EXHIBIT 10.3
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO PHARMION CORPORATION, QUALIFIES AS AN EXEMPT
TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
PHARMION CORPORATION
COMMON STOCK PURCHASE WARRANT
PHARMION CORPORATION, a Delaware corporation (the "Company"),
hereby certifies that, for value received, CELGENE CORPORATION, a Delaware
corporation, or its assigns (the "Holder") is entitled, subject to the terms set
forth below, to purchase from the Company, at any time and from time to time
during the period beginning on April 8, 2003 and ending on April 8, 2008 (the
"Expiration Date"), in whole or in part, an aggregate of 1,454,545 fully paid
and non-assessable shares of the common stock, $0.001 par value per share, of
the Company (the "Common Stock") at a purchase price, subject to the provisions
of Paragraph 3 hereof, of $2.75 per share (the "Purchase Price"). The Purchase
Price and the number and character of such shares are subject to adjustment as
provided below, and the term "Common Stock" shall mean, unless the context
otherwise requires, the stock or other securities or property at the time
deliverable upon the exercise of this Warrant. This Warrant is herein called the
"Warrant."
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant
shall be exercised by the Holder surrendering this Warrant, with the form of
Exercise Notice at the end hereof duly executed by the Holder, to the Company at
its office in Boulder, Colorado, accompanied by payment, of an amount (the
"Exercise Payment") equal to the Purchase Price multiplied by the number of
shares being purchased pursuant to such exercise, to the Company in cash, by
certified or official bank check, or by wire transfer of the Exercise Payment to
an account specified by the Company; provided, however, that the Holder may
satisfy its obligation to make the Exercise Payment through a "cashless
exercise," in which event the Company shall issue to the Holder the number of
shares of Common Stock determined as follows:
X = Y [(A-B)/A]
where:
X = the number of shares to be issued to the Holder.
Y = the number of shares with respect
to which this Warrant is being
exercised.
A = if the Common Stock is not then
publicly traded, the fair market
value of one share of Common Stock,
as determined by the Board of
Directors of the Company in good
faith, or, if the Common Stock is
then publicly traded, the average of
the closing prices of the Common
Stock on the securities exchange or
national market system on which the
Common Stock is then traded for the
five trading days immediately prior
to (but not including) the date of
exercise.
B = the Purchase Price.
For purposes of Rule 144 promulgated under the Act, it is intended,
understood and acknowledged that the shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding
period for such shares shall be deemed to have commenced, on the date this
Warrant was originally issued.
This Warrant may be exercised for less than the full number of shares of Common
Stock, in which case the number of shares receivable upon the exercise of this
Warrant as a whole, and the sum payable upon the exercise of this Warrant as a
whole, shall be proportionately reduced. Upon any such partial exercise, the
Company at its expense will forthwith issue to the Holder a new Warrant or
Warrants of like tenor calling for the number of shares of Common Stock as to
which rights have not been exercised, such Warrant or Warrants to be issued in
the name of the Holder hereof or his or its nominee (upon payment by the Holder
of any applicable transfer taxes).
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant and payment of the applicable Purchase Price
by any of the aforementioned methods, and in any event within five (5) Business
Days thereafter, the Company, at its expense, will cause to be issued in the
name of and delivered to the Holder a certificate or certificates for the number
of fully paid and non-assessable shares to which the Holder shall be entitled
upon such exercise, together with cash in lieu of any fraction of a share, as
hereafter provided. The Company agrees that the shares so purchased shall be
deemed to be issued to the Holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid. The Company shall pay any and all
issue and other taxes (other than income taxes of the Holder) that may be
payable in respect of the issuance of this Warrant or any issuance or delivery
of shares upon exercise of this Warrant.
3. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The Purchase
Price and the number and type of shares acquirable upon exercise of this Warrant
shall
2
be subject to adjustment from time to time upon the occurrence of any of the
events described in this Paragraph 3. Upon each adjustment of the Purchase Price
pursuant to Paragraph 3.1, the registered Holder of this Warrant shall
thereafter be entitled to acquire upon exercise, at the Purchase Price resulting
from such adjustment, the number of shares of Common Stock obtainable by
multiplying the Purchase Price in effect immediately prior to such adjustment by
the number of shares of Common Stock acquirable hereunder immediately prior to
such adjustment and dividing the product thereof by the Purchase Price resulting
from such adjustment.
3.1. Subdivision or Combination of Stock. If the Company at any time
or from time to time subdivides its outstanding shares of Common Stock into a
greater number of shares, the Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, if the outstanding
shares of Common Stock of the Company are combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
3.2. Dividends in Common Stock, Other Stock, Property,
Reclassification. If at any time or from time to time the holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) receive or become entitled to receive, without
payment therefor:
(a) Common Stock or any shares of stock or other securities
that are at any time directly or indirectly convertible into or exchangeable for
Common Stock, or any rights, warrants or options to subscribe for, purchase or
otherwise acquire any of the foregoing by way of dividend or other distribution;
(b) any cash paid or payable otherwise than as a cash dividend,
evidences of the Company's indebtedness or any other asset; or
(c) Common Stock or additional stock or other securities or
property (including cash) by way of distribution, spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement or
otherwise (other than shares of Common Stock issued as a stock split, which are
covered by the terms of Paragraph 3.1),
then, and in each such case, the Holder shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) that the Holder would
have received or been entitled to receive had it been the holder of record of
such number of shares of Common Stock as of the date on which holders of Common
Stock received or became entitled to receive such shares or all other additional
stock and other securities and property.
3.3. Reorganization, Reclassification, Consolidation, Merger or
Sale. If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with another
entity, or the sale of all or substantially all of its assets in one or a series
of transactions, or other transaction, is effected and, in connection
3
therewith, holders of Common Stock are entitled to receive stock, securities, or
other assets or property (an "Organic Change"), then, as a condition of such
Organic Change, lawful and adequate provisions shall be made by the Company
whereby the Holder shall thereafter have the right to purchase and receive (in
lieu of the shares of the Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby)
upon exercise of this Warrant 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 the event of any Organic Change,
appropriate provision shall be made by the Company with respect to the rights
and interests of the Holder of this Warrant to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the
Purchase Price and of the number and type of shares and other securities and
property purchasable and receivable upon the exercise of this Warrant) shall
thereafter be applicable, in relation to any shares of stock, securities or
other assets or property thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation, merger or sale unless, prior to
the consummation thereof, the successor entity (if other than the Company)
resulting from such consolidation or merger or the entity purchasing such assets
shall assume by written instrument delivered to the Company and to the Holder
the obligation to deliver to the Holder such shares of stock, securities or
other assets or property as, in accordance with the foregoing provisions, the
Holder may be entitled to purchase, as well as the obligations of the Company
set forth in the immediately preceding sentence. The above provisions shall
similarly apply with respect to successive recapitalizations, reclassifications,
reorganizations, consolidations, mergers, sales or other transactions.
3.4. Adjustments to Purchase Price for Certain Diluting Issues. In
the event that after the date hereof any transaction or event, other than those
described in Paragraphs 3.1 through 3.3 above, occurs which, pursuant to the
provisions of the Company's Third Restated Certificate of Incorporation (as the
same may be amended or restated, the "Certificate of Incorporation"), results in
a change in the conversion price of the Company's Series C Preferred Stock, par
value $0.001 per share (the "Series C Preferred Stock"), whether by reason of
the full-ratchet or weighted average antidilution calculations pertaining to the
Series C Preferred Stock, then simultaneously with such change in the conversion
price of the Series C Preferred Stock, the Purchase Price shall be reset to
equal 1.316 times the new conversion price of the Series C Preferred Stock. In
respect of any such adjustment, the adjusted Purchase Price will be determined
by reference to the provisions of the Company's Certificate of Incorporation as
they shall be in effect at the time of any such transaction or event, and
nothing herein contained shall be deemed to limit the Company's right, upon
receipt of the appropriate consent of the holders of the Series C Preferred
Stock, to modify the antidilution provisions applicable to the Series C
Preferred Stock or to require the consent of the Holder to any such
modification.
3.5. Certain Events. If any change in the outstanding Common Stock
of the Company or any other event occurs as to which the other provisions of
this Paragraph 3 are not strictly applicable or if strictly applicable would not
fairly protect the rights of the Holder in accordance with such provisions, then
the Board of Directors of the Company shall make an adjustment in the number,
class and kind of shares available under this Warrant, the Purchase Price or the
application of such provisions, so as to give the Holder upon exercise of this
Warrant the total number, class and kind of shares as it would have owned had
this Warrant been
4
exercised prior to the event and had it continued to hold such shares until
after the event requiring adjustment.
3.6. Notices of Adjustments.
(a) Immediately upon any adjustment in the number or type of
shares subject to this Warrant or the Purchase Price, the Company shall give
written notice thereof to the Holder, setting forth in reasonable detail and
certifying the calculation of such adjustment, the adjusted Purchase Price and
the adjusted number or type of shares of Common Stock or other securities or
property issuable upon exercise hereof (as applicable) and describing the
transactions giving rise to such adjustment.
3.7. Notices of Corporate Events. If the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Organic Change
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction at least 20
Business Days prior to the applicable record or effective date on which a person
would need to hold Common Stock in order to participate in or vote with respect
to such transaction, and the Company will take all steps reasonably necessary in
order to ensure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to
such transaction. For purposes of this Warrant, "Business Day" shall mean any
day (except Saturday or Sunday) on which banks are scheduled to be open to
conduct business in the City of New York.
3.8. No Fractional Shares. No fractional shares shall be issued upon
the exercise of this Warrant, and the number of shares of Common Stock to be
issued shall be rounded to the nearest whole share (including a fraction
equating to .5000 being rounded up to the next whole number). The number of
shares issuable upon exercise shall be determined on the basis of the amount of
the Exercise Payment paid by the Holder and the number of shares of Common Stock
issuable upon such exercise of this Warrant.
3.9. Reservation of Stock Issuable Upon Exercise. The Company shall
at all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of this Warrant, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the exercise of this
Warrant for the maximum number of shares of Common Stock issuable upon exercise
of this Warrant; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the exercise of this Warrant
for the maximum number of shares of Common Stock issuable upon exercise of this
Warrant, in addition to such other remedies as shall be available to the Holder,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to the Certificate of
Incorporation.
5
3.10. Fully Paid Shares. All shares of capital stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and non-assessable
4. REPLACEMENT OF 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 loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) reasonably satisfactory
in form and amount to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, to the Holder a
new Warrant of like tenor.
5. REMEDIES. The Company stipulates that the remedies at law of the
Holder in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that the same may be specifically enforced by a decree
for the specific performance of any agreement contained herein or by an
injunction against a violation or threatened violation of any of the terms
hereof or otherwise, without the need to post a bond or other security.
6. NEGOTIABILITY, ETC. This Warrant is issued upon the following terms,
to all of which each taker or owner hereof consents and agrees:
6.1. Title. Subject to the legend appearing on the first page
hereof, title to this Warrant may be transferred by endorsement (by the Holder
executing the form of assignment at the end hereof) and delivery in the same
manner as in the case of a negotiable instrument transferable by endorsement and
delivery.
6.2. Possession. Any person in possession of this Warrant properly
endorsed is authorized to represent himself as absolute owner hereof and is
granted power to transfer absolute title hereto by endorsement and delivery
hereof to a bona fide purchaser hereof for value; each prior taker or owner
waives and renounces all of his equities or rights in this Warrant in favor of
every such bona fide purchaser, and every such bona fide purchaser shall acquire
title hereto and to all rights represented hereby.
6.3. Registered Holder. Until this Warrant is transferred on the
books of the Company, the Company may treat the registered Holder as the
absolute owner hereof for all purposes without being affected by any notice to
the contrary.
6.4. No Voting Rights Prior to Exercise. Prior to the exercise of
this Warrant, the Holder shall not be entitled to any rights of a shareholder of
the Company with respect to shares for which this Warrant shall be exercisable,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
6.5. Transfer Taxes. The Company shall not be required to pay any
Federal or state transfer tax or charge that may be payable in respect of any
transfer involved in the transfer or delivery of this Warrant or the issuance or
delivery of certificates for Common Stock in a name other than that of the
registered Holder or to issue or deliver any certificates for Common Stock upon
the exercise of this Warrant until any and all such taxes and charges shall have
been
6
paid by the Holder or until it has been established to the Company's reasonable
satisfaction that no such tax or charge is due.
7. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants
issued pursuant to the provisions of this paragraph) is exchangeable, upon the
surrender hereof by the Holder, at the principal office of the Company for any
number of new warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock which
may be subscribed for and purchased hereunder.
8. MAILING OF NOTICES, ETC. So long as this Warrant remains
outstanding, the Company shall maintain an office or agency (which shall
initially be the principal place of business of the Company, located at 0000
00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000) where notices, presentations and demands
to or upon the Company in respect of this Warrant may be given. All such
notices, presentations and demands shall be delivered (personally, by overnight
courier or by telecopier) or mailed to such address and shall be effective on
the date so delivered or three Business Days after the date so mailed.
All notices to be given by the Company to the Holder in respect of this
Warrant shall be delivered (personally, by overnight courier or by telecopier)
or mailed to the address of the Holder set forth on the records of the Company
or such other address as shall be designated in writing by the Holder to the
Company and shall be effective on the date so delivered or three Business Days
after the date so mailed.
7
9. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
10. CHANGE, WAIVER, ETC. 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 party against which enforcement of the change, waiver,
discharge or termination is sought.
11. SEVERABILITY. Any provision of this Warrant that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Warrant or affecting the validity or enforceability
of such provision in any other jurisdiction
12. BINDING EFFECT. This Warrant shall be binding upon the Company and
its successors and permitted assigns, and shall insure to the benefit of the
Holder and its successors and permitted assigns.
13. GOVERNING LAW; JURISDICTION. THIS WARRANT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. The Company
hereby submits to the jurisdiction of the federal or state courts located within
the City of New York, State of New York for the conduct of any suit, action or
proceeding arising out of or relating to this Warrant. The Company hereby agrees
that the Holder may effect service of process upon the Company by delivery
(other than facsimile) in the manner provided for the giving of notices under
Paragraph 8.
PHARMION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and CEO
Dated: April 8, 2003
8
[TO BE SIGNED ONLY UPON EXERCISE OF WARRANT]
EXERCISE NOTICE
---------------
Pharmion Corporation
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
The undersigned hereby elects to purchase, pursuant to the provisions of the
Warrant issued by Pharmion Corporation and held by the undersigned, the original
of which is attached hereto, _______________ shares of Common Stock issuable
upon the exercise of such Warrant and (check the applicable box):
|_| Tenders herewith payment of the Exercise Payment (as defined in the
Warrant) in full in the form of cash, certified check or official bank
check in the amount of $__________________.
|_| Confirms that payment of the Exercise Payment (as defined in the
Warrant) in full by means of a wire transfer in the amount of
$__________________ has been made to the Company.
|_| Elects to effect a "cashless exercise" of the Warrant as described in
Section 1 of the Warrant with respect to the number of shares indicated
above as to which this Warrant is being exercised.
The undersigned requests that the certificates for such shares be issued in the
name of, and be delivered to ______________________, whose address is
________________________ [and that a new Warrant for the remaining shares be
issued in the name of, and be delivered to ______________________, whose address
is _________________________________].
Dated:
_____________________
___________________________
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
___________________________
Address
[TO BE SIGNED ONLY UPON TRANSFER OF WARRANT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the right represented by the within Warrant to
purchase __________________ shares of Common Stock of Pharmion Corporation to
which the within Warrant relates, and appoints ____________________ attorney to
transfer said right on the books of Pharmion Corporation, with full power of
substitution in the premises.
Dated:
__________________________
____________________________
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
____________________________
Address
IN THE PRESENCE OF:
__________________________
