SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 1996
AMERICAN BIOGENETIC SCIENCES, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE
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(State of jurisdiction of incorporation)
0-19041 11-2655906
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(Commission File No.) (IRS Employer Identification No.)
1375 Akron Street, Copiague, New York 11726
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(Address of Principal Executive Offices) (Zip Code)
516-789-2600
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(Registrant's telephone number, including area code
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
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On September 30, 1996, the Company completed a private placement to
twelve accredited investors of an aggregate of $9,000,000 of its 7% Convertible
Debentures due September 30, 1998 (the "Debentures"). Interest on the Debentures
is payable quarterly at the rate of 7% per annum. The Company has undertaken (in
the Registration Rights Agreements discussed below) to file, on or prior to
October 20, 1996, a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") with the Securities and Exchange Commission to
register for resale the shares of Common Stock issuable upon conversion of the
Debentures. Debentures (together with any accrued but unpaid interest) will
become convertible to the extent of 25% of the principal amount thereof
commencing on the earlier of the effective date of the registration statement or
December 29, 1996, with an additional 25% of the principal amount of the
Debentures becoming convertible on each of the 30th, 60th and 90th days
thereafter at a conversion price equal to 83% of the average of the closing
prices of the Company's Class A Common Stock for the five consecutive trading
days ending on the trading day immediately preceding the conversion date of the
Debentures (the "Current Market Price"); provided, however, that in no event may
the conversion price be less than $3.00 per share (the "Minimum Conversion
Price") nor greater than $8.00 per share (the "Maximum Conversion Price"). In
the event that, but for the Minimum Conversion Price, the number of shares that
would have been issued is greater than the number of shares actually issued, the
holder converting such Debenture will also be entitled to receive cash in an
amount equal to such difference multiplied by the Current Market Price. In the
event any Debenture remains outstanding at its maturity date, the Company has
the option to either convert such Debenture into shares of Class A Common Stock
on the same basis as the Debentureholder could have converted such Debenture or
pay the outstanding principal amount thereof, plus any accrued and unpaid
interest thereon, in cash.
The Company has also entered into Registration Rights Agreements with
each of the investors pursuant to which, among other things, the Company has
agreed to file, on or prior to October 20, 1996, a registration statement under
the Securities Act covering the shares issuable upon conversion of the
Debentures, use its best efforts to have such registration statement declared
effective as soon thereafter as practicable and maintain such registration
statement effective and current (with certain exceptions) until all of such
shares are either sold either pursuant to such registration statement or under
Rule 144 promulgated under the Securities Act or such time as Rule 144 would
permit the investors to sell all of such shares without registration during a 90
consecutive day period. Should such registration statement not become effective
before December 29, 1996, the Company will be required to pay each
Debentureholder an amount equal to 1% of the principal amount of such holder's
Debentures during the first 30 days thereafter, and 2% for each 30 days
thereafter, that the registration statement is not effective. The Company may
elect, in certain instances, in lieu of cash, to pay such amount by delivery of
Class A Common Stock having an aggregate market value equal to the amount so
payable but only if such shares are freely tradeable without restriction under
the Securities Act or any state securities laws. All expenses of all such
registrations are to be borne by the Company, other than brokerage commissions,
underwriting
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discounts and commissions, other fees and expenses of investment bankers and any
fees and expenses of counsel employed by the investors which are the obligations
of the investors.
As compensation to the placement agent of the Debentures, the Company
paid Shoreline Pacific Institutional Finance, The Institutional Division of
Financial West Group, the placement agent, a commission of $360,000 and has
issued to brokers affiliated with the placement agent a warrant entitling the
placement agent to purchase an aggregate of 15,618 shares of the Company's
Common Stock at an exercise price of $5.7625 per share at any time until
September 30, 1998 (the "Warrants").
The foregoing is a brief description of the Debentures, Registration
Rights Agreements and Warrants, forms of which appear as Exhibits 4.1, 99.1 and
99.2 of this Report, respectively. The foregoing description does not purport to
be complete and is qualified in its entirety by reference to such documents.
Item 7. Financial Statements and Exhibits
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(a) Financial statements of businesses acquired: None
(b) Pro forma financial information: None
(c) Exhibits:
4.1 Form of the Company's 7% Convertible
Debentures.
99.1 Form of the basic Registration Rights Agreement
between the Company and each of the purchasers
of the Company's 7% Convertible Debentures.
99.2 Form of Warrant issued to brokers affiliated
with Shoreline Pacific Institutional Finance,
The Institutional Division of Financial West
Group
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN BIOGENETIC SCIENCES, INC.
(Registrant)
Dated: October 7, 1996 By: /s/ Josef C. Schoell
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Josef C. Schoell,
Vice President Finance
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NEITHER THESE SECURITIES NOR ANY SECURITIES ISSUABLE UPON THE CONVERSION HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT"), OR THE SECURITIES LAWS
OF ANY STATE. NEITHER THESE SECURITIES NOR ANY SECURITIES ISSUABLE UPON THE
CONVERSION HEREOF MAY BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED UNLESS
THEY ARE REGISTERED UNDER THE 1933 ACT AND THE LAWS OF APPLICABLE STATES OR SUCH
OFFER, SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
7% CONVERTIBLE DEBENTURE DUE September 30, 1998
$___________ September 30, 1996
Number ____
FOR VALUE RECEIVED, American Biogenetic Sciences, Inc., a Delaware
corporation (the "Company"), hereby promises to pay to _______________________,
or registered assigns (the "Holder") on September 30, 1998 (the "Maturity
Date"), the principal amount of ______________________________Dollars
($___________), and to pay interest on the principal amount hereof, in such
amounts, at such times and on such terms and conditions as are specified herein.
ARTICLE 1. Interest
The Company shall pay interest on the unpaid principal amount of this
Debenture (this "Debenture") at the rate of seven percent (7%) per year, payable
quarterly in arrears on the last day of each calendar quarter commencing
September 30, 1996 until the principal hereof is paid in full or has been
converted; provided that if the Holder shall have failed to present this
Debenture for payment following the Maturity Date pursuant to Article 2,
interest shall cease to accrue on the Maturity Date. Interest on this Debenture
shall accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance. Interest shall be computed on
the basis of a 360-day year of twelve 30-day months. If the Holder shall convert
this Debenture during any quarter, the Company shall pay to the Holder, upon
conversion, the pro-rata portion of accrued interest payable through the
conversion date in the manner provided in Section 3.1 below in lieu of cash.
ARTICLE 2. Method of Payment
This Debenture must be surrendered to the Company in order for the
Holder to receive payment of the principal amount hereof. Except as otherwise
provided herein, the Company shall pay the principal of and interest on this
Debenture in United States dollars. However, the Company may pay any principal
and interest payable by cash, by a check payable in such money. The Company may
draw a check for the payment of interest to the order of the Holder of this
Debenture and mail it to the Holder's address as shown on the Register (as
defined in Section 7.2 below). Interest and principal payments shall be subject
to withholding under applicable United States Federal Internal Revenue Service
Regulations.
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ARTICLE 3. Conversion
SECTION 3.1. Conversion Privilege
(a) The Holder of this Debenture shall have the right, at its
option, to convert this Debenture in integrals of $10,000 principal amount or
the remaining principal amount hereof if less than $10,000 into shares of Class
A Common Stock, par value $0.001 per share, of the Company ("Common Stock") at
any time which is before the close of business on the Maturity Date, except as
set forth in Section 3.1(c) below. The number of shares of Common Stock issuable
upon the conversion of this Debenture is determined by dividing the principal
amount hereof to be converted plus all accrued and unpaid interest thereon
through the conversion date by the conversion price (as defined in paragraph (b)
of this section 3.1 below) in effect on the conversion date (as defined in
Section 3.2 below). On conversion, no further payment of or adjustment for
accrued interest shall be made in addition to that provided in the previous
sentence.
(b) The conversion price is eighty-three percent (83%) of the
current market price of the Common Stock on the conversion date as determined
under Section 3.7 below; provided, however, that in no event may the conversion
price exceed $8.00 per share (the "Maximum Conversion Price") and in no event
may the conversion price be less than $3.00 per share (the "Minimum Conversion
Price"). In the event that, but for this Section 3.1(b), the conversion price
would have been below $3.00, the difference between (a) the number of shares of
Common Stock that would have been issued at what the conversion price would have
been but for the Minimum Conversion Price limitation contained in this Section
3.1(b) multiplied by 100% of the current market price of the Common Stock on the
conversion date as determined under Section 3.7 below, minus (b) the number of
shares of Common Stock actually issued multiplied by 100% of the current market
price of the Common Stock on the conversion date as determined under Section 3.7
below, shall be paid to the Holder in cash (or by check drawn to the order of
the Holder). The Minimum Conversion Price and the Maximum Conversion Price shall
be proportionately adjusted from time to time to reflect stock dividends, stock
splits and stock combinations.
(c) Notwithstanding anything to the contrary set forth in
Section 3.1(a), this Debenture may not be converted until the earlier of 90 days
after the first closing of the sale of Debentures by the Company in the same
offering as this Debenture was sold or such time as the registration statement
which the Company is to file with the Securities and Exchange Commission (the
"Commission"), pursuant to Section 2(a) of that certain Registration Rights
Agreement being entered into contemporaneously herewith between the Company and
the initial Holder of this Debenture, for the resale of the shares issuable upon
conversion of this Debenture, is declared effective by the Commission.
Commencing with the earlier of (i) 90 days after the first closing of the sale
of Debentures by the Company in the same offering as this Debenture was sold or
(ii) upon the effectiveness of such registration statement, 25% of the principal
amount of this Debenture may be converted, with an additional 25% of the
principal amount of this Debenture becoming convertible on each of the 30th,
60th and 90th days thereafter.
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Notwithstanding the foregoing, in the event the Company proposes, by
dividend or otherwise, to make a distribution to the holders of its Common Stock
generally, of cash, securities (other than in a stock dividend, stock split or
stock combination) or other assets, the Company shall so notify the Holders not
less than five (5) business days prior to the record date of such distribution
and the entire principal amount of this Debenture shall become immediately
convertible (at the option of each such Holder) into Common Stock as otherwise
set forth herein.
(d) In the event this Debenture remains outstanding on the
Maturity Date, the Company shall have the option to convert the unconverted
portion of such Debenture into shares of Common Stock on such date in the manner
set forth in this Section 3.1 or to repay the outstanding principal amount
hereof plus any accrued and unpaid interest.
Section 3.2. Conversion Procedure. To convert this Debenture into
Common Stock, the Holder must (a) complete and sign the Notice of Conversion
attached hereto, (b) surrender the Debenture to the Company, (c) furnish
appropriate endorsements and transfer documents if reasonably requested by the
Company and (d) subject to Section 3.4, pay any transfer or similar tax if
reasonably required by the Company. The date upon which the Company receives the
completed Notice of Conversion (by mail, facsimile or otherwise) is the
conversion date, provided that the Company shall not be required to deliver a
certificate for Common Shares unless and until the Company receives the
Debenture. The Company shall use its best efforts to deliver a certificate for
the number of full shares of Common Stock issuable upon the conversion and a
check for any fraction of a share in accordance with Section 3.3 below within
three (3) business days after receipt of the Notice of Conversion, provided the
Company has received the Debenture from the Holder and any other items that may
be required pursuant to this Section. The person in whose name the certificate
of Common Stock is to be registered shall be treated as a shareholder of record
on and after the conversion date. If the Holder converts more than one Debenture
at the same time, the number of full shares issuable upon the conversion shall
be based on the total principal amount of Debentures converted by such Holder.
Upon surrender of a Debenture that is to be converted in part, the Company shall
issue to the Holder a new Debenture equal in principal amount to the unconverted
portion of the Debenture surrendered.
SECTION 3.3. Fractional Shares. The Company shall not issue a
fractional share of Common Stock upon the conversion of this Debenture. Instead,
the Company shall pay in lieu of any fractional share the cash value thereof
(rounded to the nearest 1/100th of a share) at the then current market price of
the Common Stock as determined under Section 3.7 below.
SECTION 3.4. . Taxes on Conversion. The Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion of this Debenture. However, the Holder shall
pay any such tax which is due because the shares are issued in a name other than
its name.
SECTION 3.5. Company to Reserve Stock. The Company shall reserve out
of its authorized but unissued Common Stock or Common Stock held in treasury
such number of shares of Common Stock to permit the conversion of all of the
then outstanding Debentures at the Minimum Conversion
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Price. All shares of Common Stock which may be issued upon the conversion hereof
shall be fully paid and nonassessable.
SECTION 3.6. Restrictions on Transfer. This Debenture and the Common
Stock issuable upon the conversion hereof have not been registered under the
Securities Act of 1933 (the "Act") and this Debenture and the Common Stock
issuable upon the conversion of this Debenture may not be offered for sale, sold
or otherwise transferred unless such offer, sale or other transfer is registered
under the Act or is exempt from such registration.
SECTION 3.7. Current Market Price.
(a) In Sections 3.1 and 3.3, the current market price per
share of Common Stock on any date is the average of the quoted prices of the
Common Stock for five consecutive trading days ending on the trading day
immediately preceding the date in question.
(b) As used in this Section 3.7, the term quoted price shall
mean (i) the closing bid prices thereof on any such trading date, as reported by
Bloomberg, L.P. or (ii) in the event the Common Stock is not reported on such
system, the fair market value of the Common Stock as determined by the Board of
Directors of the Company in its good faith judgment.
SECTION 3.8. Mergers, Etc. If the Company merges or consolidates with
another corporation or sells or transfers all or substantially all of its assets
to another person and the holders of the Common Stock are entitled to receive
stock, securities or property in respect of or in exchange for Common Stock,
then as a condition of such merger, consolidation, sale or transfer, the Company
and any such successor, purchaser or transferee shall agree that this Debenture
may thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, securities or property receivable upon
such merger, consolidation, sale or transfer which the Holder would have been
entitled to receive had the Holder converted this Debenture immediately prior to
such merger, consolidation, sale or transfer and been the owner of the number of
shares of Common Stock into which this Debenture might have been converted
immediately before such merger, consolidation, sale or transfer.
Section 3.9. Listing. The Company shall use its best efforts to cause
all Common Shares into which this Debenture may be converted to be listed on (i)
the National Association of Securities Dealers Automated Quotation System
("NASDAQ") National Market System, (ii) a national securities exchange, or (iii)
the NASDAQ small-cap market.
ARTICLE 4. Mergers
The Company shall not consolidate or merge into, or transfer all or
substantially all of its assets to, any person, unless such person assumes the
obligations of the Company under this Debenture and immediately after such
transaction no Event of Default exists. Any reference herein to the Company
shall refer to such surviving or transferee corporation and the obligations of
the Company shall terminate upon such assumption.
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ARTICLE 5. Reports
The Company will mail to the Holder hereof at its address as shown on
the Register a copy of any annual, quarterly or current report that it files
with the Securities and Exchange Commission ("SEC") promptly after the filing
thereof and a copy of any annual, quarterly or other report or proxy statement
that it gives to its shareholders generally at the time such report or statement
is sent to shareholders. In the event the Company is no longer required to file
reports with the SEC, the Company shall provide the Holder with reports
containing substantially the same information as would be included in such
reports if they were required.
ARTICLE 6. Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs if (a)
the Company does not make the payment of the principal of this Debenture when
the same becomes due and payable at maturity, (b) the Company does not make a
payment of interest when such interest becomes due and payable and such default
continues for a period of 5 days thereafter, (c) the Company fails to issue
shares of Common Stock upon conversion, (d) the Company fails to comply with any
of its other agreements in this Debenture and such failure continues for the
period and after the notice specified below, (e) the Company pursuant to or
within the meaning of any Bankruptcy Law (as hereinafter defined): (i) commences
a voluntary case; (ii) consents to the entry of an order for relief against it
in an involuntary case; (iii) consents to the appointment of a Custodian (as
hereinafter defined) of it or for all or substantially all of its property; (iv)
makes a general assignment for the benefit of its creditors; or (v) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case; (B) appoints a
Custodian of the Company or for all or substantially all of its property or (C)
orders the liquidation of the Company, and the order or decree remain unstayed
and in effect for 60 days. As used in this Section 6.1, the term "Bankruptcy
Law" means Title 11 of the United States Code or any similar federal or state
law for the relief of debtors. The term "Custodian" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law. A default
under clause (d) above is not an Event of Default until the holders of at least
25% of the aggregate principal amount of the Debentures (as defined in Section
7.1) notify the Company of such default and the Company does not cure it within
5 days after the receipt of such notice, which must specify the default, demand
that it be remedied and state that it is a "Notice of Default."
SECTION 6.2. Acceleration. If an Event of Default occurs and is
continuing, the Holder hereof by notice to the Company, may declare the
principal of and accrued interest on this Debenture to be due and payable. Upon
such declaration, the principal and interest hereof shall be due and payable
immediately.
SECTION 6.3. Waivers. The holders of a majority in principal amount
of the Debentures then outstanding may waive a default or rescind the
declaration of an Event of Default and its consequences except that (1) a
default in the payment of principal of or interest on any Debenture, or (2) a
default in the conversion of any Debenture may only be waived by the Holder
affected thereby.
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ARTICLE 7. Registered Debentures
SECTION 7.1. Series. This Debenture is one of a numbered series of
Debentures having an aggregate principal amount of not more than $9,000,000
which are identical except as to the principal amount and date of issuance
thereof. Such Debentures are referred to herein collectively as the
"Debentures". The Debentures shall be issued in whole multiples of $10,000.
SECTION 7.2. Record Ownership. The Company shall maintain a register
of the holders of the Debentures (the "Register") showing their names and
addresses and the serial numbers and principal amounts of Debentures issued to
or transferred of record by it from time to time. A Holder may change its
address on the Register in accordance with the notice procedures in Article 8
below. The Register may be maintained in electronic, magnetic or other
computerized form. The Company may treat the person named as the Holder of this
Debenture in the Register as the sole owner of this Debenture. The Holder of
this Debenture is the person exclusively entitled to receive payments of
interest on this Debenture, receive notifications with respect to this
Debenture, convert it into Common Stock and otherwise exercise all of the rights
and powers as the absolute owner hereof.
SECTION 7.3. Registration of Transfer. Transfers of this Debenture
may be registered on the books of the Company maintained for such purpose
pursuant to Section 7.2 above (i.e., the Register). Transfers shall be
registered when this Debenture is presented to the Company with a request to
register the transfer hereof and the Debenture is duly endorsed by the
appropriate person, reasonable assurances are given that the endorsements are
genuine and effective, and the Company has received evidence satisfactory to it
that such transfer is rightful and in compliance with all applicable laws,
including tax laws and state and federal securities laws. When this Debenture is
presented for transfer and duly transferred hereunder, it shall be canceled and
a new Debenture showing the name of the transferee as the record Holder thereof
shall be issued in lieu hereof. When this Debenture is presented to the Company
with a reasonable request to exchange it for an equal principal amount of
Debentures of other denominations, the Company shall make such exchange and
shall cancel this Debenture and issue in lieu thereof Debentures having a total
principal amount equal to this Debenture in the denominations requested by the
Holder (but only in multiples of $10,000 or the remaining principal amount
hereof if less than $10,000). The Company may charge a reasonable fee for any
registration of transfer or exchange other than one occasioned by a notice of
redemption or the conversion hereof.
SECTION 7.4. Worn and Lost Debentures. If this Debenture becomes
worn, defaced or mutilated but is still substantially intact and recognizable,
the Company or its agent may issue a new Debenture in lieu hereof upon its
surrender. Where the Holder of this Debenture claims that the Debenture has been
lost, destroyed or wrongfully taken, the Company shall issue a new Debenture in
place of the original Debenture if the Holder so requests by written notice to
the Company actually received by the Company before it is notified that the
Debenture has been acquired by a bona fide purchaser and the Holder has
delivered to the Company an indemnity bond in such amount and issued by such
surety as the Company deems satisfactory together with an affidavit of the
Holder setting
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forth the facts concerning such loss, destruction or wrongful taking and such
other information in such form with such proof or verification as the Company
may request.
ARTICLE 8. Notices
Except as otherwise provided in this Debenture, any notice which is
required or convenient under the terms of this Debenture shall be duly given if
it is in writing and (a) delivered in person (b) mailed by first class mail,
postage prepaid, or (c) sent by private overnight courier service (such as
Federal Express) and directed to the Holder of the Debenture at its address as
it appears on the Register or if to the Company to its principal executive
offices. Such notice shall be effective, when personally delivered, upon
receipt, four business days after deposit with the United States Postal Service,
or the next business day after being sent when so sent by private overnight
courier service, as the case may be.
ARTICLE 9. Time
Where this Debenture authorizes or requires the payment of money or
the performance of a condition or obligation on a Saturday or Sunday or a public
holiday, or authorizes or requires the payment of money or the performance of a
condition or obligation within, before or after a period of time computed from a
certain date, and such period of time ends on a Saturday or a Sunday or a public
holiday, such payment may be made or condition or obligation performed on the
next succeeding business day, and if the period ends at a specified hour, such
payment may be made or condition performed, at or before the same hour of such
next succeeding business day, with the same force and effect as if made or
performed in accordance with the terms of this Debenture. Where time is extended
by virtue of the provisions of this Article 9, such extended time shall not be
included in the computation of interest.
ARTICLE 10. Rules of Construction
In this Debenture, unless the context otherwise requires, words in
the singular include the plural, and in the plural include the singular, and
words of the masculine gender include the feminine and the neuter, and when the
sense so indicates, words of the neuter gender may refer to any gender. The
titles of sections contained in this Debenture are inserted for convenience of
reference only, and they neither form a part of this Debenture nor are they to
be used in the construction or interpretation hereof. Wherever, in this
Debenture, a determination of the Company is required or allowed, such
determination shall be made by a majority of the Board of Directors of the
Company and if it is made in good faith, it shall be conclusive and binding upon
the Company and the Holder of this Debenture.
ARTICLE 11. Governing Law
The validity, terms, performance and enforcement of this Debenture
shall be governed and construed by the provisions hereof and in accordance with
the laws of the State of New York applicable to agreements that are negotiated,
executed, delivered and performed solely in the State of New York (except as the
corporate laws of the State of Delaware may mandatorily apply thereto).
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ARTICLE 12. No Recourse to Stockholders, Officers, Directors and Certain Others
No recourse shall be had for the payment of the principal of or
interest upon this Debenture or for any claim based thereon or otherwise against
any incorporator, stockholder, officer, director, accountant or attorney, or
other agent of the Company, past, present or future, whether by virtue of any
constitution, statute, rule of law, enforcement of any assessment or penalty or
by a reason of any other matter, all such liability, by acceptance hereof and as
part of the consideration of the issue or transfer hereof, being expressly
waived by the Holder.
IN WITNESS WHEREOF, the Company has duly executed this Debenture as
of the date first written above.
American Biogenetic Sciences, Inc.
By
-----------------------------
Josef C. Schoell
Vice President, Finance
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NOTICE OF CONVERSION
[To be completed and signed only upon conversion of Debenture]
The undersigned, the Holder of this Debenture, hereby irrevocably
elects to exercise the right to convert it into shares (the "Shares") of Class A
common stock, par value $0.001 per share, of American Biogenetic Sciences, Inc.
as set forth below:
The undersigned intends to promptly sell the Shares [_] YES [_] NO
[Complete if less than ____________________Dollars ($__________)*___
all of principal amount ($10,000 or integral multiples of $10,000)
is to be converted]
[Signature must be _____________________________________________
guaranteed by a commercial (Name of Holder of shares if
bank or a member firm of different than the registered Holder
the New York Stock of Debenture)
Exchange if registered holder
of stock differs from registered
Holder of Debenture)
_____________________________________________
(Address of Holder if different than address of
registered Holder of Debenture)
_____________________________________________
(Social Security or EIN of Holder of shares if
different than Holder of Debenture)
* If the principal amount of the Debenture to be converted is less
than the entire principal amount thereof, a new Debenture for the
balance of the principal amount shall be returned to the Holder of
the Debenture.
Date:________________ Sign:_____________________________________
(Signature must conform in all respects
to name of Holder shown on face of this
Debenture)
Signature Guaranteed:
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ASSIGNMENT OF NOTE
The undersigned hereby sell(s) and assign(s) and transfer(s) unto
________________________________________________________________________________
(name, address and SSN or EIN of assignee)
__________________________________________________Dollars ($_________)___
(principal amount of Debenture, $10,000 or integral multiples of $10,000)
of principal amount of this Debenture together with all accrued interest hereon.
Date:________ Sign:____________________________________________
(Signature must conform in all respects to name
of Holder shown on face of Debenture and be
guaranteed by a commercial bank or member firm
of the New York Stock Exchange.)
Signature Guaranteed:
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 20, 1996
(this "Agreement"), is made by and among American Biogenetic Sciences, Inc., a
Delaware corporation (the "Company"), and the person named on the signature page
hereto (the "Initial Investor").
W I T N E S S E T H :
WHEREAS, in connection with the Private Securities
Subscription Agreement, dated as of September 20, 1996, between the
Initial Investor and the Company (the "Subscription Agreement"), the
Company has agreed, upon the terms and subject to the conditions of
the Subscription Agreement, to issue and sell to the Initial Investor
[Dollar Amount] principal amount of 7% Convertible Debentures (the
"Debentures"), convertible into shares of Class A Common Stock,
$0.001 par value (the "Common Stock"); and
WHEREAS, to induce the Initial Investor to execute and
deliver the Subscription Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "Securities Act"), and
applicable state securities laws with respect to the Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree as
follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms
shall have the following meanings:
(i) "Debentures" means the Debentures issued to all of the
Investors (including the Initial Investor) pursuant to the same
offering in which Debentures have been sold to the Initial Investor.
(ii) "Initial Investor" means the Initial Investor and any
transferee or assignee of Debentures or Shares issued to the Initial
Investor provided such transferee or assignee agrees to become bound
by the provisions of this
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 2
Agreement in accordance with Section 9 hereof.
(iii) "Investors" means (A) the Initial Investor and all
other purchasers of Debentures being offered by the Company pursuant
to the same offering in which Debentures have been sold to the
Initial Investor and (B) any transferee or assignee of Debentures or
Shares from an Investor provided such transferee or assignee agrees
to become bound by the provisions of this Agreement in accordance
with Section 9 hereof.
(iv) "register," "registered," and "registration" refer to
a registration effected by (x) preparing and filing a Registration
Statement or Statements in compliance with the Securities Act on such
appropriate registration form promulgated by the United States
Securities and Exchange Commission ("SEC") as shall be selected by
the Company, and, when requested by the Investors or any Investor
pursuant to Section 2(c) hereof, shall (A) be reasonably acceptable
to the holders of a majority of the Registrable Securities to which
such registration relates, and (B) shall permit the disposition of
Registrable Securities in accordance with the intended method or
methods specified in the Investors' request for such registration,
and (y) the declaration or ordering of effectiveness of such
Registration Statement by the SEC.
(v) "Registrable Securities," as it pertains to an
Investor, means the Shares which have been issued upon conversion of
Debentures and the maximum number of Shares issuable upon conversion
of the Debentures which at the time are outstanding but have not been
converted; provided, however, that such Shares shall cease to be
Registrable Securities (i) upon any sale thereof pursuant to a
registration statement or Rule 144 promulgated under the Securities
Act, (ii) during such period, as determined by counsel to the
Company, as Rule 144 would permit such Investor to sell all
Registrable Securities to the public without registration in a period
of 90 consecutive days (but only so long as the Company meets the
"current public information" requirements of Rule 144) or (iii) at
such time as paragraph (k) of Rule 144 under the Securities Act
becomes available to such Investor for the sale of such Shares as
determined by counsel to the Company.
(vi) "Registration Statement" means a registration
statement under the Securities Act registering Registrable
Securities.
(vii) "Shares" means the shares of Common Stock issued or
issuable upon conversion of Debentures.
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 3
(b) Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the
Subscription Agreement.
2. REGISTRATION.
(a) SHELF REGISTRATION. The Company shall use its
best efforts to file, as promptly as practicable following the sale
of the last Debenture being offered to the Investors (but not later
than 20 days thereafter), a "shelf" registration statement covering
the then Registrable Securities on any appropriate form pursuant to
Rule 415 under the Securities Act (the "Shelf Registration
Statement") in order to permit the offer and sale of the Registrable
Securities from time to time by the Investors while the Shelf
Registration Statement is effective and current. The Company shall
use its best efforts to have the Shelf Registration Statement
declared effective as soon as practicable after its filing and to
keep such registration statement continuously effective until all
Registrable Securities included therein cease to be Registrable
Securities.
(b) PIGGY-BACK REGISTRATIONS. If at any time the
Company shall determine to prepare and file with the SEC a
Registration Statement relating to an offering for its own account or
the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Investor, who is
entitled to registration rights under this Section 2(b) written
notice of such determination and, if within twenty (20) days after
the Company gave such notice, the Company shall have received from
such Investor a request therefor in writing, the Company shall
include in such Registration Statement all or any part of the
Registrable Securities such Investor requests to be registered,
except that if, in connection with any underwritten public offering
as to Debentures not yet converted, the Company need not include
Registrable Securities subject thereto in such underwritten offering
unless and to the extent the Holder thereof commits to convert the
same prior to or in connection with the sale pursuant to such
Registration Statement and (ii) if such underwritten offering is for
the account of the Company and/or holders of securities which are
entitled by right to inclusion of securities in such Registration
Statement, the managing underwriter(s)
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 4
thereof shall impose a limitation on the number of shares of Common
Stock which may be included in the Registration Statement because, in
such underwriter(s)' judgment, such limitation is necessary to effect
an orderly public distribution or is likely to materially and
adversely affect the price that the Company or holders of such demand
registration rights could obtain in such offering, then the Company
shall be obligated to include in such Registration Statement only
such portion, if any, of the Registrable Securities with respect to
which such Investor has requested inclusion hereunder that the
underwriter(s) advise is not likely to have either such effect. Any
exclusion of Registrable Securities shall be made pro rata among the
Investors seeking to include Registrable Securities, in proportion to
the number of Registrable Securities sought to be included by such
Investors; provided, however, that the Company shall not exclude any
Registrable Securities unless the Company has first excluded all
outstanding securities the holders of which are not entitled by right
to inclusion of securities in such Registration Statement; and
provided, further, however, that, after giving effect to the
immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities
having the right to include such securities in the Registration
Statement to the extent such pro rata allotment is provided for under
the Company's currently existing agreements with such holders of the
Company's securities (if not provided for, then allotment of shares
by the Investors and such other Investors shall be determined by the
Company in good faith so as not to breach such registration rights
agreements). For the purpose of the pro rata allotment referred to in
the foregoing sentence, the number of shares of Common Stock to be
included for each holder of Debentures shall be determined by
assuming the conversion thereof at a conversion price based on the
average of the closing bid prices of the Common Stock during the five
trading day period ending on the second day prior to the filing date
of such registration statement. No right to registration of
Registrable Securities under this Section 2(b) shall be construed to
limit any registration required under Section 2(a) or 2(c) hereof.
The obligations of the Company under this Section 2(b) may be waived
by Investors holding a majority in interest of the Registrable
Securities and shall expire after the earlier of (i) such time as the
Company has afforded the opportunity for the Investors to exercise
registration rights under this Section 2(a) for two registrations;
provided, however, that any Investor who shall have had any
Registrable Securities excluded from any Registration Statement in
accordance with this Section 2(b) shall be entitled to include in an
additional Registration Statement filed by the Company the
Registrable Securities so excluded or (ii) when all of the
Registrable Securities cease to be Registrable Securities.
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 5
(c) DEMAND REGISTRATION. If, at any time after the
date which is 30 days after the closing under the Subscription
Agreements by all Investors, Investors holding a majority of the
Registrable Securities shall notify the Company in writing that they
intend to offer or cause to be offered for public sale Registrable
Securities held by such Investor, the Company shall use its best
efforts to cause such of the Registrable Securities as may be
requested by any Investor to be registered, on one occasion only,
under the Securities Act and applicable state laws as expeditiously
as possible. Once the right for registration of any Registrable
Securities under this Section 2(c) has been exercised by such
Investors, the Company shall use its best efforts to prepare and file
a Registration Statement covering such Registrable Securities with
the SEC as promptly as practicable, but in any event not later than
twenty (20) days after the Company's receipt of such request.
If any offering pursuant to a Registration Statement
pursuant to Section 2(c) hereof involves an underwritten offering,
the Investors who hold a majority in interest of the Registrable
Securities subject to such underwritten offering shall have the right
to select one legal counsel and an investment banker or bankers and
manager or managers to administer the offering, which investment
banker or bankers or manager or managers shall be reasonably
satisfactory to the Company. The Investors who hold the Registrable
Securities to be included in such underwriting shall pay all
underwriting discounts and commissions and other fees and expenses of
such investment banker or bankers and manager or managers so selected
in accordance with this Section 2(c) (other than fees and expenses
relating to registration of Registrable Securities under federal or
state securities laws which are payable by the Company pursuant to
Section 5 hereof) with respect to their Registrable Securities and
the fees and expenses of such legal counsel selected by the
Investors.
(d) PAYMENTS BY THE COMPANY. If the Registration
Statement covering the Registrable Securities pursuant to Section
2(a) hereof is not effective within 90 days after the first sale of
Debentures by the Company to the Investors, then the Company will
make payments to each holder of Registrable Securities (each, a
"Holder") in such amounts and at such times as shall be determined
pursuant to this Section 2(d). The aggregate amount to be paid by the
Company to all Holders shall be determined as of each Computation
Date, and such amount shall be equal to (1) in the case of the
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 6
first Computation Date, one percent (1%) and (2) in the case of each
other Computation Date, two percent (2%), in each case of the
aggregate subscription price paid by the Investors for all Debentures
pursuant to the Subscription Agreements (the "Periodic Amount");
provided, however, that if any Computation Date is less than 30 days
subsequent to another Computation Date, then the Periodic Amount
payable on the later Computation Date shall be prorated. The Periodic
Amount shall be divided among all the Holders in the same proportion
as each Holder's Debentures bears to the total of the outstanding
Debentures. The Periodic Amount shall be paid by the Company within
five business days after each Computation Date and shall be payable
in cash; provided, however, that the Company may elect in lieu of
payment of any Periodic Amount in cash to deliver to a Holder shares
of Common Stock having an Aggregate Market Value equal to the amount
of the Periodic Amount if, but only if, (1) such shares are freely
tradable by the Initial Investor without any restriction under the
Securities Act or any state securities or "blue sky" law (2) the
number of such Shares to be issued to all Investors, together with
all other Registrable Securities, does not exceed 19.9% of the
Company's outstanding Common Stock on the date of the first Closing
of the Debentures and (3) after the issuance of such shares to the
Holder, the aggregate number of shares of Common Stock beneficially
owned by the Holder (determined in accordance with Section 13(d) of,
and Regulations 13 D-G under, the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) would not exceed 4.9% of the
outstanding shares of Common Stock. In the event of the issuance of
any Shares pursuant to the preceding sentence, the Holder shall, with
respect to the Shares issued pursuant to the preceding sentence, be
deemed to have made all representations, warranties and covenants
contained in Section 2 of the Subscription Agreement related to the
purchase of the Debentures by the Initial Investor.
As used in this Section 2(d), the following terms shall
have the following meanings:
"Aggregate Market Value" of any shares of Common Stock as
of any Computation Date means the product obtained by multiplying (a)
such number of shares of Common Stock times (b) the Average Market
Price of the Common Stock for such Computation Date.
"Average Market Price" of any security for any Computation
Date shall be computed as the average of the closing bid prices of
the Common Stock over the five trading-day period ending on the
relevant Computation Date, as
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 7
reported by Bloomberg, L.P.
"Computation Date" means the date which is 90 days after
the date of the first sale of Debentures by the Company to the
Investors and, if the Registration Statement required to be filed by
the Company pursuant to Section 2(a) has not theretofore been
declared effective by the SEC, each date which is 30 days after the
immediately preceding Computation Date and, if the Registration
Statement required to be filed by the Company pursuant to Section
2(a) is not declared effective by the SEC within 90 days after date
of the first sale of Debentures by the Company to the Investors, the
date on which such Registration Statement is declared effective.
3. OBLIGATIONS OF THE COMPANY. In connection with
the registration of the Registrable Securities, the Company shall:
(a) prepare promptly and file with the SEC promptly (but
in no event later than the applicable time frames set forth in
Section 2) a Registration Statement or Statements with respect to all
Registrable Securities to be included therein, and thereafter use its
best efforts to cause the Registration Statement to become effective
as soon as reasonably possible after such filing. If such
Registration Statement is filed pursuant to Rule 415, the Company
shall keep the Registration Statement effective pursuant to Rule 415
at all times while the shares covered thereby remain Registrable
Securities; provided, however, that, each Investor may notify the
Company in writing that it wishes to exclude all or a portion of its
Registrable Securities from such Registration Statement; provided
further, however, notwithstanding anything to the contrary in
Sections 2(b) or (c) or Section 3 hereof, the Company may postpone
the filing of any registration statement otherwise required to be
prepared and filed by it or keeping any registration statement or
prospectus current and/or effective (i) (with respect to postponement
only and not to suspension) during any period up to 45 days
reasonably necessary in order to prepare annual financial statements
of the Company required to be included in the registration statement
for the fiscal period most recently ended prior to such written
requests, (ii) for a period up to 30 days (but no longer than the
reason for non-disclosure continues), if the Company would be
required to disclose in such registration statement any material
business situation, transaction or negotiation not otherwise
disclosed as to which the Company's Board of Directors has
determined, in good faith, that valid, significant and material
business reasons which are expected to be beneficial to the Company
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 8
exist that warrant that such information not be disclosed, but not to
exceed two (2) times during any one (1) year period, (iii) if the
Company ceases to be eligible to file a registration statement on
Form S-3, only such time as is necessary to cause a registration
statement on Form S-1 (or other applicable form) to be declared
effective by the SEC (but in no event longer than 60 days), or (iv)
during the ten-day period prior to, and during the ninety-day period
beginning on, the effective date of a registration statement covering
an underwritten public offering by the Company of any Common Stock or
any securities of the Company convertible into or exchangeable or
exercisable for Common Stock.
(b) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration
Statement effective at all times while the Company is obligated to
keep the Registration Statement current in accordance with section
3(a);
(c) furnish to each Investor whose Registrable Securities
are included in the Registration Statement, such number of copies of
a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents as such Investor may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;
(d) use reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under
such other securities or blue sky laws of such jurisdictions in the
United States as the Investors who hold a majority in interest of the
Registrable Securities being offered reasonably request, (ii) prepare
and file in those jurisdictions such amendments (including
post-effective amendments) and supplements, (iii) take such other
actions as may be necessary to maintain such registrations and
qualifications in effect at all times until such date as is three
years after the Initial Investor acquired the Debentures and (iv)
take all other actions reasonably necessary or advisable to qualify
the Registrable Securities for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection
therewith or as a condition thereto to (I) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (II) subject itself to general taxation in
any such jurisdiction, (III) file a general consent to service of
process in any such
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 9
jurisdiction, (IV) provide any undertakings that cause more than
nominal expense or burden to the Company or (V) make any change in
its charter or by-laws, which in each case the Board of Directors of
the Company determines to be contrary to the best interests of the
Company and its stockholders;
(e) in the event Investors who hold a majority in interest
of the Registrable Securities to be included in a Registration
Statement under Section 2(c) shall select underwriters for the
offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including,
without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering (which,
if covering the Investors, shall supersede those contained in Section
6 of this Agreement);
(f) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
being sold pursuant to such registration of the happening of any
event of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state 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, and use its best efforts promptly to
prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and deliver a number of
copies of such supplement or amendment to each Investor as such
Investor may reasonably request;
(g) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
being sold pursuant to such registration (or, in the event of an
underwritten offering, the managing underwriters) of the issuance by
the SEC of any stop order or other suspension of effectiveness of the
Registration Statement at the earliest possible time;
(h) permit a single firm of counsel designated in writing
to the Company as selling stockholders' counsel by the Investors who
hold a majority in interest of the Registrable Securities being sold
pursuant to such registration to review the Registration Statement
and all amendments and supplements thereto a reasonable period of
time prior to their filing with the SEC, and shall not file any
document in a form to which such counsel timely and reasonably
objects;
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 10
(i) make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first day
of the Company's fiscal quarter next following the effective date of
the Registration Statement;
(j) at the request of Investors who hold a majority in
interest of the Registrable Securities being sold pursuant to such
registration, furnish on the date that Registrable Securities are
delivered to an underwriter for sale in connection with the
Registration Statement (i) a letter, dated such date, from the
Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
addressed to the underwriters; and (ii) an opinion, dated such date,
from counsel representing the Company for purposes of such
Registration Statement, in form and substance as is customarily given
in an underwritten public offering, addressed to the underwriters and
Investors;
(k) make available for inspection by any Investor whose
Registrable Securities are being sold pursuant to such registration,
any underwriter participating in any disposition pursuant to the
Registration Statement, and any attorney, accountant or other agent
retained by any such Investor or underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable each Inspector
to exercise its due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information which any
Inspector may reasonably request for purposes of such due diligence;
provided, however, that each Inspector shall hold in confidence and
shall not make any disclosure (except to an Investor) of any Record
or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (i) the disclosure of such Record is necessary to
avoid or correct a material misstatement or omission in any
Registration Statement, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court or government body
of competent jurisdiction or (iii) the information in such Records
has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company
shall not be required to disclose any confidential information in
such Records to any Inspector until and unless such Inspector
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 11
shall have entered into confidentiality agreements (in form and
substance satisfactory to the Company) with the Company with respect
thereto, substantially in the form of this Section 3(k). Each
Investor agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. The Company
shall hold in confidence and shall not make any disclosure of
information concerning an Investor provided to the Company pursuant
to this Agreement unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, (ii) the
disclosure of such information is necessary to avoid or correct a
material misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of
competent jurisdiction or (iv) such information has been made
generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it
shall, upon learning that disclosure of such information concerning
an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to
such Investor, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such
information;
(l) use its best efforts either to (i) cause all the
Shares covered by the Registration Statement to be listed on a
national securities exchange and on each additional national
securities exchange on which similar securities issued by the Company
are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii)
secure designation of all the Shares covered by the Registration
Statement as a National Association of Securities Dealers Automated
Quotations System ("NASDAQ") "national market system security" within
the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the quotation of
the Registrable Securities on the NASDAQ National Market System or,
if, despite the Company's best efforts to satisfy the preceding
clause (i) or (ii), the Company is unsuccessful in satisfying the
preceding clause (i) or (ii), to secure listing on a national
securities exchange or NASDAQ authorization and quotation for such
Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register with
the National Association of Securities Dealers, Inc. ("NASD") as such
with respect to such Registrable
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 12
Securities;
(m) provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(n) cooperate with the Investors who hold Registrable
Securities being sold and the managing underwriter or underwriters,
if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing
Registrable Securities sold in the denominations or amounts, as the
case may be, and registered in such names as the managing underwriter
or underwriters, if any, or the Investors may reasonably request
within three business days after the sale of such Registrable
Securities in accordance with an effective and current Registration
Statement or Rule 144. In connection therewith, the Company shall
deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with
copies to the Investors whose Registrable Securities are included in
such Registration Statement) instructions to the transfer agent to
issue new stock certificates without a legend. The Company shall
notify each Investor of the effectiveness of each Registration
Statement promptly following such effectiveness; and
(o) take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of the
Registrable Securities pursuant to the Registration Statement;
4. OBLIGATIONS OF THE INVESTORS. In connection
with the registration of the Registrable Securities, the Investors
shall have the following obligations:
(a) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Agreement with
respect to each Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
registration of the Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request. At least fifteen (15) days prior to the first
anticipated filing date of the Registration Statement, the Company
shall notify each
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 13
Investor of the information the Company requires from each such
Investor (the "Requested Information") if such Investor elects to
have any of such Investor's Registrable Securities included in the
Registration Statement. If within five (5) business days prior to the
filing date the Company has not received the Requested Information
from an Investor (a "Non-Responsive Investor"), then the Company may
file the Registration Statement without including Registrable
Securities of such Non-Responsive Investor;
(b) Each Investor agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder,
unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement;
(c) In the event Investors holding a majority in interest
of the Registrable Securities being registered determine to engage
the services of an underwriter, each Investor agrees to enter into
and perform such Investor's obligations under an underwriting
agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations,
with the managing underwriter of such offering and take such other
actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless such Investor
has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from the
Registration Statement;
(d) Each Investor agrees that, upon receipt of any notice
from the Company pursuant to the second proviso of Section 3(a) or of
the happening of any event of the kind described in Section 3(f) or
3(g), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until (I) in the case of the
second proviso under Section 3(a), the end of the time period
contained therein, (II) in the case of Section 3(f), until such
Investor's receipt of the copies of the supplemented or amended
prospectus contemplated therein, and if so directed by the Company,
such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the
prospectus covering such Registrable Securities current at the time
of receipt of such notice and (III) in the case of Section 3(g), the
lifting of the order contemplated by such section; and
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 14
(e) No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such
Investor's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Investors entitled
hereunder to approve such arrangements pursuant to Section 3(e), (ii)
completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and (iii)
agrees to pay its pro rata share of all underwriting discounts and
commissions and other fees and expenses of investment bankers and any
manager or managers of such underwriting and legal expenses of the
underwriter applicable with respect to its Registrable Securities, in
each case to the extent not payable by the Company pursuant to the
terms of this Agreement.
5. EXPENSES OF REGISTRATION. All expenses (other
than underwriting discounts and commissions and other fees and
expenses of investment bankers and other than brokerage commissions)
incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and
accounting fees and the fees and disbursements of counsel for the
Company, shall be borne by the Company; provided, however, that the
Investors shall bear the fees and out-of-pocket expenses of the one
legal counsel selected by the Investors pursuant to Section 3(h)
hereof.
6. INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such Registrable
Securities, the directors, if any, of such Investor, the officers, if
any, of such Investor, each person, if any, who controls any Investor
within the meaning of the Securities Act or the Exchange Act (each,
an "Indemnified Person"), against any losses, claims, damages,
expenses or liabilities (joint or several) (collectively "Claims") to
which any of them become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof or the omission or
alleged omission to state therein a material fact
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 15
required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
(as amended or supplemented if the Company files any amendment or
supplement thereto with the SEC) if used prior to the effective date
of such Registration Statement, or contained in the final prospectus
(as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC), if used within the
period during which the Company shall be required to keep the
Registration Statement current pursuant to the terms of this
Agreement, or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were made,
not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state
securities law or any rule or regulation (the matters in the
foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to the restrictions set forth in Section 6 (d)
with respect to the number of legal counsel, the Company shall
reimburse the Investors and each such underwriter or controlling
person, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) (I) shall
not apply to a Claim arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished
in writing to the Company by any Indemnified Person or underwriter
for such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment
thereof or supplement thereto; (II) with respect to any preliminary
prospectus, shall not inure to the benefit of any such person from
whom the person asserting any such Claim purchased the Registrable
Securities that are the subject thereof (or to the benefit of any
person controlling such person) if the untrue statement or omission
of material fact contained in the preliminary prospectus was
corrected in the prospectus, as then amended or supplemented, if such
prospectus was timely made available by the Company pursuant to
Section 3(c) hereof; and (III) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Indemnified Persons and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 16
(b) In connection with any Registration Statement in which
an Investor is participating, each such Investor agrees to indemnify
and hold harmless, to the same extent and in the same manner set
forth in Section 6(a), the Company, each of its directors, each of
its officers who signs the Registration Statement, each person, if
any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, any underwriter and any other stockholder
selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such stockholder
or underwriter within the meaning of the Securities Act or the
Exchange Act against any Claim to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise,
insofar as such Claim arises out of or is based upon any Violation,
in each case to the extent (and only to the extent) that such
Violation occurs (I) in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for
use in connection with such Registration Statement or (II) the
Investor's violation of Rules 10-b-6 or 10-b-7 under the Exchange
Act; and such Investor will promptly reimburse any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent
shall not be unreasonably withheld; provided, further, however, that
the Investor shall be liable under this Section 6(b) for only that
amount of a Claim as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant
to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf
of such indemnified party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect
to any preliminary prospectus shall not inure to the benefit of any
indemnified party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a
timely basis in the prospectus, as then amended or supplemented.
(c) The Company shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in any distribution,
to the same extent as provided above, with respect to information
such persons so furnished in writing by such persons expressly for
inclusion in the Registration Statement.
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 17
(d) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action (including
any governmental action), such indemnified party shall, if a Claim in
respect thereof is to be made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice of
the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel reasonably
satisfactory to the indemnifying parties; provided, however, that
indemnified party shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if,
in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the indemnified party
and the indemnifying party would be inappropriate due to actual or
potential differing interests between any indemnified party and an
indemnifying party represented by such counsel in such proceeding.
The Company shall pay for only one separate legal counsel for the
Investors; which shall be selected by the Investors holding a
majority in interest of the Registrable Securities. The failure to
deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the indemnified party under
this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action. The indemnification
required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as
such expense, loss, damage or liability is incurred and is due and
payable.
7. CONTRIBUTION. In order to provide for just and
equitable contribution, if a claim for indemnification pursuant to
this Agreement is made but it is found in a final judgment by a court
of competent jurisdiction (not subject to further appeal) that such
indemnification may not be enforced in such case, even though the
express provisions hereof provide for indemnification in such case,
then the indemnifying party, on the one hand, and the indemnified
party on the other hand, shall contribute to the losses, claims,
damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements to which the indemnified persons
may be subject in accordance with the relative benefits received by
the indemnifying party, on the one hand, and the indemnified party,
on the other hand, and also the
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 18
relative fault of the parties, in connection with the statements,
acts or omissions which resulted in such losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements, and the relevant equitable considerations
shall also be considered, but contribution by any seller of
Registrable Securities shall be limited in amount to the net amount
of proceeds received by such seller from the sale of such Registrable
Securities. No person found liable for a fraudulent misrepresentation
shall be entitled to contribution from any person who is not also
found liable for such fraudulent misrepresentation.
8. REPORTS UNDER EXCHANGE ACT. With a view to
making available to the Investors the benefits of Rule 144 or any
other similar rule or regulation of the SEC that may at any time
permit the Investors to sell securities of the Company to the public
without registration, until such time as the Investors have sold all
the Registrable Securities pursuant to a Registration Statement or
Rule 144 or until paragraph (k) of Rule 144 becomes available with
respect to the sale of all Registrable Securities, the Company agrees
to:
(a) make and keep current public information available
under paragraph (c) of Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and
the Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the
Company to the SEC and such other reports and documents so filed by
the Company with the SEC after the most recent annual or quarterly
report and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The
rights to have the Company register Registrable Securities pursuant
to this Agreement may be assigned by the Investors to transferees or
assignees of all or any portion of
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 19
the Debentures or the Shares only if: (a) the Company is, within a
reasonable time after transfer or assignment of such securities,
furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which
such registration rights are being transferred or assigned, (b)
immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities
laws, and (c) at or before the time the Company received the written
notice contemplated by clause (a) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the
provisions contained herein.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision
of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the
Company and Investors who hold a majority in interest of the then
Registrable Securities (with Holders of Debentures being deemed to
own the number of shares of Registrable Securities into which such
Debentures are convertible on the effective date of the amendment or
waiver). Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.
11. THIRD PARTY BENEFICIARY. The parties
acknowledge and agree that Shoreline Pacific, the Institutional
Division of Financial West Group ("Shoreline Pacific"), shall be
deemed a third party beneficiary of the Company's agreements and
representations set forth in this Agreement, entitled to enforce the
terms thereof, and to indemnification for any damages resulting to
Shoreline Pacific from any actual or threatened breach thereof by the
Company, both in Shoreline Pacific's personal capacity and, should
Shoreline Pacific so elect, on behalf of the Investor.
12. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record
such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or
entities with respect to the same Registrable Securities, the Company
shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 20
(b) Except as otherwise provided in this Agreement, any
notice which is required or convenient under the terms of this
Agreement shall be duly given if it is in writing and (a) delivered
in person (b) mailed by first class mail, postage prepaid, or (c)
sent by private overnight courier service (such as Federal Express)
and directed to the Initial Investor at its address appears under its
name in the Subscription Agreement, if to any other Investor, at such
address as such Investor shall have provided in writing to the
Company, or if to the Company to its principal executive offices, or
at such other address as each such party furnishes by notice given in
accordance with this Section 12(b). Such notice shall be effective,
when personally delivered, upon receipt, when so sent by first class
mail, four business days after deposit with the United States Postal
Service, or when so sent by private overnight courier service, the
next business day after deposit.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of New York
applicable to the agreements made and to be performed entirely within
such state. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove
invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof. There
are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein with respect to the subject
matter hereof. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject
matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
<PAGE>
American Biogenetic Sciences, Inc./[BUYER]
Registration Rights Agreement [DATE]
Page 21
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may
require.
(h) The headings in the Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party hereto
by telephone line facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of day and
year first above written.
AMERICAN BIOGENETIC SCIENCES, INC.
By_______________________________
Josef C. Schoell
Vice President-Finance
[BUYER]
By_______________________________
[BUYER SIGN]
[BUYER SIGN TITLE]
NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES
ACT"). THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
REGISTRATION UNDER THE SECURITIES ACT OR SUCH OFFER, SALE OR TRANSFER IS EXEMPT
FROM SUCH REGISTRATION.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
Dated: September 30, 1996
[ ] Warrants
to Purchase [ ] Shares
of Common Stock, $0.001 Par Value Per Share
American Biogenetic Sciences, Inc., a Delaware corporation (the
"Company"), hereby certifies that [HOLDER], its permissible transferees,
designees, successors and assigns (collectively, the "Holder"), for value
received, is entitled to purchase from the Company at any time until September
30, 1998 up to [ ] shares (the "Shares") of the Company's Class A Common Stock,
par value $0.001 per share (the "Common Stock"), at $5.7625 per share (the
"Exercise Price").
1. Exercise of Warrants. Upon presentation and surrender of this
Common Stock Purchase Warrant Certificate ("Warrant Certificate" or "this
Certificate"), with the attached Purchase Form duly executed, at the principal
office of the Company at 1375 Akron Street, Copiague, NY, 11726, together with a
certified or bank cashier's check or wire transfer payable to the Company in the
amount of the Exercise Price multiplied by the number of Shares being purchased,
the Company, or the Company's Transfer Agent, as the case may be, shall deliver
to the Holder, certificates of Common Stock which in the aggregate represent the
number of Shares being purchased. All or less than all of the Warrants
represented by this Certificate may be exercised and, in case of the exercise of
less than all, the Company, upon surrender hereof, will deliver to the Holder a
new Warrant Certificate or Certificates of like tenor and dated the date hereof
entitling said holder to purchase the number of Shares represented by this
Certificate which have not been exercised and to receive Registration Rights
with respect to such Shares.
In lieu of tendering the requisite Exercise Price to the Company in
cash, the Holder may elect to exercise this Warrant Certificate on a net basis
whereupon, in lieu of the payment of the exercise price in cash, the number of
shares of Common Stock issued upon such exercise shall be reduced by that number
of shares which have an aggregate fair market value, based upon the average of
the closing prices for the Company's Common Stock for the three trading days
immediately preceding the Exercise Date, equal to the requisite aggregate
Exercise Price and the Exercise Price shall be deemed to have been paid and
satisfied.
<PAGE>
Common Stock Purchase Warrant Certificate
Page 2
2. Exchange and Transfer. This Certificate at any time prior to the
exercise hereof, upon presentation and surrender to the Company, may be
exchanged, alone or with other Certificates of like tenor registered in the name
of the same Holder, for another Certificate or Certificates of like tenor in the
name of such Holder exercisable for the aggregate number of Shares as the
Certificate or Certificates surrendered.
3. Rights and Obligations of Holders of this Certificate. (a) The
Holder of this Certificate shall not, by virtue hereof, be entitled to any
rights of a stockholder in the Company, either at law or in equity; provided,
however, that in the event any certificate representing shares of Common Stock
or other securities is issued to the Holder hereof upon exercise of some or all
of the Warrants, such Holder shall, for all purposes, be deemed to have become
the holder of record of such Common Stock on the date on which this Certificate,
together with a duly executed Purchase Form, was surrendered and payment of the
aggregate Exercise Price was made, irrespective of the date of delivery of such
share certificate.
(b) In case the Company shall (i) pay a dividend in Common Stock or
make a distribution in Common Stock, (ii) subdivide its outstanding Common Stock
into a greater number of shares, or (iii) combine its outstanding Common Stock
into a smaller number of shares (including a recapitalization in connection with
a consolidation or merger in which the Company is the continuing corporation),
then (x) the Exercise Price on the record date of such division or the effective
date of such action shall be adjusted by multiplying such Exercise Price by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event and
(y) the number of shares of Common Stock for which this Warrant Certificate may
be exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event.
(c) In case of any consolidation or merger of the Company with or
into another corporation (other than any consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification of the outstanding shares of Common Stock or the conversion of
such outstanding shares of Common Stock into shares or other stock or other
securities or property), or the sale or transfer of the property of the Company
as an entirety or substantially as an entirety, there shall be deliverable upon
exercise of the Warrant Certificate (in lieu of the number of shares of Common
Stock theretofore deliverable) the number of shares of stock or other securities
or property to which a holder of the number of shares of Common Stock which
would otherwise have been deliverable upon the exercise of this Warrant
Certificate would have been entitled upon such action if this Warrant
Certificate had been exercised immediately prior to such action.
4. Common Stock. (a) The Company covenants and agrees that all shares
of Common Stock issuable upon exercise of this Warrant Certificate will, upon
delivery, be duly and validly authorized and issued, fully-paid and
non-assessable.
<PAGE>
Common Stock Purchase Warrant Certificate
Page 3
(b) The Company covenants and agrees that it will at all times
reserve and keep available an authorized number of shares of its Common Stock
and other applicable securities sufficient to permit the exercise in full of all
outstanding options, warrants and rights, including the Warrants.
5. Registration Rights. The Common Shares underlying this Warrant
will be included in the registration statement to be filed by the Company
pursuant to the shelf registration obligations of the Company as set forth in
the Registration Rights Agreement to be entered into by the Company in favor of
each of the investors in the private placement of Debentures placed by Shoreline
Pacific Institutional Finance, the Institutional Division of Financial West
Group.
6. Issuance of Certificates. As soon as possible after full or
partial exercise of this Warrant, but in any event not more than three (3)
business days, the Company, at its expense, will cause to be issued in the name
of and delivered to the holder of this Warrant, a certificate or certificates
for the number of fully paid and non-assessable shares of Common Stock to which
that holder shall be entitled on such exercise. No fractional shares will be
issued on exercise of this Warrant. If on any exercise of this Warrant a
fraction of a share results, the Company will pay the cash value of that
fractional share, calculated on the basis of the Exercise Price.
Prior to registration of the shares of Common Stock underlying this
Warrant Certificate, as provided in Section 5 hereof, all such certificates
shall bear a restrictive legend to the effect that the Shares represented by
such certificate have not been registered under the Securities Act of 1933, as
amended, and the Shares may not be sold or transferred in the absence of such
registration or an exemption therefrom, such legend to be substantially in the
form of the bold face language appearing on Page 1 of this Warrant Certificate.
7. Disposition of Warrants or Shares. The Warrants and the underlying
Common Stock have not been registered under the Securities Act of 1933, as
amended (including the rules and regulations promulgated thereunder, the "Act"),
nor qualified under any State securities law and may not be sold or transferred
in the absence of such registration or an exemption therefrom. The Company is
under no obligation to register the Warrants and its obligation to register the
underlying Common Stock is as set forth in Section (5) hereof. The Holder, by
accepting the Warrants, agrees that it is acquiring the Warrants and will
acquire any shares of Common Stock issuable upon the exercise of any portion of
the Warrants for investment only and without a view to distribution of all or
any part thereof, as the terms "investment only" and "distribution" have meaning
under the Act. The Warrants and, until registered, the shares of Common Stock
issuable upon exercise of the Warrants shall bear a legend substantially in the
form of the bold face language appearing on page 1 of this Warrant Certificate.
The Holder of this Warrant Certificate, each transferee hereof and any Holder
and transferee of any Shares, by his or its acceptance thereof, agrees that no
public distribution of Warrants or Shares will be made in violation of the
provisions of the Act. Furthermore, it shall be a condition to the transfer of
the Warrants that any transferee thereof deliver to the Company his or its
written agreement to accept and be bound by all of the terms and conditions
contained in this Warrant Certificate.
<PAGE>
Common Stock Purchase Warrant Certificate
Page 4
8. Notices. Except as otherwise specified herein to the contrary, all
notices, requests, demands and other communications required or desired to be
given hereunder shall only be effective if given in writing by certified or
registered mail, return receipt requested, postage prepaid, or by U. S. express
mail service or private overnight courier service (e.g. Federal Express). All
such notices shall be sent to the addresses set forth below (or to such other
address or addresses as a party may have advised the other in the manner
provided in this Section 8). Any such notice shall be deemed to have been given
(a) on the business day immediately subsequent to mailing, if sent by U. S.
express mail service or private overnight courier service, or (b) three (3)
business days following the mailing thereof, if mailed by certified or
registered mail, postage prepaid, return receipt requested,:
If to the Company:
American Biogenetic Sciences, Inc.
1375 Akron Street
Copiague, NY 11726
If to the Holder:
9. Governing Law. This Warrant Certificate and all rights and
obligations hereunder shall be deemed to be made under and governed by the laws
of the State of New York (except as the corporate laws of the State of Delaware
may mandatorily apply thereto). The Holder hereby irrevocably consents to the
venue and jurisdiction of the State and Federal Courts located in the State of
New York, County of New York.
10. Successors and Assigns. This Warrant Certificate shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
11. Headings. The headings of various sections of this Warrant
Certificate have been inserted for reference only and shall not be a part of
this Certificate.
<PAGE>
Common Stock Purchase Warrant Certificate
Page 5
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed by one of its officers thereunto duly authorized.
AMERICAN BIOGENETIC SCIENCES, INC.
Date:_________________ By:_______________________________
JOSEF C. SCHOELL
Vice President - Finance
<PAGE>
ELECTION TO PURCHASE
To Be Executed by the Holder
in Order to Exercise the Common Stock
Purchase Warrant Certificate
The undersigned Holder hereby irrevocably elects to exercise _______
of the Warrants represented by this Common Stock Warrant Certificate, and to
purchase the shares of Common Stock issuable upon the exercise of such Warrants
and requests that certificates for securities be issued in the name of:
_________________________________________________
(Please type or print name and address)
_________________________________________________
_________________________________________________
_________________________________________________
(Social Security or tax identification number)
and delivered to _________________________________________________________
__________________________________________________________________________
(Please type or print name and address)
and, if such number of Warrants shall not be all the Warrants evidenced by this
Common Stock Warrant Certificate, that a new Common Stock Warrant Certificate
for the balance of such Warrants be registered in the name of, and delivered to,
the Holder at the address stated below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$__________ by check or money order payable in United States currency to the
order of American Biogenetic Sciences, Inc.
[HOLDER]
Dated:___________________ By:_________________________________
Name:
Title:
____________________________________
(Address)
____________________________________
____________________________________
(Social Security or tax identification number)
