EXHIBIT 4.1
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR UNLESS THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
THIS WARRANT IS SUBJECT TO THE TERMS AND PROVISIONS OF THE
SECURITIES PURCHASE AGREEMENT AMONG SEATTLE GENETICS, INC. AND THE SIGNATORIES
THERETO DATED AS OF MAY 12, 2003, AS AMENDED FROM TIME TO TIME, AND IS ENTITLED
TO THE BENEFITS THEREOF. A COPY OF THE SECURITIES PURCHASE AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN
REQUEST.
THIS WARRANT IS SUBJECT TO AN INVESTOR RIGHTS AGREEMENT DATED AS
OF [____________], 2003 AMONG SEATTLE GENETICS, INC. AND CERTAIN OF ITS
STOCKHOLDERS, AS THE SAME MAY BE AMENDED FROM TIME TO TIME. THE TERMS OF SUCH
INVESTOR RIGHTS AGREEMENT INCLUDE, AMONG OTHER THINGS, RESTRICTIONS ON
TRANSFERS. A COPY OF SUCH INVESTOR RIGHTS AGREEMENT WILL BE FURNISHED WITHOUT
CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
Warrant No. [____]
WARRANT
to Purchase Common Stock of
SEATTLE GENETICS, INC.
THIS IS TO CERTIFY THAT _________________, or its registered
assigns, is entitled to purchase in whole or in part from time to time from
SEATTLE GENETICS, INC., a Delaware corporation (the "Issuer"), at any time on or
after the date hereof (the "Effective Date"), but not later than 5:00 p.m., New
York time, on December 31, 2011 (the "Expiration Date"), that number of shares
of the Issuer's common stock, $0.001 par value per share (the "Common Stock") as
set forth below at a purchase price of $6.25 per share (the "Exercise Price"),
subject to the terms and conditions provided herein and in the Purchase
Agreement (as hereinafter defined).
This Warrant is issued pursuant to the Securities Purchase
Agreement dated as of May 12, 2003 (as modified, amended and supplemented and in
effect from time to time, the "Purchase Agreement") among the Issuer and the
signatories thereto.
The aggregate number of shares of Common Stock for which this
Warrant shall initially be exercisable shall be [_____________]./1/ The number
of shares of Common Stock for which this Warrant shall be exercisable and the
Exercise Price are subject to adjustment from time to time as provided herein.
SECTION 1. Certain Definitions.
(a) Each capitalized term used herein without definition
shall have the meaning assigned thereto (or incorporated by reference) in the
Purchase Agreement.
(b) As used herein, the following terms shall have the
following meanings (all terms defined in this Section 1 or in other provisions
of this Warrant in the singular have the same meanings when used in the plural
and vice versa):
"Common Stock" has the meaning assigned to such term in the
first paragraph of this Warrant.
"Effective Date" has the meaning assigned to such term in the
first paragraph of this Warrant.
"Exercise Notice" has the meaning assigned to such term in
Section 2(a)(i) hereof.
"Exercise Price" has the meaning assigned to such term in the
first paragraph of this Warrant.
"Expiration Date" has the meaning assigned to such term in the
first paragraph of this Warrant.
"Fair Market Value Per Share" means, for a share of Common
Stock, as of any date of determination:
(a) if such share of Common Stock is Publicly Traded as of
the date of determination, the price determined by computing the average of the
VWAP, over a period consisting of the most recent four (4) Trading Days
occurring on or prior to the date of determination (but excluding any trades or
quotations that are not bona fide, arm's length transactions); and
(b) if the Common Stock is not Publicly Traded as of the
date of determination, the Board will present to the Holder a written good faith
estimate of the fair market value of such Common Stock. Such estimate shall be
deemed to be the fair market value of such Common Stock unless the Holder shall
deliver a written objection to such estimate to the Issuer within ten (10)
Business Days of receipt of such estimate, which notice shall set forth the
Holder's good faith estimate of the fair market value of such Common Stock. If
the Issuer receives such an objection notice from the Holder, the Issuer and the
Holder shall attempt in
----------
/1/ Each warrant will be exercisable for a number of shares that represents
12.5% of the Common Stock into which the Series A Preferred Stock purchased by
the Holder is initially convertible.
-2-
good faith to agree upon the fair market value of such Common Stock; provided,
however, that if no resolution is reached within ten (10) Business Days of the
Issuer's receipt of such objection notice, the Issuer shall engage a nationally
recognized investment bank (which investment bank shall be reasonably acceptable
to the Requisite Series A Preferred Holders) experienced in the valuation of
business securities to determine the fair market value of such Common Stock, and
the written determination of such investment bank shall be deemed to be the fair
market value of such Common Stock. The parties hereto agree that for purposes of
any such appraisal, the value of such Common Stock shall not be discounted to
reflect (i) the lack of a public trading market in such Common Stock or (ii) if
applicable, that the amount of Common Stock in question represents a minority
equity interest in the Issuer. The fees and expenses of an investment bank
engaged pursuant to this provision shall be borne equally by the Issuer, on the
one hand, and the Holder, on the other hand; provided, however, that if the
Issuer's calculation of the fair market value of such Common Stock is within 20%
of the investment bank's determination and that of the Holder is not, then such
fees and expenses of the investment bank shall be borne entirely by the Holder;
provided, further, that if the Holder's calculation of the fair market value of
such Common Stock is within 20% of the investment bank's determination and that
of the Issuer is not, then such fees and expenses of the investment bank shall
be borne entirely by the Issuer. For purposes of this provision, the fair market
value of such Common Stock shall be determined as of the date such payment is
made.
"Holder" means the registered holder of this Warrant including
any Transferees of such Holder.
"include" and "including" shall be construed as if followed by
the phrase ", without being limited to,".
"Issuer" has the meaning assigned to such term in the first
paragraph of this Warrant.
"Material Sale" means (i) the sale (in one or a series of
related transactions) of all or substantially all of the Issuer's assets to a
Person or a group of Persons acting in concert (including, without limitation,
the sale of a division of the Issuer or such assets of the Issuer that would
materially change the nature or composition of the Issuer's business lines),
(ii) the sale or transfer (in one or a series of related transactions) of a
majority of the outstanding capital stock of the Issuer, to one Person or a
group of Persons acting in concert, or (iii) the merger or consolidation of the
Issuer with or into another Person that is not an Affiliate of the Issuer, in
each case in clauses (ii) and (iii) above under circumstances in which the
holders of a majority in voting power of the outstanding capital stock of the
Issuer immediately prior to such transaction own less than a majority in voting
power of the outstanding capital stock of the Issuer, or the surviving or
resulting corporation or acquirer, as the case may be, immediately following
such transaction; provided, however, that a debt or equity financing where (x)
the Issuer is the surviving corporation and (y) individuals who served as
members of the Board immediately prior to such financing constitute at least
three-fourths (3/4) of the members of the Board (rounded up to the nearest whole
number) after such financing, shall not be deemed a Material Sale. A sale (or
multiple related sales) of one or more Subsidiaries (whether by way of merger,
consolidation, reorganization or sale of all or substantially all assets or
securities) which constitutes all or substantially all of the consolidated
assets of the Issuer shall be deemed a Material Sale.
-3-
"Publicly Traded" means, with respect to the Common Stock, that
such Common Stock is (a) listed on a domestic securities exchange, (b) quoted on
the Nasdaq National Market or the Nasdaq Small-Cap Market or (c) traded in the
domestic OTC Bulletin Board Market and its successor the Bulletin Board
Exchange, which trades are reported through systems maintained by the National
Association of Securities Dealers, Inc. or (d) traded in the domestic
over-the-counter "pink sheet" market, which trades are reported by the National
Quotation Bureau, Incorporated.
"Purchase Agreement" has the meaning assigned to such term in
the second paragraph of this Warrant.
"Requisite Holders" means those Holders holding Warrants
representing the right to purchase at least sixty-six and two-thirds percent (66
2/3%) of the Warrant Stock issuable upon exercise of all outstanding Warrants
issued pursuant to the Purchase Agreement, and held by all Holders.
"Trading Day" means any day in which the principal stock
exchange (or Nasdaq) upon which the Common Stock is traded is open for business.
"Transfer", as to any Warrant or Warrant Stock, means to sell,
or in any other way transfer, assign, pledge, distribute, encumber or otherwise
dispose of, such Warrant or Warrant Stock (or any economic interest in any
Warrant or Warrant Stock), or any equity interest in any Person owning any such
Warrant or Warrant Stock, directly or indirectly, either voluntarily or
involuntarily, whether with or without consideration.
"VWAP" means, as of any Trading Day, the volume weighted
average price on such day for a share of Common Stock:
(i) on all domestic national securities exchanges on
which the Common Stock may be listed if such exchanges are the primary
securities markets for the Common Stock;
(ii) if there have been no sales on any such domestic
national securities exchange on such Trading Day, on the immediately
preceding Trading Day on all such exchanges, if such exchanges are the
primary securities markets for the Common Stock;
(iii) if on such Trading Day the Common Stock is not
listed on any such domestic national securities exchange, on the Nasdaq
National Market or the Nasdaq Small-Cap Market, as applicable;
(iv) if there have been no sales on the Nasdaq
National Market or the Nasdaq Small-Cap Market, as the case may be, on
such Trading Day, then on the immediately preceding Trading Day quoted
on the Nasdaq National Market or the Nasdaq Small-Cap Market, as the
case may be; or
(v) if on such Trading Day the Common Stock is not
quoted on the Nasdaq National Market or Nasdaq Small-Cap Market, then,
as applicable (A) the domestic OTC Bulletin Board Market and its
successor the Bulletin Board Exchange,
-4-
which trades are reported through systems maintained by the National
Association of Securities Dealers, Inc. or (B) the domestic
over-the-counter "pink sheet" market, which trades are reported by the
National Quotation Bureau, Incorporated, or any similar successor
organization;
provided, however, that for purposes of calculating the VWAP for any period of
two or more consecutive Trading Days (including in connection with determining
Fair Market Value Per Share), if the VWAP for any of such Trading Days is
determined pursuant to clause (ii) or (iv) above and the immediately preceding
Trading Day has already been considered pursuant to clause (i) or (iii) above,
then the VWAP for such immediately preceding Trading Day shall be determined by
substituting the day next preceding such immediately preceding Trading Day that
has yet to be considered.
For the purposes of (1) any determination of the "Fair Market
Value Per Share" of any share of Common Stock, on or for any day after the "ex"
date or any similar date for any dividend or distribution paid or to be paid
with respect to the Common Stock, any VWAP of the Common Stock on a day prior to
such "ex" date or similar date shall be appropriately reduced by the fair market
value of the per share amount of such dividend or distribution, as determined by
the Board in good faith and on a reasonable, customary and consistent basis, and
(2) any determination of the "Fair Market Value Per Share" of any share of
Common Stock, on or for any day after (i) the effective day of any subdivision
(by stock split or otherwise) or combination (by reverse stock split or
otherwise) of outstanding shares of Common Stock or (ii) the "ex" date or any
similar date for any dividend or distribution paid or to be paid with respect to
the Common Stock in additional shares of Common Stock, any VWAP of a share of
Common Stock on a day prior to such effective date or "ex" date or similar date
shall be appropriately adjusted by the Board in good faith and on a reasonable,
customary and consistent basis to reflect such subdivision, combination,
dividend or distribution.
"Warrant" means this Warrant originally issued by the Issuer
pursuant to the Purchase Agreement and all warrants issued upon Transfer,
division, or combination of, or in substitution for, this Warrant.
"Warrant Stock" means (a) all shares of Common Stock issued or
issuable from time to time upon exercise of this Warrant, (b) all other
securities or other property issued or issuable upon any such exercise and (c)
any securities distributed with respect to the securities referred to in the
preceding clauses (a) and (b): provided, however, that the term "Warrant Stock"
shall not include shares of Common Stock or other securities following the time
such shares or other securities have been sold in a public offering registered
under the Securities Act or sold under Rule 144 promulgated thereunder.
SECTION 2. Exercise of Warrant.
(a) On and after the Effective Date and until 5:00 p.m., New
York City time, on the Expiration Date, the Holder may exercise this Warrant, on
one or more occasions, on any Business Day, in whole or in part, by delivering
to the Issuer, at its office maintained for such purpose pursuant to Section
6(a) hereof,
-5-
(i) a written notice of the Holder's election to
exercise this Warrant, which notice shall be substantially in the form
of Annex A attached hereto and shall be properly completed (the
"Exercise Notice"),
(ii) payment of the Exercise Price (payable as set
forth in Section 2(b) below) for the Warrant Stock as to which this
Warrant is being exercised, and
(iii) this Warrant.
Except to the extent necessary to cause the number of shares of
Common Stock deliverable as provided in Section 2(b) to be a whole number of
shares, this Warrant shall be exercisable in part only for a whole number of
shares.
(b) At the option of the Holder, the Exercise Price shall be
payable
(i) in cash by wire transfer to an account
designated by the Issuer or by certified or official bank check payable
to the order of the Issuer; or
(ii) by delivery of this Warrant to the Issuer for
cancellation in accordance with the further provisions of this Section
2(b)(ii). In exchange for the portion of this Warrant that is being
exercised at such time, the Holder shall receive the number of shares of
Common Stock determined by multiplying (A) the number of shares of
Common Stock for which this Warrant is being exercised at such time by
(B) a fraction, (1) the numerator of which shall be the difference
between (x) the Fair Market Value Per Share of Common Stock at such time
and (y) the Exercise Price per share of Common Stock, and (2) the
denominator of which shall be the Fair Market Value Per Share of Common
Stock at such time. The Issuer shall issue a new Warrant for the
portion, if any, of this Warrant not being exercised as provided in
Section 2(f).
(c) Subject to the provisions of Section 2(d), upon receipt
of an Exercise Notice, the aggregate Exercise Price payable and this Warrant,
the Issuer shall, as promptly as practicable and in any event within five (5)
Business Days thereafter, issue one or more stock certificates representing the
aggregate number of shares of Common Stock to which the Holder is entitled and
transfer to the Holder of this Warrant appropriate evidence of ownership of
other securities or property (including any cash) to which the Holder is
entitled, in such denominations, and registered or otherwise placed in, or
payable to the order of, such name or names, as may be directed in writing by
the Holder, and shall deliver such stock certificates, evidence of ownership and
any other securities or property (including any cash) to the person or persons
entitled to receive the same, together with an amount in cash in lieu of any
fraction of a share (or fractional interest in any other security), as
hereinafter provided. The Issuer shall pay all expenses in connection with, and
any and all documentary, stamp or similar issue taxes of the United States or
any state thereof payable in respect of, the issuance or delivery of the Warrant
Stock upon exercise of this Warrant. However, the Issuer shall not be required
to pay any tax or other charge imposed in connection with any assignment or
Transfer involved in the issue of any certificate or other evidence of ownership
of Warrant Stock.
(d) The Holder's election to exercise this Warrant may, in
the sole discretion of the Holder, be conditioned upon, and in such event, the
exercise shall be subject in all respects
-6-
to, the consummation of a Material Sale, the public offering of any class of the
Issuer's Common Stock registered under the Securities Act or other similar
transaction involving the Issuer, as specified in the Exercise Notice. If any
exercise of this Warrant is so conditioned, then, subject to delivery of the
items required by Section 2(c), the Issuer shall deliver the certificates and
other evidence of ownership of other securities or other property in such manner
as the Holder shall direct as required in connection with the consummation of
the transaction upon which the exercise is conditioned. At any time that the
Issuer shall give notice to the Holder that such transaction has been abandoned
or the Holder has withdrawn from participation in such transaction, the Issuer
shall return the items delivered pursuant to Section 2(c) and the Holder's
election to exercise this Warrant shall be deemed rescinded.
(e) The stock certificate or certificates or other evidence
of ownership of Warrant Stock to be delivered pursuant to Section 2(c) hereof
shall be deemed to have been issued, and the Holder or any other Person so
designated to be named therein shall, to the extent permitted by law, be deemed
to have become a holder of record of the Warrant Stock represented thereby,
including having the right to vote any voting securities included therein or to
consent or to receive notice as a stockholder, as of the date on which the last
of the Exercise Notice, payment of the Exercise Price and this Warrant is
received by the Issuer as aforesaid, (subject, in the case of any exercise to
which Section 2(d) applies, to the consummation of the transaction upon which
such exercise is conditioned) notwithstanding that the transfer books of the
Issuer shall then be closed or that such certificates or other evidence of
ownership shall not then actually have been delivered to the Holder.
(f) If this Warrant shall have been exercised only in part,
the Issuer shall, at the time of delivery of the certificate or certificates or
other evidence of ownership of Warrant Stock, execute and deliver to the Holder,
without charge, a new Warrant evidencing the rights of the Holder to purchase
the unpurchased Warrant Stock called for by this Warrant, which new Warrant
shall in all other respects be identical to this Warrant, except for any legend
hereon to the extent no longer required pursuant to the Purchase Agreement.
(g) The Issuer shall not be required to issue any fractional
share of Common Stock (or fractional interest in any other security) upon
exercise of this Warrant. As to any fraction of a share (or fractional interest
in any other security) that the Holder would otherwise be entitled to receive
upon such exercise, the Issuer shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Fair Market Value Per
Share of Common Stock (and/or other security) on the date of exercise; provided,
however, that in the event that the Issuer undertakes a reduction in the number
of shares of Common Stock or other securities outstanding, it shall be required
to issue fractional shares or fractional interests in such other securities to
the Holder if the Holder exercises all (but not part) of this Warrant, unless
the Holder shall have consented in writing to such reduction and provided the
Issuer with a written waiver of its right to receive fractional shares or
interests in accordance with this paragraph. If the Holder shall exercise more
than one Warrant in the same transaction, any payment in respect of fractional
shares (or other fractional interests) shall be based on the final fraction
resulting from aggregating all such exercises.
(h) The Issuer hereby agrees at all times to keep reserved
for issuance and delivery upon exercise of this Warrant such number of its
authorized but unissued shares (or
-7-
treasury shares) of Common Stock or other securities of the Issuer from time to
time issuable upon exercise of this Warrant as will be sufficient to permit the
exercise in full of this Warrant. All such shares and other securities shall be
duly authorized and, when issued upon exercise of this Warrant in accordance
with the terms hereof, shall be validly issued, fully paid and non-assessable,
free and clear of all liens, security interests, charges and other encumbrances
or restrictions on sale and free and clear of all preemptive or similar rights.
(i) If the issuance of any shares of Common Stock or other
securities required to be reserved for purposes of the exercise of this Warrant
requires the registration with, or approval of, any Governmental Authority or
requires listing on any national securities exchange or national market system
before such shares or other securities may be so issued, the Issuer shall at its
expense use its best efforts to cause such shares to be duly registered,
approved or listed, as the case may be, so that such shares or other securities
may be issued in accordance with the terms hereof.
(j) The Issuer and the Holder intend that if the Holder
exercises this Warrant as contemplated by Section 2(b)(ii) hereof, such method
of exercise shall be treated for all Tax purposes as a "reorganization" pursuant
to Section 368(a)(1)(E) of the Code. The Issuer and the Holder intend that the
Holder (and its direct and indirect beneficial owners) will neither realize nor
recognize any taxable income or gain as a result of its exercise of the Warrant
by such method, and that for Federal income tax purposes, the Holder's holding
period for property received as a result of such exercise shall include such
Holder's holding period in the Warrant. None of the parties hereto will take any
position in their respective Tax or other financial or accounting filings that
are contrary to or inconsistent with the foregoing, unless otherwise required by
Applicable Law, as evidenced by the opinion of a nationally recognized law or
accounting firm.
SECTION 3. Transfer, Division and Combination.
(a) Subject to the Holder's compliance with the terms and
conditions of the Purchase Agreement and the other Documents, this Warrant and
all rights hereunder are assignable and transferable (subject to any restrictive
legends hereon), at any time in whole or in part, without the consent of the
Issuer, to any Person or Persons, upon surrender of this Warrant to the Issuer,
together with a written assignment of this Warrant substantially in the form of
Annex B attached hereto, duly executed by the Holder hereof or such Holder's
agent or attorney; provided, however, that this Warrant may only be transferred
by the Holder (including any transferees of such Holder): (i) to a Person that
is not an Affiliate of such Holder (or such transferee) either (A) in whole or
(B) in part, up to a maximum of five times, provided that any transfers pursuant
to this clause (B) by any Affiliates of such Holder (or such transferee) shall
be included in determining whether such maximum number has been met or (ii) to a
Person that is an Affiliate of such Holder (or such transferee) in whole or in
part. In the event of any transfer of this Warrant, the new holder hereof shall
agree to be bound by all of the terms and conditions of this Warrant, the
Purchase Agreement and the other Documents applicable to the Warrant Shares.
Upon such surrender, the Issuer shall, without charge, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees (and, if the
Holder's entire interest is not being assigned, in the name of the Holder), and
in the denominations specified in such instrument of assignment, and this
Warrant shall promptly be canceled.
-8-
(b) This Warrant may be exchanged for, or combined with,
other Warrants upon presentation of this Warrant and any other Warrants with
which this Warrant is to be combined to the Issuer, together with a written
notice specifying the denominations in which a new Warrant or Warrants are to be
issued, signed by the Holder. The Issuer shall execute and deliver a new Warrant
or Warrants to the Holder in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
(c) The Issuer shall maintain books for the registration and
Transfer of the Warrants, and shall allow each Holder to inspect such books at
such reasonable times as such holder shall request.
SECTION 4. Adjustments.
(a) Subdivisions and Combinations. If at any time the Issuer
shall
(i) take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other
distribution of Common Stock;
(ii) subdivide, split or reclassify its outstanding
shares of Common Stock into a larger number of shares of Common Stock;
or
(iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock;
then immediately after the occurrence of any such event (A) the number of shares
of Common Stock issuable upon exercise of this Warrant shall be adjusted so as
to equal the number of shares of Common Stock the Holder would have held
immediately after the occurrence of such event (in the case of an event referred
to in clause (i), after giving effect to such dividend or distribution) if the
Holder had exercised this Warrant immediately prior to the occurrence of such
event and (B) the Exercise Price shall be adjusted to be equal to (x) the
Exercise Price immediately prior to the occurrence of such event multiplied by
(y) a fraction (1) the numerator of which is the number of shares of Common
Stock issuable upon exercise of this Warrant immediately prior to the adjustment
in clause (A) and (2) the denominator of which is the number of shares of Common
Stock issuable upon exercise of this Warrant immediately after the adjustment in
clause (A).
(b) Other Provisions Applicable to Adjustments under this
Section. The following provisions shall be applicable to the making of
adjustments of the number of shares of Common Stock issuable upon exercise of
this Warrant:
(i) In computing adjustments under this Section,
fractional interests in Common Stock shall be taken into account to the
nearest one-thousandth of a share.
(ii) If the Issuer shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a
dividend or distribution or subscription or purchase rights and shall,
thereafter and before the payment of such dividend or distribution or
the granting of such subscription or purchase rights, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or
purchase rights, then
-9-
thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(c) Merger, Consolidation or Disposition of Assets. If the
Issuer shall merge, consolidate or effect a share exchange with another entity,
or shall sell, transfer or otherwise dispose of all or substantially all of its
assets to another entity and pursuant to the terms of such merger,
consolidation, share exchange or disposition of assets, cash, shares of Common
Stock or other securities of the successor or acquiring entity, or property of
any nature is to be received by or distributed to the holders of Common Stock of
the Issuer, then the Holder shall be entitled to receive upon exercise of the
Warrant at any time thereafter, the amount of cash, shares of Common Stock,
other securities or other property that it would have been entitled to receive
if such Holder had exercised this Warrant in full immediately prior to the
occurrence of such merger, consolidation, share exchange or disposition of
assets. In the case of any such merger, consolidation, share exchange or
disposition of assets, the successor or acquiring entity (and any Affiliate
thereof issuing securities) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Issuer and all of the obligations
and liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board and reasonably acceptable
to the Requisite Holders) in order to provide for adjustments of the Warrant
Stock issuable upon exercise of this Warrant that shall be as nearly equivalent
as practicable to the adjustments provided for in this Section 4. The foregoing
provisions shall similarly apply to successive mergers, consolidations, share
exchanges and dispositions of assets.
(d) Capital Reorganization or Capital Reclassification. If
the Issuer shall effect any capital reorganization or any reclassification of
its capital stock (other than a change in par value or from par value to no par
value or from no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), then in each case the Issuer
shall cause effective provision to be made so that this Warrant shall be
exercisable for the kind and number of shares of stock, other securities, cash
or other property to which a holder of the Warrant Stock deliverable upon
exercise of this Warrant would have been entitled upon such reorganization or
reclassification and any such provision shall include adjustments in respect of
such stock, securities or other property that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 4 with
respect to this Warrant.
(e) Other Action Affecting Common Stock. If at any time or
from time to time the Issuer shall take any action affecting its Common Stock,
other than any action described in this Section 4, then, unless such action will
not have an adverse effect upon the Holder's rights, the number of shares of
Warrant Stock issuable upon exercise of this Warrant and the Exercise Price
therefor shall be adjusted in such manner and at such time as the Board shall in
good faith determine (such determination to be reasonably acceptable to the
Requisite Holders) to be equitable in the circumstances.
(f) Notice of Adjustments. Whenever the number of shares of
Warrant Stock issuable upon exercise of this Warrant shall be adjusted pursuant
to this Warrant, the Issuer shall forthwith prepare a certificate setting forth,
in reasonable detail, the event requiring the adjustment, the method by which
such adjustment was calculated and specifying the number of shares of Warrant
Stock issuable upon exercise of this Warrant after giving effect to such
-10-
adjustment. The Issuer shall promptly cause a signed copy of such certificate to
be delivered to the Holder. The Issuer shall keep at its office maintained for
purposes of Section 6(a) hereof copies of all such certificates and cause the
same to be available for inspection at said office during normal business hours
by the Holder or any prospective purchaser of a Warrant designated by the
registered Holder hereof.
(g) Notice of Certain Corporate Action. If the Issuer shall
propose
(i) to pay any dividend to the holders of its Common
Stock or to make any other distribution to the holders of its Common
Stock;
(ii) to offer to the holders of its Common Stock
rights to subscribe for or to purchase any additional shares of Common
Stock or any other Securities;
(iii) to effect any reorganization or reclassification
of its Common Stock;
(iv) to effect any other capital reorganization;
(v) to effect any recapitalization, consolidation,
merger or share exchange or any sale, transfer or other disposition of
all or substantially all of its assets; or
(vi) to effect the liquidation, dissolution or
winding up of the Issuer,
then, in each such case, the Issuer shall give to the Holder a notice of such
proposed action, which shall specify the date on which a record is to be taken
for the purposes of such dividend, distribution or rights offer, or the date on
which such reclassification, issuance, reorganization, consolidation, merger,
share exchange, sale, transfer, disposition, liquidation, dissolution or winding
up is to take place and the date of participation therein by the holders of
Common Stock, if any such date is to be fixed, and shall also set forth the
material terms with respect thereto as shall be reasonably necessary to indicate
the effect of such action on the Common Stock, and the number of shares of
Warrant Stock that are issuable upon exercise of this Warrant after giving
effect to any adjustment that will be required as a result of such action. Such
notice shall be so given in the case of any action covered by clauses (i) or
(ii) above at least 15 days prior to the record date for determining holders of
the Common Stock for purposes of such action, and in the case of any other such
action, at least 15 days prior to the date of the taking of such proposed
action. Failure to give any such notice or any defect therein shall not affect
the validity of the proceedings, actions or events described in clauses (i)
through (vi) hereof.
(h) No Impairment. The Issuer will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Issuer, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such actions as may be necessary or
appropriate in order to protect the exercise rights of the Holder against
impairment.
-11-
(i) Miscellaneous. The computations of all amounts under
this Section 4 shall be made assuming that all other anti-dilution or similar
adjustments to be made to all other securities resulting from the transaction
causing an adjustment pursuant to this Section 4 have previously been made so as
to maintain the relative percentage ownership (on a fully-diluted basis) of this
Warrant vis a vis all other securities issued by the Issuer.
(j) Par Value. The Issuer shall take or cause to be taken
such steps as shall be necessary to ensure that the par value per share of
Common Stock is at all times less than or equal to the Exercise Price.
SECTION 5. Dividend and Distributions.
If, at any time prior to the full exercise of the Warrants, the
Issuer pays any dividend or makes any distribution (whether in cash, property or
securities of the Issuer) on the Common Stock which does not result in an
adjustment under Section 4 or, if the Requisite Holders notify the Issuer that
the anti-dilution provisions of Section 4 are waived in connection with such
dividend or distribution, then, in either event the Issuer shall simultaneously
pay to the Holder of each Warrant, the dividend or distribution which would have
been paid to such Holder on the Warrant Shares receivable upon exercise in full
of the Warrant had the Warrant been fully exercised immediately prior to the
record date for such dividend or distribution or if no record is taken, the date
as of which the record holder of Common Stock entitled to such dividend or
distribution are to be determined.
SECTION 6. Miscellaneous.
(a) Office of Issuer. So long as this Warrant remains
outstanding, the Issuer shall maintain an office in the continental United
States where the Warrants may be presented for exercise, Transfer, division or
combination as provided in this Warrant. Such office shall be at 00000 00xx
Xxxxx X.X., Xxxxxxx, Xxxxxxxxxx 00000, unless and until the Issuer shall
designate and maintain some other office for such purposes and give notice
thereof to the Holder.
(b) Notices Generally. Any notices and other communications
pursuant to the provisions hereof shall be sent in accordance with the
provisions of Section 10.6 of the Purchase Agreement.
(c) Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its conflicts of laws rules. The Issuer agrees that it may be served with
process in the State of New York or the State of Delaware and any action for
breach of this Warrant may be prosecuted against it in the courts of either
State or any Federal court located in either State. Notwithstanding the
foregoing provisions of this Section 6(c), those provisions of this Warrant that
relate to the internal governance of the Issuer and are required by Delaware
corporate law to be governed by such, shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware.
(d) Voting Rights. Except as otherwise provided herein, this
Warrant does not entitle the Holder to any voting rights or other rights of a
stockholder of the Issuer, as a stockholder.
-12-
(e) Limitation of Liability. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Common Stock,
and no mere enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the Exercise Price or as a
stockholder of the Issuer, whether such liability is asserted by the Issuer, by
any creditor of the Issuer or any other Person.
(f) Loss or Destruction of Warrant. Upon receipt by the
Issuer of evidence satisfactory to it (in the exercise of its reasonable
discretion) of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction), if requested by the Issuer, of
reasonably satisfactory indemnification (if the Holder is a financial
institution or an Affiliate thereof, its own agreement being satisfactory), or
(in the case of mutilation) upon surrender and cancellation of this Warrant, the
Issuer shall, without charge, execute and deliver a new Warrant exercisable for
the same amount of Warrant Stock.
(g) Amendments and Waivers. Any provision of this Warrant
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by the Issuer and the Requisite Holders
and, in the case of a waiver, by the party against whom the waiver is to be
effective. No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
* * * *
-13-
IN WITNESS WHEREOF, the Issuer has duly executed this Warrant.
Dated: [_______ __], 2003
SEATTLE GENETICS, INC.
By:
------------------------
Name: Xxxx X. Xxxxxxx
Title: President & CEO
ANNEX A TO WARRANT
FORM OF EXERCISE NOTICE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Warrant exercises this
Warrant for the purchase of ________ shares of Common Stock of Seattle Genetics,
Inc., a Delaware corporation, and herewith makes payment therefor of $__________
(such payment being made [check one] (x) [ ] in cash or by certified or official
bank check or (y) [ ] by acceptance of a reduced number of shares of Common
Stock upon cancellation of this Warrant as provided in Section 2(b) of this
Warrant, all on the terms and conditions specified in this Warrant, and requests
that
(i) certificates and/or other instruments covering
such shares of Common Stock be issued in accordance with the
instructions given below; and
(ii) if such shares of Common Stock shall not include
all of the shares of Common Stock to which the Holder is entitled under
this Warrant, that a new Warrant for the unpurchased balance of the
shares of Common Stock issuable hereunder be delivered to the
undersigned. References in this Exercise Notice to "Common Stock" shall
include other securities or other property to the extent included in
Warrant Stock.
The undersigned agrees that the shares to be issued upon
exercise of this Warrant may not be offered, sold, assigned, pledged,
hypothecated or otherwise transferred or disposed of except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
and applicable provisions of state securities laws.
[This Exercise Notice is being delivered contingent upon the
consummation of [describe transaction] as contemplated by Section 2(d) of this
Warrant].*
Dated:________________________
---------------------------------------
(Signature of Registered Holder)**
Instructions for issuance and
registration of shares of Common Stock:
--------------------------------------- Social Security or Other
Name of Registered Holder Identifying Number:___________
(please print)
Please deliver certificate to
the following address
Street
City, State and Zip Code
----------
*Include if applicable.
**The signature must correspond with the name as written upon the face of the
attached Warrant in every particular, without alteration.
ANNEX B TO WARRANT
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the assignee named below all
the rights of the undersigned under this Warrant with respect to the number of
shares of Common Stock covered thereby set forth below to:
Number of
Shares of
Name of Assignee Address Common Stock
----------------------------------------------------------------
and hereby irrevocably constitutes and appoints _______________ as agent and
attorney-in-fact to transfer such portion of said Warrant on the books of the
within-named Issuer, with full power of substitution in the premises.
References in this Exercise Notice to "Common Stock" shall
include other securities or other property to the extent included in Warrant
Stock.
Dated:__________________________
---------------------------------------
(Signature of Registered Holder)*
---------------------------------------
Name of Registered Holder
(Please Print)
By its signature below, the assignee hereby agrees to be bound by all of
the terms and conditions of this Warrant, the Purchase Agreement and the other
Documents applicable to the Warrant Shares.
---------------------------------------
(Signature of Assignee)
---------------------------------------
Name of Assignee
(Please Print)
----------
*The signature must correspond with the name as written upon the face of the
attached Warrant in every particular, without alteration.
