, claims and
encumbrances.

            (b)    Reservation of Shares. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant,

 

 

a sufficient number of shares of Common Stock to provide for the exercise in
full of this Warrant (without giving effect to the limitations on exercise set
forth in Section 7(g) hereof).

            (c)    Listing. The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed or become listed (subject to official
notice of issuance upon exercise of this Warrant) and shall maintain, so long
as any other shares of Common Stock shall be so listed, such listing of all
shares of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be listed
on such national securities exchange or automated quotation system.

            (d)    Certain Actions Prohibited. The Company will not, by amendment
of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed by it hereunder, but will at all times
in good faith assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested by the
holder of this Warrant in order to protect the economic benefit inuring to the
holder hereof and the exercise privilege of the holder of this Warrant against
dilution or other impairment, consistent with the tenor and purpose of this
Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

            (e)    Successors and Assigns. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all of the Company’s assets.

            (f)    Blue Sky Laws. The Company shall, on or before the date of
issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for, or obtain
exemption for the Warrant Shares for, sale to the holder of this Warrant upon
the exercise hereof under applicable securities or “blue sky” laws of the
states of the United States, and shall provide evidence of any such action so
taken to the holder of this Warrant prior to such date; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(f), (b) subject itself
to general taxation in any such jurisdiction or (c) file a general consent to
service of process in any such jurisdiction.

     4.     Antidilution Provisions. During the Exercise Period, the
Exercise Price and the number of Warrant Shares issuable hereunder shall be
subject to adjustment from time to time as

 

 

provided in this Section 4, provided that no adjustment shall be required for
the issuance of securities in the proposed Public Offering.

     In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up or
down to the nearest cent.

            (a)    Subdivision or Combination of Common Stock. If the Company, at
any time during the Exercise Period, subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company, at
any time during the Exercise Period, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record
for effecting such combination, the Exercise Price in effect immediately prior
to such combination will be proportionately increased.

            (b)    Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of Section 4(a), the number of shares
of Common Stock issuable upon exercise of this Warrant at each such Exercise
Price shall be adjusted by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of this Warrant at such Exercise Price immediately
prior to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.

            (c)    Consolidation, Merger or Sale. In case of any consolidation of
the Company with, or merger of the Company into, any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder hereof will have the right to acquire and receive upon
exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such consolidation,
merger or sale or conveyance not taken place. In any such case, the Company
will make appropriate provision to insure that the provisions of this Section 4
hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor corporation
(if other than the Company) assumes by written instrument the obligations under
this Warrant and the obligations to deliver to the holder hereof such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
the holder may be entitled to acquire.

            (d)    Distribution of Assets. In case the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to
holders of Common Stock as a partial liquidating dividend, stock repurchase by
way of return of capital or otherwise (including any

 

 

 dividend or distribution to the Company’s shareholders of cash or shares
(or rights to acquire shares) of capital stock of a subsidiary) (a
“Distribution”), at any time during the Exercise Period, then the holder hereof
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets (or rights) which would have been payable to the holder had such holder
been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution. If the Company
distributes rights, warrants, options or any other form of convertible
securities and the right to exercise or convert such securities would expire in
accordance with their terms prior to the expiration of the Exercise Period,
then the terms of such securities shall provide that such exercise or
convertibility right shall remain in effect until 30 days after the date the
holder hereof receives such securities pursuant to the exercise hereof.

            (e)    Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder hereof, which notice shall
state the Exercise Price resulting from such adjustment and the increase or
decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be
certified by the chief financial officer of the Company.

            (f)    Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than $.01, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than $.01.

            (g)    No Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a
cash adjustment in respect of any fractional share which would otherwise be
issuable in an amount equal to the same fraction of the Market Price of a share
of Common Stock on the date of such exercise.

            (h)    Other Notices. In case at any time:

                     (i)    the Company shall declare any dividend upon the Common Stock payable
in shares of stock of any class or make any other distribution (other than
dividends or distributions payable in cash out of retained earnings consistent
with the Company’s past practices with respect to declaring dividends and
making distributions) to the holders of the Common Stock;

                     (ii)    the Company shall offer for subscription pro rata to the holders of
the Common Stock any additional shares of stock of any class or other rights;

                     (iii)    there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all of its assets to, another
corporation or entity; or

 

 

                     (iv)    there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company
shall close or a record shall be taken for determining the holders of Common
Stock entitled to receive any such dividend, distribution, or subscription
rights or for determining the holders of Common Stock entitled to vote in
respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place.
Such notice shall also specify the date on which the holders of Common Stock
shall be entitled to receive such dividend, distribution, or subscription
rights or to exchange their Common Stock for stock or other securities or
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up, as the case may be.
Such notice shall be given at least thirty (30) days prior to the record date
or the date on which the Company’s books are closed in respect thereto.
Failure to give any such notice or any defect therein shall not affect the
validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv)
above. Notwithstanding the foregoing, the Company shall publicly disclose the
substance of any notice delivered hereunder prior to delivery of such notice to
the holder hereof.

                 (l)    Certain Definitions.

                         (i)    “Common Stock Deemed Outstanding” shall mean the number of shares of
Common Stock actually outstanding (not including shares of Common Stock held in
the treasury of the Company), plus (x) in the case of any adjustment required
by Section 4(a) resulting from the issuance of any Options, the maximum total
number of shares of Common Stock issuable upon the exercise of the Options for
which the adjustment is required (including any Common Stock issuable upon the
conversion of Convertible Securities issuable upon the exercise of such
Options), and (y) in the case of any adjustment required by Section 4(a)
resulting from the issuance of any Convertible Securities, the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of the Convertible Securities for which the adjustment is required, as
of the date of issuance of such Convertible Securities, if any.

                         (ii)    “Market Price,” as of any date, (i) means the average of the closing
bid prices for the shares of Common Stock as reported on the American Stock
Exchange by Bloomberg Financial Markets (“Bloomberg”) for the five consecutive
business days immediately preceding such date, or (ii) if the American Stock
Exchange is not the principal trading market for the shares of Common Stock,
the average of the reported bid prices reported by Bloomberg on the principal
trading market for the Common Stock during the same period, or, if there is no
bid price for such period, the last sales price reported by Bloomberg for such
period, or (iii) if the foregoing do not apply, the last sale price of such
security in the over-the-counter market on the pink sheets or bulletin board
for such security as reported by Bloomberg,

 

 

 or if no sale price is so reported for such security, the last bid price
of such security as reported by Bloomberg, or (iv) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price
shall be the average fair market value as reasonably determined by an
investment banking firm selected by the Company and reasonably acceptable to
the holder, with the costs of the appraisal to be borne by the Company. The
manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

                         (iii)    “Common Stock,” for purposes of this Section 4, includes the Common
Stock and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only Common Stock in respect
of which this Warrant is exercisable, or shares resulting from any subdivision
or combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to
in Section 4(e) hereof, the stock or other securities or property provided for
in such Section.

                         (iv)    “Measurement Date” means (i) for purposes of any private offering of
securities under Section 4(2) of the Securities Act of 1933, as amended, the
date that the Company enters into legally binding definitive agreements for the
issuance and sale of such securities and (ii) for purposes of any other
issuance of securities, the date of issuance thereof.

     5.     Issue Tax. The issuance of certificates for Warrant Shares upon
the exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

     6.     No Rights or Liabilities as a Shareholder. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.

     7.     Transfer, Exchange, Redemption and Replacement of Warrant.

            (a)    Restriction on Transfer. This Warrant and the rights granted
to the holder hereof are transferable, in whole or in part, upon surrender of
this Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Section 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Sections 7(f) and (g) hereof. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary contained

 

 

 herein, the registration rights described in Section 8 hereof are
assignable only in accordance with the provisions of the Registration Rights
Agreement.

            (b)    Warrant Exchangeable for Different Denominations. This Warrant
is exchangeable, upon the surrender hereof by the holder hereof at the office
or agency of the Company referred to in Section 7(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right
to purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares (at the Exercise Price therefor) as shall be designated by the
holder hereof at the time of such surrender.

            (c)    Replacement of Warrant. 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 this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

            (d)    Cancellation; Payment of Expenses. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided
in this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all
other expenses (other than legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Section 7. The Company shall
indemnify and reimburse the holder of this Warrant for all losses and damages
arising as a result of or related to any breach of the terms of this Warrant,
including costs and expenses (including legal fees) incurred by such holder in
connection with the enforcement of its rights hereunder.

            (e)    Warrant Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.

            (f)    Transfer or Exchange Without Registration. If, at the time of
the surrender of this Warrant in connection with any transfer or exchange of
this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder) shall not be registered under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer or exchange, (i) that the holder or
transferee of this Warrant, as the case may be, furnish to the Company a
written opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect
that such transfer or exchange may be made without registration under the
Securities Act and under applicable state securities or blue sky laws (the cost
of which shall be borne by the Company if the Company’s counsel renders such an
opinion), (ii) that the holder or transferee execute and deliver to the Company
an investment letter in form and substance acceptable to the Company and (iii)
that the transferee be an “accredited

 

 

 investor” as defined in Rule 501(a) promulgated under the Securities Act;
provided that no such opinion, letter, or status as an “accredited investor”
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act.

            (g)    Additional Restrictions on Exercise or Transfer.
                     (i)    
At no time may the Holder exercise this Warrant if the number of
shares of Common Stock to be issued pursuant to such exercise would exceed,
when aggregated with all other shares of Common Stock owned by the Holder at
such time, the number of shares of Common Stock which would result in the
Holder owning more than 4.99% of all of the Common Stock outstanding at such
time; provided, however, that upon the Holder providing the Issuer with
sixty-one (61) days notice (pursuant to Section 9 hereof) (the “Waiver Notice”)
that the Holder would like to waive this Section 7(g)(i) with regard to any or
all shares of Common Stock issuable upon exercise of this Warrant, this Section
7(g)(i) will be of no force or effect with regard to all or a portion of the
Warrant referenced in the Waiver Notice.

                     (ii)    In no event shall the holder hereof have the right to exercise any
portion of this Warrant for shares of Common Stock or to dispose of any portion
of this Warrant to the extent that such right to effect such exercise or
disposition would result in the holder or any of its affiliates beneficially
owning more than 9.99% of the outstanding shares of Common Stock. For purposes
of this Section 7(g)(ii), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder. The restriction contained in this
Section 7(g)(ii) may not be altered, amended, deleted or changed in any manner
whatsoever unless the holders of a majority of the outstanding shares of Common
Stock and the holder hereof shall approve, in writing, such alteration,
amendment, deletion or change.

     8.     Registration Rights. The initial holder of this Warrant (and
certain assignees thereof) is entitled to the benefit of unlimited “piggyback”
registration rights in respect of the Warrant Shares as such rights and terms
and conditions of such rights are usual and customary.

     9.     Notices. Any notices required or permitted to be given under
the terms of this Warrant shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier, or by confirmed telecopy, in each case addressed to a party. The
addresses for such communications shall be:

	 	If to the Company:

	 	Antex Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Facsimile: (301) 590-1252

Attn: Chief Executive Officer

	 	with a copy simultaneously transmitted by like means to:

 

 

	 	Covington & Burling

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2401

Facsimile: (202) 778-5196

Attn: Alfred Moses, Esq.

     If to the holder, at such address as such holder shall have provided in writing
to the Company, or at such other address as such holder furnishes by notice
given in accordance with this Section 9.

     10.     Governing Law; Jurisdiction. This Warrant shall be governed by
and construed in accordance with the laws of the State of Delaware. The
Company irrevocably consents to the jurisdiction of the United States federal
courts and state courts located in the State of Delaware in any suit or
proceeding based on or arising under this Warrant and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts. The Company irrevocably waives any objection to the laying of venue and
the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company further agrees that service of process upon the Company
mailed by certified or registered mail shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
Nothing herein shall affect the holder’s right to serve process in any other
manner permitted by law. The Company agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.

     11.     Miscellaneous.

            (a)    Amendments. Except as provided in Section 7(g) hereof, this
Warrant and any provision hereof may only be amended by an instrument in
writing signed by the Company and the holder hereof.

            (b)    Descriptive Headings. The descriptive headings of the several
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.

            (c)    Cashless Exercise. Notwithstanding anything to the contrary
contained in this Warrant, this Warrant may be exercised at any time during the
Exercise Period by presentation and surrender of this Warrant to the Company at
its principal executive offices with a written notice of the holder’s intention
to effect a cashless exercise, including a calculation of the number of shares
of Common Stock to be issued upon such exercise in accordance with the terms
hereof (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu
of paying the Exercise Price in cash, the holder shall surrender this Warrant
for that number of shares of Common Stock determined by multiplying the number
of Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market
Price of a share of the Common Stock on the date of exercise and the Exercise
Price, and the denominator of which shall be the then current Market Price per
share of Common Stock.

 

 

            (d)    Business Day. For purposes of this Warrant, the term “business
day” means any day, other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law,
regulation or executive order to close.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

	 
	ANTEX BIOLOGICS INC
	 
	By: /s/ Jeffrey Pirone                        
	      Title:  Executive Vice President

 

 

FORM OF EXERCISE AGREEMENT

(To be Executed by the Holder in order to Exercise the Warrant)

	To: 	 	Antex Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Facsimile: (301) 590-1252

Attn: Chief Executive Officer

     The undersigned hereby irrevocably exercises the right to purchase
______ shares of the Common Stock of Antex Biologics Inc., a corporation
organized under the laws of the State of ______ (the “Company”), evidenced by the attached Warrant, and herewith [makes payment of
the Exercise Price with respect to such shares in full][elects to effect a
Cashless Exercise (as defined in Section 11(c) of such Warrant], all in
accordance with the conditions and provisions of said Warrant.

     The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws.

	•	 	The undersigned requests that the Company cause its transfer agent to
electronically transmit the Common Stock issuable pursuant to this
Exercise Agreement to the account of the undersigned or its nominee
(which is ______) with DTC through its Deposit Withdrawal
Agent Commission System (“DTC Transfer”), provided that such transfer
agent participates in the DTC Fast Automated Securities Transfer
program.
	 
	•	 	In lieu of receiving the shares of Common Stock issuable pursuant to
this Exercise Agreement by way of DTC Transfer, the undersigned hereby
requests that the Company cause its transfer agent to issue and
deliver to the undersigned physical certificates representing such
shares of Common Stock.

     The undersigned requests that a Warrant representing any unexercised
portion hereof be issued, pursuant to the Warrant, in the name of the Holder
and delivered to the undersigned at the address set forth below:

	 	 	 
	Dated:______________________________	 	
____________________________________
	 	 	
     Signature of Holder
	 
	 	 	
____________________________________
	 	 	
     Name of Holder (Print)
	 
	 	 	
     Address:
	 
	 	 	
____________________________________
	 
	 	 	
____________________________________
	 
	____________________________________	 	 

 

 

FORM OF ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

	 	 	 	 	 
	Name of Assignee	 	
Address
	 	No. of Shares

, and hereby irrevocably constitutes and appoints
________________________ as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of
substitution in the premises.

	 	 	 	 	 	 	 
	Dated: ______________, ______	 	 	 	 	 	 
	 
	In the presence of	 	 	 	 	 	 
	 
	____________	 	 	 	 	 	 
	 
	 	 	
Name:	 	____________________________
	 
	 	 	 	 	Signature:
	 	__________________________
	 
	 	 	 	 	Title of Signing Officer or Agent (if any):
	 
	 	 	 	 	 	 	__________________________
	 
	 	 	 	 	Address:
	 	__________________________
	 
	 	 	 	 	 	 	__________________________

Note: The above signature should correspond exactly with the name on the face
of the within Warrant.exv4w8

 

Exhibit 4.8

	 	VOID AFTER 5:00 P.M., NEW YORK CITY

TIME, ON December 12, 2007

(UNLESS EXTENDED PURSUANT TO SECTION 2 HEREOF)

		
	 	THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

	 	Right to Purchase 363,750 Shares of

Common Stock, par value $.01 per share

Date: December 12, 2002

ANTEX BIOLOGICS INC.

STOCK PURCHASE WARRANT

     THIS CERTIFIES THAT, for value received, DMG Legacy International Ltd., or
its registered assigns, is entitled to purchase from Antex Biologics Inc., a
corporation organized under the laws of the State of Delaware (the “Company”),
at any time or from time to time during the period specified in Section 2
hereof, 363,750 fully paid and nonassessable shares of the Company’s common
stock, par value $.01 per share (the “Common Stock”), at an exercise price per
share (the “Exercise Price”) equal to the exercise price of the warrants issued
in Antex Biologics’ proposed Public Offering (the “Public Offering Warrant
Exercise Price”) that is anticipated to close no later then February 15, 2003
(the “Public Offering”), but in no even shall the Exercise Price be greater
than $1.00 per share. (The Public Warrant Offering Price shall be based on a
premium to the offering price of the Units sold in the Public Offering.) In the
event a Public Offering is not completed, then the Exercise Price shall be set
at $1.00 per share. The number of shares of Common Stock purchasable hereunder
(the “Warrant Shares”) and the Exercise Price are subject to adjustment as
provided in Section 4 hereof. The term “Warrants” means this Warrant and the
other warrants of the Company issued in connection with the Promissory Note
issued and dated December 12, 2002, by and among the Company and the other
signatory thereto (the “Promissory Note”).

This Warrant is subject to the following terms,
provisions and conditions:

 

 

     1.     Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, including, without limitation, the
limitations contained in Section 7 hereof, this Warrant may be exercised by the
holder hereof, in whole or in part, by the surrender of this Warrant, together
with a completed exercise agreement in the form attached hereto (the “Exercise
Agreement”), to the Company during normal business hours on any business day at
the Company’s principal executive offices (or such other office or agency of
the Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company, of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the holder is
effectuating a Cashless Exercise (as defined in Section 11(c) hereof) pursuant
to Section 11(c) hereof, delivery to the Company of a written notice of an
election to effect a Cashless Exercise for the Warrant Shares specified in the
Exercise Agreement. The Warrant Shares so purchased shall be deemed to be
issued to the holder hereof or such holder’s designee, as the record owner of
such shares, as of the close of business on the date on which this Warrant
shall have been surrendered, the completed Exercise Agreement shall have been
delivered, and payment shall have been made for such shares as set forth above
or, if such date is not a business date, on the next succeeding business date.
The Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding two business days, after this Warrant
shall have been so exercised (the “Delivery Period”). If the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer program, and so long as the certificates
therefore do not bear a legend and the holder is not obligated to return such
certificate for the placement of a legend thereon, the Company shall cause its
transfer agent to electronically transmit the Warrant Shares so purchased to
the holder by crediting the account of the holder or its nominee with DTC
through its Deposit Withdrawal Agent Commission system (“DTC Transfer”). If
the aforementioned conditions to a DTC Transfer are not satisfied, the Company
shall deliver to the holder physical certificates representing the Warrant
Shares so purchased. Further, the holder may instruct the Company to deliver
to the holder physical certificates representing the Warrant Shares so
purchased in lieu of delivering such shares by way of DTC Transfer. Any
certificates so delivered shall be in such denominations as may be reasonably
requested by the holder hereof, shall be registered in the name of such holder
or such other name as shall be designated by such holder and, following the
date on which the Warrant Shares have been registered under the Securities Act,
pursuant to piggback registration rights or as otherwise may be sold by the
holder pursuant to Rule 144 promulgated under the Securities Act (or a
successor rule), shall not bear any restrictive legend. If this Warrant shall
have been exercised only in part, then the Company shall, at its expense, at
the time of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.

     If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement (including pursuant to a
Cashless Exercise), and the Company fails for any reason (other than the
reasons contemplated by Sections 3(c), 7(f) and (g) hereof) to deliver, on or
prior to the fourth business day following the expiration of the Delivery
Period for such exercise, the number of shares of Common Stock to which the
holder is entitled upon such

 

 

exercise (an “Exercise Default”), then the Company shall pay to the holder
payments (“Exercise Default Payments”) for an Exercise Default in the amount of
(a) (N/365), multiplied by (b) the amount by which the Market Price (as defined
in Section 4(l) hereof) on the date the Exercise Agreement giving rise to the
Exercise Default is transmitted in accordance with this Section 1 (the
“Exercise Default Date”) exceeds the Exercise Price in respect of such Warrant
Shares, multiplied by (c) the number of shares of Common Stock the Company
failed to so deliver in such Exercise Default, multiplied by (d) .24, where N =
the number of days from the Exercise Default Date to the date that the Company
effects the full exercise of this Warrant which gave rise to the Exercise
Default. The accrued Exercise Default Payment for each calendar month shall be
paid in cash or shall be convertible into Common Stock, at the Company’s
option, as follows:

            (a)  In the event Company elects to take such payment in cash, cash payment
shall be made to holder by the fifth day of the month following the month in
which it has accrued; and

            (b)  In the event Company elects to take such payment in Common Stock, the
Company may convert such payment amount into Common Stock at the lower of the
Exercise Price or the Market Price (as in effect at the time of conversion) at
any time after the fifth day of the month following the month in which it has
accrued.

                   Nothing herein shall limit the holder’s right to pursue actual damages for
the Company’s failure to maintain a sufficient number of authorized shares of
Common Stock as required pursuant to the terms of Section 3(b) hereof or to
otherwise issue shares of Common Stock upon exercise of this Warrant in
accordance with the terms hereof, and the holder shall have the right to pursue
all remedies available at law or in equity (including a decree of specific
performance and/or injunctive relief).

     2.     Period of Exercise. This Warrant, once listed pursuant to Section 3(c)
hereof, is immediately exercisable, at any time or from time to time on or
after the date of initial issuance of this Warrant (the “Issue Date”) and
before 5:00 p.m., New York City time, on the fifth anniversary of the Issue
Date (the “Exercise Period”). The Exercise Period shall automatically be
extended by one (1) day for (i) each day on which the Company does not have a
number of shares of Common Stock reserved for issuance upon exercise hereof at
least equal to the number of shares of Common Stock issuable upon exercise
hereof, or (ii) by each day for which the Warrant Shares are not timely
delivered in accordance with Section 1 hereof.

     3.     Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

            (a)  Shares to be Fully Paid. All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, claims and encumbrances.

            (b)  Reservation of Shares. During the Exercise Period, the Company shall
at all times have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant,

 

 

a sufficient number of shares of Common Stock to provide for the exercise in
full of this Warrant (without giving effect to the limitations on exercise set
forth in Section 7(g) hereof).

            (c)  Listing. The Company shall promptly secure the listing of the shares
of Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed or become listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all shares of
Common Stock from time to time issuable upon the exercise of this Warrant; and
the Company shall so list on each national securities exchange or automated
quotation system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system.

            (d)  Certain Actions Prohibited. The Company will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder
of this Warrant in order to protect the economic benefit inuring to the holder
hereof and the exercise privilege of the holder of this Warrant against
dilution or other impairment, consistent with the tenor and purpose of this
Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

            (e)  Successors and Assigns. This Warrant will be binding upon any entity
succeeding to the Company by merger, consolidation, or acquisition of all or
substantially all of the Company’s assets.

            (f)  Blue Sky Laws. The Company shall, on or before the date of issuance
of any Warrant Shares, take such actions as the Company shall reasonably
determine are necessary to qualify the Warrant Shares for, or obtain exemption
for the Warrant Shares for, sale to the holder of this Warrant upon the
exercise hereof under applicable securities or “blue sky” laws of the states of
the United States, and shall provide evidence of any such action so taken to
the holder of this Warrant prior to such date; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to (a) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(f), (b) subject itself to general
taxation in any such jurisdiction or (c) file a general consent to service of
process in any such jurisdiction.

     4.     Antidilution Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares issuable hereunder shall be subject to
adjustment from time to time as

 

 

provided in this Section 4, provided that no adjustment shall be required for
the issuance of securities in the proposed Public Offering.

       
     In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up or
down to the nearest cent.

       
     (a)  Subdivision or Combination of Common Stock. If the Company, at any
time during the Exercise Period, subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company, at
any time during the Exercise Period, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record
for effecting such combination, the Exercise Price in effect immediately prior
to such combination will be proportionately increased.

       
     (b)  Adjustment in Number of Shares. Upon each adjustment of the Exercise
Price pursuant to the provisions of Section 4(a), the number of shares of
Common Stock issuable upon exercise of this Warrant at each such Exercise Price
shall be adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant at such Exercise Price immediately prior
to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.

            
(c)  Consolidation, Merger or Sale. In case of any consolidation of the
Company with, or merger of the Company into, any other corporation, or in case
of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder hereof will have the right to acquire and receive upon
exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such consolidation,
merger or sale or conveyance not taken place. In any such case, the Company
will make appropriate provision to insure that the provisions of this Section 4
hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor corporation
(if other than the Company) assumes by written instrument the obligations under
this Warrant and the obligations to deliver to the holder hereof such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
the holder may be entitled to acquire.

       
     (d)  Distribution of Assets. In case the Company shall declare or make any
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock as a partial liquidating dividend, stock repurchase by way of
return of capital or otherwise (including any

 

 

 dividend or distribution to the Company’s shareholders of cash or shares
(or rights to acquire shares) of capital stock of a subsidiary) (a
“Distribution”), at any time during the Exercise Period, then the holder hereof
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets (or rights) which would have been payable to the holder had such holder
been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution. If the Company
distributes rights, warrants, options or any other form of convertible
securities and the right to exercise or convert such securities would expire in
accordance with their terms prior to the expiration of the Exercise Period,
then the terms of such securities shall provide that such exercise or
convertibility right shall remain in effect until 30 days after the date the
holder hereof receives such securities pursuant to the exercise hereof.

       
     (e)  Notice of Adjustment. Upon the occurrence of any event which requires
any adjustment of the Exercise Price, then, and in each such case, the Company
shall give notice thereof to the holder hereof, which notice shall state the
Exercise Price resulting from such adjustment and the increase or decrease in
the number of Warrant Shares purchasable at such price upon exercise, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. Such calculation shall be certified by the chief
financial officer of the Company.

       
     (f)  Minimum Adjustment of Exercise Price. No adjustment of the Exercise
Price shall be made in an amount of less than $.01, but any such lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which, together with any adjustments so
carried forward, shall amount to not less than $.01.

       
     (g)  No Fractional Shares. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of
Common Stock on the date of such exercise.

       
     (h)  Other Notices. In case at any time:

       
       
     (i)      the Company shall declare any dividend upon the Common Stock payable
in shares of stock of any class or make any other distribution (other than
dividends or distributions payable in cash out of retained earnings consistent
with the Company’s past practices with respect to declaring dividends and
making distributions) to the holders of the Common Stock;

       
       
     (ii)     the Company shall offer for subscription pro rata to the holders of
the Common Stock any additional shares of stock of any class or other rights;

       
       
     (iii)    there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all of its assets to, another
corporation or entity; or

 

 

       
       
     (iv)    there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company
shall close or a record shall be taken for determining the holders of Common
Stock entitled to receive any such dividend, distribution, or subscription
rights or for determining the holders of Common Stock entitled to vote in
respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place.
Such notice shall also specify the date on which the holders of Common Stock
shall be entitled to receive such dividend, distribution, or subscription
rights or to exchange their Common Stock for stock or other securities or
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up, as the case may be.
Such notice shall be given at least thirty (30) days prior to the record date
or the date on which the Company’s books are closed in respect thereto.
Failure to give any such notice or any defect therein shall not affect the
validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv)
above. Notwithstanding the foregoing, the Company shall publicly disclose the
substance of any notice delivered hereunder prior to delivery of such notice to
the holder hereof.

       
     (l)  Certain Definitions.

       
       
     (i)      “Common Stock Deemed Outstanding” shall mean the number of shares of
Common Stock actually outstanding (not including shares of Common Stock held in
the treasury of the Company), plus (x) in the case of any adjustment required
by Section 4(a) resulting from the issuance of any Options, the maximum total
number of shares of Common Stock issuable upon the exercise of the Options for
which the adjustment is required (including any Common Stock issuable upon the
conversion of Convertible Securities issuable upon the exercise of such
Options), and (y) in the case of any adjustment required by Section 4(a)
resulting from the issuance of any Convertible Securities, the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of the Convertible Securities for which the adjustment is required, as
of the date of issuance of such Convertible Securities, if any.

            
       
(ii)     “Market Price,” as of any date, (i) means the average of the closing
bid prices for the shares of Common Stock as reported on the American Stock
Exchange by Bloomberg Financial Markets (“Bloomberg”) for the five consecutive
business days immediately preceding such date, or (ii) if the American Stock
Exchange is not the principal trading market for the shares of Common Stock,
the average of the reported bid prices reported by Bloomberg on the principal
trading market for the Common Stock during the same period, or, if there is no
bid price for such period, the last sales price reported by Bloomberg for such
period, or (iii) if the foregoing do not apply, the last sale price of such
security in the over-the-counter market on the pink sheets or bulletin board
for such security as reported by Bloomberg,

 

 

 or if no sale price is so reported for such security, the last bid price
of such security as reported by Bloomberg, or (iv) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price
shall be the average fair market value as reasonably determined by an
investment banking firm selected by the Company and reasonably acceptable to
the holder, with the costs of the appraisal to be borne by the Company. The
manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

       
       
     (iii)    “Common Stock,” for purposes of this Section 4, includes the Common
Stock and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only Common Stock in respect
of which this Warrant is exercisable, or shares resulting from any subdivision
or combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to
in Section 4(e) hereof, the stock or other securities or property provided for
in such Section.

            
       
(iv)      “Measurement Date” means (i) for purposes of any private offering of
securities under Section 4(2) of the Securities Act of 1933, as amended, the
date that the Company enters into legally binding definitive agreements for the
issuance and sale of such securities and (ii) for purposes of any other
issuance of securities, the date of issuance thereof.

     5.     Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

     6.     No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

     7.     Transfer, Exchange, Redemption and Replacement of Warrant.

       
     (a)  Restriction on Transfer. This Warrant and the rights granted to the
holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Section 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Sections 7(f) and (g) hereof. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary contained

 

 

 herein, the registration rights described in Section 8 hereof are
assignable only in accordance with the provisions of the Registration Rights
Agreement.

       
     (b)  Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Section 7(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right
to purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares (at the Exercise Price therefor) as shall be designated by the
holder hereof at the time of such surrender.

       
     (c)  Replacement of Warrant. 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 this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

            
(d)  Cancellation; Payment of Expenses. Upon the surrender of this Warrant
in connection with any transfer, exchange, or replacement as provided in this
Section 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Section 7. The Company shall
indemnify and reimburse the holder of this Warrant for all losses and damages
arising as a result of or related to any breach of the terms of this Warrant,
including costs and expenses (including legal fees) incurred by such holder in
connection with the enforcement of its rights hereunder.

            
(e)  Warrant Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.

       
     (f)  Transfer or Exchange Without Registration. If, at the time of the
surrender of this Warrant in connection with any transfer or exchange of this
Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder) shall not be registered under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer or exchange, (i) that the holder or
transferee of this Warrant, as the case may be, furnish to the Company a
written opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect
that such transfer or exchange may be made without registration under the
Securities Act and under applicable state securities or blue sky laws (the cost
of which shall be borne by the Company if the Company’s counsel renders such an
opinion), (ii) that the holder or transferee execute and deliver to the Company
an investment letter in form and substance acceptable to the Company and (iii)
that the transferee be an “accredited

 

 

 investor” as defined in Rule 501(a) promulgated under the Securities Act;
provided that no such opinion, letter, or status as an “accredited investor”
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act.

       
     (g)  Additional Restrictions on Exercise or Transfer.

       
       
     (i)  At no time may the Holder exercise this Warrant if the number of
shares of Common Stock to be issued pursuant to such exercise would exceed,
when aggregated with all other shares of Common Stock owned by the Holder at
such time, the number of shares of Common Stock which would result in the
Holder owning more than 4.99% of all of the Common Stock outstanding at such
time; provided, however, that upon the Holder providing the Issuer with
sixty-one (61) days notice (pursuant to Section 9 hereof) (the “Waiver Notice”)
that the Holder would like to waive this Section 7(g)(i) with regard to any or
all shares of Common Stock issuable upon exercise of this Warrant, this Section
7(g)(i) will be of no force or effect with regard to all or a portion of the
Warrant referenced in the Waiver Notice.

       
       
     (ii)  In no event shall the holder hereof have the right to exercise any
portion of this Warrant for shares of Common Stock or to dispose of any portion
of this Warrant to the extent that such right to effect such exercise or
disposition would result in the holder or any of its affiliates beneficially
owning more than 9.99% of the outstanding shares of Common Stock. For purposes
of this Section 7(g)(ii), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder. The restriction contained in this
Section 7(g)(ii) may not be altered, amended, deleted or changed in any manner
whatsoever unless the holders of a majority of the outstanding shares of Common
Stock and the holder hereof shall approve, in writing, such alteration,
amendment, deletion or change.

     8.     Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of unlimited “piggyback”
registration rights in respect of the Warrant Shares as such rights and terms
and conditions of such rights are usual and customary.

     9.     Notices. Any notices required or permitted to be given under the terms
of this Warrant shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier, or by
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:

	 	If to the Company:

	 	Antex Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Facsimile: (301) 590-1252

Attn: Chief Executive Officer

	 	with a copy simultaneously transmitted by like means to:

 

 

	 	Covington & Burling

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2401

Facsimile: (202) 778-5196

Attn: Alfred Moses, Esq.

If to the holder, at such address as such holder shall have provided in writing
to the Company, or at such other address as such holder furnishes by notice
given in accordance with this Section 9.

     10.     Governing Law; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware. The Company
irrevocably consents to the jurisdiction of the United States federal courts
and state courts located in the State of Delaware in any suit or proceeding
based on or arising under this Warrant and irrevocably agrees that all claims
in respect of such suit or proceeding may be determined in such courts. The
Company irrevocably waives any objection to the laying of venue and the defense
of an inconvenient forum to the maintenance of such suit or proceeding. The
Company further agrees that service of process upon the Company mailed by
certified or registered mail shall be deemed in every respect effective service
of process upon the Company in any such suit or proceeding. Nothing herein
shall affect the holder’s right to serve process in any other manner permitted
by law. The Company agrees that a final non-appealable judgment in any such
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.

     11.     Miscellaneous.

       
     (a)  Amendments. Except as provided in Section 7(g) hereof, this Warrant
and any provision hereof may only be amended by an instrument in writing signed
by the Company and the holder hereof.

       
     (b)  Descriptive Headings. The descriptive headings of the several
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.

            
(c)  Cashless Exercise. Notwithstanding anything to the contrary contained
in this Warrant, this Warrant may be exercised at any time during the Exercise
Period by presentation and surrender of this Warrant to the Company at its
principal executive offices with a written notice of the holder’s intention to
effect a cashless exercise, including a calculation of the number of shares of
Common Stock to be issued upon such exercise in accordance with the terms
hereof (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu
of paying the Exercise Price in cash, the holder shall surrender this Warrant
for that number of shares of Common Stock determined by multiplying the number
of Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market
Price of a share of the Common Stock on the date of exercise and the Exercise
Price, and the denominator of which shall be the then current Market Price per
share of Common Stock.

 

 

       
     (d)  Business Day. For purposes of this Warrant, the term “business day”
means any day, other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law,
regulation or executive order to close.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

	 	 	 
	 	 	
ANTEX BIOLOGICS INC.
	 
	 	 	
By: /s/ Jeffrey Pirone

      Title:  Executive Vice President

 

 

FORM OF EXERCISE AGREEMENT

(To be Executed by the Holder in order to Exercise the Warrant)

	 	 	 
	To:	 	
Antex Biologics Inc.
	 	 	
300 Professional Drive
	 	 	
Gaithersburg, Maryland 20879
	 	 	
Facsimile: (301) 590-1252
	 	 	
Attn: Chief Executive Officer

     The undersigned hereby irrevocably exercises the right to purchase ____________shares of the Common Stock of Antex Biologics Inc., a corporation organized under the laws of the State of ____________ (the “Company”), evidenced by the attached Warrant, and herewith [makes payment of
the Exercise Price with respect to such shares in full][elects to effect a
Cashless Exercise (as defined in Section 11(c) of such Warrant], all in
accordance with the conditions and provisions of said Warrant.

     The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws.

	 	 	 
	•	 	The undersigned requests that the Company cause its transfer agent to electronically transmit the Common Stock issuable pursuant to this
Exercise Agreement to the account of the undersigned or its nominee
(which is ____________) with DTC through its Deposit Withdrawal
Agent Commission System (“DTC Transfer”), provided that such transfer
agent participates in the DTC Fast Automated Securities Transfer
program.

	•	 	In lieu of receiving the shares of Common Stock issuable pursuant to this Exercise Agreement by way of DTC Transfer, the undersigned hereby
requests that the Company cause its transfer agent to issue and deliver to the undersigned physical certificates representing such shares of Common Stock.

     The undersigned requests that a Warrant representing any unexercised portion hereof be issued, pursuant to the Warrant, in the name of the Holder
and delivered to the undersigned at the address set forth below:

	 	 	 
	Dated:_________________________	 	____________________________________
        Signature of Holder
	 
	 	 	____________________________________

        Name of Holder (Print)
	 
	 	 	
        Address:
	 
	________________________________________________	 	
____________________________________

____________________________________

 

 

FORM OF ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

	 	 	 	 	 
	Name of Assignee	 	
Address
	 	No. of Shares

     , and hereby irrevocably constitutes and appoints
________________________as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of
substitution in the premises.

Dated: __________________, ____________

In the presence of

__________________

	 	 	 
	 	
Name: ______________________________

	 
	 
	 	 	
Signature: ___________________________

Title of Signing Officer or Agent (if any):
	 
	 	 	
                  ____________________________

Address:   ____________________________

                  ____________________________

Note:   The above signature should correspond exactly with the name on the face
of the within Warrant.

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