WARRANT TO PURCHASE SHARES OF COMMON STOCK OF TARGETED GENETICS CORPORATION
Exhibit
10.3
THIS
WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER SAID ACT AND, IF REQUESTED BY THE COMPANY,
UPON DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT THE PROPOSED TRANSFER IS EXEMPT FROM SAID ACT.
WARRANT
NO. ______
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NUMBER
OF SHARES:
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______ | |
DATE
OF ISSUANCE: January 11, 2007
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(subject
to adjustment)
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WARRANT
TO PURCHASE SHARES
OF
COMMON
STOCK OF
TARGETED
GENETICS CORPORATION
This
Warrant is issued to [_____________], or its registered assigns (the
“Purchaser”),
pursuant to that certain Securities Purchase Agreement, dated as of January
8,
2007, among Targeted Genetics Corporation (the “Company”),
the
Purchaser and certain other purchasers thereunder (the “Purchase
Agreement”)
and is
subject to the terms and conditions of the Purchase Agreement.
1. EXERCISE
OF WARRANT.
(a) Method
of Exercise.
Subject
to the terms and conditions herein set forth, upon surrender of this Warrant
at
the principal office of the Company and upon payment of the Warrant Price (as
defined below) by wire transfer to the Company or cashier’s check drawn on a
United States bank made to the order of the Company, or exercise of the right
to
credit the Warrant Price against the fair market value of the Warrant Stock
(as
defined below) at the time of exercise (the “Net
Exercise Right”)
pursuant to Section 1(b), Purchaser is entitled to purchase from the Company,
at
any time after the date that is six (6) months after the date of issuance
of this Warrant and on or before the date that is five (5) years from the Date
of Issuance set forth above (the “Expiration
Date”),
up to
[______] shares (as adjusted from time to time pursuant to the provisions of
this Warrant) of Common Stock of the Company (the “Warrant
Stock”),
at a
purchase price of $5.41 per share (the “Warrant
Price”).
(b) Net
Exercise Right.
If the
Company shall receive written notice from the holder of this Warrant at the
time
of exercise of this Warrant that the holder elects to exercise the Net Exercise
Right, the Company shall deliver to such holder (without payment by the
Purchaser of any exercise price in cash) that number of fully paid and
nonassessable shares of Common Stock, par value $0.01 per share, of the Company
(“Common
Stock”)
equal
to the quotient obtained by dividing (y) the value of this Warrant (or the
specified portion thereof) on the date of exercise, which value shall be
determined by subtracting (1) the aggregate Warrant Price of the Warrant Stock
(or the specified portion thereof) immediately prior to the exercise of this
Warrant from (2) the Aggregate Fair Market Value (as defined below) of the
Warrant Stock (or the specified portion thereof) issuable upon exercise of
this
Warrant (or specified portion thereof) on the date of exercise by (z) the Fair
Market Value (as defined below) of one share of Common Stock on the date of
exercise. The “Fair
Market Value”
of
a
share of Common Stock shall mean the last reported sale price and, if there
are
no sales, the last reported bid price, of the Common Stock on the business
day
prior to the date of exercise as reported by the NASDAQ Global Market or such
other principal exchange or quotation system on which the Common Stock is then
traded or, if the Common Stock is not publicly traded, the price determined
in
good faith by the Company’s Board of Directors. The “Aggregate
Fair Market Value”
of
the
Warrant Stock shall be determined by multiplying the number of shares of Warrant
Stock by the Fair Market Value of one share of Warrant Stock.
2. CERTAIN
ADJUSTMENTS.
(a) Mergers
or Consolidations.
If at
any time after the date hereof there shall be a capital reorganization (other
than a combination or subdivision of Warrant Stock otherwise provided for
herein) (a “Reorganization”),
or a
merger or consolidation of the Company with another corporation (other than
a
merger with another corporation in which the Company is a continuing corporation
and which does not result in any reclassification or change of outstanding
securities issuable upon exercise of this Warrant or a merger effected
exclusively for the purpose of changing the domicile of the Company) (a
“Merger”),
then,
as a part of such Reorganization or Merger, lawful provision shall be made
so
that the Purchaser shall thereafter be entitled to receive upon exercise of
this
Warrant, and upon payment of the Warrant Price, the number of shares of stock
or
other securities, cash or property of the Company or the successor corporation
resulting from such Reorganization or Merger, to which a holder of the Common
Stock deliverable upon exercise of this Warrant would have been entitled under
the provisions of the agreement in such Reorganization or Merger if this Warrant
had been exercised immediately before that Reorganization or Merger. At the
effective time of any such Reorganization or Merger, this Warrant (and the
right
to purchase securities upon exercise hereof) will terminate.
(b) Splits
and Subdivisions; Dividends.
In the
event the Company should at any time, or from time to time, fix a record date
for the effectuation of a split or subdivision of the outstanding shares of
Common Stock or the determination of the holders of Common Stock entitled to
receive a dividend or other distribution payable in additional shares of Common
Stock or other securities or rights convertible into, or entitling the holder
thereof to receive directly or indirectly, additional shares of Common Stock
(hereinafter referred to as the “Common
Stock Equivalents”)
without payment of any consideration by such holder for the additional shares
of
Common Stock or Common Stock Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise thereof), then, as of such
record date (or the date of such distribution, split or subdivision if no record
date is fixed), the per share Warrant Price shall be appropriately decreased
and
the number of shares of Warrant Stock shall be appropriately increased in
proportion to such increase (or potential increase) of outstanding
shares.
-2-
(c) Combination
of Shares.
If the
number of shares of Common Stock outstanding at any time after the date hereof
is decreased by a combination of the outstanding shares of Common Stock, the
per
share Warrant Price shall be appropriately increased and the number of shares
of
Warrant Stock shall be appropriately decreased in proportion to such decrease
in
outstanding shares.
(d) Adjustments
for Other Distributions.
In the
event the Company shall declare a distribution payable in securities of other
persons, evidences of indebtedness issued by the Company or other persons,
assets (excluding cash dividends paid out of net profits) or options or rights
not referred to in Section 2(b), then, in each such case for the purpose of
this
Section 2(d), upon exercise of this Warrant the holder hereof shall be entitled
to a proportionate share of any such distribution as though such holder was
the
holder of the number of shares of Common Stock into which this Warrant may
be
exercised as of the record date fixed for the determination of the holders
of
Common Stock entitled to receive such distribution.
3. NO
FRACTIONAL SHARES. No fractional shares of Warrant Shares will be issued in
connection with any exercise of this Warrant. In lieu of any fractional shares
which would otherwise be issuable, the Company shall pay cash equal to the
product of such fraction multiplied by the Fair Market Value of one share of
Warrant Stock.
4. NO
STOCKHOLDER RIGHTS. Until the exercise of this Warrant or any portion of this
Warrant, the Purchaser shall not have nor exercise any rights by virtue hereof
as a stockholder of the Company (including without limitation the right to
notification of stockholder meetings or the right to receive any notice or
other
communication concerning the business and affairs of the Company).
5. RESERVATION
OF STOCK. The Company covenants that during the period this Warrant is
exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares of Common Stock (or other securities, if
applicable) to provide for the issuance of Warrant Stock (or other securities)
upon the exercise of this Warrant. The Company agrees that its issuance of
this
Warrant shall constitute full authority to its officers who are charged with
the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Stock upon the exercise of this
Warrant.
6. MECHANICS
OF EXERCISE. This Warrant may be exercised by the holder hereof, in whole or
in
part, by the surrender of this Warrant and the Notice of Exercise attached
hereto as Exhibit
A
duly
completed and executed on behalf of the holder hereof, at the principal office
of the Company together with payment in full of the Warrant Price then in effect
(or an election in the Notice of Exercise to net exercise) with respect to
the
number of shares of Warrant Stock as to which the Warrant is being exercised.
This Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of its surrender for exercise as provided above,
and the person entitled to receive the Warrant Stock issuable upon such exercise
shall be treated for all purposes as the holder of such shares of record as
of
the close of business on such date. Within three (3) days after such date,
the
Company at its expense shall cause to be issued and delivered to the person
or
persons entitled to receive the same a certificate or certificates for the
number of full shares of Warrant Stock issuable upon such exercise, together
with cash in lieu of any fraction of a share as provided above. The shares
of
Warrant Stock issuable upon exercise hereof shall, upon their issuance, be
validly issued, fully paid and nonassessable, and free from all preemptive
rights, taxes, liens and charges with respect to the issue thereof. In the
event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of shares
for
which this Warrant may then be exercised.
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7. CERTIFICATE
OF ADJUSTMENT. Whenever the Warrant Price or number or type of securities
issuable upon exercise of this Warrant is adjusted, as herein provided, the
Company shall, at its expense, promptly deliver to the record holder of this
Warrant a certificate of an officer of the Company setting forth the nature
of
such adjustment and showing in detail the facts upon which such adjustment
is
based.
8. REPRESENTATIONS
OF PURCHASER. As of the date hereof, the Purchaser hereby confirms the
representations and warranties made by the Purchaser in Section 4 of the
Purchase Agreement.
9. TRANSFER
RESTRICTIONS.
(a) Unregistered
Security.
The
holder of this Warrant acknowledges that this Warrant and the Warrant Stock
have
not been registered under the Securities Act of 1933, as amended (the
“Securities
Act”)
or
applicable state securities laws (collectively, the “Acts”),
and
agrees not to sell, encumber or otherwise transfer this Warrant or any Warrant
Stock issued upon its exercise unless (i) there is an effective registration
statement under the Acts covering the transaction, (ii) the Company receives
an
opinion of counsel satisfactory to the Company that such registration is not
required under the Acts; provided that no such opinion of counsel shall be
required in connection with a sale of the Securities pursuant to Rule 144 under
the Securities Act, or (iii) the Company otherwise satisfies itself that
registration is not required under the Acts. Each certificate or other
instrument for Warrant Stock issued upon the exercise of this Warrant shall
bear
a legend substantially to the foregoing effect.
(b) No
Transfer.
This
Warrant is not transferable without the Company’s prior written consent;
provided, however, such consent shall not be required in connection with the
transfer by the Purchaser of such Warrant (but only with all related
obligations) without consideration to a Qualifying Holder (as such term is
defined in the Registration Rights Agreement between the Company and the
Purchaser entered into in connection with the Purchase Agreement dated as of
even date herewith), provided that (i) written notice (in the form of
Exhibit
B
as
attached hereto) is provided to the Company at least five (5) business days
prior to any such transfer, (ii) the transferee is an “accredited investor” as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act
and
(iii) the transferee agrees in writing to be bound by all of the provisions
of
this Warrant.
10. NOTICES
OF RECORD DATE. In the event of:
(a) any
taking by the Company of a record of the holders of any class of securities
for
the purpose of determining the holders thereof who are entitled to receive
any
dividend (other than a cash dividend payable out of earned surplus of the
Company) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities
or
property, or to receive any other right; or
-4-
(b) any
Reorganization or Merger; or
(c) any
voluntary or involuntary dissolution, liquidation or winding-up of the
Company,
then
and
in each such event the Company will mail or cause to be mailed to the Purchaser
(or a permitted transferee pursuant to Section 9(b) above) a notice
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character
of
such dividend, distribution or right, and (ii) the date on which any such
Reorganization, Merger, dissolution, liquidation or winding-up is to take place,
and the time, if any, as of which the holders of record of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock
(or
other securities) for securities or other property deliverable upon such
Reorganization, Merger, dissolution, liquidation or winding-up. Such notice
shall be mailed at least ten (10) business days prior to the date therein
specified.
11. REPLACEMENT
OF WARRANTS. On receipt of evidence reasonably satisfactory to the Company
of
the loss, theft, destruction or mutilation of this Warrant and, in the case
of
any such loss, theft, destruction or mutilation of this Warrant, on delivery
of
an indemnity agreement or security reasonably satisfactory in form and amount
to
the Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. NO
IMPAIRMENT. Except to the extent as may be waived by the holder of this Warrant,
the Company will not, by amendment of its charter or through a Reorganization,
Merger, dissolution, sale of assets or any other voluntary action, avoid or
seek
to avoid the observance or performance of any of the terms of this Warrant,
but
will at all times in good faith assist in the carrying out of all such terms
and
in the taking of all such action as may be necessary or appropriate in order
to
protect the rights of the holder of this Warrant against
impairment.
13. SATURDAYS,
SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall be a
Saturday or Sunday or shall be a legal U.S. holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal U.S. holiday.
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14. MISCELLANEOUS.
This Warrant shall be governed by the laws of the State of New York. The
headings in this Warrant are for purposes of convenience and reference only,
and
shall not be deemed to constitute a part hereof. Neither this Warrant nor any
term hereof may be changed, waived, discharged or terminated orally but only
by
an instrument in writing signed by the Company and the Purchaser. All notices
and other communications from the Company to the Purchaser shall be sufficient
if in writing and delivered (i) personally, (ii) by facsimile transmission
(receipt verified), (iii) by registered or certified mail (return receipt
requested), postage prepaid, or (iv) sent by express courier service (receipt
verified), to the address furnished to the Company in writing by the Purchaser.
All such notices and communications to the Company shall be effective if
delivered (i) personally, (ii) by facsimile transmission (receipt verified),
(iii) by registered or certified mail (return receipt requested), postage
prepaid, or (iv) sent by express courier service (receipt verified), at 0000
Xxxxx Xxx Xxxxx 000, Xxxxxxx, XX 00000, H.
Xxxxxxx Xxxxxx, CEO & President, fax: (000) 000-0000, with a copy to Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Xxxxxxx X. Xxxxxx, Esq. fax: (000) 000-0000. The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability
of
any other provisions.
[Signature
Page Follows]
-6-
IN
WITNESS WHEREOF, this Common Stock Purchase Warrant is issued effective as
of
the Date of Issuance first set forth above.
TARGETED
GENETICS CORPORATION
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By: | ||
Name:
H. Xxxxxxx Xxxxxx
Title:
Chief Executive Officer & President
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EXHIBIT
A
NOTICE
OF
INTENT TO EXERCISE
(To
be
signed only upon exercise of Warrant)
To:
Targeted Genetics Corporation
The
undersigned, the Purchaser of the attached Warrant, hereby irrevocably elects
to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, ______________ (________) shares of Common Stock of Targeted
Genetics Corporation and (choose one)
__________
herewith makes payment of __________________ Dollars ($_________)
thereof
or
__________
exercises the Net Exercise Right pursuant to Section 1(b) thereof and requests
that the certificates for such shares be issued in the name of, and delivered
to
___________________________, whose address is
____________________________________________________________________________________________________.
DATED: ____________________________ | |||
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(Signature
must conform in all
respects
to name of the Purchaser
as
specified on the face of the
Warrant)
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(Address)
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EXHIBIT
B
NOTICE
OF
ASSIGNMENT FORM
FOR
VALUE
RECEIVED, ______________________ (the “Assignor”)
hereby
sells, assigns and transfers all of the rights of the undersigned Assignor
under
the attached Warrant with respect to the number of shares of common stock of
Targeted Genetics Corporation (the “Company”)
covered thereby set forth below, to the following “Assignee”
and,
in
connection with such transfer, represents and warrants to the Company that
(i)
such Assignee is a Qualifying Holder (as such term is defined in the
Registration Rights Agreement between the Company and the Purchaser entered
into
in connection with the Purchase Agreement dated as of even date herewith) of
the
Assignor and (ii) the transfer is otherwise in compliance with Section 9(b)
of
the Warrant:
NAME
OF ASSIGNEE
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ADDRESS/FAX
NUMBER
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Dated:
____________________________
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Signature:
Witness:
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ASSIGNEE
ACKNOWLEDGMENT
The
undersigned Assignee acknowledges that it has reviewed the attached Warrant
and
by its signature below it hereby represents and warrants that it is a Qualifying
Holder and an “accredited investor” as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933, as amended, and agrees to be
bound
by the terms and conditions of the attached Warrant as of the date
hereof.
Signature: | ||
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By: | ||
Its: |
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Address:
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