AVANIR PHARMACEUTICALS CLASS A COMMON STOCK WARRANT
Exhibit 4.8
CLASS A COMMON STOCK WARRANT
This certifies that _____________ (the “Holder”), or assigns, for value received, is entitled
to purchase from Avanir Pharmaceuticals (the “Company”), subject to the terms set forth below, a
maximum of ________ fully-paid and nonassessable shares (subject to adjustment as provided
herein) of the Company’s Class A Common Stock, no par value, (the “Warrant Shares”) for cash at a
price of $3.30 per share (the “Exercise Price”) (subject to adjustment as provided herein) at any
time or from time to time on or after May ___, 2007 (the “Initial Exercise Date”) and up to and
including 5:00 p.m. (New York City Time) on November ___, 2007 (the “Expiration Date”) upon
surrender to the Company at its principal office (or at such other location as the Company may
advise the Holder in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly completed and signed and upon payment in cash or by check of the aggregate
Exercise Price for the number of shares for which this Warrant is being exercised determined in
accordance with the provisions hereof. The Exercise Price is subject to adjustment as provided in
Section 3 of this Warrant. This Warrant is issued subject to the following terms and conditions:
1. Exercise, Issuance of Certificates. The Holder may exercise this Warrant at any
time or from time to time on or after the Initial Exercise Date and on or prior to the Expiration
Date, for all or any part of the Warrant Shares (but not for a fraction of a share) which may be
purchased hereunder, as that number may be adjusted pursuant to Section 3 of this Warrant. The
Company agrees that the Warrant Shares purchased under this Warrant shall be and are deemed to be
issued to the Holder hereof as the record owner of such Warrant Shares as of the close of business
on the date on which this Warrant shall have been surrendered, properly endorsed, the completed and
executed Form of Subscription delivered, and payment made for such Warrant Shares (such date, a
“Date of Exercise”). Certificates for the Warrant Shares so purchased, together with any other
securities or property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company’s expense as soon as practicable after
the rights represented by this Warrant have been so exercised, but in any event not later than the
third trading day following the Date of Exercise (“Warrant Share Delivery Date”). In case of a
purchase of less than all the Warrant Shares which may be purchased under this Warrant, the Company
shall cancel this Warrant and execute and deliver to the Holder hereof within a reasonable time a
new Warrant or Warrants of like tenor for the balance of the Warrant Shares purchasable under the
Warrant surrendered upon such purchase. Each stock certificate so delivered shall be registered in
the name of such Holder and issued without legend if there is an effective registration statement
covering such Warrant Shares or if exercised via cashless exercise pursuant to the terms set forth
below and such Warrant Shares shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company
through its Deposit Withdrawal Agent Commission (“DWAC”) system. If this Warrant is exercised for
cash at a time when there is no effective Registration Statement, the Warrant Shares may be issued
with a restrictive legend.
If, but only if, there is no effective Registration Statement covering the Warrant Shares at
the time of exercise, this Warrant may also be exercised at such time by means of a
“cashless exercise” in which the Holder shall be entitled to receive a certificate for the
number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = the VWAP on the trading day preceding the date of such election; | ||
| (B) | = the Exercise Price of the Warrants, as adjusted; and | ||
| (X) | = the number of Warrant Shares issuable upon exercise of the Warrants in accordance with the terms of this Warrant. |
As used herein, “VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the common stock of the Company (the “Common Stock”) is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg Financial L.P. (based on a trading day from 9:30 a.m. Eastern
Time to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed or quoted on a Trading
Market and if prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board and
if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets
LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair
market value of a share of Common Stock as determined in good faith by the Company’s Board of
Directors.
2. Holder’s Restrictions. The Company shall not effect any exercise of this Warrant,
and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section
1 or otherwise, to the extent that after giving effect to such issuance after exercise, such Holder
(together with such Holder’s affiliates, and any other person or entity acting as a group together
with such Holder or any of such Holder’s affiliates), as set forth on the applicable Form of
Subscription, would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by such Holder and its affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which the determination of such sentence is being
made, but shall exclude the number of shares of Common Stock which would be issuable upon (A)
exercise of the remaining, nonexercised portion of this Warrant beneficially owned by such Holder
or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without limitation, any other Warrants) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by such Holder or any of its affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 2, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by a Holder that the Company is not representing to such Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2 applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by
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such Holder) and of which a portion of this Warrant is exercisable shall be in the sole
discretion of a Holder, and the submission of a Form of Subscription shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to other securities
owned by such Holder) and of which portion of this Warrant is exercisable, in each case subject to
such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm
the accuracy of such determination. In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. The “Beneficial Ownership Limitation” shall be 4.99%
of the number of shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of this Warrant. The provisions of this
paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of
this Section 2 to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.
3. (a) Rescission Rights. If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to
Section 1 by the 2nd business day following the Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise.
(b) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.
In addition to any other rights available to the Holder, if the Company fails to cause its transfer
agent to transmit to the Holder a certificate or certificates representing the Warrant Shares
pursuant to an exercise on or before the 2nd trading day following the Warrant Share
Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the exercise at issue
times (B) the price at which the sell order giving rise to such purchase obligation was executed,
and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued had the Company timely complied with
its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of
$10,000, under clause (1) of the immediately preceding sentence the Company shall be required to
pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. Nothing herein shall limit a Xxxxxx’s right to
pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely
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deliver certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
4. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees
that all Warrant Shares, will, upon issuance and, if applicable, payment of the applicable Exercise
Price, be duly authorized, validly issued, fully paid and nonassessable, and free of all preemptive
rights, liens and encumbrances, except for restrictions on transfer provided for herein. The
Company shall at all times reserve and keep available out of its authorized and unissued Class A
Common Stock, solely for the purpose of providing for the exercise of the rights to purchase all
Warrant Shares granted pursuant to this Warrant, such number of shares of Common Stock as shall,
from time to time, be sufficient therefor.
5. Adjustment of Exercise Price and Number of Shares. The Exercise Price and the
total number of Warrant Shares shall be subject to adjustment from time to time upon the occurrence
of certain events described in this Section 3. Upon each adjustment of the Exercise Price, the
Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the Exercise Price
resulting from such adjustment.
5.1. Subdivision or Combination of Stock. In the event the outstanding shares of the
Company’s Common Stock shall be increased by a stock dividend payable in Common Stock, stock split,
subdivision, or other similar transaction occurring after the date hereof into a greater number of
shares of Common Stock, the Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced and the number of Warrant Shares issuable hereunder proportionately
increased. Conversely, in the event the outstanding shares of the Company’s Common Stock shall be
decreased by reverse stock split, combination, consolidation, or other similar transaction
occurring after the date hereof into a lesser number of shares of Common Stock, the Exercise Price
in effect immediately prior to such combination shall be proportionately increased and the number
of Warrant Shares issuable hereunder proportionately decreased.
5.2. Reclassification. If any reclassification of the capital stock of the Company or
any reorganization, consolidation, merger, or any sale, lease, license, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially all, of the
business and/or assets of the Company (the “Reclassification Events”) shall be effected in such a
way that holders of Common Stock shall be entitled to receive stock, securities, or other assets or
property, then, as a condition of such Reclassification Event lawful and adequate provisions shall
be made whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu
of the shares of Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of stock, securities, or other
assets or property as may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights represented hereby. In any
Reclassification Event, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions
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hereof (including, without limitation, provisions for adjustments of the Exercise Price and of
the number of Warrant Shares), shall thereafter be applicable, as nearly as may be, in relation to
any shares of stock, securities, or assets thereafter deliverable upon the exercise hereof.
5.3. Notice of Adjustment. Upon any adjustment of the Exercise Price or any increase
or decrease in the number of Warrant Shares, the Company shall give written notice thereof, by
first class mail postage prepaid, addressed to the registered Holder of this Warrant at the address
of such Holder as shown on the books of the Company. The notice shall be prepared and signed by
the Company’s Chief Financial Officer and shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
6. No Voting or Dividend Rights. Nothing contained in this Warrant shall be construed
as conferring upon the holder hereof the right to vote or to consent to receive notice as a
shareholder of the Company on any other matters or any rights whatsoever as a shareholder of the
Company. No dividends or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised.
7. Modification and Waiver. This Warrant and any provision hereof may be changed,
waived, discharged, or terminated only by an instrument in writing signed by the party against whom
enforcement of the same is sought.
8. Notices. Any notice, request, or other document required or permitted to be given
or delivered to the Holder hereof or the Company shall be delivered by hand or messenger or shall
be sent by certified mail, postage prepaid, or by overnight courier to each such Holder at its
address as shown on the books of the Company or to the Company at its principal place of business
or such other address as either may from time to time provide to the other. Each such notice or
other communication shall be treated as effective or having been given: (i) when delivered if
delivered personally, (ii) if sent by registered or certified mail, at the earlier of its receipt
or three business days after the same has been registered or certified as aforesaid, (iii) if sent
by overnight courier, on the next business day after the same has been deposited with a nationally
recognized courier service, or (iv) the date of transmission, if such notice or communication is
delivered via facsimile prior to 5:00 p.m. (New York City time) on a trading day at a facsimile
number as either may from time to time provide to the other and a confirming copy of such notice is
sent the same day by first class mail.
9. Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York (the
“Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the
Courts for the adjudication of any dispute hereunder or in connection herewith or with any
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transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of
any Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each
party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Warrant or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other party for its
reasonable attorney’s fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.
10. Lost or Stolen Warrant. Upon 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 or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or
in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company,
at its expense, will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
11. Fractional Shares. No fractional shares shall be issued upon exercise of this
Warrant. The Company shall, in lieu of issuing any fractional share, pay the Holder entitled to
such fraction a sum in cash equal to such fraction (calculated to the nearest 1/100th of a share)
multiplied by the then effective Exercise Price on the date the Form of Subscription is received by
the Company.
12. Acknowledgement. Upon the request of the Holder, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form satisfactory to
Holder, the continued validity of this Warrant and the Company’s obligations hereunder.
13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the successors and assigns
of the Holder. The provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant, and shall be enforceable by any such Holder.
14. Severability of Provisions. In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby
and the parties will attempt in good faith to agree upon a valid and enforceable provision which
shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its officer,
thereunto duly authorized on this ___ day of November 2006.
| Avanir Pharmaceuticals, a California corporation |
||||
| By: | ||||
| Xxxxxxx X. Xxxxxx, CMA | ||||
| Vice President and Chief Accounting Officer | ||||
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
The undersigned, the holder of the attached Class A Common Stock Warrant, hereby elects to
exercise the purchase right represented by such Warrant for, and to purchase thereunder, 1 shares of Class A Common Stock of Avanir
Pharmaceuticals and makes payment of $ therefor.
By its delivery of this Form of Subscription, the undersigned represents and warrants to the
Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own
in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934) permitted to be owned under Warrant to which this notice
relates.
| The undersigned requests that certificates for such shares be issued in the name of, and delivered to: | |||||
| whose address is: | . | ||||
DATED:
| (Signature must conform in all respects to name of Xxxxxx as specified on the face of the Warrant) |
||||
| Name: | ||||
| Title: | ||||
| 1 | Insert here the number of shares called for on the face of the Warrant (or, in the case of a partial exercise, the portion thereof as to which the Warrant is being exercised), in either case without making any adjustment for any stock or other securities or property or cash which, pursuant to the adjustment provisions of the Warrant, may be deliverable upon exercise. |
