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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ALPHA 1 BIOMEDICALS, INC.
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(Name of Issuer)
COMMON STOCK, $0.001 par value
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(Title of Class of Securities)
020910 10 5
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(CUSIP Number)
Roger H. Samet
254 East 68th Street, #29B
New York, NY 10021
212-472-2127
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)
March 12, 1997
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(Date of Event Which Requires Filing
of this Statement
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
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CUSIP No. 020910 10 5
1) Names of Reporting Persons, S.S. or I.R.S. Identification Nos. of Above
Persons
Roger H. Samet
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2) Check the Appropriate Box if a Member of a Groups (See Instructions)
(a)
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(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions) PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) Not Applicable
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6) Citizenship or Place of Organization United States
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<TABLE>
<CAPTION>
<S> <C> <C>
Number of Shares 7) Sole Voting Power 1,172,050
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Beneficially Owned 8) Shared Voting Power -0-
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by Each Reporting 9) Sole Dispositive Power 1,172,050
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Person with 10 Shared Dispositive Power -0-
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</TABLE>
11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,172,050
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions
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13) Percent of Class Represented by Amount in Row (11) 9.96%
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14) Type of Reporting Person (See Instructions) IN
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Item 1. Security and Issuer.
The class of equity securities to which this statement relates is Common Stock,
par value $0.001 per share, of Alpha 1 Biomedicals, Inc., a Delaware
corporation ("Alpha 1"). The principal executive offices of Alpha 1 are located
at Two Democracy Plaza, 6707 Democracy Drive, Suite 111, Bethesda, Maryland
20817-1129.
Item 2. Identity and Background.
The person filing this statement is Roger H. Samet, an individual whose
principal residence address is 254 East 68th Street #29B, New York, New York
10021. Mr. Samet is a private investor. Mr. Samet is a U.S. citizen who has
not, during the last five (5) years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent
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jurisdiction which (i) resulted in Mr. Samet being subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws, or (ii)
resulted in a finding of a violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Considerations.
The amount of funds used to purchase the shares of Common Stock and the Class D
Warrant to which this statement relates was $88,500. The source of the funds
was from Mr. Samet's personal funds.
Item 4. Purpose of Transaction.
All 880,000 shares of Alpha 1 Common Stock owned by Mr. Samet are held for
investment purposes. Mr. Samet may acquire up to 292,050 additional shares of
Alpha 1 Common Stock upon exercise of the Class D Warrant. Mr. Samet has no
present plan or proposal relating to or that would result in any transactions
of the type described in Item 4(a) through (j).
Item 5. Interest in Securities of the Issuer.
(a) Mr. Samet is the beneficial owner of 1,172,050 shares of Common Stock
of Alpha 1, consisting of 880,000 shares of Common Stock plus the right to
acquire 292,050 shares of Common Stock upon exercise of his Class D Warrant.
Such number of shares constitutes approximately 9.96% of the outstanding shares
of Common Stock calculated in accordance with Rule 13d-3(d)(l) promulgated
under the Securities Exchange Act of 1934 (11,769,479 shares of Common Stock
reported outstanding at March 12, 1997 by Alpha 1 in its Form 8-K dated March
12, 1997, plus 292,050 shares of Common Stock subject to Mr. Samet's Class D
Warrant).
(b) Mr. Samet has sole power to vote or to direct the vote and sole power
to dispose or to direct the disposition of the shares of Common Stock to which
this statement relates.
c) Mr. Samet has engaged in no transactions in Alpha 1 Common Stock in the
past sixty (60) days, except that he made gifts of a total of 180,000 shares of
Common Stock to certain friends and family members on March 12, 1997.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Mr. Samet acquired 885,000 shares of Common Stock and a Class D Warrant to
purchase 292,050 shares of Common Stock on March 12, 1997 pursuant to a Unit
Purchase Agreement and a Warrant Agreement each dated March 12, 1997 between
Mr. Samet and Alpha 1. Mr. Samet and Alpha 1 also entered into a Registration
Rights Agreement dated as of March 12, 1997, copies of such agreements are
attached and listed in Item 7. Simultaneous with the purchase of the shares of
Common Stock, Mr. Samet made gifts of a total of 180,000 shares of Common Stock
to certain friends and family members.
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Item 7. Material to Be Filed as Exhibits.
The following are filed herewith as exhibits to this statement:
Form of Unit Purchase Agreement between Alpha 1 Biomedicals, Inc.
and the reporting person.
Form of Registration Rights Agreement between Alpha 1 Biomedicals, Inc.
and the reporting person.
Form of Warrant Agreement between Alpha 1 Biomedicals, Inc. and the
reporting person.
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
March 12, 1997 /s/ Roger H. Samet
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(Date) Roger H. Samet
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UNIT PURCHASE AGREEMENT
THIS AGREEMENT is made as of March 12, 1997, by and between Alpha 1
Biomedicals, Inc., a Delaware corporation (the "Company"), and each of the
investors listed in Schedule 1 attached hereto (hereinafter collectively
referred to as the "Investors" and individually as an "Investor"). Capitalized
terms used herein are defined in Section 8 hereof.
The parties hereto hereby agree as follows:
Section 1. Purchase and Sale of Units.
1.01 Purchase and Sale. At the Closing, the Company shall sell to the
Investor and each Investor shall purchase from the Company the number of Units,
each Unit consisting of (i) 500,000 shares (the "Unit Shares") of common stock,
par value $.001 per share, of the Company ("Common Stock") and (ii) warrants to
purchase 165,000 shares of Common Stock (the "Class D Warrants"), set forth
opposite the name of such Investor on Schedule 1 attached hereto at a purchase
price of $50,000 per Unit. The number of Units purchased by all Investors in
the aggregate shall not exceed seven Units.
1.03 The Closing. The closing of the purchase and sale of the Units (the
"Closing") shall take place at the offices of Covington & Burling, 1201
Pennsylvania Avenue, N.W., Washington, D.C. 20004, at 10:00 a.m. on such date
as the parties hereto shall mutually determine.
Section 2. Deliveries at Closing. At the Closing, the following deliveries
shall be made and agreements entered into:
2.01 Common Stock and Class D Warrants. The Company shall deliver to each
Investor:
(a) a copy of the resolutions of the Company's Board of Directors
authorizing the sale and issuance of the Units, certified by the Secretary of
the Company;
(b) a stock certificate registered in the name of the Investor evidencing
the number of Unit Shares purchased by the Investor; and
(c) a Class D Warrant certificate registered in the name of the Investor
evidencing the number of Class D Warrants purchased by the Investor.
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2.02 Cash Payment. Each Investor shall pay to the Company, by wire
transfer of immediately available funds to an account designated by the Company
or by certified or official bank check, the amount set forth opposite the name
of such Investor on Schedule 1 attached.
2.03 Registration Rights Agreement. The Company and the Investors shall
enter into a Registration Rights Agreement with respect to the registration for
resale of (i) the Unit Shares and (ii) the shares of Common Stock issuable upon
the exercise of the Class D Warrants in form attached hereto as Exhibit A (the
"Registration Rights Agreement") .
2.04 Warrant Agreement. The Company and the Investors shall enter into a
Warrant Agreement setting forth the terms of the Class D Warrants in the form
attached hereto as Exhibit B, (the "Warrant Agreement").
Section 3. Representations and Warranties of the Company.
The Company hereby represents and warrants to each of the Investors as
follows:
3.01. Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company has all requisite corporate power and authority to carry on its
business as it currently is conducted and to own or lease and operate its
assets, properties and business.
3.02 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of the
Company consists of (i) 20,000,000 shares of Common Stock, 9,477,429 shares of
which are issued and outstanding, and (ii) 1,000,000 shares of Preferred Stock,
of which no shares are issued or outstanding.
(b) All of the issued and outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable.
(c) Except as set forth on Schedule 2, there are no outstanding
subscriptions, options, warrants, rights (including conversion or preemptive
rights), commitments, agreements, understandings or arrangements to which the
Company is a party, whether oral or written, pursuant to which the Company is
obligated to issue any shares of its capital stock.
3.03 Subsidiaries. The Company has no subsidiaries.
3.04 Financial Statements. The Company has delivered to the Investors
audited balance sheets of the Company at December 31, 1994 and 1995, and the
related statements of operations, stockholders' equity and cash flows for each
year then ended, including the notes thereto (the "Company Financial
Statements"), accompanied by the opinion
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thereon of Price Waterhouse L.L.P. The Company has also delivered to the
Investors the unaudited balance sheet of the Company at September 30, 1996, and
the related unaudited statements of operations, stockholders' equity and cash
flow for the nine months then ended, including the notes thereto (the "Company
Interim Financial Statements"). The Company Financial Statements present fairly
in all material respects the financial position of the Company as of December
31, 1994 and 1995, and the results of operations and changes in financial
position of the Company for the respective one-year periods then ended, and the
Company Interim Financial Statements present fairly in all material respects
the financial position of the Company as of September 30, 1996, and the results
of operations and changes in financial position for the nine-month period then
ended, in each case in conformity with generally accepted accounting principles
applied on a basis consistent with that of prior periods, except that the
Company Interim Financial Statements may be subject to normal year-end
adjustments that are not in the aggregate material.
3.05 SEC Reports. Since January 1, 1994, all reports and proxy statements
required to be filed by the Company with the Securities and Exchange Commission
(the "SEC") pursuant to the Securities Exchange Act of 1934 (the "1934 Act")
complied in all material respects with the applicable requirements of the 1934
Act and the applicable rules and regulations thereunder, and did not include at
the time of filing any untrue statement of a material fact or omit to state a
material fact concerning the Company necessary in order to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading.
3.06 No Violation of Law. Except as will not have a Material Adverse
Effect, the Company's operations have been conducted in accordance with all
applicable laws, regulations and other requirements of all governmental bodies
having jurisdiction over the Company and the Company has all licenses, permits,
orders or approvals from governmental bodies required for the conduct of its
business. Except as will not have a Material Adverse Effect, none of the real
or personal property owned, leased, occupied or operated by the Company, or the
ownership, leasing, occupancy or operation thereof, is in violation of any
applicable law, code, rule, regulation, ordinance, license or permit
(including, but not limited to, those related to building, zoning,
environmental matters or employee health and safety). No notice from any
governmental body or other Person has been served upon the Company or upon any
property owned, leased, occupied or operated by the Company claiming any
violation of any such law, code, rule, regulation, ordinance, license or
permit, or requiring, or calling attention to the need for, any work, repairs,
construction, alterations or installation on or in connection with such
property, except such notices with which the Company has complied or except as
will not have a Material Adverse Effect.
3.07 Undisclosed Liabilities. Except as will not have a Material Adverse
Effect, the Company does not have any debts, liabilities or obligations of any
nature, secured or unsecured, whether accrued, absolute, contingent or
otherwise, whether due or to become due, including, but not limited to,
liabilities or obligations on account of taxes, other governmental charges,
duties, penalties, interest, pension plan obligations or indebtedness for
borrowed money, except:
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(a) to the extent set forth or reserved against the Company Financial
Statements or the Company Interim Financial Statements; and
(b) normal and usual current liabilities incurred, and normal and usual
obligations under agreements entered into, in the ordinary course of business
after September 30, 1996.
3.08 Absence of Certain Changes or Events. Except as disclosed in the SEC
Filings, since December 31, 1995, the business of the Company has been operated
only in the usual and ordinary course of business and there has not been:
(a) any damage, destruction or loss (whether or not covered by insurance)
of properties, assets or the business of the Company that has had a Material
Adverse Effect;
(b) any change in the accounting methods or practices followed by the
Company or any change in the accrual of liabilities or in depreciation,
amortization or inventory valuation policies, rates or methods theretofore used
or adopted;
(c) any sale, lease, abandonment or other disposition by the Company of
any interest in real property or, other than in the ordinary course of business
and other than those that will not have a Material Adverse Effect, of any
machinery, equipment or other operating property;
(d) any sale, assignment, transfer, license or other disposition by the
Company of any patent, trademark, servicemark, trade name, brand name,
copyright (or pending application for any patent, trademark, servicemark, trade
name or copyright), invention, process, know-how, formula, trade secret or
interest thereunder or other intangible asset, the transfer of which has had or
will have a Material Adverse Effect; or
(e) any declaration, setting aside or payment of any dividend or other
distribution on or in respect of shares of capital stock, or any direct or
indirect redemption, retirement, purchase or other acquisition by the Company
of any such shares of capital stock.
3.09 Tax Matters.
(a) The Company has duly, properly, accurately and timely filed all tax
returns required to be filed by it, and has paid, or will pay on a timely
basis, all taxes shown to be due and payable on such returns, all deficiencies
and assessments notices that have been received by it, and all other taxes due
and payable by it, except for taxes, deficiencies and assessments that are
being contested in good faith and for which appropriate reserves have been
established or the nonpayment of which would not have a Material Adverse
Effect.
(b) There are no liens for unpaid federal, state and local taxes on any of
the assets of the Company.
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3.10 Absence of Defaults. Except as will not have a Material Adverse
Effect, (i) the Company is not, nor is it alleged to be, in default under, or
in breach of any term or provision of, any contract, agreement, lease, license,
commitment, instrument, or fiduciary or other obligation and (ii) to the
knowledge of the Company, all material contracts, agreements, commitments and
obligations to which the Company is a party are valid and binding agreements of
the parties thereto and are in full force and effect. To the knowledge of the
Company, no other party to any contract, agreement, lease, license, commitment,
instrument, or fiduciary or other obligation to which the Company is party is
in default thereunder, or in breach of any term or provision thereof, except as
will not have a Material Adverse Effect.
3.11 Litigation. Except as set forth in the SEC Filings, there is no
material (i) suit, action or claim, (ii) investigation or inquiry by any
administrative agency or governmental body, or (iii) legal, administrative or
arbitration proceeding pending or, to the knowledge of the Company, threatened
against the Company or any of the properties, assets or business of the
Company. There is no material outstanding order, writ, injunction or decree
against or relating to the Company or any of the capital stock, properties,
assets or business of the Company.
3.12 Validity and Authorization. The Company has full corporate power to
enter into this Agreement, the Registration Rights Agreement and the Warrant
Agreement and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement, the Registration Rights Agreement and
the Warrant Agreement, and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all necessary
corporate action. This Agreement constitutes and, upon the execution and
delivery thereof by the parties thereto, each of the Registration Rights
Agreement and the Warrant Agreement will constitute a legal, valid and binding
agreement of the Company that is enforceable against the Company in accordance
with its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally.
3.13 No Conflicts. The execution and delivery by the Company of this
Agreement, the Registration Rights Agreement and the Warrant Agreement, and
compliance with the respective terms hereof and thereof, by the Company do not
and will not (i) conflict with or result in a breach of the terms, conditions
or provisions of, (ii) constitute a default under, (iii) result in the creation
of any lien, security interest, charge or encumbrance upon the Company's
capital stock or properties pursuant to, (iv) give any third party the right to
accelerate any obligation under, (v) result in a violation of, or (vi) except
for the registrations, qualifications and notices contemplated by the
Registration Rights Agreement, require any authorization, consent, approval,
exemption or other action by or notice to any court or administrative or
governmental body pursuant to the Certificate of Incorporation or Bylaws of the
Company, any law, statute, rule or regulation to which the Company is subject,
or any agreement, instrument, order, judgment or decree to which the Company is
subject or by which it is bound.
3.14 Authorization of Shares. The Unit Shares have been duly authorized
and, upon issuance in accordance with the terms of this Agreement, will be
validly issued,
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fully paid and nonassessable. 660,000 shares of Common Stock issuable upon the
exercise of the Class D Warrants have been duly authorized and reserved for
issuance and, upon issuance in accordance with the terms of the Class D
Warrants, will be validly issued, fully paid and nonassessable. No stockholder
of the Company is entitled to exercise any preemptive rights in connection with
the issuance of such shares of Common Stock.
3.15 Rights Agreement. Assuming the accuracy of the representation and
warranty of each of the Investors in Section 4.10 of this Agreement, the
execution, delivery and performance of this Agreement by the parties hereto
will not result in any Investor becoming an Acquiring Person (as such term is
defined in the Rights Agreement, dated as of April 29, 1994, between the
Company and American Stock Transfer & Trust Company, as Rights Agent).
3.16 Exemption from Registration. Assuming the accuracy of the
representations and warranties of each Investor set forth in Sections 4.04
through 4.08 of this Agreement, the offer and sale of the Units to each
Investor will be exempt from registration under the Securities Act of 1933, as
amended (the "1933 Act").
3.17 Brokerage. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated
by this Agreement based on any agreement or arrangement binding upon the
Company.
Section 4. Representations and Warranties of the Investors. Each of the
Investors hereby, severally and not jointly, represents and warrants to the
Company as follows:
4.01. Organization. If the Investor is a corporation, it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and if the Investor is a partnership or
other organization, it is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization.
4.02. Authorization; No Breach. (i) If the Investor is a corporation, the
execution, delivery and performance of this Agreement, the Registration Rights
Agreement and the Warrant Agreement have been duly authorized by all necessary
corporate action, (ii) if the Investor is a partnership or other organization,
the Investor is permitted under its partnership agreement or other governing
documents to enter into this Agreement, the Registration Rights Agreement and
the Warrant Agreement and to consummate the transactions contemplated hereby
and thereby, and all necessary consents and approvals required by the
partnership agreement or other governing documents have been obtained, and
(iii) this Agreement constitutes, and upon the execution and delivery thereof
by the parties thereto, each of the Registration Rights Agreement and the
Warrant Agreement will constitute, a legal, valid and binding agreement of the
Investor that is enforceable against the Investor in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights generally.
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4.03. No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Warrant Agreement do and
will not (i) violate any provision of the Investor's Certificate of
Incorporation or Bylaws (or comparable organizational documents), if the
Investor is a corporation, or the Investor's partnership agreement or other
governing documents, if the Investor is a partnership or other organization,
(ii) violate or breach any material contract or agreement to which the Investor
is a party, or (iii) violate, or require the authorization, consent or approval
of any court or any administrative or governmental body under, any law,
statute, rule or regulation to which the Investor is subject or any order,
judgment or decree by which the Investor is bound.
4.04. Accredited Investor. The Investor is an "accredited investor" as
defined in Rule 501 of Regulation D under the 1933 Act. The Investor has
knowledge and experience in financial and business matters such that the
Investor is capable of evaluating the merits and risks of an investment in the
Unit Shares and Class D Warrants.
4.05. Receipt of Information. The Investor (i) has received a copy of the
Private Placement Memorandum and has reviewed each of the documents included as
part thereof, (ii) has been given the opportunity to obtain from the Company
and to review each of the contracts and other documents that have been filed
with the SEC as exhibits to the filings included as part of the Private
Placement Memorandum, (iii) has been furnished with all such additional
information as the Investor has deemed necessary to make an informed investment
decision with respect to the Unit Shares and Class D Warrants and (iv) has been
afforded an opportunity to ask questions and receive answers from authorized
officers of the Company concerning the Company and the terms and conditions of
the offering of the Unit Shares and Class D Warrants.
4.06. Awareness of Risks. The Investor is aware that an investment in the
Unit Shares and Class D Warrants is highly speculative and subject to
substantial risks. The Investor is capable of bearing the economic risks of an
investment in the Unit Shares and Class D Warrants including, but not limited
to, the possibility of a complete loss of the Investor's investment, as well as
limitations on the transferability of the Unit Shares and Class D Warrants,
which may make the liquidation of an investment in the securities difficult or
impossible for the indefinite future.
4.07. Purchases for Investment. The Unit Shares and Class D Warrants are
being acquired solely for investment, and are not being purchased with a view
to a distribution or resale thereof otherwise than in compliance with the 1933
Act.
4.08. Restrictions on Transfer. The Investor understands that none of the
Unit Shares, the Class D Warrants or the shares of Common Stock issuable upon
the exercise of the Class D Warrants have been registered under the 1933 Act,
or any state securities laws, in reliance upon exemptions from registration for
non-public offerings. The Investor agrees that none of the Unit Shares, the
Class D Warrants or the shares of Common Stock issuable upon the exercise of
the Class D Warrants will be resold or otherwise transferred by the Investor
unless such securities have been registered under the 1933 Act and under
appropriate state
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securities laws or unless the Company receives an opinion of counsel reasonably
satisfactory to it that an exemption from registration is applicable.
4.09 Brokerage. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated
by this Agreement based on any agreement or arrangement binding upon the
Investor.
4.10 Beneficial Ownership. After giving effect to the purchase of the
Units, neither the Investor, nor any group (with the meaning of Section
13(d)(3) of the 1934 Act) of which the Investor is a member, will be the
beneficial owner of more than 25% of the then-outstanding shares of Common
Stock (calculated in the manner provided for in Rule 13d-3 under the 1934 Act).
Section 5. Termination.
5.01 Termination of Agreement. The parties hereto may terminate this
Agreement as provided below:
(a) Any individual Investor and the Company may terminate this Agreement
as between that Investor and the Company by mutual written consent at any time
prior to the Closing.
(b) Any individual Investor may terminate this Agreement as between that
Investor and the Company, by giving written notice to the Company at any time
prior to the Closing, in the event the Company is in breach of any
representation, warranty or covenant contained in this Agreement in any
material respect.
(c) The Company may terminate this Agreement as between itself and an
individual Investor, by giving written notice to the Investor at any time prior
to the Closing, in the event the Investor is in breach of any representation,
warranty or covenant contained in this Agreement in any material respect.
(d) Any individual Investor may terminate this Agreement as between that
Investor and the Company, by giving written notice to the Company at any time
prior to the Closing, if the Closing shall not have occurred on or before the
30th day following the date of this Agreement.
(e) The Company may terminate this Agreement as between itself and an
individual Investor, by giving written notice to the Investor at any time prior
to the Closing if the Closing, shall not have occurred on or before the 30th
day following the date of this Agreement.
5.02 Effect of Termination. If any party hereto terminates this Agreement
pursuant to Section 5.01, all obligations hereunder of the terminating party,
and of the other party to the terminating party, shall terminate and such
parties shall be released from all of their respective obligations hereunder.
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Section 6 Right of First Refusal.
The Company hereby covenants as follows:
(a) The Company shall not issue any debt or equity securities for cash in
private capital raising transactions (a "Future Offering") within the
three-year period after the date of the Closing ("Closing Date") without
delivering to the Investors prior written notice of its intent to conduct a
Future Offering (a "Future Offering Notice") setting forth the material terms
of the proposed Future Offering, including copies of all relevant documents and
agreements. For a period of twenty days, commencing on the date of receipt of
such Future Offering Notice (the "Offer Period"), each Investor shall have the
right irrevocably to commit, by written notice to the Company, to purchase the
Investor's Portion (as that term is defined below) of the securities being
offered in the Future Offering on the terms contained in the Future Offering
Notice. If, during the Offer Period, the Investor fails irrevocably to commit
to purchase the Investor's Portion of the securities that are the subject of
the Future Offering Notice, the Company shall be permitted to offer and sell
any such securities, on terms generally no less favorable to the Company than
are set forth in the Future Offering Notice, to any third party during a period
of 90 days following the termination of the Offer Period, after which 90-day
period the terms of this Section 6 shall again apply.
(b) The provision of paragraph (a) shall not apply to (i) any transaction
involving the Company's commercial banking arrangements, (ii) the issuance of
securities in connection with a merger, consolidation or sale of assets, or in
connection with a joint venture or an acquisition or disposition of a business,
a product or a license by the Company, or (iii) to the issuance of securities
to any employee, officer, director or consultant.
(c) The amount of securities that an Investor is entitled to purchase in a
Future Offering (the "Investor's Portion") shall be the number obtained by
multiplying the aggregate amount of securities being offered in the Future
Offering by a fraction, the numerator of which is the number of Units purchased
by the Investor pursuant to this Agreement (whether or not the Investor
continues to own the Unit Shares or the Warrants) and the denominator of which
is the number of Units purchased by all Investors pursuant to this Agreement.
(d) The rights of each Investor under this Section 6 shall not be
transferable or assignable by the Investor without the prior written consent of
the Company.
Section 7 Transfer Restrictions on Common Stock.
7.01 The Company shall be under no obligation to effect the transfer of
the Unit Shares unless the holder thereof shall deliver written notice to the
Company describing in reasonable detail the proposed transfer and, in the case
of a transfer that is effected other than pursuant to an effective registration
statement under the 1933 Act or pursuant to Rule 144, an agreement in writing
of the transferee to be bound by the restrictions on transfer set forth in this
Section 7. For so long as the Unit Shares are Restricted Securities, the holder
also shall deliver to the Company an opinion of counsel, in form and substance
reasonably satisfactory to
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the Company, to the effect that such transfer may be effected without
registration under the 1933 Act.
7.02 For so long as any shares of Common Stock issuable upon the exercise
of the Class D Warrants are Restricted Securities, the Company shall not be
obligated to effect any transfer thereof unless the holder shall deliver to the
Company an opinion of counsel, in form and substance reasonably satisfactory to
the Company, to the effect that such transfer can be effected without
registration under the 1933 Act.
7.03 If at any time a holder of Unit Shares or shares of Common Stock
issued upon the exercise of the Class D Warrants delivers to the Company an
opinion of counsel, in form and substance reasonably satisfactory to the
Company, that such shares of Common Stock are eligible for resale by the holder
thereof pursuant to Rule 144(k) under the 1933 Act, the Company shall, upon
surrender of the legended certificates, deliver to the holder new certificates
for such shares of Common Stock that do not bear the legend set forth in
Section 9.02.
Section 8. Definitions. For the purpose of this Agreement, the following
terms have the meanings set forth below:
"1933 Act" has the meaning set forth in section 3.17.
"1934 Act" has the meaning set forth in Section 3.05.
"Class D Warrants" has the meaning set forth in Section 1.01.
"Closing" has the meaning set forth in Section 1.03.
"Common Stock" has the meaning set forth in Section 1.01.
"Company" has the meaning set forth in the Preamble.
"Company Financial Statements" has the meaning set forth in Section 3.04.
"Company Interim Financial Statements" has the meaning set forth in Section
3.04.
"Investor" has the meaning set forth in the Preamble.
"Material Adverse Effect" means, with respect to the Company, a material
adverse effect on the business, properties, assets, condition (financial or
other), results of operations or prospects of the Company.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
<PAGE> 11
-11-
"Registration Rights Agreement" has the meaning set forth in Section 2.03.
"Restricted Securities" means (i) the Unit Shares hereunder; (ii) the
shares of Common Stock issued upon the exercise of the Class D Warrants; and
(iii) any securities issued with respect to the securities referred to in
clause (i) or (ii) above by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have (A) been sold pursuant to an effective registration statement under the
1933 Act or (B) become eligible for sale pursuant to Rule 144 (or any similar
provision then in force) under the 1933 Act.
"SEC" has the meaning set forth in Section 3.05.
"SEC Filings" means (i) the Annual Report of the Company on Form 10-K for
the year ended December 31, 1995, (ii) the Quarterly Reports of the Company on
Form 10-Q for the quarters ended March 31, June 30, and September 30, 1996, and
(iii) any Form 8-K filed by the Company since December 31, 1995.
"Unit Shares" has the meaning set forth in Section 1.01.
"Warrant Agreement" has the meaning set forth in Section 2.04.
Section 9. Miscellaneous.
9.01 Certain Expenses. The Company agrees to pay, and hold the Investors
harmless against liability for the payment of, stamp and other similar taxes
which may be payable in respect of (i) the execution and delivery of this
Agreement, the Registration Rights Agreement and the Warrant Agreement, (ii)
the issuance, sale and delivery of the shares of Common Stock and Class D
Warrants comprising the Units, and (iii) the issuance, sale and delivery to a
holder of Class D Warrants of the shares of Common Stock issued upon the
exercise of the Class D Warrants. The Company agrees to pay or reimburse Roger
H. Samet for up to $7,000 in legal fees and disbursements incurred in
connection with the purchase of the Units and in connection with any legal
opinions with respect to the application of the 1933 Act that are required to
effect a transfer of the shares of Common Stock and Class D Warrants comprising
the Units or the shares of Common Stock issued upon the exercise of the Class D
Warrants.
9.02 Securities Legend.
Each certificate for Unit Shares and each certificate for shares of Common
Stock issued upon the exercise of the Class D Warrants shall be imprinted with
a legend in substantially the following form for so long as such shares
continue to be Restricted Securities:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED FOR
SALE, SOLD OR
<PAGE> 12
-12-
OTHERWISE TRANSFERRED, OTHER THAN IN ACCORDANCE WITH AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION."
9.03 Amendments. The provisions of this Agreement may be amended only with
the written consent of the Company and each Investor. No other course of
dealing between the Company and any Investor or any delay in exercising any
rights hereunder shall operate as a waiver of any rights of an Investor or the
Company.
9.04 Survival of Representation and Warranties. All representations and
warranties contained herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby for a
period of three years after the Closing.
9.05 Successors and Assigns. This Agreement and the rights and obligations
hereunder may not be assigned by either party hereto (by operation of law or
otherwise) without the prior written consent of the other.
9.06 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 prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, and to the extent permitted by
law shall not invalidate the remainder of this Agreement.
9.07 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
9.08 Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience only and shall not affect the
meaning of this Agreement. The use of the word "including" in this Agreement
shall be by way of example rather than by limitation.
9.09 Governing law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Maryland without giving effect to any
choice of law or conflict of law provision.
9.10 Notices.
(a) All notices, requests, demands, claims and other communications
hereunder will be in writing and shall be made by hand-delivery, certified
mail, return receipt requested, overnight or two-day courier, or facsimile
transmission, addressed to the intended recipient as set forth below:
<PAGE> 13
-13-
If to the Company:
Alpha 1 Biomedicals, Inc.
6707 Democracy Boulevard
Suite 111
Bethesda, MD 20817-1129
Facsimile Number: (301) 564-4424
Copy (which shall not constitute notice) to:
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20044
Attn: Michael Lefever
Facsimile Number: (202) 778-5276
If to the Investors:
To the address set forth on Schedule 1
Each party hereto may change the address for such communication by notice to
the other party (to the Company in the case of each Investor and to the
Investor in the case of the Company) in the manner contemplated hereby.
(b) All such notices, requests, demands, claims and other communications
shall be deemed to have been duly given (i) when delivered by hand, if
personally delivered, (ii) five days after being deposited in the mail, if
mailed, (iii) upon receipt, if sent by overnight or two day courier and (iv)
upon receipt, if sent by facsimile transmission, except in the case of Roger H.
Samet, no notice, request, demand, claim or other communication shall be deemed
given unless (x) actually received by Roger H. Samet or (y) given in the manner
provided above to the person to whom copies are to be delivered.
9.11 Entire Agreement. This Agreement, together with the Registration
Rights Agreement and the Warrant Agreement, constitutes the entire agreement of
the parties hereto with respect to the subject matter thereof and supersedes
all prior agreements of the parties with respect to such subject matter.
<PAGE> 14
-14-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
ALPHA 1 BIOMEDICALS,
INC.
By
-----------------------------------
Michael Berman
President and Chief
Executive Officer
-------------------------------------
ROGER H. SAMET
-------------------------------------
[Name of Investor]
-------------------------------------
[Name of Investor]
-------------------------------------
[Name of Investor]
<PAGE> 15
-15-
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
See attached executed Registration Rights Agreement
<PAGE> 16
-16-
EXHIBIT B
WARRANT AGREEMENT
See attached executed Warrant Agreement
<PAGE> 17
-17-
SCHEDULE 1
Name of Investor Number of Total Purchase Number of Number of
- ---------------- Units Price Shares Warrants
--------- -------------- --------- ---------
<PAGE> 18
-18-
SCHEDULE 2
OUTSTANDING OPTIONS/WARRANTS
PPM-UNIT MARCH 5, 1997
<PAGE> 1
-1-
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as of
March 12, 1997, by and among Alpha 1 Biomedicals, Inc., a Delaware corporation
(the "Company"), and each of the undersigned purchasers (the "Investors") of
Units issued by the Company under a Unit Purchase Agreement, dated as of the
date hereof, among the Company and the Investors (the "Unit Purchase
Agreement"). Each Unit is comprised of (i) 500,000 shares (the "Unit Shares")
of common stock, par value $.001 per share, of the Company ("Common Stock"),
and (ii) 165,000 Class D Warrants ("Warrants"), each such Warrant being
exercisable to purchase one share of Common Stock in accordance with the terms
of a Warrant Agreement, dated the date hereof, among the Company and each of
the Investors (the "Warrant Agreement").
In order to induce the Investors to enter into the Unit Purchase
Agreement, the Company has agreed to provide to the Investors the registration
rights set forth in this Agreement.
The parties hereby agree as follows:
1. DEINITIONS.
(a) "Registrable Securities" means (i) the Unit Shares, (ii) the
shares of Common Stock issuable by the Company upon the exercise of the
Warrants, and (iii) in the case of Roger H. Samet, any other shares of Common
Stock of which he is the registered holder that are not eligible for sale
pursuant to Rule 144(k).
(b) "Restricted Registrable Securities" means the Registrable
Securities until such time as (i) they have been resold pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), or (ii) they are eligible for resale to the public
pursuant to Rule 144(k) under the Securities Act (or any similar provision then
in force) and any legend restricting the transfer of the shares has been
removed.
2. DEMAND REGISTRATION.
(a) Filing of Shelf Registration Statement. After August 1, 1997,
upon the request in writing of any holder of Restricted Registrable Securities,
the Company shall use its best efforts to file with the Securities and Exchange
Commission (the "Commission"), within 45 days after the receipt of such
request, a registration statement for an offering to be made on a continuous
basis pursuant to Rule 415 under the Securities Act, covering the resale of the
Restricted Registrable Securities that are the subject of the request and any
other Restricted Registrable Securities that any other
<PAGE> 2
-2-
holder thereof or the Company wishes to include therein (a "Shelf Registration
Statement"). Each Investor shall be entitled to three such registrations under
this Section 2(a). The Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Restricted Registrable
Securities for resale by the holders thereof in any lawful manner designated by
them (including, without limitation, an underwritten offering). Except for
securities that the Company may be obligated to include in the Shelf
Registration Statement pursuant to any agreement entered into by the Company
prior to the date hereof, the Company shall not, without the consent of the
person requesting registration of Restricted Registrable Securities, permit any
securities other than the Restricted Registrable Securities to be included in
the Shelf Registration Statement.
(b) Effectiveness of Shelf Registration Statement. The Company shall
use its best efforts to cause the Shelf Registration Statement to be declared
effective under the Securities Act as promptly as practicable after the filing
thereof and, unless directed otherwise by the holders of a majority of the
Restricted Registrable Securities included therein, shall use its best efforts
to keep the Shelf Registration Statement continuously effective under the
Securities Act until all of the Registrable Securities shall have ceased to be
Restricted Registrable Securities (the "Effectiveness Period").
(c) Expenses. The Company shall bear all Registration Expenses (as
defined in Section 5) incurred in connection with filing and maintaining the
effectiveness of a registration statement under this Section 2. Each holder of
Restricted Registrable Securities shall pay all underwriting discounts and
sales commissions attributable to the shares sold by such holder.
3. PIGGY-BACK REGISTRATION RIGHTS.
(a) Notice of Filing and Inclusion of Shares. If at any time or from
time to time following the date hereof, the Company shall file with the
Commission a registration statement under the Securities Act relating (i) in
whole or in part to the primary offer and sale of shares of its Common Stock
(other than a registration statement that relates exclusively to (A) the sale
of securities in connection with an employee or director stock option, bonus,
retirement or other compensation plan or arrangement, (B) a corporate
reorganization or (C) the issuance of securities in connection with a business
acquisition or combination) or (ii) the resale of shares of Common Stock issued
by the Company to other stockholders ("Other Eligible Shareholders") and the
registration rights afforded such Other Eligible Shareholders do not preclude
the inclusion of the Restricted Registrable Securities in a registration
effected on behalf of such Other Eligible Shareholders, the Company shall
notify the holders of Restricted Registrable Securities in writing of its
intention to file such registration statement at least 30 days prior to the
filing thereof. If, within 15 days of receipt of the Company's notice, a holder
notifies the Company in writing that such holder wishes to have some or all of
such holder's Restricted Registrable Securities
<PAGE> 3
-3-
included in such registration statement, such Restricted Registrable Securities
shall be so included, subject to the provisions of this Section 3.
Notwithstanding the foregoing, if the registration statement is to include
shares to be registered for sale by the Company, the decision to proceed with
the filing of the registration statement, and the timing and content of all
filings in connection therewith, shall be within the sole discretion of the
Company.
(b) Underwritten Offerings. If the registration statement filed under
this Section 3 involves an underwritten offering and, the underwriter
determines that the number of shares proposed to be sold by the Company, the
holders of Restricted Registrable Securities and any Other Eligible
Shareholders is greater than the number of shares that the underwriter believes
is feasible to sell at that time, at the price and upon the terms approved by
the Company, then the number of shares that the underwriter believes may be
sold shall be allocated in the following order: (i) primary shares being
offered by the Company and (ii) pro rata among all selling shareholders based
upon the number of shares as to which each such selling shareholder has
registration rights.
(c) Expenses. The Company shall bear all Registration Expenses
incurred in connection with filing and maintaining the effectiveness of a
registration statement under this Section 3. Each holder of Restricted
Registrable Securities shall pay all underwriting discounts and sales
commissions attributable to the shares sold by such holder.
4. REGISTRATION PROCEDURES.
(a) Obligations of the Company. In connection with the registration
provided for in Section 2 or Section 3, the Company will:
(i) Furnish to each holder of Restricted Registrable Securities
included in the registration statement a copy of the registration statement
(including all exhibits thereto) and each amendment thereto, each related
prospectus and all amendments or supplements thereto (including any preliminary
prospectus), and such other documents as such holder may reasonably request in
order to facilitate the disposition of the Restricted Registrable Securities
owned by such holder.
(ii) Use reasonable efforts to register or qualify (unless an
exemption is applicable) such Restricted Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any holder of Restricted Registrable Securities or the
managing underwriter, in the case of an underwritten offering, reasonably shall
request in writing, use reasonable efforts to keep any such registration or
qualification effective (unless an exemption is available) during the
Effectiveness Period, and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
Restricted Registrable Securities covered by the registration statement
provided, however, that
<PAGE> 4
-4-
the Company shall not be required (A) to qualify generally to do business in
any jurisdiction where it is not then so qualified, (B) to take any action that
would subject it to general service of process in any such jurisdiction where
it is not then so subject, (C) to subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then so subject,
or (D) to modify in any way its Certificate of Incorporation or Bylaws or agree
to any restriction on the offer or sale of any securities by the Company or any
of its affiliates.
(iii) Notify the holders of Restricted Registrable Securities
promptly (but in any event within three business days), (A) of the issuance by
the Commission of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use of any
prospectus, or of the initiation of any proceedings for such purpose, (B) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or an exemption from qualification of the Restricted
Registrable Securities, or any registration statement with respect thereto, for
offer or sale in any jurisdiction, or the initiation of any proceeding for such
purpose, or (C) if any information becomes known to the Company that makes any
statement made in the registration statement or related prospectus, or any
document incorporated or deemed to be incorporated therein by reference, untrue
in any material respect or that requires that the registration statement be
amended or that any related prospectus be amended or supplemented so that it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(iv) Use its best efforts to prevent the issuance of any stop
order suspending the effectiveness of the registration statement, of any order
preventing or suspending the use of prospectus or suspending the qualification
(or exemption from qualification) of any of the Restricted Registrable
Securities for sale in any jurisdiction and, if any such order is issued, to
use its best efforts to obtain the withdrawal of such order as soon as
practicable.
(v) Upon the occurrence of any event referred to in Section
4(a)(iii)(C), if requested by the holders of a majority of the Restricted
Registrable Securities included in the registration statement, as promptly as
practicable prepare and file with the Commission, as applicable, a
post-effective amendment to the registration statement, an amendment or
supplement to the related prospectus, or a document (or an amendment thereto)
deemed to be incorporated therein by reference, so that, as thereafter
delivered to the holders of such Restricted Registrable Securities, the
prospectus for the resale of the Restricted Registrable Securities related to
the registration statement will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, not misleading.
(vi) In connection with any underwritten offering of Restricted
Registrable Securities pursuant to the registration statement, enter into an
underwriting
<PAGE> 5
-5-
agreement as is customary in underwritten offerings of equity securities
similar to the Common Stock and take all such other actions as are reasonably
requested by the managing underwriter in order to facilitate the registration
and the disposition of such Restricted Registrable Securities and, in such
connection, (A) make such representations and warranties to, and covenants
with, the underwriters with respect to the Company and its business and with
respect to the registration statement, prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case,
as are customarily made by issuers to underwriters in underwritten offerings of
equity securities similar to the Common Stock, (B) obtain the written opinion
of counsel to the Company in form, scope and substance reasonably satisfactory
to the managing underwriter, addressed to the underwriters covering the matters
customarily covered in opinions requested in underwritten offerings of equity
securities similar to the Common Stock, and (C) obtain "cold comfort" letters
and updates thereof in form, scope and substance reasonably satisfactory to the
managing underwriter from the independent public accountants of the Company
(and, if necessary, any other independent public accountants of any subsidiary
of the Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included or
incorporated by reference in the registration statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings of equity securities similar to the Common Stock and
such other matters as reasonably is requested by the managing underwriter.
(b) Obligations of a Holder of Restricted Registrable
Securities. The Company may require each holder of Restricted Registrable
Securities covered by the registration statement to furnish in writing to the
Company such information regarding such holder and the distribution of such
Restricted Registrable Securities as the Company may, from time to time,
reasonably request. The Company may exclude from the registration statement the
Restricted Registrable Securities of any holder who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
Each such holder agrees to supplement promptly any information previously
furnished to the Company with all such additional information as is required in
order to make the information previously furnished to the Company by such
seller not misleading.
(c) Suspension of Sales Under the Shelf Registration Statement.
Each holder of Restricted Registrable Securities included in the registration
statement agrees that, upon receipt of any notice from the Company as described
in Section 4(a)(iii), such holder forthwith will discontinue disposition of
such Restricted Registrable Securities pursuant to the registration statement
until such holder receives copies of the amended or supplemented prospectus
contemplated by Section 4(a)(v), or until such holder is advised in writing by
the Company that the use of the prospectus may be resumed.
<PAGE> 6
-6-
5. REGISTRATION EXPENSES.
Registration Expenses shall be borne as set forth in Section 2 or Section
3, as applicable. Registration Expenses ("Registration Expenses") shall consist
of all expenses incidental to the Company's performance of and compliance with
this Agreement, including without limitation (i) all registration and filing
fees (including all fees and expenses of compliance with state securities or
Blue Sky laws), (ii) printing expenses, including expenses of printing of the
registration statement or any prospectus, if the printing thereof is requested
any holder of the Restricted Registrable Securities, (iii) messenger and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v)
fees and disbursements of all independent public accountants referred to in
Section 4(a)(vi) hereof (including, without limitation, the expenses of any
special audit) and (vi) the fees and expenses incurred in connection with the
listing of the securities to be registered on NASDAQ or any securities exchange
on which the Common Stock is then listed.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each holder of
Restricted Registrable Securities included in a registration statement, each
person, if any, who controls such holders within the meaning of either Section
15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and their respective officers, directors,
employees and agents, if any (each, a "Participant"), from and against any and
all losses, claims, damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement (or any amendment thereto) or a
related prospectus (or any amendment or supplement thereto), or caused by,
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Company will not be required to
indemnify a holder (or any related Participant) if (i) such losses, claims,
damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Participant furnished to the Company in
writing by or on behalf of such Participant expressly for use therein or (ii)
if a holder sold to the person asserting the claim the Restricted Registrable
Securities that are the subject of such claim and such untrue statement or
omission, or alleged untrue statement or omission, was made in or involved any
prospectus and was corrected in a subsequent prospectus (or any supplement
thereto) provided to such holder of the Restricted Registrable Securities and
such holder failed to deliver or provide a copy of the subsequent prospectus
(or such supplement thereto) to such person with or prior to the confirmation
of the sale of such Restricted Registrable Securities.
<PAGE> 7
-7-
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Company, each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and their respective directors, officers, employees and agents,
to the same extent as the foregoing indemnity from the Company to each
Participant, but only (i) with respect to information relating to such
Participant furnished to the Company in writing by or on behalf of such
Participant expressly for use in a registration statement (or any amendment
thereto) or a related prospectus (or any amendment or supplement thereto), or
(ii) with respect to any untrue statement or representation made by such
Participant in writing to the Company in connection with the transactions
contemplated by the registration statement.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to paragraph
(a) or (b) of this Section 5, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person shall be
entitled to assume the defense thereof with counsel retained by the
Indemnifying Person, reasonably satisfactory to the Indemnified Person, who
also may be counsel to any other Indemnifying Person with respect to the same
matter, and shall pay the reasonable fees of, and the expenses actually
incurred by, such counsel related to such matter; provided, however, that the
failure to so notify the Indemnifying Person shall not relieve it of any
obligation or liability which it may have hereunder or otherwise (unless and
only to the extent that such failure directly results in the loss or compromise
of any material rights or defenses by the Indemnifying Person and the
Indemnifying Person was not otherwise aware of such action or claim). In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person, or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that, unless there
exists a conflict among Indemnified Persons, the Indemnifying Person shall not,
in connection with any one such proceeding or separate but substantially
similar related proceedings in the same jurisdiction arising out of the same
general allegations, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Persons.
Any such separate firm for the Participants shall be designated in writing by
Participants who sold a majority in interest of Restricted Registrable
Securities sold by all such Participants and any such separate firm for the
Company, any control person of the Company and their respective directors,
officers, employers and agents shall be
<PAGE> 8
-8-
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior written
consent (which consent shall not be unreasonably withheld), but if settled with
such consent or if a final nonappealable judgment is entered for which an
Indemnified Person is entitled to indemnification pursuant to this Agreement,
the Indemnifying Person agrees to indemnify and hold harmless such Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such settlement and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of any
Indemnified Person.
(d) If the indemnification provided for in paragraph (a) or (b)
of this Section 5 is for any reason unavailable to, or is insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person on the one hand
and the Indemnified Person on the other from the offering of the Common Stock
pursuant to the Shelf Registration Statement or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the Indemnifying Person on the
one hand and the Indemnified Person on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof).
The relative fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or a Participant on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. However, no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 5 are in addition to any liability which an Indemnifying Person may
otherwise have to an Indemnified Person.
<PAGE> 9
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7. PARTICIPATION IN AN UNDERWRITTEN OFFERING.
No holder of Restricted Registrable Securities may participate in any
underwritten offering of Common Stock of the Company pursuant to a registration
statement filed under either Section 2 or Section 3 unless such holder
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and such other documents reasonably required under the
terms of customary underwriting arrangements.
8. RULE 144.
The Company covenants that it will use its best efforts to file timely the
reports required to be filed by it under the Exchange Act and the rules and
regulations thereunder, and it will take such further action as any owner of
Restricted Registrable Securities may reasonably request, all to the extent
required from time to time to enable such owner to sell Restricted Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such rule
may be amended from time to time (or any similar rule or regulation hereafter
adopted by the Commission). Upon the request of any holder of Restricted
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements and shall
provide to the Company's transfer agent such advice as shall be necessary to
effect the transfer of any Restricted Registrable Securities sold pursuant to
Rule 144.
9. TERMINATION.
This Agreement shall terminate at such time as the Investors no longer own
any Registrable Securities. The provisions of Section 6 hereof shall survive
such termination.
10. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company has not, as of the date
hereof, and the Company shall not, after the date of this Agreement, enter into
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the holders of Restricted Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, (i) as related to the rights and
obligations of Roger H. Samet, otherwise than with the prior written
<PAGE> 10
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consent of the Company and Roger H. Samet, and (ii) as related to rights and
obligations of the holder of Restricted Registrable Securities other than Roger
H. Samet, otherwise than with the prior written consent of the Company and the
holders of not less than a majority of the Restricted Registrable Securities
other than Roger H. Samet (for which purpose each holder of Warrants will be
deemed the holder of the number of Restricted Registrable Securities then
obtainable upon the exercise such Warrants). Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of holders of Restricted Registrable
Securities whose securities are being sold pursuant to a registration statement
and that does not directly or indirectly affect, impair, limit or compromise
the rights of other holders of Restricted Registrable Securities may be given
(i) by the holders not less than a majority of the Restricted Registrable
Securities being sold by such holders pursuant to such registration statement
and (ii) each Investor whose Restricted Registrable Securities are included in
such registration statement.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing and be delivered by hand or sent
by registered or certified mail, return receipt requested and postage prepaid,
or by facsimile transmission (followed by a confirmation copy sent by either
overnight or two-day courier):
(i) if to a holder of Restricted Registrable Securities, in the
case of the Investors in accordance with the terms of the Unit Purchase
Agreement, and in the case of all other holders of Restricted Registrable
Securities at the most current address given by such holder to the Company in
writing; and
(ii) if to the Company, at its address set forth in the Unit
Purchase Agreement.
All such notices and communications shall be deemed to have been duly given (i)
when delivered by hand, if personally delivered, (ii) five business days after
being deposited in the mail, postage prepaid, if mailed or (iii) upon receipt,
if sent by facsimile, except that in the case of Roger H. Samet, no notice or
communication shall be deemed given unless (x) actually received by Roger H.
Samet or (y) given in the manner provided above to the person to whom copies
are to be delivered.
(d) Third Party Beneficiaries. Each registered holder of Restricted
Registrable Securities, whether or not such holder is a party to this
Agreement, is an intended beneficiary of this Agreement, and this Agreement may
be enforced by such person. Nothing in this Agreement shall be construed to
give any person or entity, other than the Company, the registered holders of
the Warrants and the registered holders of Restricted Registrable Securities,
any legal or equitable right, remedy or claim under this Agreement.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties hereto and the registered holders of the Restricted Registrable
Securities;
<PAGE> 11
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provided, however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign unless and to the extent such successor or
assign holds Restricted Registrable Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning --------
hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WHOLLY WITHIN THE STATE OF MARYLAND, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES, AND EACH
BENEFICIARY SHALL BE BOUND, TO SUBMIT TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN THE STATE OF MARYLAND IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall to the extent permitted by
law remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such invalid, illegal, void or unenforceable
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any term,
provision, covenant or restriction that may be hereafter declared invalid,
illegal, void or unenforceable.
(j) Entire Agreement. This Agreement, the Unit Purchase Agreement and
the Warrant Agreement are intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no representations, promises, warranties or
undertakings between the parties hereto with respect to the subject matter
hereof, other than those set forth or referred to herein or therein. This
Agreement, the Unit Purchase Agreement and the Warrant Agreement supersede all
prior agreements and understandings between the parties with respect to such
subject matter.
<PAGE> 12
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(j) No Impairment. The Company agrees that it will not enter
into any agreement conferring registration rights on any other person that
impairs in any material respect the registration rights of the holders of
Restricted Registrable Securities under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
ALPHA 1 BIOMEDICALS, INC.
By: --------------------------
Michael Berman
President and Chief
Executive Officer
[additional signature pages follow]
<PAGE> 13
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REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
FOR INDIVIDUAL INVESTORS
--------------------------------
Name of Purchaser
(Please print or type)
--------------------------------
Signature
<PAGE> 14
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REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
FOR TRUST INVESTORS
-------------------------------
Name of Trust
(Please print or type)
By: ---------------------------
Trustee's Signature
<PAGE> 15
-15-
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
FOR PARTNERSHIP INVESTORS
--------------------------------
Name of Partnership
(Please print or type)
By:
----------------------------
Signature of a
General Partner
By:
----------------------------
Signature of Additional
General Partner
(if required by
partnership agreement)
By:
---------------------------
Signature of Additional
General Partner
(if required by
partnership agreement)
<PAGE> 16
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REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
FOR CORPORATE INVESTORS
--------------------------------
Name of Corporation
(Please print or type)
By:
----------------------------
Name:
Title:
PPM-REG MARCH 5, 1997
<PAGE> 1
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WARRANT AGREEMENT
This Agreement (the "Agreement"), dated as of March 12, 1997, is entered
into among Alpha 1 Biomedicals, Inc., a Delaware corporation (the "Company"),
and the purchasers (the "Investors") of Units (as defined below) in a private
offering (the "Offering") by the Company in accordance with a Unit Purchase
Agreement, dated as of the date hereof (the "Unit Purchase Agreement").
WITNESSETH:
WHEREAS, the Company has issued in the Offering a total of 4.0 Units (the
"Units"), each Unit consisting of 500,000 shares of the common stock, par value
$.001 per share, of the Company (the "Common Stock") and 165,000 Class D
Warrants (the "Warrants"), each Warrant being exercisable to purchase one share
of Common Stock (the "Warrant Shares"); and
WHEREAS, the Company desires to set forth herein the terms of the Warrants
and to provide for the issuance of certificates representing the Warrants.
NOW, THEREFORE, in consideration of the above and foregoing premises and
the mutual promises and agreements hereinafter set forth, it is agreed that:
1. WARRANT CERTIFICATES.
(a) Each Warrant shall entitle the holder in whose name the
certificate shall be registered on the transfer books of the Company (a
"Warrant Holder") to purchase one share of Common Stock at the exercise price
set forth in Section 3(a), subject to modification and adjustment as provided
in Section 8 hereof. The Warrant certificates shall be detached from
certificates representing shares of Common Stock comprising the Units and shall
be distributed to the purchasers thereof at the closing of the Offering (the
"Closing Date").
(b) Warrants shall be issuable only in whole number denominations
both upon initial issuance and in connection with any exercise, transfer or
exchange.
2. FORM AND EXECUTION OF CERTIFICATES.
(a) The Warrants shall be issued in registered form only. The form of
Warrant certificate shall be substantially as attached hereto as Exhibits A and
shall include any such other terms and legends as may be required to comply
with any applicable law or the rules and regulations of any stock exchange or
market.
<PAGE> 2
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(b) Each Warrant certificate shall be sequentially numbered and shall
have set forth thereon the designation "WD." The Warrant certificates shall be
dated the date of their issuance.
(c) The Company shall act as its own warrant agent in connection with
the issuance, registration, transfer, exchange and exercise of Warrants, or in
its sole discretion, upon notice to the Warrant Holders, may appoint an entity
that is registered as "transfer agent" under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to perform any one or more of such
functions (the "Warrant Agent").
(d) The Warrant certificates shall be manually signed on behalf of
the Company by proper officers thereof (or, in the case of the appointment of a
Warrant Agent other than the Company, by the facsimile signatures of the proper
officers of the Company and countersigned by the Warrant Agent) and shall not
be valid for any purpose unless so signed. In the event any officer of the
Company who executed certificates (whether manually or by facsimile) shall
cease to be an officer of the Company, such certificates shall have the same
force and effect as though the person who signed such certificate had not
ceased to be an officer of the Company.
3. EXERCISE; EXPIRATION.
(a) Subject to the provisions of this Agreement, each Warrant may be
exercised at a price (the "Exercise Price") of $.10 per Warrant Share, subject
to adjustment as provided herein, at any time during the period (the "Warrant
Exercise Period") commencing on the Closing Date and terminating on a date (the
"Warrant Expiration Date") that is the tenth anniversary of the Closing Date or
if the Warrant Expiration Date is a Saturday, Sunday, or a day on which banks
in New York are not open for business (a "Business Day"), then the Warrant
Expiration Date shall be the next Business Day. If an initial Warrant Holder is
the holder of a Warrant on the 90th day preceding the Warrant Expiration Date,
the Company will notify him no later than the 60th day prior to the Warrant
Expiration Date of the date on which the Warrant will expire.
(b) A Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date (an "Exercise Date") that the
Warrant Holder has delivered to the Company at its corporate offices located at
6707 Democracy Boulevard, Suite 111, Bethesda, MD 20817 (the "Corporate
Office"), or at any such other office or agency as the Company may designate,
(i) the Warrant certificate with the Election to Purchase certification duly
executed, which shall include, if at the time of exercise the Warrant Shares
deliverable upon exercise of a Warrant have not been registered for sale by the
Company under the Securities Act of 1933, as amended (the "Act"), a written
representation of the Warrant Holder to the effect that (A) the Holder is an
"accredited investor" as defined by Rule 501 under the Act (or such other
reasonable representations as shall be necessary for the Company to conclude
that the
<PAGE> 3
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sale of the Warrant Shares to the Warrant Holder is an exempt transaction under
the Securities Act), (B) the Warrant Shares being acquired upon exercise are
being purchased for investment and not for distribution in violation of the
Act, (C) acknowledging that such Warrant Shares have not been registered under
the Act and (D) agreeing that such Warrant Shares may not be sold or
transferred unless there is an effective registration statement relating
thereto under the Act or such sale or transfer is not in violation of the Act
(the "Exercise Form"), and (ii) payment in full of the aggregate Exercise
Price. An Exercise Form shall be executed by the Warrant Holder thereof or his
attorney duly authorized in writing. Payment of the Exercise Price of each
Warrant shall be in cash or by official bank or certified check, money order or
wire transfer of an amount equal to the Exercise Price then in effect, in
lawful money of the United States of America. The person entitled to receive
the Warrant Shares deliverable on exercise shall be treated for all purposes as
the holder of such Warrant Shares as of the close of business on the Exercise
Date.
(c) The Company shall not be obligated to issue any fractional shares
of Common Stock in connection with the exercise of any Warrant. In lieu of
issuing any fractional Warrant Shares, the Company shall pay to any Warrant
Holder who otherwise would have been entitled to a fractional Warrant Share
cash (without interest) in an amount determined by multiplying the fractional
interest to which such Warrant Holder would otherwise be entitled by the
closing sale price of the Common Stock as reported on the NASDAQ National
Market (or, if the Common Stock is not then listed for trading thereon, on such
other principal market or exchange on which the Common Stock is then traded or,
if no closing sale price is reported by the principal market or exchange on
which the Common Stock is then traded, then the average of the closing bid and
asked prices as reported) on the day immediately prior to (but not including)
the Exercise Date (or if no bid and asked prices are reported, then the fair
market value of the Common Stock as determined in good faith by the Board of
Directors of the Company (as so determined, the "Market Price").
(d) Within two Business Days after the Exercise Date, the Company, at
its own expense, shall cause to be issued and sent for next Business Day
delivery to the person or persons entitled to receive the same, a certificate
or certificates in the name of the Warrant Holder for the number of Warrant
Shares deliverable on such exercise. All Warrant Shares delivered upon the
exercise of the Warrants shall be validly issued, fully paid and nonassessable.
(e) The Company may deem and treat the Warrant Holder as the absolute
owner thereof for all purposes, and the Company shall not be affected by any
notice to the contrary. No Warrant shall entitle the holder thereof to any of
the rights of shareholders or to any dividend declared on the Common Stock
unless such holder shall have exercised the Warrant on or prior to the record
date fixed by the Board of Directors for the determination of holders of Common
Stock entitled to such rights or dividends.
<PAGE> 4
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4. REGISTRATION RIGHTS.
The holders of Warrant Shares shall have the registration rights
provided for in the Registration Rights Agreement executed by the Company and
the Investors on the date hereof (the "Registration Rights Agreement").
5. RESERVATION OF SHARES AND PAYMENT OF TAXES.
(a) The Company covenants that it shall at all times reserve and have
available from its authorized Common Stock such number of shares of Common
Stock as shall then be issuable on the exercise of all outstanding Warrants.
The Company covenants that all Warrant Shares shall be free from all taxes,
liens and charges with respect to the issuance thereof.
(b) The Company shall pay all documentary, stamp or similar taxes and
other government charges that may be imposed with respect to the issuance of
the Warrants, and the issuance or delivery of any Warrant Shares upon the
exercise of the Warrants, except that in the event that the Warrant Shares are
to be delivered in a name other than the name of the Warrant Holder reflected
on the certificate for the Warrant, no such delivery shall be made unless the
person requesting the same has paid to the Company the amount of any such
taxes, charges or transfer fees incident thereto.
6. REGISTRATION OF TRANSFER.
(a) The Warrant certificates may, subject to provisions of the
Federal securities and state securities laws and the provisions of this
Agreement, be transferred in whole or in part. Certificates to be transferred
shall be surrendered to the Company at its Corporate Office or such other
office or agency as the Company may designate.
(b) The Company shall keep transfer books which shall register
Warrant certificates and the transfer thereof. On due presentment for
registration of transfer of any Warrant certificate, the Company shall execute,
issue and deliver to the transferee or transferees a new certificate or
certificates representing an equal aggregate number of Warrants. All such
Warrant certificates shall be duly endorsed or be accompanied by a written
instrument or instruments of transfer in form reasonably satisfactory to the
Company, together with an opinion of counsel, reasonably satisfactory in form
and substance to counsel for the Company, that an exemption from registration
under the Act for the transfer exists and a written representation from the
transferee that (i) the Warrants are being acquired for investment and not for
distribution otherwise than in compliance with the Act, (ii) acknowledging that
the Warrants have not been registered under the Act and (iii) agreeing that the
Warrants, if not registered under the Act, may not be transferred unless there
is an effective registration statement with respect thereto or in the opinion
of counsel, which shall be reasonably satisfactory in
<PAGE> 5
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form and substance to counsel for the Company, that such transfer is an exempt
transaction under the Act.
(c) Prior to due presentment for registration of transfer thereof,
the Company may treat the Warrant Holder as the absolute owner thereof
(notwithstanding any notations of ownership or writing thereon made by anyone),
and the Company shall not be affected by any notice to the contrary.
7. LOSS OR MUTILATION.
On receipt by the Company of satisfactory evidence of the loss,
theft, destruction or mutilation of any Warrant certificate, the Company shall
execute and deliver to a Warrant Holder in lieu thereof a new Warrant
certificate representing an equal number of Warrants. In the case of loss,
theft or destruction of any certificate, the Warrant Holder shall be required
to indemnify the Company and to post an indemnity bond as a condition to the
issuance of a replacement certificate. In the event a certificate is mutilated,
such certificates shall be surrendered and canceled by the Company prior to
delivery of a new certificate. The Warrant Holder shall also comply with such
other regulations and pay such other reasonable charges as the Company may
prescribe.
8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES PURCHASABLE.
(a) (i) Except as otherwise provided in Section 8(b) and subject to
the exceptions set forth in Section 8(c), in the event the Company shall, at
any time or from time to time after the date hereof, (A) sell or issue for cash
any shares of Common Stock for a consideration per share that is less than
either (x) the Market Price of the Common Stock (as defined in Section 3(c)) on
the last trading day preceding the date of such sale or issuance or (y) at any
time prior to the first anniversary of the date of this Agreement, for a price
per share that is less than the then-applicable Exercise Price on the last
trading day preceding the date of such sale or issuance, (B) issue any shares
of Common Stock as a stock dividend to the holders of shares of Common Stock,
or (C) subdivide or combine the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then in each such case the
Exercise Price in effect immediately prior to such event shall be changed to
the Exercise Price (calculated to the nearest cent) determined by multiplying
the Exercise Price in effect immediately prior thereto by a fraction, (1) the
numerator of which shall be the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such additional shares and the
number of shares of Common Stock that the aggregate consideration received
(determined as provided in Section 8(b)) for the issuance of such additional
shares would purchase at the Market Price and (2) the denominator of which
shall be the sum of the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares; provided, however, if
a sale or issuance satisfies conditions of both A(x) and A(y), only the
adjustment that produces the greater
<PAGE> 6
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change in the Exercise Price shall be made. Such adjustment shall be made
successively whenever such an issuance is made.
(ii) Upon the adjustment of the Exercise Price pursuant to this
Section 8, the total number of shares of Common Stock purchasable upon exercise
of each Warrant shall be such number of shares (calculated to the nearest
one-tenth of a share) purchasable at the Exercise Price in effect immediately
prior to such adjustment multiplied by a fraction, (1) the numerator of which
shall be the Exercise Price in effect immediately prior to such adjustment and
(2) the denominator of which shall be the Exercise Price in effect immediately
after such adjustment.
(b) For purposes of Section 8(a), the following provisions shall be
applicable:
(i) The number of shares of Common Stock outstanding at any
given time shall not include shares of Common Stock owned or held by or for the
account of the Company, and the sale of such shares shall be a sale for
purposes of Section 9(a).
(ii) No adjustment of the Exercise Price shall be made unless
such adjustment would require an increase or decrease of at least $.01 in the
Exercise Price; provided that any adjustments that by reason of this clause
(ii) are not required to be made shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment that, together
with all adjustments so carried forward, require an increase or decrease of at
least $.01 in the Exercise Price.
(iii) In the event of (A) the sale by the Company (or as a component
of a unit being sold) for cash of any rights or warrants to subscribe for or
purchase, or any options for the purchase of, either Common Stock or any
securities that are convertible into or exchangeable for Common Stock (such
securities convertible or exchangeable into Common Stock being herein referred
to as "Convertible Securities") or (B) the issuance by the Company, without the
receipt by the Company of any consideration therefor, of any rights or warrants
to subscribe for or purchase, or any options for the purchase of, Common Stock
or Convertible Securities (in either case whether or not such rights, warrants
or options, or the right to convert or exchange such Convertible Securities,
are immediately exercisable), and the price per share for which Common Stock is
issuable upon the exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(1) the minimum aggregate consideration payable to the Company upon the
exercise of such rights, warrants or options, plus the consideration, if any,
received by the Company for the issuance or sale of such rights, warrants or
options, plus, in the case of such Convertible Securities, the minimum
aggregate amount of additional consideration, if any (other than the surrender
of such Convertible Securities), payable upon the conversion or exchange
thereof, by (2) the total maximum number of shares of Common
<PAGE> 7
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Stock issuable upon the exercise of such rights, warrants or options or upon
the conversion or exchange of the Convertible Securities issuable upon the
exercise of such rights, warrants or options) is less than either (x) the
Market Price of the Common Stock on the last trading day preceding the date of
the issuance or sale of such rights, warrants or options or (y) at any time
prior to the first anniversary of the date of this Agreement, for a price per
share that is less than the then-applicable Exercise Price on the last trading
day preceding the date of such sale or issuance, then for purposes of Section
8(a) the total maximum number of shares of Common Stock issuable upon the
exercise of such rights, warrants, or options and upon the conversion or
exchange of such Convertible Securities shall be deemed to be outstanding
shares of Common Stock as of the date of the issuance or sale of such rights,
warrants or options and shall be deemed to have been sold for cash in an amount
equal to such price per share.
(iv) In the event of the sale by the Company for cash of any
Convertible Securities, whether or not the right of conversion or exchange
thereunder is immediately exercisable, and the price per share for which Common
Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined by dividing (1) the total amount of consideration
received by the Company for the sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any (other than the
surrender of such Convertible Securities), payable upon the conversion or
exchange thereof, by (2) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of such Convertible Securities) is
less than either (x) the Market Price of the Common Stock on the last trading
day preceding the date of the sale of such Convertible Securities or (y) at any
time prior to the first anniversary of the date of this Agreement, for a price
per share that is less than the then-applicable Exercise Price on the last
trading day preceding the date of such sale or issuance, then for purposes of
Section 8(a) the total maximum number of shares of Common Stock issuable upon
the conversion or exchange of such Convertible Securities shall be deemed to be
outstanding shares of Common Stock as of the date of the sale of such
Convertible Securities and shall be deemed to have been sold for cash in an
amount equal to such price per share.
(v) On the expiration of any rights or warrants to subscribe for
or purchase, or any options for the purchase of, Common Stock or Convertible
Securities, or the termination of any right to convert or exchange Convertible
Securities, in respect of which any adjustments previously shall have been made
in accordance with clause (iii) or (iv) of this Section 8(b), the Exercise
Price in effect immediately prior to the time of such expiration or termination
shall be adjusted to such Exercise Price as would be applicable had such
adjustments not been made with respect to (A) the issuance of or the adjustment
of the Exercise Price of such rights, warrants or options which have expired or
(B) the issuance of or the adjustment of the conversion or exercise price of
such Convertible Securities the rights under which to convert or exchange have
terminated.
<PAGE> 8
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(vi) In case of the sale or issuance of any shares of Common
Stock, any Convertible Securities, any rights or warrants to subscribe for or
purchase, or any options for the purchase of, Common Stock or Convertible
Securities, the consideration received by the Company therefor shall be deemed
to be the gross sales price therefor without deducting therefrom any expense
paid or incurred by the Company or any underwriting discounts or commissions or
concessions paid or allowed by the Company in connection therewith.
(c) No adjustment to the Exercise Price of the Warrants or to the
number of shares of Common Stock purchasable upon the exercise of each Warrant
will be made:
(i) upon the issuance or sale of any securities (including stock
options) of the Company that are issued pursuant to any stock option or stock
bonus plan or arrangement of the Company for the benefit of directors, officers
or employees of the Company; or
(ii) upon the sale or exercise of the Warrants or any adjustment
to the Exercise Price thereof; or
(iii) upon the issuance or sale of Common Stock or Convertible
Securities as the result of the exercise of any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Common Stock or
Convertible Securities, whether or not such rights, warrants or options were
outstanding on the date of this Agreement or were thereafter issued or sold; or
(iv) upon the issuance or sale of Common Stock as the result of
the conversion or exchange of any Convertible Securities, whether or not such
Convertible Securities were outstanding on the date of this Agreement or were
thereafter issued or sold.
(d) As used in this Section 8, the term "Common Stock" shall mean the
Common Stock as designated in the Company's Certificate of Incorporation on the
date hereof and shall also include any capital stock of any class of the
Company hereafter authorized that shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary liquidation,
dissolution or winding up of the Company; provided, however, that the shares
issuable upon exercise of the Warrants shall be the shares so designated as
Common Stock on the date hereof or (i) in the case of any reclassification,
change, consolidation, merger, sale or conveyance of the character referred to
in Section 8(e), the stock, securities or property provided for in such
section, or (ii) in the case of any reclassification or change in the
outstanding shares of Common Stock issuable upon exercise of the Warrants
consisting of a change in par value, or from par value to no par
<PAGE> 9
-9-
value, or from no par value to par value, such shares of Common Stock as so
reclassified or changed.
(e) In case of any reclassification, capital reorganization or other
change in the Common Stock, or in case of any consolidation or merger of the
Company with or into another corporation (other than a consolidation or merger
in which the Company is the continuing corporation and which does not result in
any reclassification, capital reorganization or other change in the Common
Stock), or in case of any sale or conveyance to another corporation of the
property of the Company as, or substantially as, an entirety, the Company shall
cause effective provision to be made so that each registered holder of a
Warrant then outstanding shall have the right thereafter, by exercising such
Warrant, to purchase the kind and number of shares of stock or other securities
or property (including cash) receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock that could have been purchased
upon the exercise of such Warrant immediately prior to such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance, and in any such case appropriate adjustments shall be made in the
application of the provisions of this Section 8 with respect to rights and
interests thereafter of the holder to the end that the provisions of this
Section 8 shall thereafter be applicable, as near as reasonably practicable, in
relation to any shares or other property thereafter purchasable upon the
exercise of a Warrant. The Company shall not effect any such consolidation,
merger or sale unless prior to, or simultaneously with, the consummation
thereof the successor (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing the property of the
Company shall assume, by written instrument executed and delivered to the
Company, the obligation to deliver to the holder of each Warrant such shares of
stock, securities or property as, in accordance with the foregoing provisions,
such holder shall be entitled to purchase (and the other obligations of the
Company under this Agreement). The foregoing provisions shall similarly apply
to successive reclassifications, capital reorganizations and other changes in
the Common Stock and to successive consolidations, mergers, sales or
conveyances.
(f) After each adjustment of the Exercise Price pursuant to this
Section 8, the Company promptly will prepare a statement, certified by its
Chairman or President and by its Treasurer or Assistant Treasurer, setting
forth: (i) in reasonable detail the computation of the Exercise Price, as so
adjusted, and the computation of the number of shares of Common Stock
purchasable upon exercise of each Warrant, as so adjusted, and (ii) a brief
description of the circumstances giving rise to the adjustment. The Company
shall deliver a copy of such statement to each Warrant Holder. The Company will
allow any Warrant Holder or its representative to inspect the books and records
of the Company to the extent necessary to verify any such computation.
(g) Irrespective of any adjustments in the Exercise Price or the
number of shares of Common Stock purchasable upon exercise of the Warrants, the
Warrant
<PAGE> 10
-10-
certificates theretofore and thereafter issued shall, unless the
Company in its sole discretion shall determine to issue new Warrant
certificates, continue to express the Exercise Price per share and the number
of shares purchasable thereunder as were expressed in the Warrant certificates
when the same were originally issued.
(h) The Company will not, by amendment of its Certificate of
Incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as reasonably may be necessary
or appropriate (including, if necessary or appropriate, making equitable
adjustments to the kind and amount of securities issuable upon the exercise of
the Warrants and the Exercise Price) in order to protect the rights of the
holders of the Warrants against dilution or other impairment.
(i) In case the Company shall take a record of the holders of its
Common Stock for the purpose of (i) entitling them to receive a dividend or any
other distribution in respect of the Common Stock payable in cash or other
property, (ii) entitling them to subscribe for or purchase any shares of stock
of any class or to receive any other rights, (iii) any classification,
reclassification or other reorganization of the capital stock of the Company,
any consolidation or merger of the Company with or into another corporation, or
any conveyance of all or substantially all of the assets of the Company, or
(iv) the voluntary or involuntary dissolution, liquidation or winding up of the
Company, then, and in any such case, the Company shall mail to each Warrant
Holder in the manner provided for in Section 10, at least 20 days prior to such
record date, a notice stating the date or expected date on which a record is to
be taken for the purpose of such dividend, distribution of rights, or the date
on which such classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up, as the case may be,
is to take place. Such notice shall also specify the date or expected date, if
any is to be fixed, on which said dividend, distribution of rights, or an
exchange of shares of Common Stock for securities or other property deliverable
upon such classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up, as the case may be,
is expected to occur, provided, however, that the failure to give such notice
shall not affect the validity of any such proceeding or transaction.
<PAGE> 11
-11-
9. OBTAINING OF GOVERNMENTAL APPROVALS AND STOCK EXCHANGE LISTINGS.
The Company will use its best efforts (a), except that the Company is
not obligated to register the Warrant Shares for sale by the Company under the
Securities Act or any state securities laws, to obtain and keep effective any
and all permits, consents and approvals of governmental agencies and
authorities and make any necessary filings under federal or state securities
laws, which may be or become requisite in connection with the issuance, sale
and delivery of the Warrant certificates, the exercise of the Warrants and the
issuance, sale, transfer and delivery of the Warrant Shares and (b) to cause
the Warrant Shares, prior to their sale pursuant to any registration statement
filed in accordance with the Registration Rights Agreement or other transfer
which is not restricted under the federal securities laws, to be listed on the
NASDAQ National Market or the principal securities exchange or market within
the United States of America on which the Common Stock is then listed.
10. NOTICES.
All notices, demands, elections, opinions or requests (however
characterized or described) required or authorized hereunder shall be in
writing and shall be delivered by hand or sent by registered or certified mail,
return receipt requested and postage prepaid, or by facsimile transmission to,
in the case of the Company:
Alpha 1 Biomedicals, Inc.
6707 Democracy Boulevard
Suite 111
Bethesda, MD 20817-1129
Telecopier number: (301) 564-4424
Attention: Michael Berman
and if to the Warrant Holder at the address of such holder as set forth on the
transfer books maintained by or on behalf of the Company.
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid; upon receipt, if sent by
facsimile, except that in the case of Roger H. Samet, no notice or
communication shall be deemed given unless (x) actually received by Roger H.
Samet or (y) given in the manner provided above to the person to whom copies
are to be delivered as identified in the Unit Purchase Agreement.
<PAGE> 12
-12-
11. THIRD PARTY BENEFICIARIES.
Each registered holder of a Warrant, whether or not such holder is a
party to this Agreement, is an intended beneficiary of this Agreement, and this
Agreement may be enforced by such registered holder. Nothing in this Agreement
shall be construed to give any person or entity, other than the Company and the
registered holders of the Warrants, any legal or equitable right, remedy or
claim under this Agreement.
12. FURTHER INSTRUMENTS.
The parties shall execute and deliver any and all such other
instruments and take any and all other actions as may be reasonably necessary
to carry out the intention of this Agreement.
13. NO INCONSISTENT AGREEMENTS.
The Company has not, as of the date hereof, and the Company shall
not, after the date of this Agreement, enter into any agreement with respect to
any of its securities that is inconsistent with the rights granted to the
Warrant Holders in this Agreement or otherwise conflicts with the provisions
hereof. The Company will not enter into any agreement which will grant any such
rights that are in conflict with the rights afforded by this Agreement.
14. AMENDMENTS AND WAIVERS.
The Company may, without the consent or concurrence of the holders of
the Warrants, make any changes or corrections in this Agreement that are
necessary or desirable to cure any ambiguity or to correct any defective
provision, mistake or manifest error herein contained; provided that such
changes do not adversely affect the rights or interests of the holders of the
Warrants. Otherwise, the provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, (i) as related to the rights or obligations
of Roger H. Samet, except with the prior written consent of the Company and
Roger H. Samet, and (ii) as related to the rights or obligations of the holders
of Warrants other than Roger H. Samet, otherwise than with the prior written
consent of the Company and the registered holders of not less than a majority
of the then-outstanding Warrants; provided, however, that no change in the
number of the Warrant Shares purchasable upon the exercise of any Warrant, no
increase in the Exercise Price and no acceleration of the Warrant Expiration
Date shall be made without the consent in writing of each Warrant Holder.
<PAGE> 13
-13-
15. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties hereto.
16. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
17. HEADINGS.
The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
18. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MARYLAND, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WHOLLY WITHIN THE STATE OF MARYLAND, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW. EACH OF THE PARTIES HERETO AGREES, AND EACH BENEFICIARY HEREOF SHALL BE
BOUND, TO SUBMIT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN
THE STATE OF MARYLAND IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
19. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall, to the extent permitted by law, remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such invalid, illegal, void or unenforceable term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any term, provision,
covenant or restriction that may be hereafter declared invalid, illegal, void
or unenforceable.
<PAGE> 14
-14-
20. ENTIRE AGREEMENT.
This Agreement, together with the Registration Rights Agreement and
the Unit Purchase Agreement, is intended by the parties hereto as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein, and supersede all prior agreements
between the parties with respect to such subject matter. There are no
representations, promises, warranties or undertakings between the parties
hereto with respect to the subject matter hereof, other than those set forth or
referred to herein and therein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date first set forth above.
ALPHA 1 BIOMEDICALS, INC.
By:
----------------------------------
Michael Berman
President
[additional signature pages follow]
<PAGE> 15
-15-
WARRANT AGREEMENT
SIGNATURE PAGE
FOR INDIVIDUAL PURCHASERS
- -------------------------------------
Name of Purchaser
(Please print or type)
- -------------------------------------
Signature
<PAGE> 16
-16-
WARRANT AGREEMENT
SIGNATURE PAGE
FOR TRUST PURCHASERS
- --------------------------------------
Name of Trust (Please print or type)
By
------------------------------------
Trustee's Signature
<PAGE> 17
-17-
WARRANT AGREEMENT
SIGNATURE PAGE
FOR PARTNERSHIP PURCHASERS
- -------------------------------------------------
Name of Partnership (Please print or type)
By
----------------------------------------------
Signature of a General Partner
By
----------------------------------------------
Signature of Additional General Partner
(if required by partnership agreement)
By
----------------------------------------------
Signature of Additional General Partner
(if required by partnership agreement)
<PAGE> 18
-18-
WARRANT AGREEMENT
SIGNATURE PAGE
FOR CORPORATE PURCHASERS
- ----------------------------------------------
Name of Corporation (Please print or type)
By
------------------------------------------
Signature of Authorized Agent
Title:
----------------------------------------
<PAGE> 19
-19-
EXHIBIT A
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER
THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT AND SUCH LAWS.
CLASS D WARRANT CERTIFICATE
ALPHA 1 BIOMEDICALS, INC.
Warrant No. WD-________ No. of Class D Warrants: ________
This certifies that, for value received and subject to the terms and
conditions set forth herein, _______________________________ or its registered
assign (the "Warrant Holder"), is the registered holder of _______ Class D
Warrants. This Class D Warrant has been issued pursuant to, and is subject to
the terms and conditions set forth in, a Warrant Agreement, dated March ____,
1997, by and among Alpha 1 Biomedicals, Inc. (the "Company"), and the other
initial purchasers of Class D Warrants (the "Warrant Agreement").
1. EXERCISE. Each whole Class D Warrant evidenced hereby is exercisable by
the Warrant Holder at any time on or prior to the Warrant Expiration Date (as
defined in Section 2) to purchase, at an exercise price of $.10 per Class D
Warrant (the "Exercise Price"), one share of the common stock, par value $.001
per share of the Company (the "Common Stock"). (The shares of Common Stock
acquirable upon exercise hereof are referred to herein as "Warrant Shares.")
Notwithstanding the foregoing, no Warrant may be exercised by the Warrant
Holder, nor may any Warrant Shares be issued or delivered by the Company,
unless on the Exercise Date (i) there is an effective registration statement
covering the offer and sale of the applicable Warrant Shares under the
Securities Act of 1933, as amended (the "Act"), and the Warrant Shares are
registered or qualified for sale under applicable securities or "Blue Sky"
statutes or (ii) an exemption from registration or qualification thereunder is
applicable. The Company may require, as a condition of allowing the exercise of
this Warrant, that the Warrant Holder furnish to the Company a written
representation from the Warrant Holder to the effect that (i) the holder is an
"accredited investor" as defined by Rule 501 under the Act (or such other
reasonable representations as shall be necessary for the Company to conclude
that the sale of the Warrant Shares to the Warrant Holder is an exempt
transaction under the Act), (ii) the Warrant Shares being acquired upon
exercise are being purchased for investment and not for distribution in
violation of the Act, (iii) acknowledging that such Warrant Shares have not
been registered under the Act and (iv)
<PAGE> 20
-20-
agreeing that such Warrant Shares may not be sold or transferred unless there
is an effective registration statement relating thereto under the Act, or,
such sale or transfer is not in violation of the Act. No fractional shares may
be acquired upon exercise hereof.
2. TERM OF WARRANT. The Class D Warrants evidenced by this certificate may
be exercised at any time, and from time to time, in whole or in part prior to
5:00 P.M. on March 12, 2007 (the "Warrant Expiration Date"), subject to
extension as described in the Warrant Agreement if the date that otherwise
would be the Warrant Expiration Date is not a Business Day (as defined in the
Warrant Agreement).
3. ADJUSTMENTS. The Exercise Price and the number of shares of Common
Stock issuable upon the exercise of the Class D Warrants is subject to
adjustment under certain circumstances as set forth in Section 8 of the Warrant
Agreement.
4. MANNER OF EXERCISE. The Class D Warrants evidenced hereby may be
exercised by delivery to the Company at its corporate offices located at 6707
Democracy Boulevard, Suite 111, Bethesda, MD 20817-1129, or such other office
or agency as the Company may designate, of (i) this Class D Warrant
certificate, with the attached Election to Purchase Certificate duly executed
and (ii) payment in full of the aggregate Exercise Price for the number of
Class D Warrants being exercised by official bank or certified check, money
order or wire transfer in lawful money of the United States of America.
5. ISSUANCE OF COMMON STOCK UPON EXERCISE. Within two Business Days after
the exercise date of a Class D Warrant, the Company, at its own expense, shall
cause to be issued and sent for next Business Day delivery, a certificate or
certificates for the whole number of Warrant Shares to which the Warrant Holder
is entitled upon such exercise. Cash will be issued in lieu of any fractional
share of Common Stock to which the Warrant Holder otherwise would be entitled.
The Warrant Shares delivered upon the exercise of the Class D Warrants shall be
validly issued, fully paid and nonassessable. Irrespective of the date of
issuance and delivery of any Warrant Shares, upon the exercise of a Class D
Warrant, each person in whose name any such certificate is to be issued will
for all purposes be deemed to have become the holder of record of the Warrant
Shares acquired on the date on which the Class D Warrant has been duly
exercised.
6. REGISTRATION RIGHTS. The registered holder of this Warrant is entitled
to the registration rights that are set forth in a Registration Rights
Agreement entered into among the Company and the initial purchasers of the
Class D Warrants.
7. NO RIGHT AS SHAREHOLDER. The Warrant Holder is not, by virtue of the
ownership of this Class D Warrant, entitled to any rights whatsoever as a
shareholder of the Company.
<PAGE> 21
-21-
8. TRANSFER OR ASSIGNMENT. A Class D Warrant may not be transferred or
assigned unless the Warrant Holder provides to the Company an opinion of
counsel, reasonably satisfactory in form and substance to counsel for the
Company, that an exemption from registration under the Act for the transfer
exists and the transferee provides a written representation that (i) the Class
D Warrant is being acquired for investment and not for distribution otherwise
than in compliance with the Act, (ii) acknowledging that the Class D Warrant
has not been registered under the Act for sale to the transferee and (iii)
agreeing that the Class D Warrant may not be transferred unless there is an
effective registration statement with respect thereto under the Act, or in the
opinion of its counsel delivered to the Company, which opinion shall be
reasonably satisfactory in form and substance to counsel for the Company, such
transfer is an exempt transaction under the Act.
9. WARRANT AGREEMENT. The terms and conditions of this Class D Warrant are
set forth in the Warrant Agreement which is incorporated herein by this
reference as if fully set forth herein and made a part hereof, and to which the
Warrant Holder, by the acceptance of this certificate, agrees to be bound. To
the extent of any conflict between this certificate and the Warrant Agreement,
the terms and conditions of the Warrant Agreement shall control.
IN WITNESS WHEREOF, the Company has caused this Warrant certificate to be
signed on its behalf by its President, his signature to be attested to by its
Secretary, and its corporate seal to be hereunto affixed this 12th day of
March, 1997.
[SEAL] ALPHA 1 BIOMEDICALS, INC.
on behalf of the Company
and as Warrant Agent
By:
-----------------------------
Attest:
----------------------------------
Name: R.J. Lanham
---------------
Title: Secretary
---------------
<PAGE> 22
-22-
[Form of Election to Purchase]
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Class D Warrant certificate, to purchase _______ shares of
Common Stock of Alpha 1 Biomedicals, Inc. (the "Company") and herewith tenders
payment for such shares to the order of the Company in the amount of
$___________ in cash or by official bank or certified check, money order or
wire transfer.
]
The undersigned requests that a certificate for such shares be registered
in the name of _____________________________, which person, if other than the
undersigned, is the _____________ (e.g., nominee or affiliate) of the
undersigned, and whose address is ______________________________ and that such
shares be delivered to ___________________________ whose address is
___________________________.
If said number of shares is less than all of the shares of Common Stock
purchasable hereunder, the undersigned requests that a new Warrant certificate
representing the remaining balance of such shares be registered in the name of
________________, which person, if other than the undersigned, is the
_____________ (e.g., nominee or affiliate) of the undersigned, and whose
address is ______________________, and that such Warrant certificate be
delivered to ________________, whose address is ______________________.
In connection with this exercise, the undersigned (i) the undersigned is
an "accredited investor" as defined by Rule 501 under the Securities Act of
1933, as amended (the "Act"), (ii) represents and warrants to the Company that
the shares are being purchased for investment and not for distribution in
violation of the Act, (iii) acknowledges that such shares have not been
registered for sale to the undersigned under the Act, and (iv) agrees that such
shares may not be sold or transferred unless there is an effective registration
statement relating thereto under the Act or, in the opinion of counsel to the
Company, such sale or transfer is an exempt transaction under the Act.
----------------------------------
Signature
Date:
-----------------------------
----------------------------------
Signature Guaranteed
<PAGE> 23
-23-
[Form of Assignment]
(To Be Executed by the Registered Holder
in Order to Assign Warrants)
FOR VALUE RECEIVED, _________________________________________________ hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
(please print or type name and address
_________________________________________________ of the Class D Warrants
represented by this Warrant Certificate, and hereby irrevocably constitutes and
appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: -------------------------------------
Signature
THE SIGNATURE TO THE ASSIGNMENT FORM MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
PPM-WARR MARCH 5, 1997
