Document:

Exhibit 10.26

 

AMENDMENT TO THE

8% CONVERTIBLE SECURED NOTE PURCHASE AGREEMENT,

8% CONVERTIBLE SECURED NOTES AND

RELATED SECURITY AGREEMENTS

 

Reference is made to:

 

(i) the 8%

Convertible Secured Notes (the “Notes”) issued by Alliance Pharmaceutical Corp.

(the “Company”) pursuant to that certain 8% Convertible Secured Note Purchase

Agreement (the “Agreement”) among the Company and the purchasers signatory

thereto, dated as of October 4, 2002;

 

(ii) the

Imagent Security Agreement (the “Imagent Security Agreement”), dated as of

October 4, 2002, made by the Company to SDS Merchant Fund, L.P (the

“Collateral Agent”) for the benefit of the holders of the Notes;

 

(iii) the

General Collateral Security Agreement (the “General Collateral Security

Agreement”), dated as of October 4, 2002, made by the Company to the

Collateral Agent for the benefit of the holders of the Notes; and

 

(iv) the

Imagent and Oxygent Patent and Trademark Security Agreement (the “Imagent and

Oxygent Patent and Trademark Security Agreement”), dated as of October 4, 2002,

made by the Company to the Collateral Agent for the benefit of the holders of

the Notes;

 

(v) the

Debenture Imagent Security Agreement (the “Debenture Imagent Security

Agreement”), dated as of October 4, 2002, made by the Company to the parties

signatory thereto;

 

(vi) the

Debenture General Collateral Security Agreement (the “Debenture General

Collateral Security Agreement”) dated as of October 4, 2002, made by the

Company to the parties signatory thereto;

 

(vii) the

Debenture Imagent and Oxygent Patent and Trademark Security Agreement (the

“Debenture Imagent and Oxygen Patent and Trademark Security Agreement,” and,

collectively with the Imagent Security Agreement, the General Collateral

Security Agreement, the Imagent and Oxygen Patent and Trademark Security

Agreement, the Debenture Imagent Security Agreement and the Debenture General

Collateral Security Agreement, the “Security Agreements”), dated as of October

4, 2002, made by the Company to the parties signatory thereto;

 

(viii) the

Intercreditor Agreement (the “Intercreditor Agreement”) dated as of October 4,

2002, among the Collateral Agent, for itself and the holders of the Notes, SDS

Merchant Fund, L.P., Brown Simpson Partners I, L.P., Castle Creek Healthcare

Investors, LLC, CC Life Science, Ltd., and CCL Fund LLC (collectively, the

“Subordinated Debenture Holders”) and the Company; and

 

(ix) the

Intercreditor Agreement (the “Xmark Intercreditor Agreement,” and together with

the Intercreditor Agreement, the “Intercreditor Agreements”), dated as of

October 4,

 

 

2002, among

the Collateral Agent, for itself and the holders of the Notes, the Company, the

Subordinated Debenture Holders and Xmark Fund, L.P. and Xmark Fund, Ltd. (the

“Senior Leaders”).

 

Capitalized terms used herein

but not otherwise defined shall have the meanings ascribed to them in the

Agreement.

 

In accordance with Section

11(b) of the Agreement, the undersigned, constituting the holders of a majority

of the currently outstanding aggregate principal amounts of the Notes, hereby

agree to amend as of the date hereof, Section 1(b) of the Agreement, and any

reference to the aggregate principal amount of the Notes, to provide that the

aggregate principal amount of the Notes shall not exceed $5,000,000.

 

In accordance with Section 11

of each of the Imagent and Oxygent Patent and Trademark Security Agreement and

the Debenture Imagent and Oxygent Patent and Trademark Security Agreement,

Section 12 of each of the Imagent Security Agreement and the Debenture General

Collateral Security Agreement and Section 13 of each of the General Collateral

Security Agreement and the Debenture Imagent Security Agreement, the

undersigned, constituting the holders a majority of the currently outstanding

aggregate principal amounts of the Notes, hereby agree to amend the second

recital of each of the security Agreements, and any reference to the aggregate

principal amount of the Notes, to provide that the aggregate principal amount

of the Notes shall not exceed $5,000,000.

 

In accordance with Section 4.3

of the Intercreditor Agreement, the undersigned, constituting the Subordinated

Debenture Holders, the Collateral Agent and the Company hereby:

 

(i)     acknowledge that any reference to the

aggregate principal amount of the Notes in the Intercreditor Agreement shall be

amended as of the date hereof to provide that the aggregate principal amount of

the Notes shall not exceed $5,000,000; and

 

(ii)     amend as of the date hereof Section 3.6

of the Intercreditor Agreement, clause (i) to read as follows: “(i) any

increase in the principal amount of the Senior Obligations in excess of

$5,000,000 resulting from the issuance and sale for cash of Notes or Subsequent

Debt (as such term is defined in the Waiver and Consent); and.”

 

In accordance with Section 4.3

of the Xmark Intercreditor Agreement, the undersigned, constituting the

Subordinated Debenture Holders, the Collateral Agent, the Company and the

Senior Lenders hereby:

 

(i)     acknowledge that any reference to the

aggregate principal amount of the Notes in the Xmark Intercreditor Agreement

shall be amended as of the date hereof to provide that the aggregate principal

amount of the Notes shall not exceed $5,000,000; and

 

(ii)     amend as of  the date hereof Section 4.9 of the Xmark Intercreditor Agreement

to read as follows: “Subsequent Debt shall mean, in the event that the

aggregate gross proceeds from the sale of the Notes pursuant to the Convertible

Secured Note Purchase Agreement is less than $5,000,000, the issuance by the

Borrower, in one or a series of transactions, on or prior to January 31, 2003,

of additional securities having substantially the same economic terms as those

set forth in the Notes and the Convertible Secured Note Purchase

 

2

 

Agreement, which transactions,

together with the Notes, results in total gross proceeds of not more than

$5,000,000 to the Borrower.”

 

3

 

IN WITNESS WHEREOF, the

undersigned have caused this Amendment to the 8% Convertible Secured Note

Purchase Agreement, 8% Convertible Secured Notes and Related Security

Agreements to be duly executed by their respective officers duly authorized as

of the day hereof.

 

	

  Dated:

  February 26, 2003

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  SDS MERCHANT

  FUND, L.P.

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Steve

  Derby

  
	

   

  	

   

  	

  Name: Steve

  Derby

  
	

   

  	

   

  	

  Title:

  Managing Member

  

 

4

 

	

   

  	

  PHOTOGEN

  TECHNOLOGIES, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Taffy

  Williams

  
	

   

  	

   

  	

  Name: Taffy

  Williams

  
	

   

  	

   

  	

  Title:

  President & CEO

  

 

 

5

 

	

   

  	

  BROWN

  SIMPSON PARTNERS I, L.P.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Mitchell

  D. Kaye

  
	

   

  	

   

  	

  Name

  :Mitchell D. Kaye

  
	

   

  	

   

  	

  Title:

  Managing Principal

  

 

6

 

	

   

  	

  CASTLE CREEK

  HEALTHCARE

  INVESTORS, LLC

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Thomas

  A. Frei

  
	

   

  	

   

  	

  Name: Thomas

  A. Frei

  
	

   

  	

   

  	

  Title:

  Managing Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  CC LIFE

  SCIENCE, LTD.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Thomas

  A. Frei

  
	

   

  	

   

  	

  Name: Thomas

  A. Frei

  
	

   

  	

   

  	

  Title:

  Managing Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  CCL FUND LLC

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Thomas

  A. Frei

  
	

   

  	

   

  	

  Name: Thomas

  A. Frei

  
	

   

  	

   

  	

  Title:

  Managing Director

  

 

7

 

	

   

  	

  XMARK FUND,

  L.P.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Mitchell

  D. Kaye

  
	

   

  	

   

  	

  Name:

  Mitchell D. Kaye

  
	

   

  	

   

  	

  Title: Chief

  Investment Officer

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  XMARK FUND,

  L.P.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Mitchell

  D. Kaye

  
	

   

  	

   

  	

  Name:

  Mitchell D. Kaye

  
	

   

  	

   

  	

  Title: Chief

  Investment Officer

  

 

8

 

	

  Acknowledged:

  
	

   

  
	

   

  
	

  ALLIANCE

  PHARMACEUTICAL CORP.

  
	

   

  
	

   

  
	

  By: 

  	

  /s/ Duane J.

  Roth

  	

   

  
	

   

  	

  Name: Duane

  J. Roth

  
	

   

  	

  Title:

  Chairman, Chief Executive Officer and

  Chief Financial Officer

  

 

9Exhibit 10.27

 

 

PHOTOGEN TECHNOLOGIES, INC.

 

and

 

BROADMARK CAPITAL, LLC

 

 

 

 

WARRANT AGREEMENT

 

Dated as of November 12, 2002

 

 

WARRANT

AGREEMENT dated as of November 12, 2002, between PHOTOGEN TECHNOLOGIES, INC. ,

a Nevada corporation (the “Company”), and BROADMARK CAPITAL, LLC, a Washington

limited liability company (“Holder”).

 

WHEREAS, the

Company proposes to sell common stock purchase warrants, as hereinafter

described (the “Warrants”), to purchase up to an aggregate of 150,000 shares of

Common Stock, par value $0.001 per share (the “Common Stock”), of the Company

(the Common Stock issuable on exercise of the Warrants being referred to herein

as the “Warrant Shares”), each Warrant entitling the holder thereof to purchase

one Warrant Share.

 

NOW, THEREFORE,

in consideration of the premises and pursuant to the Settlement Agreement and

Mutual Release dated as of September 23, 2002 and for other good and valuable

consideration, the adequacy and receipt of which is hereby acknowledged by the

Company, and the mutual agreements herein set forth, the parties hereto agree

as follows:

 

Section

1.  Warrant Certificates.  The certificates evidencing the Warrants

(the “Warrant Certificates”) to be delivered pursuant to this Agreement shall

be substantially in the form set forth in Exhibit A attached hereto, with such

appropriate insertions, omissions, substitutions and other variations as

required or permitted by this Agreement.

 

Section

2.  Execution of Warrant Certificates.  Warrant Certificates shall be signed on

behalf of the Company by its Chairman of the Board or its President or a Vice

President and by its Secretary or an Assistant Secretary.  Each such signature upon the Warrant

Certificates may be in the form of a facsimile signature of the present or any future

Chairman of the Board, President, Vice President, Secretary or Assistant

Secretary and may be imprinted or otherwise reproduced on the Warrant

Certificates and for that purpose the Company may adopt and use the facsimile

signature of any person who shall have been Chairman of the Board, President,

Vice President, Secretary or Assistant Secretary, notwithstanding the fact that

at the time the Warrant Certificates shall be countersigned and delivered or

disposed of such person shall have ceased to hold such office.

 

Any Warrant

Certificate may be signed on behalf of the Company by any person who, at the

actual date of the execution of such Warrant Certificate, shall be a proper

officer of the Company to sign such Warrant Certificate, although at the date

of the execution of this Warrant Agreement any such person was not such

officer.

 

Section 3.  Registration.  The Company shall number and register the

Warrant Certificates in a register as they are issued by the Company.  The Company may deem and treat the

registered holder(s) of the Warrant Certificates as the absolute owner(s)

thereof (notwithstanding any notation of ownership or other writing thereon

made by anyone), for all purposes, and the Company shall not be affected by any

notice to the contrary.

 

Section 4.  Registration

of Transfers and Exchanges.  The

Company shall from time to time register the transfer of any outstanding

Warrant Certificates upon the records to be maintained by it for that purpose,

upon surrender thereof accompanied (if so required by it) by a written

instrument or instruments of transfer duly executed by the registered holder or

holders thereof or by the duly appointed legal representative thereof or by a

duly authorized attorney.  Upon any such

registration of transfer, a new Warrant Certificate shall be issued to the

transferee(s) and the surrendered Warrant Certificate shall be canceled by the

Company.  Canceled Warrant Certificates

shall thereafter be disposed of in a manner satisfactory to the Company.

 

 

The Holder agrees

that each certificate representing Warrant Shares will bear the following

legend:

 

“The

securities evidenced or constituted hereby have been acquired for investment

and have not been registered under the Securities Act of 1933, as amended.  Such securities may not be sold,

transferred, pledged or hypothecated unless the registration provisions of said

Act have been complied with or unless the Company has received an opinion of

counsel reasonably satisfactory to the Company that such registration is not required.”

 

Warrant

Certificates may be exchanged at the option of the holder(s) thereof, when

surrendered to the Company at its office for another Warrant Certificate or

other Warrant Certificates of like tenor and representing in the aggregate a

like number of Warrants.  Warrant

Certificates surrendered for exchange shall be canceled by the Company.

 

Section 5.

Terms of Warrants, Exercise of Warrants.

 

(a)                                  Subject to the terms

of this Agreement and the Warrant Certificates, the Warrant holder shall have the

right, commencing at the opening of business on the respective dates set forth

on the Warrant Certificates and until 5:00 p.m., Eastern time on November 12,

2007 (the “Exercise Period”), to receive from the Company the number of fully

paid and nonassessable Warrant Shares which the Warrant holder may at the time

be entitled to receive on exercise of such Warrants and payment of the Exercise

Price then in effect for such Warrant Shares. 

Each Warrant not exercised prior to 5:00 p.m., Eastern time, on November

12, 2007 shall become void and all rights thereunder and all rights in respect

thereof under this agreement shall cease as of such time.  No adjustments as to dividends payable in

cash will be made upon exercise of the Warrants.

 

(b)                                 A Warrant may be exercised

upon surrender to the Company at its principal office of the Warrant

Certificate evidencing the Warrants to be exercised with the form of election

to purchase, which is attached hereto as Exhibit B, duly filled in and signed,

and upon payment to the Company of the exercise price (the “Exercise Price”) as

adjusted as herein provided, for the number of Warrant Shares in respect of

which such Warrants are then exercised. 

Payment of the aggregate Exercise Price shall be made in cash, or by

certified or official bank check payable to the order of the Company or in

accordance with Section 6.

 

(c)                                  Upon such surrender

of Warrants and payment of the Exercise Price the Company shall issue and cause

to be delivered with all reasonable dispatch to or upon the written order of

the Warrant holder in the name of the holder, a certificate or certificates for

the number of full Warrant Shares issuable upon the exercise of such Warrants

together with cash as provided in Section 12; provided, however,

that if any consolidation, merger or lease or sale of assets is proposed to be

effected by the Company as described in subsection (k) of Section 13 hereof, or

a tender offer or an exchange offer for shares of Common Stock of the Company

shall be made, upon such surrender of Warrants and payment of the Exercise

Price as aforesaid, the Company shall, as soon as possible, but in any event

not later than two business days thereafter, issue and cause to be delivered

the full number of Warrant Shares issuable upon the exercise of such Warrants

in the manner described in this sentence together with cash as provided in

Section 14.  Such certificate or

certificates shall be deemed to have been issued to the holder of record of

such Warrant Shares as of the date of the surrender of such Warrants and

payment of the Exercise Price.

 

(d)                                 The Warrants shall be

exercisable, at the election of the holders thereof, either in full or from

time to time in part and, in the event that a certificate evidencing Warrants

is exercised in respect of fewer than all of the Warrant Shares issuable on

such exercise at any time prior to the date of expiration

 

2

 

of the Warrants, a new certificate evidencing

the remaining Warrant or Warrants will be issued pursuant to the provisions of

this Section 5.

 

(e)                                  All Warrant

Certificates surrendered upon exercise of Warrants shall be canceled by the

Company.  Such canceled Warrant

Certificates shall then be disposed of by the Company.

 

Section 6.  Exercise by Surrender of Warrant.  In addition to the methods of payment set

forth in Section 5 and in lieu of any cash payment required thereunder, the

Warrant holder(s) shall have the right at any time and from time to time to

exercise the Warrants in full or in part by surrendering the Warrant

Certificates in the manner specified in Section 5 in exchange for the number of

Warrant Shares equal to the product of (x) the number of Warrant Shares as to

which the Warrants are being exercised, multiplied by (y) a fraction, the

numerator of which is the “current

market price”, as defined in Section 13(d), minus the Exercise Price of the

Warrant Shares and the denominator of which is the current market price per

share.

 

Section 7.  Payment of Taxes.  The Company shall not be required to pay any

tax or taxes which may be payable in respect of any transfer involved in the

issue of any Warrant Certificates or any certificates for Warrant Shares in a

name other than that of the registered holder of a Warrant Certificate

surrendered upon the exercise of a Warrant, and the Company shall not be

required to issue or deliver such Warrant Certificates unless or until the

person or persons requesting the issuance thereof shall have paid to the

Company the amount of such tax or shall have established to the satisfaction of

the Company that such tax has been paid.

 

Section 8.  Mutilated or Missing Warrant Certificates.  In case any of the Warrant Certificates

shall be mutilated, lost, stolen or destroyed, the Company may, in its

discretion, issue in exchange and substitution for and upon cancellation of the

mutilated Warrant Certificate, or in lieu of and substitution for the Warrant

Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor

and representing an equivalent number of Warrants, but only upon receipt of

evidence satisfactory to the Company of such loss, theft or destruction of such

Warrant Certificate and indemnity, if requested, also satisfactory to the

Company.  Holders requesting such

substitute Warrant Certificates shall also comply with such other reasonable

regulations and pay such other reasonable charges as the Company may determine.

 

Section 9.  Reservation of Warrant Shares.  The Company will at all times reserve and

keep available, out of the aggregate of its authorized but unissued Common

Stock or its authorized and issued Common Stock held in its treasury, for the

purpose of enabling it to satisfy any obligation to issue Warrant Shares upon

exercise of Warrants, the maximum number of shares of Common Stock which may

then be deliverable upon the exercise of all outstanding Warrants.

 

The Company

or, if appointed, the transfer agent for the Common Stock (the “Transfer

Agent”) and every subsequent transfer agent for any shares of the Company’s

capital stock issuable upon the exercise of any of the rights of purchase

aforesaid will be irrevocably authorized and directed at all times to reserve

such number of authorized shares as shall be required for such purpose.

 

Before taking

any action which would cause an adjustment pursuant to Section 13 hereof to

reduce the Exercise Price below the then par value (if any) of the Warrant

Shares, the Company will take any corporate action which may, in the opinion of

its counsel (which may be counsel employed by the Company), be necessary in

order that the Company may validly and legally issue fully paid and

nonassessable Warrant Shares at the Exercise Price, as so adjusted.

 

3

 

Section 10.  Obtaining Stock Exchange Listings.  The Company will from time to time take all

action which may be necessary so that the Warrant Shares, immediately upon

their issuance upon the exercise of Warrants, will be listed on the principal

securities exchanges and markets within the United States of America, if any,

on which other shares of Common Stock are then listed.

 

Section 11.  Registration Rights.

 

(a)                                  Termination.  All Demand and Piggyback Registration rights

shall expire and be of no force or effect as to Warrant Shares that are eligible

for sale under Rule 144 promulgated under the Securities Act of 1933, as

amended (the “Act”).

 

(b)                                 Piggyback

Registration.

 

(i)                                     If the Company

proposes to register any of its securities under the Act (other than in

connection with a merger or pursuant to Form S-8) it will give written notice

by registered mail, at least five (5) days prior to the filing of each such

registration statement, to Warrant 

holder(s) and/or the holders of Warrant Shares of its intention to do

so.  If Warrant holders and/or holders

of Warrant Shares notify the Company within three (3) days after receipt of any

such notice of its or their desire to include any such securities in such

proposed registration statement, the Company shall afford such holders the

opportunity to have any such Warrant Shares as are not saleable under Rule 144

of the Act registered under such registration statement (sometimes referred to

herein as the “Piggyback Registration”). 

The holders of the Warrant Shares will collectively be entitled to

participate in one Piggyback Registration.

 

(ii)                                  Notwithstanding the

provisions of this section (b), the Company shall have the right at any time

after it shall have given written notice pursuant to this section (b)

(irrespective of whether a written request for inclusion of any such securities

shall have been made) to elect not to file any such proposed registration

statement, or to withdraw the same after the filing but prior to the effective

date thereof without liability to any holder.

 

(iii)                               Notwithstanding anything

to the contrary contained herein, if the Company shall not have filed a

registration statement for the Warrant Shares pursuant to Section 12 hereof or

desires to exclude the Warrant Shares from such registration, the Company shall

have the option but not the obligation, upon the written consent and notice of

election of a majority of the holders of the Warrants and/or Warrant Shares, to

repurchase (A) any and all Warrant Shares at the higher of the current market

price per share of Common Stock on (x) the date of the notice sent pursuant to

Section 11(b)(i) or (y) the expiration of the period specified in Section

12(a)and (B) any and all Warrants at such current market price less the

Exercise Price of such Warrant.  Such

repurchase shall be in immediately available funds and shall close within two

(2) days after the later of (A) the expiration of the period specified in

Section 12(a) or (B) the delivery of the written notice of election specified

in this Section 11(b)(iii).

 

(c)                                  Demand Registration.

 

(i)                                     In the event that

(A) the Company receives from the holders of 

a majority of the Warrants and Warrant Shares a written request that the

Company file a registration statement on Form S-3 (or any successor form to Form

S-3), or any similar short-form registration statement, for a public offering

of Warrant Shares (a “Demand Registration”), the reasonably anticipated

aggregate price to the public of which, net of underwriting discounts and

commissions, would be at least $1,500,000 and (B) the Company is a registrant

eligible to use Form S-3 to register the Warrant Shares for such an offering,

within 10 days after receipt of any such request, the Company will give written

notice of such requested registration to all other holders of Warrant Shares.  The Company shall include such other

holders’ Warrant Shares in such offering if they have responded affirmatively

within  10  days after the

receipt of

 

4

 

the Company’s notice.  The holders of the Warrant Shares will collectively

be entitled to request one Demand Registration hereunder.  A registration will not count as a permitted

Demand Registration until it has become effective (unless such Demand

Registration has not become effective due solely to the fault of the holders

requesting such registration, including a request by such holders that such

registration be withdrawn).

 

(ii)                                  The Company may

postpone the filing or the effectiveness of a registration statement for a

Demand Registration if the Company determines in good faith that such Demand

Registration would reasonably be expected to have a material adverse effect on

any proposal or plan by the Company to engage in any financing, acquisition or

disposition of assets (other than in the ordinary course of business) or any

merger, consolidation, tender offer or similar transaction or would require

disclosure of any information that the board of directors of the Company

determines in good faith the disclosure of which would be detrimental to the

Company; provided, however, that in such event, the holders initially

requesting such Demand Registration will be entitled to withdraw such request

and, if such request is withdrawn, such Demand Registration will not count as a

permitted Demand Registration hereunder and the Company will pay any

Registration Expenses in connection with such withdrawn registration.

 

Section 12.  Covenants of the Company with Respect to

Registration.  In connection with

any registration under Section 11 hereof, the Company covenants and agrees as follows:

 

(a)                                  The Company shall use

all reasonable best efforts to have any registration statements declared

effective at the earliest possible time, and shall furnish each holder desiring

to sell Warrant Shares eligible for Piggyback or Demand Registration such

number of prospectuses as shall reasonably be requested.

 

(b)                                 The Company shall pay

all costs (excluding fees and expenses of holder(s)’ counsel and any

underwriting or selling commissions), fees and expenses in connection with all

registration statements filed pursuant to Section 11 hereof including, without

limitation, the Company’s legal and accounting fees, printing expenses, blue

sky fees and expenses.

 

(c)                                  The Company will take

all necessary action that may be required in qualifying or registering the

Warrant Shares included in a registration statement for offering and sale under

the securities or blue sky laws of such states as reasonably are requested by

the holder(s), provided that the Company shall not be obligated to execute or

file any general consent to service of process or to qualify as a foreign

corporation to do business under the laws of any such jurisdiction.

 

(d)                                 Notwithstanding any

other provision of this Agreement to the contrary, the Company shall indemnify

and hold harmless the holders of the Warrant Shares to be sold pursuant to any

registration statement, each person, if any, who controls such holders within

the meaning of Section 5 of the Act, or Section 20(a) of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”), and such underwriter,

within the meaning of the Act, who may purchase from or sell for the holders,

any Warrant Shares, from and against any and all losses, claims, damages and

liabilities (including all expenses reasonably incurred in investigating,

preparing or defending against any claim whatsoever) caused by any untrue

statement of a material fact contained in any registration statement filed by

the Company under the Act, any post-effective amendment to such registration

statements, or any prospectus included therein required to be filed or

furnished by reason of  Section 11 of

this Agreement or caused by any omission or alleged omission to state therein a

material fact required to be stated therein or necessary to make the statements

therein not misleading, except insofar as such losses, claims, damages or

liabilities are caused by any such untrue statement or alleged untrue statement

or omission or alleged omission

 

5

 

based upon information furnished or required

to be furnished in writing to the Company by the holders or such underwriter.

 

(e)                                  The holder(s) of the

Warrant Shares to be sold pursuant to a registration statement, their

successors and assigns, and any such underwriter and other person shall

severally, and not jointly, indemnify the Company, its officers and directors

and each person, if any, who controls the Company within the meaning of Section

15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,

damage or expense or liability (including all expenses reasonably incurred in

investigating, preparing or defending against any claim whatsoever) to which

they may become subject under the Act, the Exchange Act or otherwise, caused by

any untrue statement or alleged untrue statement of a material fact contained

in any registration statement or any prospectus required to be filed or

furnished by reason of  Section 11 of

this Agreement or caused by any omission to state therein a material fact

required to be stated therein or necessary to make the statements therein not

misleading, insofar as such losses, claims, damages or liabilities are caused

by any untrue statement or alleged untrue statement or omission based upon

information furnished in writing to the Company by the Warrant holders or such

underwriter or other person expressly for use therein.

 

(f)                                    With respect to any

registration statements filed by the Company in connection with any

underwritten public offering, the Company’s underwriter will retain the right

to reduce or eliminate the number of shares proposed to be registered as it

deems necessary.  If a Demand

Registration is an underwritten offering and the managing underwriters advise

the Company in writing that in their opinion the number of securities requested

to be included in such registration exceeds the number which can be sold in

such offering without adversely affecting the marketability of the offering,

the Company shall include in such registration only such number of Warrant

Shares allocated pro rata amongst the holders thereof, based upon the number of

Warrant Shares owned by each such holder. 

If a Piggyback Registration is an underwritten registration on behalf of

the Company, and the managing underwriters advise the Company in writing that

in their opinion the number of securities requested to be included in such

registration exceeds the number which can be sold in such offering without

adversely affecting the marketability of the offering, the Company shall

include in such registration, only as may be permitted in the reasonable

business judgment of the managing underwriters for such registration:

 

(i)                                     first, up to that

number of securities the Company proposes to sell;

 

(ii)                                  second, up to that

number of registrable securities requested to be included in such registration

by the holders of the Company’s Series A Exchangeable Convertible Preferred

Stock and others with registration rights in existence prior to the date

hereof;

 

(iii)                               third, up to that number

of Warrant Shares requested and eligible to be included in such registration by

the holder(s); and

 

(iv)                              fourth, up to that number

of other securities requested to be included in such registration.

 

(g)                                 Nothing contained in

this Agreement shall be construed as requiring the holder(s) to exercise their

Warrants prior to the initial filing of any registration statement or the

effectiveness thereof.

 

(h)                                 The Company shall

furnish to each holder participating in an underwritten public offering and to

each underwriter, a signed counterpart, addressed to such holder or

underwriter, of a “cold comfort” letter dated the effective date of such

registration statement and a letter dated the date of the closing under the

underwriting agreement signed by the independent public accountants who have

issued a report on the Company’s financial statements included in such

registration statement, in each case

 

6

 

covering substantially the same matters with

respect to such registration statement (and the prospectus included therein)

and, in the case of such accountants’ letter, with respect to events subsequent

to the date of such financial statements, as are customarily covered in

accountants’ letters delivered to underwriters in underwritten public offerings

of securities.

 

(i)                                     The Company shall

as soon as practicable after the effective date of the registration statement,

make “generally available to its security holders” (within the meaning of Rule

158 under the Act) an earnings statement (which need not be audited) complying

with Section 11(a) of the Act and covering a period of at least 12 consecutive

months beginning after the effective date of the registration statement.

 

(j)                                     The Company shall

make available for inspection by the holder(s) of Warrant Shares included in

each Demand or Piggyback Registration Statement, or a representative thereof,

any underwriter participating in the disposition pursuant to such registration

statement and any attorney, accountant or other agent retained by any such

seller or underwriter, all pertinent financial and other records, pertinent

corporate documents and properties of the Company, and cause the Company’s

officers, directors, employees and independent accountants to supply all

information reasonably requested by any such selling holder(s), underwriter,

attorney, accountant or agent in connection with such registration statement.

 

Section 13.  Adjustment of Exercise Price and Number

of Warrant Shares Issuable.  The

Exercise Price and the number of Warrant Shares issuable upon the exercise of

each Warrant are subject to adjustment from time to time upon the occurrence of

the events enumerated in this Section 13. 

For purposes of this Section 13, “Common Stock” means shares now or

hereafter authorized of any class of common stock of the Company and any other

stock of the Company, however designated, that has the right (subject to any

prior rights of any class or series of preferred stock) to participate in any

distribution of the assets or earnings of the Company without limit as to per

share amount.

 

(a)                                  Adjustment for Change

in Capital Stock.

 

If the

Company:

 

(i)                                          pays

a dividend or makes a distribution on its Common Stock in shares of its Common

Stock;

 

(ii)                                       subdivides

its outstanding shares of Common Stock into a greater number of shares;

 

(iii)                                    combines

its outstanding shares of Common Stock into a smaller number of shares;

 

(iv)                                   makes

a distribution on its Common Stock in shares of its capital stock other than

Common Stock; or

 

(v)                                      issues

by reclassification of its Common Stock any shares of its capital stock;

 

then the Exercise Price in

effect immediately prior to such action shall be proportionately adjusted so

that the holder of any Warrant thereafter exercised may receive the aggregate

number and kind of shares of capital stock of the Company which he would have

owned immediately following such action if such Warrant had been exercised

immediately prior to such action.

 

7

 

The adjustment

shall become effective immediately after the record date in the case of a

dividend or distribution and immediately after the effective date in the case

of a subdivision, combination or reclassification.

 

If after an

adjustment a holder of a Warrant upon exercise of it may receive shares of two

or more classes of capital stock of the Company, the Company shall determine

the allocation of the adjusted Exercise Price between the classes of capital

stock.  After such allocation, the

exercise privilege and the Exercise Price of each class of capital stock shall

thereafter be subject to adjustment on terms comparable to those applicable to

Common Stock in this Section 13.

 

Such

adjustment shall be made successively whenever any event listed above shall

occur.

 

(b)                                 Adjustment for Common

Stock Issue.

 

If the Company

issues shares of Common Stock for a consideration per share less than the lower

of the Exercise Price or current market price per share on the date the Company

fixes the offering price of such additional shares, the Exercise Price shall be

adjusted in accordance with the formula:

 

	

   

  	

   P

  	

   

  	

   

  
	

   

  	

  E’ = E x O + M

  	

   

  	

   

  
	

   

  	

  A   

  	

   

  	

   

  

 

where:

 

E’  =                          the

adjusted Exercise Price.

 

E  =                              the

then current Exercise Price.

 

O  =                            the

number of shares outstanding immediately prior to the issuance of such

additional shares.

 

P  =                              the

aggregate consideration received for the issuance of such additional shares.

 

M  =                         the

current market price per share on the date of issuance of such additional

shares.

 

A  =                           the

number of shares outstanding immediately after the issuance of such additional

shares.

 

The adjustment shall be made

successively whenever any such issuance is made, and shall become effective

immediately after such issuance.

 

This subsection (b) does not

apply to:

 

(1)                                  any

of the transactions described in subsections (a), (b) or (c) of this Section

13,

 

(2)                                  the

exercise of Warrants, or the conversion or exchange of other securities

convertible or exchangeable for Common Stock,

 

(3)                                  Common

Stock issued to the Company’s employees under bona fide employee benefit plans

adopted by the Board of Directors and approved by the holders of Common Stock

when required by law, if such Common Stock would otherwise be covered by this

subsection (b) (but only to the extent that the aggregate number of shares

excluded hereby and issued after the

 

8

 

date of this

Warrant Agreement shall not exceed 5% of the Common Stock outstanding at the

time of the adoption of each such plan, exclusive of antidilution adjustments

thereunder),

 

(4)                                  Common

Stock upon the exercise of rights or warrants issued to the holders of Common

Stock,

 

(5)                                  Common

Stock issued to shareholders of any person which merges into the Company in

proportion to their stock holdings of such person immediately prior to such

merger, upon such merger,

 

(6)                                  Common

Stock issued in a bona fide public offering pursuant to a firm commitment

underwriting or

 

(7)                                  Common

Stock issued in a bona fide private placement (except to the extent that any

discount from the current market price attributable to restrictions on

transferability of the Common Stock, as determined in good faith by the Board

of Directors and described in a Board resolution which shall be filed with the

Trustee, shall exceed 25%).

 

(c)                                  Adjustment for

Convertible Securities Issue.

 

If the Company

issues any securities convertible into or exchangeable for Common Stock for a

consideration per share of Common Stock initially deliverable upon conversion

or exchange of such securities less than the lower of the Exercise Price or the

then current market price per share on the date of  issuance of such securities, the Exercise Price shall be adjusted

in accordance with this formula:

 

	

   

  	

   P

  	

   

  	

   

  
	

   

  	

  E’ = E x O + M

  	

   

  	

   

  
	

   

  	

  O + D

  	

   

  	

   

  

 

where:

 

E’  =                          the

adjusted Exercise Price.

 

E  =                              the

then current Exercise Price.

 

O  =                            the

number of shares outstanding immediately prior to the issuance of such

securities.

 

P  =                              the

aggregate consideration received for the issuance of such securities.

 

M  =                         the

current market price per share on the date of issuance of such securities.

 

D  =                            the

maximum number of shares deliverable upon conversion or in exchange for such

securities at the initial conversion or exchange rate.

 

The adjustment

shall be made successively whenever any such issuance is made, and shall become

effective immediately after such issuance.

 

If all of the

Common Stock deliverable upon conversion or exchange of such securities have

not been issued when such securities are no longer outstanding, then the

Exercise Price shall promptly be readjusted to the Exercise Price which would

then be in effect had the adjustment upon the issuance of such securities been

made on the basis of the actual number of shares of Common Stock issued upon

conversion or exchange of such securities.

 

9

 

This subsection (c) does not

apply to:

 

(1)                                  any

of the transaction referred to in subsection (a) or (b) of this Section 13.

 

(2)                                  convertible

securities issued to shareholders of any person which merges into the Company,

or with a subsidiary of the Company, in proportion to their stock holdings of

such person immediately prior to such merger, upon such merger,

 

(3)                                  convertible

securities issued in a bona fide public offering pursuant to a firm commitment

underwriting or

 

(4)                                  convertible

securities issued in a bona fide private placement (except to the extent that

any discount from the current market price attributable to restrictions on

transferability of Common Stock issuable upon conversion, as determined in good

faith by the Board of Directors and described in a Board resolution, shall

exceed 25% of the then current market price).

 

(d)                                 Current Market Price.

 

In Section 6

and subsections (b) and (c) of this Section 13 the “current market price” per

share of Common Stock on any date shall be the fair market value per Warrant

Share which shall mean (i) if the Common Stock is in the over-the-counter

market and not in The Nasdaq National Market nor on any national securities

exchange, the average of the per share closing bid price on the 20 consecutive

trading days immediately preceding the date in question, as reported by The

Nasdaq Small Cap Market (or an equivalent generally accepted reporting service

if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the

Common Stock is traded in The Nasdaq National Market or on a national

securities exchange, the average for the 20 consecutive trading days

immediately preceding the date in question of the daily per share closing

prices in The Nasdaq National Market or on the principal stock exchange on

which it is listed, as the case may be. 

For purposes of clause (i) above, if trading in the Common Stock is not

reported by The Nasdaq SmallCap Market, the applicable bid price referred to in

said clause shall be the lowest bid price as reported on the OTC Electronic

Bulletin Board of the National Association of Securities Dealers, Inc. or, if

not reported thereon, as reported in the “pink sheets” published by National

Quotation Bureau, Incorporated, and, if such securities are not so reported,

shall be the price of a share of Common Stock determined by the Company’s Board

of Directors in good faith. The closing price referred to in clause (ii) above

shall be the last reported sale price or, in case no such reported sale takes

place on such day, the average of the reported closing bid and asked prices, in

either case in The Nasdaq National Market or on the national securities

exchange on which the Common Stock is then listed in accordance with Section

5(a) of this Agreement.

 

(e)                                  Consideration

Received.

 

(1)                                  For

purposes of any computation respecting consideration received pursuant to

subsections (b) and (c) of this Section 13, the following shall apply: in the

case of the issuance of shares of Common Stock for cash, the consideration

shall be the amount of such cash, provided that in no case shall any deduction

be made for any commissions, discounts or other expenses incurred by the

Company for any underwriting of the issue or otherwise in connection therewith;

 

(2)                                  in

the case of the issuance of shares of Common Stock for a consideration in whole

or in part other than cash, the consideration other than cash shall be deemed

to be the fair market value thereof as determined in good faith by the Board of

Directors (irrespective of the accounting treatment thereof), whose

determination shall be conclusive, and described in a Board resolution, a copy

of which shall be mailed to each holder; and

 

10

 

(3)                                  in

the case of the issuance of securities convertible into or exchangeable for

shares, the aggregate consideration received therefor shall be deemed to be the

consideration received by the Company for the issuance of such securities plus

the additional minimum consideration, if any, to be received by the Company

upon the conversion or exchange thereof (the consideration in each case to be

determined in the same manner as provided in clauses (1) and (2) of this

subsection).

 

(f)                                    When De Minimis

Adjustment May Be Deferred.

 

No adjustment

in the Exercise Price need be made unless the adjustment would require an

increase or decrease of at least 1% in the Exercise Price. Any adjustments that

are not made shall be carried forward and taken into account in any subsequent

adjustment.

 

All

calculations under this Section shall be made to the nearest cent or to the

nearest 1/100th of a share, as the case may be.

 

(g)                                 When No Adjustment

Required.

 

No adjustment

need be made for a transaction referred to in subsections (a), (b) or (c) of

this Section 13 if Warrant holders are to participate in the transaction on a

basis and with notice that the Board of Directors determines to be fair and

appropriate in light of the basis and notice on which holders of Common Stock

participate in the transaction.

 

No adjustment

need be made for rights to purchase Common Stock pursuant to a Company plan for

reinvestment of dividends or interest.

 

No adjustment need be made for

a change in the par value or no par value of the Common Stock.

 

To the extent the Warrants

become convertible into cash, no adjustment need be made thereafter as to the

cash.  Interest will not accrue on the

cash.

 

(h)                                 Notice of Adjustment.

 

Whenever the

Exercise Price is adjusted, the Company shall provide the notices required by

Section 15 hereof.

 

(i)                                     Voluntary Reduction.

 

The Company

from time to time may reduce the Exercise Price by any amount for any period of

time if the period is at least 20 days and if the reduction is irrevocable

during the period; provided, however, that in no event may the

Exercise Price be less than the par value of a share of Common Stock.

 

Whenever the

Exercise Price is reduced, the Company shall mail to Warrant holders a notice

of the reduction.  The Company shall

mail the notice at least 15 days before the date the reduced Exercise Price

takes effect.  The notice shall state

the reduced Exercise Price and the period it will be in effect.

 

A reduction of

the Exercise Price does not change or adjust the Exercise Price otherwise in

effect for purposes of subsections (a), (b) or (c) of this Section 13.

 

(j)                                     Notice of Certain

Transactions.

 

 

11

 

If the

Company:

 

(1)                                  takes

any action that would require an adjustment in the Exercise Price pursuant to

subsections (a), (b) or (c) of this Section 13 and if the Company does not

arrange for Warrant holders to participate pursuant to subsection (i) of this

Section 13;

 

(2)                                  takes

any action that would require a supplemental Warrant Agreement pursuant to

subsection (k) of this Section 13; or

 

(3)                                  liquidates

or dissolves,

 

then the Company shall mail to

Warrant holders a notice stating the proposed record date for a dividend or

distribution or the proposed effective date of a subdivision, combination,

reclassification, consolidation, merger, transfer, lease, liquidation or

dissolution.  The Company shall mail the

notice at least 20 days before such date. 

Failure to mail the notice or any defect in it shall not affect the

validity of the transaction.

 

(k)                                  Reorganization of

Company.

 

If the Company

consolidates or merges with or into, or transfers or leases all or

substantially all its assets to, any person, upon consummation of such

transaction the Warrants shall automatically become exercisable for the kind

and amount of securities, cash or other assets which the holder of a Warrant

would have owned immediately after such transaction if the holder had exercised

the Warrant immediately before the effective date of such transaction.  Concurrently with the consummation of such

transaction, the corporation formed by or surviving any such consolidation or

merger if other than the Company, or the person to which such sale or

conveyance shall have been made, shall enter into a supplemental Warrant

Agreement so providing and further providing for adjustments which shall be as

nearly equivalent as may be practical to the adjustments provided for in this

Section.  The successor Company shall

mail to Warrant holders a notice describing the supplemental Warrant Agreement.

 

If the issuer

of securities deliverable upon exercise of Warrants under the supplemental

Warrant Agreement is an Affiliate of the formed, surviving, transferee or

lessee corporation, that issuer shall join in the supplemental Warrant

Agreement.

 

If this

subsection (k) applies, subsections (a), (b) and (c) of this Section 13 do not

apply.

 

(l)                                     When Issuance or

Payment May Be Deferred.

 

In any case in

which this Section 13 shall require that an adjustment in the Exercise Price be

made effective as of a record date for a specified event, the Company may elect

to defer until the occurrence of such event (i) issuing to the holder of any

Warrant exercised after such record date the Warrant Shares and other capital

stock of the Company, if any, issuable upon such exercise over and above the

Warrant Shares and other capital stock of the Company, if any, issuable upon

such exercise on the basis of the Exercise Price and (ii) paying to such holder

any amount in cash in lieu of a fractional share pursuant to Section 14; provided,

however, that the Company shall deliver to such holder a due bill or

other appropriate instrument evidencing such holder’s right to receive such

additional Warrant Shares, other capital stock and cash upon the occurrence of

the event requiring such adjustment.

 

(m)                               Adjustment in Number of

Shares.

 

Upon each

adjustment of the Exercise Price pursuant to Section 13(a), each Warrant

outstanding prior to the making of the adjustment in the Exercise Price shall

thereafter evidence the right to receive

 

12

 

upon payment of the adjusted

Exercise Price that number of shares of Common Stock (calculated to the nearest

hundredth) obtained from the following formula:

 

	

   

  	

  N’ = N x E 

  	

   

  
	

   

  	

  E’

  	

   

  

 

where:

 

N’  =                        the

adjusted number of Warrant Shares issuable upon exercise of a Warrant by

payment of the adjusted Exercise Price.

 

N  =                            the

number or Warrant Shares previously issuable upon exercise of a Warrant by

payment of the Exercise Price prior to adjustment.

 

E’  =                          the

adjusted Exercise Price.

 

E  =                              the

Exercise Price prior to adjustment.

 

(n)                                 Form of Warrants.

 

Irrespective

of any adjustments in the Exercise Price or the number or kind of shares

purchasable upon the exercise of the Warrants, Warrants theretofore or

thereafter issued may continue to express the same price and number and kind of

shares as are stated in the Warrants initially issuable pursuant to this

Agreement.

 

(o)                                 Company

Determination Final.

 

Any

determination that the Company or its Board of Directors must make pursuant to

this Section 13 is conclusive if made reasonably and in good faith.

 

Section 14.  Fractional Interests.  The Company shall not be required to issue

fractional Warrant Shares on the exercise of Warrants.  If more than one Warrant shall be presented

for exercise in full at the same time by the same holder, the number of full

Warrant Shares which shall be issuable upon the exercise thereof shall be

computed on the basis of the aggregate number of Warrant Shares purchasable on

exercise of the Warrants so presented. 

If any fraction of a Warrant Share would, except for the provisions of

this Section 14, be issuable on the exercise of any Warrants (or specified

portion thereof), the Company shall pay an amount in cash equal to the Exercise

Price on the day immediately preceding the date the Warrant is presented for

exercise, multiplied by such fraction.

 

Section 15.  Notices to Warrant Holders.  Upon any adjustment of the Exercise Price

pursuant to Section 13, the Company shall promptly thereafter (i) cause to be

given to each of the registered holders of the Warrant Certificates at his

address appearing on the Warrant register a certificate of a firm of

independent public accountants of recognized standing selected by the Board of

Directors of the Company (who may be the regular auditors of the Company)

setting forth the Exercise Price after such adjustment and setting forth in

reasonable detail the method of calculation and the facts upon which such

calculations are based and setting forth the number of Warrant Shares (or

portion thereof) issuable after such adjustment in the Exercise Price, upon

exercise of a Warrant and payment of the adjusted Exercise Price, which

certificate shall be conclusive evidence of the correctness of the matters set

forth therein, by first-class mail, postage prepaid.  Where appropriate, such notice may be given in advance and

included as a part of the notice required to be mailed under the other

provisions of this Section 15.

 

13

 

In case:

 

(a)                                  the Company shall authorize

the issuance to all holders of shares of Common Stock of rights, options or

warrants to subscribe for or purchase shares of Common Stock or of any other

subscription rights or warrants; or

 

(b)                                 the Company shall

authorize the distribution to all holders of shares of Common Stock of

evidences of its indebtedness or assets (other than cash dividends or cash

distributions payable out of consolidated earnings or earned surplus or

dividends payable in shares of Common Stock or distributions referred to in

subsection Section 13(a) of Section 13 hereof); or

 

(c)                                  of any consolidation

or merger to which the Company is a party and for which approval of any

shareholders of the Company is required, or of the conveyance or transfer of

the properties and assets of the Company substantially as an entirety, or of

any reclassification or change of Common Stock issuable upon exercise of the

Warrants (other than a change in par value, or from par value to no par value,

or from no par value to par value, or as a result of a subdivision or

combination), or a tender offer or exchange offer for shares of Common Stock;

or

 

(d)                                 of the voluntary or

involuntary dissolution, liquidation or winding up of the Company; or

 

(e)                                  the Company proposes

to take any action (other than actions of the character described in Section

13(a)) which would require an adjustment of the Exercise Price pursuant to

Section 13; then the Company shall cause to be given to each of the registered

holders of the Warrant Certificates at his address appearing on the Warrant

register, at least 20 days (or 10 days in any case specified in clauses (a) or

(b) above) prior to the applicable record date hereinafter specified, or

promptly in the case of events for which there is no record date, by

first-class mail, postage prepaid, a written notice stating (i) the date as of

which the holders of record of shares of Common Stock to be entitled to receive

any such rights, options, warrants or distribution are to be determined, or

(ii) the initial expiration date set forth in any tender offer or exchange

offer for shares of Common Stock, or (iii) the date on which any such

consolidation, merger, conveyance, transfer, dissolution, liquidation or

winding up is expected to become effective or consummated, and the date as of which

it is expected that holders of record of shares of Common Stock shall be

entitled to exchange such shares for securities or other property, if any,

deliverable upon such reclassification, consolidation, merger, conveyance,

transfer, dissolution, liquidation or winding up.  The failure to give the notice required by this Section 15 or any

defect therein shall not affect the legality or validity of any distribution,

right, option, warrant, consolidation, merger, conveyance, transfer,

dissolution, liquidation or winding up, or the vote upon any action.

 

Nothing

contained in this Agreement or in any of the Warrant Certificates shall be

construed as conferring upon the holders thereof the right to vote or to

consent or to receive notice as shareholders in respect of the meetings of

shareholders or the election of Directors of the Company or any other matter,

or any rights whatsoever as shareholders of the Company.

 

Section 16.  Notices to Company.  Any notice or demand authorized by this

Agreement to be given or made by the registered holder of any Warrant

Certificate to or on the Company shall be sufficiently given or made when and

if deposited in the mail, first class or registered, postage prepaid, addressed

(until another address is filed in writing by the Company), as follows:

 

	

   

  	

  Photogen Technologies, Inc.

  
	

   

  	

  140 Union

  Square Drive

  
	

   

  	

  New Hope, PA

  18938

  

 

14

 

	

  With copy

  to:

  
	

   

  
	

   

  	

  Theodore W.

  Grippo, Esq.

  
	

   

  	

  Grippo &

  Elden

  
	

   

  	

  227 West

  Monroe Street, Suite 3600

  
	

   

  	

  Chicago, IL 60606

  

 

In case the

Company shall fail to maintain such office or agency or shall fail to give such

notice of the location or of any change in the location thereof, presentations

may be made and notices and demands may be served at the principal office of

the Transfer Agent.

 

Section 17.  Supplements and Amendments.  The Company and the Warrant holders may from

time to time supplement or amend this Agreement with the approval of all

holders of Warrant Certificates.

 

Section 18.  Successors.  All the covenants and provisions of this Agreement by or for the

benefit of the Company or the Holder shall bind and inure to the benefit of

their respective successors and permitted assigns hereunder.

 

Section 19.  Termination.  This Agreement shall terminate at 5:00 p.m.,

Eastern time on November 12, 2007. Notwithstanding the foregoing, this

Agreement will terminate on any earlier date if all Warrants have been

exercised.

 

Section 20.  Governing Law; Jurisdiction and Venue.  This Agreement and each Warrant Certificate

issued hereunder shall be deemed to be a contract made under the laws of the

State of Nevada and for all purposes shall be construed in accordance with the

internal laws of said State, without giving effect to the principles thereof

relating to conflicts of laws.

 

Section 21.  Transferability and Nonnegotiability of

Warrant. The Warrants may not be transferred or assigned in whole or in

part without compliance with all applicable federal and state  securities laws by the transferor and the transferee.

Subject to compliance with such laws and Section 23 below, title to the

Warrants may be transferred by endorsement (by the Holder executing the

Assignment Form Exhibited to the Warrant Certificate) and delivery in the same

manner as a negotiable instrument transferable by endorsement and delivery.

 

Section 22.  Exchange of Warrant Upon a Transfer.  On surrender of the Warrant Certificate for

exchange, properly endorsed on the Assignment Form and subject to the

provisions of this Agreement with respect to compliance with applicable

securities laws and with the limitations on assignments and transfers and

contained in Section 21, the Company at its expense shall issue to or on the

order of the Holder a new Warrant Certificate of like tenor, in the name of the

Holder or as the Holder may direct, for the number of shares issuable upon

exercise hereof.

 

Section 23.  Compliance with Securities Laws.  The Holder agrees that the Holder will not

offer, sell or otherwise dispose of this Warrant or any shares of Common Stock

to be issued upon exercise hereof except under circumstances that will not

result in a violation of the federal or any state securities laws. Prior to any

proposed transfer of this Warrant, the holder thereof shall give written notice

to the Company of its intention to effect such transfer.  Each such notice shall describe the manner

of the proposed transfer and, if requested by the Company, shall be accompanied

by an opinion of counsel satisfactory to the Company to the effect that the

proposed transfer may be effected without registration under the Securities

Act, whereupon the holder shall be entitled to transfer this Warrant in

accordance with the terms of its notice; provided, however, that no such

opinion of counsel shall be required for a

 

15

 

transfer to one or more partners of the

transferor (in the case of a transferor that is a partnership) or to an

affiliated corporation (in the case of a transferor that is a

corporation).  Each Warrant transferred

as above provided shall bear the legend set forth at the beginning of the form

Warrant Certificates Exhibited hereto as Exhibit A and B, as the case may be .

 

Section 24.  Benefits of This Agreement.  Nothing in this Agreement shall be construed

to give to any person or corporation other than the Company, the Holder and the

registered holders of the Warrant Certificates any legal or equitable right,

remedy or claim under this Agreement; but this Agreement shall be for the sole

and exclusive benefit of the Company, the Holder and the registered holders of

the Warrant Certificates.

 

Section 25.  Counterparts.  This Agreement may be executed in any number

of counterparts and each of such counterparts shall for all purposes be deemed

to be an original, and all such counterparts shall together constitute but one

and the same instrument.

 

[Signature page

follows]

 

16

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

duly executed, as of this 29th day of January, 2003.

 

	

   

  	

  PHOTOGEN

  TECHNOLOGIES, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

    /s/

  Taffy J. Williams, Ph.D.

  	

   

  
	

   

  	

  Name:  Taffy

  J. Williams, Ph.D.

  
	

   

  	

  Title:  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Brooks Boveroux

  	

   

  
	

   

  	

  Name:  Brooks Boveroux

  
	

   

  	

  Title:    Secretary, Chief Financial Officer,

  
	

   

  	

              Treasurer

  and Senior Vice President-Finance

  
	

   

  	

   

  
	

   

  	

  BROADMARK CAPITAL, LLC

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

    /s/

  John L. Schocken

  	

   

  
	

   

  	

  Name:

  	

  John L. Schocken

  	

   

  
	

   

  	

  Title:

  	

  President

  	

   

  
						

 

17

 

Exhibit A

 

[Form of Warrant Certificate]

 

THE SECURITIES EVIDENCED OR

CONSTITUTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  SUCH SECURITIES MAY NOT BE SOLD,

TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE REGISTRATION PROVISIONS OF SAID

ACT HAVE BEEN COMPLIED WITH OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF

COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT

REQUIRED.

 

EXERCISABLE ON OR BEFORE

NOVEMBER 12, 2007

 

150,000 Warrants

 

Warrant Certificate

 

PHOTOGEN TECHNOLOGIES, INC.

 

This Warrant

Certificate certifies that BROADMARK CAPITAL, LLC, or registered assigns, is

the registered holder of Warrants expiring November 12, 2007 (the “Warrants”)

to purchase Common Stock, par value $0.001 per share (the “Common Stock”), of

PHOTOGEN TECHNOLOGIES, INC., a Nevada corporation (the “Company”).  Each Warrant entitles the holder upon

exercise to receive from the Company one fully paid and nonassessable share of

Common Stock (a “Warrant Share”) at the initial exercise price (the “Exercise

Price”) of $1.08 payable in lawful money of the United States of America upon

surrender of this Warrant Certificate and payment of the Exercise Price at the

office of the Company, but subject to the conditions set forth herein and in

the Warrant Agreement referred to herein. 

The Exercise Price and number of Warrant Shares issuable upon exercise

of the Warrants are subject to adjustment upon the occurrence of certain events

set forth in the Warrant Agreement.

 

No Warrant may

be exercised after 5:00 p.m., Eastern Time on November 12, 2007, and to the

extent not exercised by such time such Warrants shall become void.

 

This Warrant

Certificate shall be governed and construed in accordance with the internal laws

of the State of Nevada, without giving effect to the principles thereof

relating to conflicts of laws.

 

The Warrants

evidenced by this Warrant Certificate are part of a duly authorized issue of

Warrants expiring November 12, 2007 entitling the holder on exercise to receive

shares of Common Stock, par value $0.001 per share, of the Company (the “Common

Stock”), and are issued or to be issued pursuant to a Warrant Agreement dated

as of November 12, 2002 (the “Warrant Agreement”), duly executed and delivered

by the Company to Broadmark Capital, LLC (the “Holder”), which Warrant

Agreement is hereby incorporated by reference in and made a part of this

instrument and is hereby referred to for a description of the rights,

limitation of rights, obligations, duties and immunities thereunder of the

Company, the Holder and the holders (the words “holders” or “holder” meaning

the registered holders or registered holder and any transferee of the

registered Holder) of the Warrants.  A

copy of the Warrant Agreement may be obtained by the holder hereof upon written

request to the Company.

 

 

Warrants may

be exercised at any time on or before November 12, 2007.  The holder of Warrants evidenced by this

Warrant Certificate may exercise them by surrendering this Warrant Certificate,

with the form of election to purchase set forth hereon properly completed and

executed, together with payment of the Exercise Price in cash at the office of

the Company or in accordance with Section 6 of the Warrant Agreement.  In the event that upon any exercise of

Warrants evidenced hereby the number of Warrants exercised shall be less than

the total number of Warrants evidenced hereby, there shall be issued to the

holder hereof or its assignee a new Warrant Certificate evidencing the number of

Warrants not exercised.  No adjustment

shall be made for any dividends on any Common Stock issuable upon exercise of

this Warrant.

 

The Warrant

Agreement provides that upon the occurrence of certain events the Exercise

Price set forth on the face hereof may, subject to certain conditions, be

adjusted.  If the Exercise Price is

adjusted, the Warrant Agreement provides that in certain circumstances the

number of shares of Common Stock issuable upon the exercise of each Warrant

shall be adjusted.  No fractions of a

share of Common Stock will be issued upon the exercise of any Warrant, but the

Company will pay the cash value thereof determined as provided in the Warrant

Agreement.

 

Warrant

Certificates, when surrendered at the office of the Company by the registered

holder thereof may be exchanged, in the manner and subject to the limitations

provided in the Warrant Agreement, but without payment of any service charge,

for another Warrant Certificate or Warrant Certificates of like tenor

evidencing in the aggregate a like number of Warrants.

 

Upon due

presentation for registration of transfer of this Warrant Certificate at the

office of the Company a new Warrant Certificate or Warrant Certificates of like

tenor and evidencing in the aggregate a like number of Warrants shall be issued

to the transferee(s) in exchange for this Warrant Certificate, subject to the

limitations provided in the Warrant Agreement, without charge except for any

tax or other governmental charge imposed in connection therewith.

 

The Company

may deem and treat the registered holder(s) thereof as the absolute owner(s) of

this Warrant Certificate (notwithstanding any notation of ownership or other

writing hereon made by anyone), for the purpose of any exercise hereof, of any

distribution to the holder(s) hereof, and for all other purposes, and the

Company shall not be affected by any notice to the contrary.  Neither the Warrants nor this Warrant

Certificate entitles any holder hereof to any rights of a stockholder of the

Company.

 

2

 

IN WITNESS WHEREOF, PHOTOGEN TECHNOLOGIES,

INC. has caused this Warrant Certificate to be signed by its President and by

its Secretary.

 

 

	

  Dated:

                          ,

  2003

  	

   

  
	

   

  	

   

  
	

   

  	

  PHOTOGEN TECHNOLOGIES, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name: Taffy J. Williams, Ph.D.

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By :

  	

   

  	

   

  
	

   

  	

  Name:  Brooks Boveroux

  
	

   

  	

  Title:

  	

  Secretary,

  Chief Financial Officer,

  Treasurer and Senior Vice President-Finance

  
						

 

3

 

Exhibit B

 

[Form of Election to Purchase]

 

(To Be Executed Upon Exercise of Warrant)

 

The

undersigned hereby irrevocably elects to exercise the right, represented by

this Warrant Certificate, to receive

         shares of Common Stock and

herewith tenders payment for such shares to the order of PHOTOGEN TECHNOLOGIES,

INC. in the amount of

$            in

accordance with the terms hereof. The undersigned requests that a certificate

for such shares be registered in the name of

                     ,

whose address is                                                                             and that such shares be delivered to

                                    whose address is

                                                                               .  If said number of shares is less than all of

the shares of Common Stock purchasable hereunder, the undersigned requests that

a new Warrant Certificate representing the remaining balance of such shares be

registered in the name of                                     ,

whose address is

                                                               

and that such Warrant Certificate be delivered to

                                

, whose address is

                                    

..

 

 

	

  Dated:

  	

   

  
	

   

  	

   

  
	

   

  	

  Signature:

  	

   

  	

   

  
	

   

  	

  (Signature

  must confirm in all respects to name of holder

  as specified on the face of the Warrant Certificate.)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]