Document:

Exhibit
4.14

 

 

METABASIS
THERAPEUTICS, INC.

 

 

and

 

 

                      ,
As Warrant Agent

 

 

FORM OF
COMMON STOCK

WARRANT AGREEMENT

 

 

Dated
As Of                               

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  ISSUANCE OF WARRANTS AND EXECUTION AND
  DELIVERY OF WARRANT CERTIFICATES

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Issuance of
  Warrants

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Execution
  and Delivery of Warrant Certificates

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Issuance of
  Warrant Certificates

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Warrant
  Price

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Duration of
  Warrants

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Exercise of
  Warrants

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT
  CERTIFICATES

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  No Rights as
  Warrant Securityholder Conferred by Warrants or Warrant Certificates

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Lost,
  Stolen, Mutilated or Destroyed Warrant Certificates

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Holder of
  Warrant Certificate May Enforce Rights

  	
  5

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Adjustments

  	
  5

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Notice to
  Warrantholders

  	
  8

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  [If the
  Warrants are subject to acceleration by the Company, insert—Acceleration of
  Warrants by the Company

  	
  8]

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Exchange and
  Transfer of Warrant Certificates

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Treatment of
  Holders of Warrant Certificates

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Cancellation
  of Warrant Certificates

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  CONCERNING THE WARRANT AGENT

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Warrant
  Agent

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Conditions
  of Warrant Agent’s Obligations

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Resignation
  and Appointment of Successor

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  MISCELLANEOUS

  	
  13

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Amendment

  	
  13

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Notices and
  Demands to the Company and Warrant Agent

  	
  13

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Addresses

  	
  14

  

 

i

 

	
  6.4

  	
  Governing
  Law

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Obtaining of
  Governmental Approvals

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Persons
  Having Rights Under Warrant Agreement

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  Headings

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  Counterparts

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.9

  	
  Inspection
  of Agreement

  	
  14

  

 

ii

 

METABASIS
THERAPEUTICS, INC.

Form of
Common Stock Warrant Agreement

 

COMMON
STOCK WARRANT AGREEMENT, dated as of               
between METABASIS THERAPEUTICS, INC.,
a Delaware corporation (the “Company”) and                                       ,
a [corporation] [national banking association] organized and existing under the
laws of                       
and having a corporate trust office in                         ,
as warrant agent (the “Warrant
Agent”).

 

WHEREAS,
the Company proposes to sell [if Warrants are sold with other securities -
[title of such other securities being offered] (the “Other Securities”)
with] warrant certificates evidencing one or more warrants (the “Warrants” or
individually a “Warrant”)
representing the right to purchase Common Stock of the Company, par value $0.001
per share (the “Warrant
Securities”), such warrant certificates and other warrant
certificates issued pursuant to this Agreement being herein called the “Warrant Certificates”;
and

 

WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing so to act, in connection with the issuance,
registration, transfer, exchange, exercise and replacement of the Warrant
Certificates, and in this Agreement wishes to set forth, among other things,
the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, registered, transferred, exchanged,
exercised and replaced;

 

NOW
THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

 

ARTICLE 1

 

ISSUANCE OF WARRANTS AND EXECUTION
AND 

DELIVERY OF WARRANT CERTIFICATES

 

1.1                               Issuance of Warrants.  [If Warrants alone - Upon issuance, each
Warrant Certificate shall evidence one or more Warrants.]  [If Other Securities and Warrants - Warrants
shall be [initially] issued in connection with the issuance of the Other
Securities [but shall be separately transferable on and after                                                                       
(the “Detachable Date”)]
[and shall not be separately transferable] and each Warrant Certificate shall
evidence one or more Warrants.]  Each
Warrant evidenced thereby shall represent the right, subject to the provisions
contained herein and therein, to purchase one Warrant Security.  [If Other Securities and Warrants - Warrant
Certificates shall be initially issued in units with the Other Securities and
each Warrant Certificate included in such a unit shall evidence                           
Warrants for each                 
shares of Other Securities included in such unit.]

 

1.2                               Execution and Delivery of Warrant
Certificates.  Each Warrant
Certificate, whenever issued, shall be in registered form substantially in the
form set forth in Exhibit A hereto, shall be dated the date of its
countersignature by the Warrant Agent and may have such letters, numbers, or
other marks of identification or designation and such legends or

 

1

 

endorsements
printed, lithographed or engraved thereon as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which the Warrants may be listed, or to conform to
usage.  The Warrant Certificates shall be
signed on behalf of the Company by any of its present or future chief executive
officers, presidents, senior vice presidents, vice presidents, chief financial
officers, chief legal officers, treasurers, assistant treasurers, controllers,
assistant controllers, secretaries or assistant secretaries under its corporate
seal reproduced thereon.  Such signatures
may be manual or facsimile signatures of such authorized officers and may be
imprinted or otherwise reproduced on the Warrant Certificates.  The seal of the Company may be in the form of
a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.

 

No Warrant Certificate
shall be valid for any purpose, and no Warrant evidenced thereby shall be
exercisable, until such Warrant Certificate has been countersigned by the
manual signature of the Warrant Agent. 
Such signature by the Warrant Agent upon any Warrant Certificate
executed by the Company shall be conclusive evidence that the Warrant
Certificate so countersigned has been duly issued hereunder.

 

In case any officer of
the Company who shall have signed any of the Warrant Certificates either
manually or by facsimile signature shall cease to be such officer before the
Warrant Certificates so signed shall have been countersigned and delivered by
the Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed Warrant Certificates ceased to be
such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution
of such Warrant Certificate, shall be the proper officers of the Company,
although at the date of the execution of this Agreement any such person was not
such officer.

 

The term “holder” or “holder
of a Warrant Certificate” as used herein shall mean any person in whose name at
the time any Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent for that purpose [If Other Securities and Warrants
are not immediately detachable - or upon the registration of the Other
Securities prior to the Detachable Date. 
Prior to the Detachable Date, the Company will, or will cause the
registrar of the Other Securities to, make available at all times to the
Warrant Agent such information as to holders of the Other Securities as may be
necessary to keep the Warrant Agent’s records up to date].

 

1.3                               Issuance of Warrant Certificates.  Warrant Certificates evidencing the right to
purchase Warrant Securities may be executed by the Company and delivered to the
Warrant Agent upon the execution of this Warrant Agreement or from time to time
thereafter.  The Warrant Agent shall,
upon receipt of Warrant Certificates duly executed on behalf of the Company,
countersign such Warrant Certificates and shall deliver such Warrant
Certificates to or upon the order of the Company.

 

2

 

ARTICLE 2

WARRANT PRICE, DURATION AND EXERCISE OF
WARRANTS

 

2.1                               Warrant Price.  During the period specified in Section 2.2,
each Warrant shall, subject to the terms of this Warrant Agreement and the
applicable Warrant Certificate, entitle the holder thereof to initially
purchase the number of Warrant Securities specified in the applicable Warrant
Certificate at an initial exercise price of $              
per Warrant Security, subject to adjustment upon the occurrence of certain
events, as hereinafter provided.  Such
purchase price per Warrant Security is referred to in this Agreement as the “Warrant Price.”

 

2.2                               Duration of Warrants.  Each Warrant may be exercised in whole or in
part at any time, as specified herein, on or after [the date thereof] [                ]
and at or before [                ] p.m.,
[City] time, on                 
or such later date as the Company may designate by notice to the Warrant Agent
and the holders of Warrant Certificates mailed to their addresses as set forth
in the record books of the Warrant Agent (the “Expiration Date”).  Each Warrant not exercised at or before [                ] p.m.,
[City] time, on the Expiration Date shall become void, and all rights of the
holder of the Warrant Certificate evidencing such Warrant under this Agreement
shall cease.

 

2.3                               Exercise
of Warrants.

 

(a)                                  During
the period specified in Section 2.2, the Warrants may be exercised to
purchase a whole number of Warrant Securities in registered form by providing
certain information as set forth on the reverse side of the Warrant Certificate
and by paying in full, in lawful money of the United States of America, [in
cash or by certified check or official bank check in New York Clearing House
funds] [by bank wire transfer in immediately available funds] the Warrant Price
for each Warrant Security with respect to which a Warrant is being exercised to
the Warrant Agent at its corporate trust office, provided that such exercise is subject to receipt within
five business days of such payment by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities set forth
on the reverse side of the Warrant Certificate properly completed and duly
executed.  The date on which payment in
full of the Warrant Price is received by the Warrant Agent shall, subject to
receipt of the Warrant Certificate as aforesaid, be deemed to be the date on
which the Warrant is exercised; provided,
however, that if, at the date of receipt of such Warrant Certificates
and payment in full of the Warrant Price, the transfer books for the Warrant
Securities purchasable upon the exercise of such Warrants shall be closed, no
such receipt of such Warrant Certificates and no such payment of such Warrant
Price shall be effective to constitute the person so designated to be named as
the holder of record of such Warrant Securities on such date, but shall be
effective to constitute such person as the holder of record of such Warrant
Securities for all purposes at the opening of business on the next succeeding
day on which the transfer books for the Warrant Securities purchasable upon the
exercise of such Warrants shall be opened, and the certificates for the Warrant
Securities in respect of which such Warrants are then exercised shall be
issuable as of the date on such next succeeding day on which the transfer books
shall next be opened, and until such date the Company shall be under no duty to
deliver any certificate for such Warrant Securities.  The Warrant Agent shall deposit all funds
received by it in payment of the Warrant Price in an account of the Company
maintained with it and shall advise the Company by

 

3

 

telephone
at the end of each day on which a payment for the exercise of Warrants is
received of the amount so deposited to its account.  The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.

 

(b)                                  The
Warrant Agent shall, from time to time, as promptly as practicable, advise the
Company of (i) the number of Warrant Securities with respect to which
Warrants were exercised, (ii) the instructions of each holder of the
Warrant Certificates evidencing such Warrants with respect to delivery of the
Warrant Securities to which such holder is entitled upon such exercise, (iii) delivery
of Warrant Certificates evidencing the balance, if any, of the Warrants for the
remaining Warrant Securities after such exercise, and (iv) such other
information as the Company shall reasonably require.

 

(c)                                  As
soon as practicable after the exercise of any Warrant, the Company shall issue
to or upon the order of the holder of the Warrant Certificate evidencing such
Warrant the Warrant Securities to which such holder is entitled, in fully
registered form, registered in such name or names as may be directed by such
holder.  If fewer than all of the
Warrants evidenced by such Warrant Certificate are exercised, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, a new Warrant Certificate evidencing Warrants for the
number of Warrant Securities remaining unexercised.

 

(d)                                  The
Company shall not be required to pay any stamp or other tax or other
governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities, and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
Warrant Security until such tax or other charge shall have been paid or it has
been established to the Company’s satisfaction that no such tax or other charge
is due.

 

(e)                                  Prior
to the issuance of any Warrants there shall have been reserved, and the Company
shall at all times through the Expiration Date keep reserved, out of its
authorized but unissued Warrant Securities, a number of shares sufficient to
provide for the exercise of the Warrants.

 

ARTICLE 3

OTHER PROVISIONS RELATING TO RIGHTS

OF HOLDERS OF WARRANT CERTIFICATES

 

3.1                               No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates. 
No Warrant Certificate or Warrant evidenced thereby shall entitle the
holder thereof to any of the rights of a holder of Warrant Securities,
including, without limitation, the right to receive the payment of dividends or
distributions, if any, on the Warrant Securities or to exercise any voting
rights, except to the extent expressly set forth in this Agreement or the
applicable Warrant Certificate.

 

3.2                               Lost, Stolen, Mutilated or Destroyed Warrant
Certificates.  Upon receipt by
the Warrant Agent of evidence reasonably satisfactory to it and the Company of
the ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and/or indemnity

 

4

 

reasonably
satisfactory to the Warrant Agent and the Company and, in the case of
mutilation, upon surrender of the mutilated Warrant Certificate to the Warrant
Agent for cancellation, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the Warrant
Agent shall manually countersign and deliver, in exchange for or in lieu of the
lost, stolen, destroyed or mutilated Warrant Certificate, a new Warrant
Certificate of the same tenor and evidencing Warrants for a like number of
Warrant Securities.  Upon the issuance of
any new Warrant Certificate under this Section 3.2, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Warrant Agent) in connection
therewith.  Every substitute Warrant
Certificate executed and delivered pursuant to this Section 3.2 in lieu of
any lost, stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder.  The provisions of this Section 3.2
are exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement of mutilated, lost, stolen or
destroyed Warrant Certificates.

 

3.3                               Holder of Warrant Certificate May Enforce
Rights.  Notwithstanding any
of the provisions of this Agreement, any holder of a Warrant Certificate, without
the consent of the Warrant Agent, the holder of any Warrant Securities or the
holder of any other Warrant Certificate, may, in such holder’s own behalf and
for such holder’s own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce, or
otherwise in respect of, such holder’s right to exercise the Warrants evidenced
by such holder’s Warrant Certificate in the manner provided in such holder’s
Warrant Certificate and in this Agreement.

 

3.4                               Adjustments.

 

(a)                                  In
case the Company shall at any time subdivide its outstanding shares of Common
Stock into a greater number of shares, the Warrant Price in effect immediately
prior to such subdivision shall be proportionately reduced and the number of Warrant
Securities purchasable under the Warrants shall be proportionately
increased.  Conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Warrant Price in effect immediately prior to such
combination shall be proportionately increased and the number of Warrant
Securities purchasable under the Warrants shall be proportionately decreased.

 

(b)                                  If
at any time or from time to time the holders of Common Stock (or any shares of
stock or other securities at the time receivable upon the exercise of the
Warrants) shall have received or become entitled to receive, without payment
therefore,

 

(i)                                    Common
Stock or any shares of stock or other securities which are at any time directly
or indirectly convertible into or exchangeable for Common Stock, or any rights
or options to subscribe for, purchase or otherwise acquire any of the foregoing
by way of dividend or other distribution;

 

5

 

(ii)                                any
cash paid or payable otherwise than as a cash dividend paid or payable out of
the Company’s current or retained earnings;

 

(iii)                            any
evidence of the Company’s indebtedness or rights to subscribe for or purchase
the Company’s indebtedness; or

 

(iv)                               Common
Stock or additional stock or other securities or property (including cash) by
way of spinoff, split-up, reclassification, combination of shares or similar
corporate rearrangement (other than shares of Common Stock issued as a stock
split or adjustments in respect of which shall be covered by the terms of Section 3.4(a) above),
then and in each such case, the holder of each Warrant shall, upon the exercise
of the Warrant, be entitled to receive, in addition to the number of Warrant
Securities receivable thereupon, and without payment of any additional
consideration therefore, the amount of stock and other securities and property
(including cash and indebtedness (or rights to subscribe for or purchase
indebtedness) which such holder would hold on the date of such exercise had he
been the holder of record of such Warrant Securities as of the date on which
holders of Common Stock received or became entitled to receive such shares or
all other additional stock and other securities and property.

 

(c)                                  In
case of (i) any reclassification, capital reorganization, or change in the
Common Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 3.4(a) or Section 3.4(b) above),
(ii) share exchange, merger or similar transaction of the Company with or
into another person or entity (other than a share exchange, merger or similar
transaction in which the Company is the acquiring or surviving corporation and
which does not result in any change in the Common Stock other than the issuance
of additional shares of Common Stock) or (iii) the sale, exchange, lease,
transfer or other disposition of all or substantially all of the properties and
assets of the Company as an entirety (in any such case, a “Reorganization Event”),
then, as a condition of such Reorganization Event, lawful provisions shall be
made, and duly executed documents evidencing the same from the Company or its
successor shall be delivered to the holders of the Warrants, so that the
holders of the Warrants shall have the right at any time prior to the
expiration of the Warrants to purchase, at a total price equal to that payable
upon the exercise of the Warrants, the kind and amount of shares of stock and
other securities and property receivable in connection with such Reorganization
Event by a holder of the same number of Warrant Securities as were purchasable
by the holders of the Warrants immediately prior to such Reorganization
Event.  In any such case appropriate
provisions shall be made with respect to the rights and interests of the
holders of the Warrants so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise the Warrants, and appropriate adjustments shall be
made to the Warrant Price payable hereunder provided the aggregate purchase
price shall remain the same.  In the case
of any transaction described in clauses (ii) and (iii) above, the
Company shall thereupon be relieved of any further obligation hereunder or
under the Warrants, and the Company as the predecessor corporation may
thereupon or at any time thereafter be dissolved, wound up or liquidated.  Such successor or assuming entity thereupon
may cause to be signed, and may issue either in its own name or in the name of
the Company, any or all of the Warrants issuable hereunder which heretofore
shall not have been signed by the Company, and may execute and deliver
securities in its own name, in

 

6

 

fulfillment
of its obligations to deliver Warrant Securities upon exercise of the
Warrants.  All the Warrants so issued
shall in all respects have the same legal rank and benefit under this Agreement
as the Warrants theretofore or thereafter issued in accordance with the terms
of this Agreement as though all of such Warrants had been issued at the date of
the execution hereof.  In any case of any
such Reorganization Event, such changes in phraseology and form (but not in
substance) may be made in the Warrants thereafter to be issued as may be
appropriate.

 

The Warrant Agent may
receive a written opinion of legal counsel as conclusive evidence that any such
Reorganization Event complies with the provisions of this Section 3.4.

 

(d)                                  The
Company may, at its option, at any time until the Expiration Date, reduce the
then current Warrant Price to any amount deemed appropriate by the Board of
Directors of the Company for any period not exceeding twenty consecutive days
(as evidenced in a resolution adopted by such Board of Directors), but only
upon giving the notices required by Section 3.5 at least ten days prior to
taking such action.

 

(e)                                  Except
as herein otherwise expressly provided, no adjustment in the Warrant Price
shall be made by reason of the issuance of shares of Common Stock, or
securities convertible into or exchangeable for shares of Common Stock, or
securities carrying the right to purchase any of the foregoing or for any other
reason whatsoever.

 

(f)                                    No
fractional Warrant Securities shall be issued upon the exercise of
Warrants.  If more than one Warrant shall
be exercised at one time by the same holder, the number of full Warrant
Securities which shall be issuable upon such exercise shall be computed on the
basis of the aggregate number of Warrant Securities purchased pursuant to the
Warrants so exercised.  Instead of any
fractional Warrant Security which would otherwise be issuable upon exercise of
any Warrant, the Company shall pay a cash adjustment in respect of such fraction
in an amount equal to the same fraction of the last sales price (or bid price
if there were no sales) per Warrant Security, in either case as reported on the
New York Stock Exchange Composite Tape on the business day which next precedes
the day of exercise or, if the Warrant Securities are not then listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Warrant Securities are listed or admitted to
trading or, if not listed or admitted to trading on any national securities exchange,
on the Nasdaq Stock Market, or if the Warrant Securities are not then listed or
admitted to trading on any national securities exchange or quoted on the Nasdaq
Stock Market, the average of the closing high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market, Inc., or
the National Association of Securities Dealers, Inc., as applicable (“NASDAQ”),
or such other system then in use, or if on any such date the Warrant Securities
are not quoted by any such organization, an amount equal to the same fraction
of the average of the closing bid and asked prices as furnished by any New York
Stock Exchange firm selected from time to time by the Company for that purpose
at the close of business on the business day which next precedes the day of
exercise.

 

(g)                                 Whenever
the Warrant Price then in effect is adjusted as herein provided, the Company
shall mail to each holder of the Warrants at such holder’s address as it shall
appear on the books of the Company a statement setting forth the adjusted
Warrant Price then and

 

7

 

thereafter
effective under the provisions hereof, together with the facts, in reasonable
detail, upon which such adjustment is based.

 

3.5                               Notice to Warrantholders.  In case the Company shall (a) effect any
dividend or distribution described in Section 3.4(b), (b) effect any
Reorganization Event, (c) make any distribution on or in respect of the
Common Stock in connection with the dissolution, liquidation or winding up of
the Company, or (d) reduce the then current Warrant Price pursuant to Section 3.4(d),
then the Company shall mail to each holder of Warrants at such holder’s address
as it shall appear on the books of the Warrant Agent, at least ten days prior to
the applicable date hereinafter specified, a notice stating (x) the record date
for such dividend or distribution, or, if a record is not to be taken, the date
as of which the holders of record of Common Stock that will be entitled to such
dividend or distribution are to be determined, (y) the date on which such
Reorganization Event, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such Reorganization
Event, dissolution, liquidation or winding up, or (z) the first date on which
the then current Warrant Price shall be reduced pursuant to Section 3.4(d).  No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect any such transaction or any
adjustment in the Warrant Price required by Section 3.4.

 

3.6                               [If
the Warrants are subject to acceleration by the Company, insert—Acceleration of
Warrants by the Company.

 

(a)                                  At
any time on or after                       ,
the Company shall have the right to accelerate any or all Warrants at any time
by causing them to expire at the close of business on the day next preceding a
specified date (the “Acceleration
Date”), if the Market Price (as hereinafter defined) of the
Common Stock equals or exceeds                         
percent (          %) of the
then effective Warrant Price on any twenty Trading Days (as hereinafter
defined) within a period of thirty consecutive Trading Days ending no more than
five Trading Days prior to the date on which the Company gives notice to the
Warrant Agent of its election to accelerate the Warrants.

 

(b)                                  “Market
Price” for each Trading Day shall be, if the Common Stock is listed or admitted
for trading on the New York Stock Exchange, the last reported sale price,
regular way (or, if no such price is reported, the average of the reported
closing bid and asked prices, regular way) of Common Stock, in either case as
reported on the New York Stock Exchange Composite Tape or, if the Common Stock
is not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the Nasdaq Stock Market or, if not listed or admitted
to trading on any national securities exchange or quoted on the Nasdaq Stock Market,
the average of the closing high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ, or such other system then in
use, or if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by any New York Stock Exchange firm selected from time to time by the Company
for that purpose.  “Trading Day” shall be
each Monday through Friday, other than any day on which securities are

 

8

 

not
traded in the system or on the exchange that is the principal market for the
Common Stock, as determined by the Board of Directors of the Company.

 

(c)                                  In
the event of an acceleration of less than all of the Warrants, the Warrant
Agent shall select the Warrants to be accelerated by lot, pro rata or in such
other manner as it deems, in its discretion, to be fair and appropriate.

 

(d)                                  Notice
of an acceleration specifying the Acceleration Date shall be sent by mail first
class, postage prepaid, to each registered holder of a Warrant Certificate
representing a Warrant accelerated at such holder’s address appearing on the
books of the Warrant Agent not more than sixty days nor less than thirty days
before the Acceleration Date.  Such
notice of an acceleration also shall be given no more than twenty days, and no
less than ten days, prior to the mailing of notice to registered holders of
Warrants pursuant to this Section 3.6, by publication at least once in a
newspaper of general circulation in the City of New York.

 

(e)                                  Any
Warrant accelerated may be exercised until [          ] p.m.,
[City] time, on the business day next preceding the Acceleration Date.  The Warrant Price shall be payable as
provided in Section 2.]

 

ARTICLE 4

EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES

 

4.1                               Exchange and Transfer of Warrant
Certificates.  [If Other
Securities with Warrants which are immediately detachable - Upon] [If Other
Securities with Warrants which are not immediately detachable - Prior to the
Detachable Date, a Warrant Certificate may be exchanged or transferred only
together with the Other Security to which the Warrant Certificate was initially
attached, and only for the purpose of effecting or in conjunction with an
exchange or transfer of such Other Security. 
Prior to any Detachable Date, each transfer of the Other Security shall
operate also to transfer the related Warrant Certificates.  After the Detachable Date, upon] surrender at
the corporate trust office of the Warrant Agent, Warrant Certificates
evidencing Warrants may be exchanged for Warrant Certificates in other
denominations evidencing such Warrants or the transfer thereof may be
registered in whole or in part; provided
that such other Warrant Certificates evidence Warrants for the same
aggregate number of Warrant Securities as the Warrant Certificates so
surrendered.  The Warrant Agent shall
keep, at its corporate trust office, books in which, subject to such reasonable
regulations as it may prescribe, it shall register Warrant Certificates and
exchanges and transfers of outstanding Warrant Certificates, upon surrender of
the Warrant Certificates to the Warrant Agent at its corporate trust office for
exchange or registration of transfer, properly endorsed or accompanied by
appropriate instruments of registration of transfer and written instructions
for transfer, all in form satisfactory to the Company and the Warrant
Agent.  No service charge shall be made
for any exchange or registration of transfer of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any stamp or other tax
or other governmental charge that may be imposed in connection with any such
exchange or registration of transfer. 
Whenever any Warrant Certificates are so surrendered for exchange or
registration of transfer, an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates duly authorized and executed by the

 

9

 

Company,
as so requested.  The Warrant Agent shall
not be required to effect any exchange or registration of transfer which will
result in the issuance of a Warrant Certificate evidencing a Warrant for a
fraction of a Warrant Security or a number of Warrants for a whole number of
Warrant Securities and a fraction of a Warrant Security.  All Warrant Certificates issued upon any
exchange or registration of transfer of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations and entitled to the
same benefits under this Agreement as the Warrant Certificate surrendered for
such exchange or registration of transfer.

 

4.2                               Treatment of Holders of Warrant Certificates.  [If Other Securities and Warrants are not immediately
detachable - Prior to the Detachable Date, the Company, the Warrant Agent and
all other persons may treat the owner of the Other Security as the owner of the
Warrant Certificates initially attached thereto for any purpose and as the
person entitled to exercise the rights represented by the Warrants evidenced by
such Warrant Certificates, any notice to the contrary notwithstanding.  After the Detachable Date and prior to due
presentment of a Warrant Certificate for registration of transfer, the]  [T]he Company, the Warrant Agent and all other
persons may treat the registered holder of a Warrant Certificate as the
absolute owner thereof for any purpose and as the person entitled to exercise
the rights represented by the Warrants evidenced thereby, any notice to the
contrary notwithstanding.

 

4.3                               Cancellation of Warrant Certificates.  Any Warrant Certificate surrendered for
exchange, registration of transfer or exercise of the Warrants evidenced
thereby shall, if surrendered to the Company, be delivered to the Warrant Agent
and all Warrant Certificates surrendered or so delivered to the Warrant Agent
shall be promptly canceled by the Warrant Agent and shall not be reissued and,
except as expressly permitted by this Agreement, no Warrant Certificate shall
be issued hereunder in exchange therefor or in lieu thereof.  The Warrant Agent shall deliver to the
Company from time to time or otherwise dispose of canceled Warrant Certificates
in a manner satisfactory to the Company.

 

ARTICLE 5

CONCERNING THE WARRANT AGENT

 

5.1                               Warrant Agent.  The Company hereby appoints                           
as Warrant Agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth, and
                          
hereby accepts such appointment.  The
Warrant Agent shall have the powers and authority granted to and conferred upon
it in the Warrant Certificates and hereby and such further powers and authority
to act on behalf of the Company as the Company may hereafter grant to or confer
upon it.  All of the terms and provisions
with respect to such powers and authority contained in the Warrant Certificates
are subject to and governed by the terms and provisions hereof.

 

5.2                               Conditions of Warrant Agent’s Obligations.  The Warrant Agent accepts its obligations
herein set forth upon the terms and conditions hereof, including the following
to all of which the Company agrees and to all of which the rights hereunder of
the holders from time to time of the Warrant Certificates shall be subject:

 

10

 

(a)                                  Compensation and Indemnification.  The Company agrees promptly to pay the
Warrant Agent the compensation to be agreed upon with the Company for all
services rendered by the Warrant Agent and to reimburse the Warrant Agent for
reasonable out-of-pocket expenses (including reasonable counsel fees) incurred
without negligence, bad faith or willful misconduct by the Warrant Agent in
connection with the services rendered hereunder by the Warrant Agent.  The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, bad faith or willful misconduct on the
part of the Warrant Agent, arising out of or in connection with its acting as
Warrant Agent hereunder, including the reasonable costs and expenses of
defending against any claim of such liability.

 

(b)                                  Agent for the Company.  In acting under this Warrant Agreement and in
connection with the Warrant Certificates, the Warrant Agent is acting solely as
agent of the Company and does not assume any obligations or relationship of
agency or trust for or with any of the holders of Warrant Certificates or
beneficial owners of Warrants.

 

(c)                                  Counsel.  The Warrant Agent may consult with counsel
satisfactory to it, which may include counsel for the Company, and the written
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the advice of such counsel.

 

(d)                                  Documents.  The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken or omitted by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper
parties.

 

(e)                                  Certain Transactions.  The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, it or
they may engage or be interested in any financial or other transaction with the
Company and may act on, or as depositary, trustee or agent for, any committee
or body of holders of Warrant Securities or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder.  Nothing in this Warrant Agreement shall be
deemed to prevent the Warrant Agent from acting as trustee under any indenture
to which the Company is a party.

 

(f)                                    No Liability for Interest.  Unless otherwise agreed with the Company, the
Warrant Agent shall have no liability for interest on any monies at any time
received by it pursuant to any of the provisions of this Agreement or of the
Warrant Certificates.

 

(g)                                 No Liability for Invalidity.  The Warrant Agent shall have no liability
with respect to any invalidity of this Agreement or any of the Warrant
Certificates (except as to the Warrant Agent’s countersignature thereon).

 

(h)                                 No Responsibility for Representations.  The Warrant Agent shall not be responsible
for any of the recitals or representations herein or in the Warrant
Certificates (except 

 

11

 

as to
the Warrant Agent’s countersignature thereon), all of which are made solely by
the Company.

 

(i)                                    No Implied Obligations.  The Warrant Agent shall be obligated to
perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent.  The Warrant Agent shall not be under any
obligation to take any action hereunder which may tend to involve it in any
expense or liability, the payment of which within a reasonable time is not, in
its reasonable opinion, assured to it. 
The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of the proceeds of the
Warrant Certificates.  The Warrant Agent
shall have no duty or responsibility in case of any default by the Company in
the performance of its covenants or agreements contained herein or in the
Warrant Certificates or in the case of the receipt of any written demand from a
holder of a Warrant Certificate with respect to such default, including,
without limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except
as provided in Section 6.2 hereof, to make any demand upon the Company.

 

5.3                               Resignation
and Appointment of Successor.

 

(a)                                  The
Company agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder until
all the Warrants have been exercised or are no longer exercisable.

 

(b)                                  The
Warrant Agent may at any time resign as agent by giving written notice to the
Company of such intention on its part, specifying the date on which its desired
resignation shall become effective; provided
that such date shall not be less than three months after the date on
which such notice is given unless the Company otherwise agrees.  The Warrant Agent hereunder may be removed at
any time by the filing with it of an instrument in writing signed by or on
behalf of the Company and specifying such removal and the intended date when it
shall become effective.  Such resignation
or removal shall take effect upon the appointment by the Company, as hereinafter
provided, of a successor Warrant Agent (which shall be a bank or trust company
authorized under the laws of the jurisdiction of its organization to exercise
corporate trust powers) and the acceptance of such appointment by such
successor Warrant Agent.  The obligation
of the Company under Section 5.2(a) shall continue to the extent set
forth therein notwithstanding the resignation or removal of the Warrant Agent.

 

(c)                                  In
case at any time the Warrant Agent shall resign, or shall be removed, or shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or
shall commence a voluntary case under the Federal bankruptcy laws, as now or
hereafter constituted, or under any other applicable Federal or state
bankruptcy, insolvency or similar law or shall consent to the appointment of or
taking possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property
or affairs, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due,
or shall take corporate action in furtherance of any such action, or a decree
or order for relief by a court having jurisdiction in the premises shall have

 

12

 

been
entered in respect of the Warrant Agent in an involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or similar law, or a decree
or order by a court having jurisdiction in the premises shall have been entered
for the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. 
Upon the appointment as aforesaid of a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the Warrant
Agent shall cease to be Warrant Agent hereunder.

 

(d)                                  Any
successor Warrant Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor and to the Company an instrument accepting such
appointment hereunder, and thereupon such successor Warrant Agent, without any
further act, deed or conveyance, shall become vested with all the authority,
rights, powers, trusts, immunities, duties and obligations of such predecessor
with like effect as if originally named as Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over, and such
successor Warrant Agent shall be entitled to receive, all monies, securities
and other property on deposit with or held by such predecessor, as Warrant
Agent hereunder.

 

(e)                                  Any
corporation into which the Warrant Agent hereunder may be merged or converted
or any corporation with which the Warrant Agent may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Warrant Agent shall be a party, or any corporation to which the Warrant Agent
shall sell or otherwise transfer all or substantially all the assets and
business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.

 

ARTICLE 6

MISCELLANEOUS

 

6.1                               Amendment.  This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided that such action shall not materially adversely
affect the interests of the holders of the Warrant Certificates.

 

6.2                               Notices and Demands to the Company and
Warrant Agent.  If the Warrant
Agent shall receive any notice or demand addressed to the Company by the holder
of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.

 

13

 

6.3                               Addresses.  Any communication from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to                             ,
Attention:                          
and any communication from the Warrant Agent to the Company with respect to
this Agreement shall be addressed to Metabasis Therapeutics, Inc., 11119
North Torrey Pines Road, La Jolla, California 92037, Attention:  Chief Financial Officer (or such other
address as shall be specified in writing by the Warrant Agent or by the
Company).

 

6.4                               Governing Law.  This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of California.

 

6.5                               Obtaining of Governmental Approvals.  The Company will from time to time take all
action which may be necessary to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities and securities
act filings under United States Federal and state laws (including without
limitation a registration statement in respect of the Warrants and Warrant
Securities under the Securities Act of 1933, as amended), which may be or
become requisite in connection with the issuance, sale, transfer, and delivery
of the Warrant Securities issued upon exercise of the Warrants, the issuance,
sale, transfer and delivery of the Warrants or upon the expiration of the
period during which the Warrants are exercisable.

 

6.6                               Persons Having Rights Under Warrant
Agreement.  Nothing in this
Agreement shall give to any person other than the Company, the Warrant Agent
and the holders of the Warrant Certificates any right, remedy or claim under or
by reason of this Agreement.

 

6.7                               Headings.  The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.

 

6.8                               Counterparts.  This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.

 

6.9                               Inspection of Agreement.  A copy of this Agreement shall be available
at all reasonable times at the principal corporate trust office of the Warrant
Agent for inspection by the holder of any Warrant Certificate.  The Warrant Agent may require such holder to
submit his Warrant Certificate for inspection by it.

 

14

 

IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.

 

	
   

  	
   

  	
  METABASIS
  THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Warrant Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

[SIGNATURE PAGE TO COMMON STOCK WARRANT AGREEMENT]

 

 

EXHIBIT A

 

FORM OF
WARRANT CERTIFICATE

[Face of Warrant Certificate]

 

	
  [Form if
  Warrants are attached to Other Securities and are not immediately detachable.

  	
   

  	
  Prior to                     ,
  this Warrant Certificate cannot be transferred or exchanged unless attached
  to a [Title of Other Securities].]

  
	
   

  	
   

  	
   

  
	
  [Form of
  Legend if Warrants are not immediately exercisable.

  	
   

  	
  Prior to                     ,
  Warrants evidenced by this Warrant Certificate cannot be exercised.]

  

 

EXERCISABLE ONLY
IF COUNTERSIGNED BY THE WARRANT

AGENT AS PROVIDED HEREIN

 

VOID AFTER [         ] P.M.,
[CITY] TIME, ON              ,

 

METABASIS THERAPEUTICS,
INC.

 

WARRANT
CERTIFICATE REPRESENTING

WARRANTS TO PURCHASE

COMMON STOCK, PAR VALUE $0.001 PER SHARE

 

	
  No.

  	
   

  	
   

  	
   

  	
   Warrants

  

 

This certifies that                                   
or registered assigns is the registered owner of the above indicated number of
Warrants, each Warrant entitling such owner [if Warrants are attached to Other
Securities and are not immediately detachable - , subject to the registered
owner qualifying as a “Holder” of this Warrant Certificate, as hereinafter defined),]
to purchase, at any time [after [                ] p.m.,
[City] time, on                 
and] on or before [        ] p.m.,
[City] time, on                     ,
                
shares of Common Stock, par value $0.001 per share (the “Warrant
Securities”), of Metabasis Therapeutics, Inc. (the “Company”) on the following
basis:  during the period from                   ,
through and including                         ,
the exercise price per Warrant Security will be $                  ,
subject to adjustment as provided in the Warrant Agreement (as hereinafter
defined) (the “Warrant
Price”).  The Holder may
exercise the Warrants evidenced hereby by providing certain information set
forth on the back hereof and by paying in full, in lawful money of the United
States of America, [in cash or by certified check or official bank check in New
York Clearing House funds] [by bank wire transfer in immediately available
funds], the Warrant Price for each Warrant Security with respect to which this
Warrant is exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back
hereof duly executed, at the corporate trust office of [name of Warrant Agent],
or its successor as warrant agent (the “Warrant Agent”), which is, on the date
hereof, at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and in the Warrant
Agreement (as hereinafter defined).

 

A-1

 

The term “Holder” as used herein shall mean
[if Warrants are attached to Other Securities and are not immediately
detachable - prior to                         ,
           (the “Detachable Date”), the registered
owner of the Company’s [title of Other Securities] to which this Warrant
Certificate was initially attached, and after such Detachable Date,] the person
in whose name at the time this Warrant Certificate shall be registered upon the
books to be maintained by the Warrant Agent for that purpose pursuant to Section 4
of the Warrant Agreement.

 

The Warrants evidenced by
this Warrant Certificate may be exercised to purchase a whole number of Warrant
Securities in registered form.  Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the Holder hereof a new Warrant
Certificate evidencing Warrants for the number of Warrant Securities remaining
unexercised.

 

This Warrant Certificate
is issued under and in accordance with the Warrant Agreement dated as of                           ,
         (the “Warrant
Agreement”), between the Company and the Warrant Agent and is
subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Holder of this Warrant Certificate consents
by acceptance hereof.  Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant
Agent.

 

[If Warrants are attached
to Other Securities and are not immediately detachable - Prior to the Detachable
Date, this Warrant Certificate may be exchanged or transferred only together
with the [Title of Other Securities] (the “Other Securities”)
to which this Warrant Certificate was initially attached, and only for the
purpose of effecting or in conjunction with, an exchange or transfer of such
Other Security.  Additionally, on or
prior to the Detachable Date, each transfer of such Other Security on the
register of the Other Securities shall operate also to transfer this Warrant
Certificate.  After such date, transfer
of this] [If Warrants are attached to Other Securities and are immediately
detachable – Transfer of this] Warrant Certificate may be registered when this
Warrant Certificate is surrendered at the corporate trust office of the Warrant
Agent by the registered owner or such owner’s assigns, in the manner and
subject to the limitations provided in the Warrant Agreement.

 

[If Other Securities with
Warrants which are not immediately detachable - Except as provided in the
immediately preceding paragraph, after] [If Other Securities with Warrants
which are immediately detachable or Warrants alone - After] countersignature by
the Warrant Agent and prior to the expiration of this Warrant Certificate, this
Warrant Certificate may be exchanged at the corporate trust office of the
Warrant Agent for Warrant Certificates representing Warrants for the same
aggregate number of Warrant Securities.

 

This Warrant Certificate
shall not entitle the Holder hereof to any of the rights of a holder of the
Warrant Securities, including, without limitation, the right to receive
payments of dividends or distributions, if any, on the Warrant Securities
(except to the extent set forth in the Warrant Agreement) or to exercise any
voting rights.

 

Reference is hereby made
to the further provisions of this Warrant Certificate set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

 

A-2

 

This Warrant Certificate
shall not be valid or obligatory for any purpose until countersigned by the
Warrant Agent.

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be
executed in its name and on its behalf by the facsimile signatures of its duly
authorized officers.

 

	
  Dated:

  	
   

  	
   

  	
  METABASIS
  THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  As Warrant Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Authorized Signature

  	
   

  	
   

  
								

 

A-3

 

[REVERSE OF
WARRANT CERTIFICATE]

 

(Instructions for
Exercise of Warrant)

 

To exercise any Warrants
evidenced hereby for Warrant Securities (as hereinafter defined), the Holder
must pay, in lawful money of the United States of America, [in cash or by
certified check or official bank check in New York Clearing House funds] [by
bank wire transfer in immediately available funds], the Warrant Price in full
for Warrants exercised, to [Warrant Agent] [address of Warrant Agent],
Attn:                            ,
which payment must specify the name of the Holder and the number of Warrants
exercised by such Holder.  In addition,
the Holder must complete the information required below and present this
Warrant Certificate in person or by mail (certified or registered mail is
recommended) to the Warrant Agent at the appropriate address set forth
above.  This Warrant Certificate,
completed and duly executed, must be received by the Warrant Agent within five
business days of the payment.

 

(To be executed
upon exercise of Warrants)

 

The undersigned hereby
irrevocably elects to exercise                     
Warrants, evidenced by this Warrant Certificate, to purchase                     
shares of the Common Stock, par value $0.001 per share (the “Warrant Securities”),
of Metabasis Therapeutics, Inc. and represents that he has tendered
payment for such Warrant Securities, in lawful money of the United States of
America, [in cash or by certified check or official bank check in New York
Clearing House funds] [by bank wire transfer in immediately available funds],
to the order of Metabasis Therapeutics, Inc., c/o [insert name and address
of Warrant Agent], in the amount of $                    
in accordance with the terms hereof.  The
undersigned requests that said Warrant Securities be in fully registered form
in the authorized denominations, registered in such names and delivered all as
specified in accordance with the instructions set forth below.

 

If the number of Warrants
exercised is less than all of the Warrants evidenced hereby, the undersigned
requests that a new Warrant Certificate evidencing the Warrants for the number
of Warrant Securities remaining unexercised be issued and delivered to the
undersigned unless otherwise specified in the instructions below.

 

 

	
  Dated

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
								

 

A-4

 

	
   

  	
   

  
	
   

  	
  (Insert Social
  Security or Other Identifying Number of Holder)

  
	
   

  	
   

  
	
  Signature
  Guaranteed

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  (Signature must
  conform in all respects to name of holder as specified on the face of this
  Warrant Certificate and must bear a signature guarantee by a bank, trust
  company or member broker of the New York, Midwest or Pacific Stock Exchange)

  
	
   

  	
   

  
	
  This Warrant may
  be exercised at the following addresses:

  	
   

  
	
   

  
	
  By hand at

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By mail at

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
			

 

[Instructions as
to form and delivery of Warrant Securities and, if applicable, Warrant
Certificates evidencing Warrants for the number of Warrant Securities remaining
unexercised – complete as appropriate.]

 

A-5

 

ASSIGNMENT

 

[Form of
assignment to be executed if

Warrant Holder desires to transfer Warrant)

 

FOR VALUE RECEIVED,                                       
hereby sells, assigns and transfers unto:

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Please print
  name and address including zip code)

  	
   

  	
  Please insert
  Social Security or other identifying number

  

 

the right
represented by the within Warrant to purchase               
shares of [Title of Warrant Securities] of Metabasis Therapeutics, Inc. to
which the within Warrant relates and appoints                         
attorney to transfer such right on the books of the Warrant Agent with full
power of substitution in the premises.

 

 

	
  Dated

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  the Warrant)

  
	
   

  	
   

  
	
  Signature
  Guaranteed

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

A-6Exhibit 4.1

 

Amended
and Restated Security Holders Agreement dated as of February 3,
2006 (this “Agreement”) among:

 

(i)                                     H&E Equipment Services, Inc., a Delaware
corporation (the “Company”), and

 

(ii)                                  the
Persons identified on the signature pages hereto as the “Stockholders”, together with such
additional Persons who become “Stockholders” in accordance with the provisions
of this Agreement.

 

The
Company and the Stockholders are herein together referred to as the “Parties”.

 

Recitals

 

A.                                   On
the date hereof, and pursuant to the Agreement and Plan of Merger dated as of February 2,
2006 (the “Agreement and Plan of Merger”) among the Company, H&E
Holdings L.L.C., a Delaware limited liability company (“H&E Holdings”),
H&E Equipment Services, L.L.C., a Louisiana limited liability company,
H&E Holdings will be merged with and into the Company, with the Company as
the surviving corporation (the “Merger”).

 

B.                                     Prior
to the Merger, H&E Holdings and the Stockholders are the holders of “Class A
Common Units”, “Class B Common Units”, “Class A Preferred Units”, “Class B
Preferred Units”, “Class C Preferred Units” and “Class D Preferred
Units” (together, “Units”) representing membership interests in H&E
Holdings and, pursuant to the Merger, their Units will be converted into shares
of the Common Stock, par value $0.01 per share (the “Common Stock”), of
the Company. Subsequent to the Merger, the number of shares of the Common Stock
which the Stockholders will receive pursuant to the Merger in respect of their
Units is set forth opposite their names on Schedule A hereto.

 

C.                                     H&E
Holdings and the Stockholders are parties to the Securityholders Agreement
dated as of June 17, 2002 (the “H&E Holdings Securityholders
Agreement”).

 

D.                                    The
Company and the Stockholders desire that this Agreement shall amend, restate
and replace the H&E Holdings Securityholders Agreement.

 

Agreement

 

Now, therefore,
in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:

 

 

1.                                       Definitions.
As used herein, the following terms shall have the following meanings:

 

“Affiliate”
means, when used with reference to a specified Person, any Person that directly
or indirectly controls or is controlled by or is under common control with the
specified Person. As used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise). With
respect to any Person who is an individual, “Affiliates” shall also include,
without limitation, any member of such individual’s Family Group.

 

“Approved
Company Sale” means if BRS Majority Holders approve a sale of all or
substantially all of the Company’s assets determined on a consolidated basis or
a sale of all (or a lesser percentage, if necessary, as determined by BRS
Majority Holders for accounting, tax or other reasons) of the Company’s
outstanding Common Stock (in either case, whether by merger, recapitalization,
consolidation, reorganization, combination or otherwise) or any other
transaction which has the same effect as any of the foregoing, to an
Independent Third Party or group of Independent Third Parties.

 

“BRS
Investors” means those Stockholders identified as such on the signature page to
this Agreement together with their respective Permitted Transferees.

 

“BRS
Majority Holders” means, at any time, the holders of a majority of the
number of the BRS Restricted Shares.

 

“BRS
Restricted Shares” means all Restricted Shares owned by any BRS Investor.

 

“Common
Stock” means collectively the Common Stock, par value $0.01 per share, of
the Company and any other equity securities of the Company (or its successors)
which is not limited to a fixed sum or percentage of par value or stated value
in respect of the rights of the holders thereof to participate in dividends or
other distributions or in the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of the issuer of such
securities.

 

“Family
Group” means, with respect to any Person who is an individual, (i) such
Person’s spouse, former spouse, ancestors and descendants (whether natural or
adopted), parents and their descendants and any spouse of the foregoing persons
(collectively, “Relatives”), (ii) the trustee, fiduciary or
personal representative of such Person and any trust solely for the benefit of
such Person and/or such Person’s relatives or (iii) any limited
partnership or limited liability company the governing instruments of which
provide that such Person shall have the exclusive, nontransferable power to
direct the management and policies of such entity and of which the sole owners
of partnership interests, membership interests or any other equity interests
are, and will remain, limited to such Person and such Person’s relatives.

 

2

 

“Independent
Third Party” means any Person who, immediately prior to the contemplated
transaction, does not own in excess of 5% of the number of Common Stock on a
fully diluted basis (a “5% Owner”), who is not an Affiliate of any such
5% Owner and who is not the spouse or descendent (by birth or adoption) of any
such 5% Owner or a trust for the benefit of any such 5% Owner and/or such other
Persons.

 

“Management
Investor” means any of John M. Engquist, Kristan Engquist Dunne, South
Nevada Capital Corporation, Bagley Family Investments, L.L.C., Kenneth Sharp, Jr.,
The McClain Family Revocable Trust, or any of their respective Permitted
Transferees.

 

“Other
Investor” means any of Wheeler Investments, Inc., Don Wheeler, Siegfried
Wallin, The Conner Family Trust, C/J Land & Livestock L.P., John and
Ellen Williams Limited Partnership, Robert G. Williams Limited Partnership or
any of their respective Permitted Transferees.

 

“Permitted
Transferee” has the meaning set forth in Section 3(b)(ii) hereof.

 

“Person”
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, a governmental entity or any department, agency or
political subdivision thereof or any other entity or organization.

 

“Public
Sale” means any sale of Restricted Shares to the public pursuant to an
offering registered under the Securities Act or, after the consummation of an
initial public offering, to the public pursuant to the provisions of Rule 144
(or any similar rule or rules then in effect) under the Securities
Act.

 

“Restricted
Shares” means shares of the Common Stock issued to Stockholders pursuant to
the Merger and all equity securities issued directly or indirectly with respect
to such shares, in each case, by way of a unit or stock dividend or other
distribution, or unit or stock split, or in connection with a combination of
units or shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Shares, such shares will cease
to be Restricted Shares when they have been Transferred in a Public Sale.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Transfer”
means any direct or indirect sale, transfer, assignment, pledge or other
disposition or encumbrance.

 

2.                                       Conflicting
Agreements. Each Stockholder represents that such Stockholder has not
granted and is not a party to any proxy, voting trust or other agreement which
is inconsistent with or conflicts with the provisions of this Agreement, and no
Stockholder shall grant any proxy or become party to any voting trust or other
agreement which is inconsistent with or conflicts with the provisions of this
Agreement.

 

3

 

3.                                       Restrictions
on Transfer of Restricted Shares.

 

(a)                                  General
Restrictions.

 

(i)                                     A
Management Investor or an Other Investor may Transfer Restricted Shares only (A) in
Public Sales, (B) pursuant to an Approved Company Sale, (C) to the
Company, or (D) with the prior written consent of the Board, to any
Person, provided, that, unless waived in writing by the Board, such Person
shall have complied with the requirements of Section 4(b)(ii).

 

(ii)                                  A
BRS Investor may Transfer Restricted Shares only (A) in Public Sales, (B) to
any Person, provided, that such Person shall have complied with the
requirements of Section 4(b)(ii), or (C) pursuant to an Approved
Company Sale.

 

(b)                                 Permitted
Transfers.

 

(i)                                     The
restrictions contained in Section 3(a) shall not apply with
respect to any Transfer of Restricted Shares by any Stockholder (A) in the
case of any Stockholder who is a natural person, pursuant to applicable laws of
descent and distribution or to any member of such Stockholder’s Family Group or
to any trust established by such Stockholder for the benefit of such
Stockholder’s Family Group, (B) in the case of any Stockholder, to its
Affiliates, or (C) in the case of Bruckmann, Rosser, Sherrill &
Co., L.P. or Bruckmann, Rosser, Sherrill & Co. II, L.P. (in each case,
if it becomes a Permitted Transferee), in a pro rata
distribution to its partners; provided, in each case, that any such transferee
shall have complied with the requirements of Section 3(b)(ii).

 

(ii)                                  Prior
to any proposed transferee’s acquisition of Restricted Shares pursuant to a
Transfer permitted by Section 3(a)(i), in each case, unless waived
in writing by the Board of Directors of the Company, or pursuant to a Transfer
permitted by clause (ii) of Section 3(a), such proposed
transferee must agree to take such Restricted Shares subject to and to be fully
bound by the terms of this Agreement applicable to such Restricted Shares by
executing a joinder to this Agreement substantially in the form attached hereto
as Exhibit A and delivering such executed joinder to the Secretary
of the Company prior to the effectiveness of such Transfer (unless such
Transfer is pursuant to applicable laws of descent and distribution, in which
case, such executed joinder shall be delivered to the Secretary of the Company
as soon as reasonably possible after such Transfer). All transferees acquiring Restricted
Shares and executing a joinder in compliance with this Section 3(b)(ii) are
collectively referred to herein as “Permitted Transferees”.

 

(c)                                  If
any Stockholder Transfers Restricted Shares to an Affiliate and an event occurs
which causes such Affiliate to cease to be an Affiliate of such Stockholder
unless, prior to such event, such Affiliate Transfers such Restricted Shares back
to such Stockholder, then, in each case, such event or Transfer shall be deemed
a Transfer of Restricted Shares subject to all of the restrictions on Transfers
of Stockholder set forth in this Agreement, including without limitation, this Section 3.

 

4

 

(d)                                 Wheeler
Investments, Inc. (“Wheeler Investments”) shall not permit any
event to occur which causes Wheeler Investments to cease to be a member of Don Wheeler’s
Family Group, unless, prior to such event, Wheeler Investments Transfers, or
causes the Transfer of, all Restricted Shares held by Wheeler Investments or
any Affiliate of Wheeler Investments to Don Wheeler or one or more members of Don
Wheeler’s Family Group. South Nevada Capital Corporation (“SNCC”) shall
not permit any event to occur which causes SNCC to cease to be a member of Dale
Roesener’s Family Group, unless, prior to such event, SNCC Transfers, or causes
the Transfer of, all Restricted Shares held by SNCC or any Affiliate of SNCC to
Dale Roesener. Bagley Family Investments, L.L.C. (“Bagley Investments”)
shall not permit any event to occur which causes Bagley Investments to cease to
be a member of Gary Bagley’s Family Group, unless, prior to such event, Bagley
Investments Transfers, or causes the Transfer of, all Bagley Investments held
by Bagley Investments or any Affiliate of Bagley Investments to Gary Bagley. The
Connor Family Trust (“Connor Trust”) shall not permit any event to occur
which causes Connor Trust to cease to be a member of Ralph Connor’s Family
Group, unless, prior to such event, Connor Trust Transfers, or causes the
Transfer of, all Connor Trust held by Connor Trust or any Affiliate of Connor
Trust to Ralph Connor. The McClain Family Revocable Trust (“McClain Trust”)
shall not permit any event to occur which causes McClain Trust to cease to be a
member of Steve McClain’s Family Group, unless, prior to such event, McClain
Trust Transfers, or causes the Transfer of, all McClain Trust held by McClain
Trust or any Affiliate of McClain Trust to Steve McClain. C/J Land &
Livestock L.P. (“Gerald Williams Investments”) shall not permit any
event to occur which causes Gerald Williams Investments to cease to be a member
of Gerald Williams’s Family Group, unless, prior to such event, Gerald Williams
Investments Transfers, or causes the Transfer of, all Restricted Shares held by
Gerald Williams Investments or any Affiliate of Gerald Williams Investments to
Gerald Williams. John and Ellen Williams Limited Partnership (“John Williams
Investments”) shall not permit any event to occur which causes John
Williams Investments to cease to be a member of John Williams’s Family Group,
unless, prior to such event, John Williams Investments Transfers, or causes the
Transfer of, all McClain Trust held by John Williams Investments or any
Affiliate of John Williams Investments to John Williams. Robert G. Williams
Limited Partnership (“Robert Williams Investments”) shall not permit any
event to occur which causes Robert Williams Investments to cease to be a member
of Robert Williams’s Family Group, unless, prior to such event, Robert Williams
Investments Transfers, or causes the Transfer of, all Restricted Shares held by
Robert Williams Investments or any Affiliate of Robert Williams Investments to
Robert Williams.

 

4.                                       Legend.

 

(a)                                  Each
certificate or instrument evidencing Restricted Shares and each certificate or
instrument issued in exchange for or upon the Transfer of any Common Stock (if
such securities remain Restricted Shares after such Transfer) shall be stamped
or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
AMENDED AND RESTATED SECURITY

 

5

 

HOLDERS AGREEMENT DATED AS OF FEBRUARY 3, 2006,
AS SUCH AMENDED AND RESTATED SECURITY HOLDERS AGREEMENT MAY BE AMENDED
FROM TIME TO TIME, BY AND AMONG THE ISSUER AND CERTAIN OF THE ISSUER’S COMMON
STOCK. A COPY OF SUCH AMENDED AND RESTATED SECURITY HOLDERS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN
REQUEST.”

 

The legend set forth
above regarding this Agreement shall be removed from the certificates
evidencing any securities which cease to be Restricted Shares. Upon the request
of any Stockholder, the Company shall remove the Securities Act portion of the
legend set forth above from the certificate or certificates for such Restricted
Shares (if such Restricted Shares are certificated as of such time); provided,
that such Restricted Shares are eligible (as reasonably determined by the
Company) for sale pursuant to Rule 144(k) (or any similar rule or rules then
in effect) under the Securities Act.

 

(b)                                 Unless
waived by the Company, no Stockholder may Transfer any Restricted Shares
(except pursuant to an effective registration statement under the Securities
Act) without first delivering to the Company an opinion of counsel reasonably
acceptable in form and substance to the Company (which counsel will be
reasonably acceptable to the Company) that registration under the Securities
Act is not required in connection with such Transfer. If such opinion of
counsel reasonably acceptable in form and substance to the Company further
states that no subsequent Transfer of such Restricted Shares will require
registration under the Securities Act (including due to such Restricted Shares
being eligible for sale pursuant to Rule 144 (or any similar rule or rules then
in effect) under the Securities Act), the Company will promptly upon such
Transfer deliver new certificates for such securities (if such securities are
certificated as of such time) which do not bear the Securities Act portion of
the legend set forth in Section 4(a).

 

5.                                       Transfers
in Violation of Agreement. Any Transfer or attempted Transfer of any
Restricted Shares in violation of any provision of this Agreement shall be null
and void, and the Company shall not record such Transfer on its books or treat
any purported transferee of such Restricted Shares as the owner of such
securities for any purpose.

 

6.                                       Amendment
and Waiver. No modification or amendment of any provision of this Agreement
shall be effective against the Stockholders or the Company unless such
modification or amendment is approved in writing by (i) the Company and (ii) BRS
Majority Holders; and any amendment to which such written consent is obtained
will be binding upon the Company and each Stockholder. No waiver of any
provision of this Agreement shall be effective against any Stockholder unless
such waiver is approved in writing by such Stockholder. No waiver of any
provision of this Agreement shall be effective against the Company unless such
waiver is approved in writing by the Company. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms. Each Stockholder shall remain a party to this Agreement only so
long as such person is the holder of record of Restricted Shares.

 

6

 

7.                                       Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

8.                                       Entire
Agreement. Except as otherwise expressly set forth herein, this document
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
However, the Parties acknowledge that the provisions of Section 10.17(c) of
the Limited Liability Company Agreement dated June 17, 2002 of H&E
Holdings shall continue to be applicable for the period specified therein in
respect of the initial public offering effected by H&E Holdings pursuant to
the Registration Statement on Form S-1 filed by the Company with the U.S.
Securities and Exchange Commission and effective as of January 30, 2006.

 

9.                                       Successors
and Assigns. Except as otherwise provided herein, this Agreement shall bind
and inure to the benefit of and be enforceable by the Company and its
successors and assigns, including any corporation which is a successor to the
Company, and the Stockholder and any subsequent holders of Restricted Shares and
the respective successors, heirs and assigns of each of them, so long as they
hold Restricted Shares.

 

10.                                 Counterparts.
This Agreement may be executed in separate counterparts each of which shall be
an original and all of which taken together shall constitute one and the same
agreement.

 

11.                                 Remedies.
The Parties shall be entitled to enforce their rights under this Agreement
specifically to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights existing in their favor. The Parties
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that the Company and any Stockholder
may in his, hers, or its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.

 

12.                                 Notices.
All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Agreement will be in writing and will be
deemed to have been given when delivered if delivered personally, sent via a
nationally recognized overnight courier, or sent via facsimile to the
recipient, or if sent by certified or registered mail, return receipt
requested, will be deemed to have been given two business days thereafter. Such
notices, demands and other communications shall be sent to any Stockholder at
such Stockholder’s last address on the records of the Company, and to the
Company at: 11100 Mead Road, Second Floor, Baton Rouge, Louisiana 70816;
Attention: Chief Executive Officer;

 

7

 

Telephone: (225) 298-5230;
Fax: (225) 298-5382, or such other address, telecopy number or to the attention
of such other person as the recipient party shall have specified by prior
written notice to the sending party.

 

13.                                 Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to any rules,
principles or provisions of choice of law or conflict of laws.

 

14.                                 Descriptive
Headings. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.

 

15.                                 WAIVER
OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY
ANCILLARY AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF.

 

16.                                 VENUE;
SUBMISSION TO JURISDICTION. ANY AND ALL SUITS, LEGAL ACTIONS OR PROCEEDINGS
ARISING OUT OF THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE COURT OF CHANCERY OF
THE STATE OF DELAWARE AND EACH PARTY TO THIS AGREEMENT HEREBY SUBMITS TO AND
ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURT FOR THE PURPOSE OF SUCH SUITS,
LEGAL ACTIONS OR PROCEEDINGS. IN ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING,
EACH PARTY TO THIS AGREEMENT HEREBY WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS AND AGREES THAT SERVICE THEREOF MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL DIRECTED TO HIM OR IT AT THE ADDRESS AS PROVIDED
IN SECTION 17 HEREOF. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH HE OR IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OR ANY SUCH SUIT, LEGAL ACTION OR
PROCEEDING IN SUCH COURT AND HEREBY FURTHER WAIVES ANY CLAIM THAT ANY SUIT,
LEGAL ACTION OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

17.                                 No
Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.

 

18.                                 Time
of the Essence; Computation of Time. Time is of the essence for each and
every provision of this Agreement. Whenever the last day for the exercise of
any privilege or the discharge or any duty hereunder shall fall upon a
Saturday, Sunday, or any date on which commercial banks in the State of
Delaware are authorized to be closed, the party having such

 

8

 

privilege or duty may
exercise such privilege or discharge such duty on the next succeeding day which
is a regular business day.

 

19.                                 Effectiveness
of this Agreement. This Agreement shall be effective as of the “Effective
Time of the H&E Holdings Merger” as defined in the Agreement and Plan of
Merger, and the H&E Holdings Securityholders Agreement will thereafter have
no force and effect. In the event that the Merger shall not occur, this
Agreement shall be automatically terminated and the Parties shall have no
rights or obligations hereunder, and the H&E Holdings Securityholders
Agreement shall continue in effect.

 

[Signature Pages Follow]

 

9

 

In witness whereof, the parties hereto have executed
this Agreement as of the date first above written.

 

	
  H&E
  Equipment Services, Inc.

  
	
   

  	
   

  
	
  By:

  	
   /s/ John M.
  Engquist

  	
   

  
	
   

  	
  John M. Engquist

  
	
   

  	
  President

  

 

Amended and Restated Security Holders Agreement
dated as of February 3, 2006

 

10

 

Stockholders

 

	
  Bruckmann,
  Rosser, Sherrill & Co.,

  L.P.(1)

  	
  Bruckmann,
  Rosser, Sherrill & Co. II,

  L.P. (1)

  
	
  By:

  	
  BRS Partners, LP

  	
  By:

  	
  BRSE LLC

  
	
  By:

  	
  BRSE Associates, Inc., its General

  Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Print name:

  	
   

  	
   

  	
  Print name:

  	
   

  	
   

  
	
  Print title:

  	
   

  	
   

  	
  Print title:

  	
   

  	
   

  
										

 

	
  Bruckmann,
  Rosser, Sherrill & Co.,

  Inc. (1)

  	
  The
  Estate of Donald J. Bruckmann(1)

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Print name:

  	
   

  	
   

  	
  Print name:

  	
   

  	
   

  
	
  Print title:

  	
   

  	
   

  	
  Print title:

  	
   

  	
   

  
								

 

	
  BCB
  Family Partners, L.P. (1)

  	
  NAZ
  Family Partners, L.P. (1)

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Print name:

  	
   

  	
   

  	
  Print name:

  	
   

  	
   

  
	
  Print title:

  	
   

  	
   

  	
  Print title:

  	
   

  	
   

  
								

 

	
  Harold
  Rosser Charitable Trust(1)

  	
  Stephen
  C. and Katherine D. Sherrill

  Foundation(1)

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Print name:

  	
   

  	
   

  	
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  Bruce
  C. Bruckmann(1)

  	
   

  	
  Harold
  O. Rosser(1)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  H.
  Virgil Sherrill(1)

  	
   

  	
  Stephen
  C. Sherrill(1)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nancy
  A. Zweng(1)

  	
   

  	
  Paul D.
  Kaminski(1)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  John
  Rice Edmonds(1)

  	
   

  	
  Marilena
  Tibrea(1)

  	
   

  

 

(1)                               BRS
Investors

 

11

 

	
  Wheeler
  Investments, Inc. (3)

  	
  Southern
  Nevada Capital Corporation(2)

  
	
   

  	
   

  	
   

  
	
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  Bagley
  Family Investments, L.L.C. (2)

  	
  The
  Connor Family Trust(3)

  
	
   

  	
   

  	
   

  
	
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  The
  McClain Family Revocable Trust(2)

  	
  Robert
  G. Williams Limited Partnership(3)

  
	
   

  	
   

  	
   

  
	
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  C/J
  Land & Livestock L.P. (3)

  	
  John
  and Ellen Williams Limited

  Partnership(3)

  
	
   

  	
   

  	
   

  
	
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  John M.
  Engquist(2)

  	
   

  	
  Kristan
  Engquist Dunne(2)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Don
  Wheeler(3)

  	
   

  	
  Gary
  Bagley(3)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kenneth
  Sharp, Jr. (2)

  	
   

  	
  Lindsay
  Jones(3)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Siegfried
  Wallin(3)

  	
   

  	
   

  	
   

  

 

(2)                               Management
Investors

(3)                               Other
Investors

 

12

 

Schedule A to Amended and Restated

Security Holders Agreement

 

Shares of Common Stock
Issuable Pursuant to the Merger

 

Attached

 

 

Exhibit A to Amended and Restated

Security Holders Agreement

 

Form of Joinder to

Amended and Restated Security Holders Agreement

 

This Joinder to the Security Holders Agreement dated as of             
 (the “Security Holders Agreement”)among
H&E Equipment Services, Inc., a Delaware corporation (the “Company”),
and certain holders of the Common Stock, par value $0.01 per share (the “Common
Stock”), of the Company, is made and entered into as of               by and between the Company and               (“Holder”). Capitalized terms used
herein but not otherwise defined shall have the meanings set forth in the Security
Holders Agreement.

 

Whereas,
Holder has acquired certain shares of the Common Stock from                            and the Security Holders Agreement and/or the
Company require Holder, as a holder of such Common Stock, to become a party to
the Security Holders Agreement, and Holder agrees to do so in accordance with
the terms hereof.

 

Now, therefore,
in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Joinder hereby agree as follows:

 

1.                                       Agreement
to be Bound. Holder hereby agrees that upon execution of this Joinder, it
shall become a party to the Security Holders Agreement and shall be fully bound
by, and subject to, all of the covenants, terms and conditions of the Security
Holders Agreement as though an original party thereto and shall be deemed a Stockholder
for all purposes thereof. In addition, Holder hereby agrees that all Common
Stock held by Holder shall be deemed Restricted Shares for all purposes of the Security
Holders Agreement.

 

2.                                       Successors
and Assigns. Except as otherwise provided herein, this Joinder shall bind
and inure to the benefit of and be enforceable by the Company and its
successors, heirs and assigns and Holder and any subsequent holders of Restricted
Shares the respective successors, heirs and assigns of each of them, so long as
they hold any Restricted Shares.

 

3.                                       Counterparts.
This Joinder may be executed in separate counterparts each of which shall be an
original and all of which taken together shall constitute one and the same
agreement.

 

4.                                       Notices.
For purposes of Section 12 of the Security Holders Agreement, all notices,
demands or other communications to the Holder shall be directed to:

 

[Name]

[Address]

 

 

5.                                       Governing
Law. This Joinder shall be governed by and construed in accordance with the
laws of the state of Delaware, without giving effect to any rules, principles
or provisions of choice of law or conflict of laws.

 

6.                                       Descriptive
Headings. The descriptive headings of this Joinder are inserted for
convenience only and do not constitute a part of this Joinder.

 

[Signature Page Follows]

 

2

 

In
witness whereof, the parties hereto have executed this Joinder to the Security
Holders Agreement as of the date set forth in the introductory paragraph
hereof.

 

	
  H&E
  Equipment Services, Inc.

  	
  Holder:

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Print name:

  	
   

  	
   

  	
   Print
  name:

  	
   

  
	
  Print title:

  	
   

  	
   

  	
   

  	
   

  
							

 

3

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