EXHIBIT 99.3
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EXHIBIT A
COMMON SHARE PURCHASE WARRANT
To Purchase __________ Common Shares of
VASOGEN INC.
THIS COMMON SHARE PURCHASE WARRANT (the "WARRANT") certifies
that, for value received, _____________ (the "HOLDER"), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the "INITIAL EXERCISE
DATE") and on or prior to the close of business on the five year anniversary of
the Initial Exercise Date (the "TERMINATION DATE") but not thereafter, to
subscribe for and purchase from Vasogen Inc., a Canadian corporation (the
"Company"), up to ______ shares (the "WARRANT SHARES") of Common Shares of the
Company (the "COMMON SHARES"). The purchase price of one Common Share under
this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the "PURCHASE AGREEMENT"), dated May 17, 2007, among the
Company and the purchasers signatory thereto.
SECTION 2. EXERCISE.
a) EXERCISE OF WARRANT. Exercise of the purchase rights
represented by this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before
the Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto (or such
other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder
appearing on the books of the Company); PROVIDED, HOWEVER, within 5
Trading Days of the date said Notice of Exercise is delivered to the
Company, if this Warrant is exercised in full, the Holder shall have
surrendered this Warrant to the Company and the Company shall have
received payment of the aggregate Exercise Price of the Common Shares
thereby purchased by wire transfer or cashier's check drawn on a United
States or Canadian bank. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised
in full. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number of
Warrant Shares purchased. The Holder and the Company shall maintain
records showing the number of Warrant Shares purchased and the date of
such purchases. The Company shall deliver any objection to any Notice
of Exercise Form within 1 Business Day of receipt of such notice. In
the event of any dispute or discrepancy, the records of the Holder
shall be controlling and determinative in the absence of manifest
error. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this
paragraph, following the purchase of a portion of the Warrant Shares
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hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on the
face hereof.
b) EXERCISE PRICE. The exercise price of the Common Shares
under this Warrant shall be U.S.$3.16, subject to adjustment hereunder
(the "EXERCISE PRICE").
c) CASHLESS EXERCISE. If, but only if, at any time during
the term of this Warrant either there is no effective Registration
Statement registering the sale of the Warrant Shares to the Holder, or
no current prospectus available for, the resale of the Warrant Shares
by the Holder, then 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 immediately preceding the
date of such election;
(B) = the Exercise Price of this Warrant, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise of
this Warrant in accordance with the terms of this
Warrant by means of a cash exercise rather than a
cashless exercise,
provided that the foregoing shall in no way adjust or change the
Exercise Price of this Warrant
"VWAP" means, for any security as of any date, the dollar
volume-weighted average price for such security on NASDAQ during the
period beginning at 9:30:01 a.m., New York Time (or such other time as
NASDAQ publicly announces is the official open of trading), and ending
at 4:00:00 p.m., New York Time (or such other time as NASDAQ publicly
announces is the official close of trading) as reported by Bloomberg
through its "Volume at Price" functions, or, if the foregoing does not
apply, the dollar volume weighted average price of such security on
another Trading Market for such security during the period beginning at
9:30:01 a.m., New York Time (or such other time as such Trading Market
publicly announces is the official open of trading), and ending at
4:00:00 p.m., New York Time (or such other time as such Trading Market
publicly announces is the official close of trading) as reported by
Bloomberg, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the
period beginning at 9:30:01 a.m., New York Time (or such other time as
such Trading Market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York Time (or such other time
as such market publicly announces is the official close of trading) as
reported by Bloomberg, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any
of the market makers for such security as reported in the "pink sheets"
by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
the VWAP cannot be calculated for a security on a particular date on
any of the foregoing bases, the VWAP of such security on such date
shall be the fair market values determined by an appraiser selected in
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good faith by the Holder and reasonably acceptable to the Company. All
such determinations shall be appropriately adjusted for any share
dividend, share split, share combination or other similar transaction
during the applicable calculation period.
d) 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 2(c) 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 Notice of Exercise, would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of Common Shares beneficially owned by
such Holder and its affiliates shall include the number of Common
Shares issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the
number of Common Shares 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(d), 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(d) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by
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
Notice of Exercise 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. For purposes of this
Section 2(d), in determining the number of outstanding Common Shares, a
Holder may rely on the number of outstanding Common Shares as reflected
in (x) the Company's most recent Form 6-K or Form 40-F or 20-F, as the
case may be, (y) a more recent public announcement by the Company or
(z) any other notice by the Company or the Company's Transfer Agent
setting forth the number of Common Shares outstanding. Upon the written
or oral request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to such Holder the number of Common
Shares then outstanding. In any case, the number of outstanding Common
Shares shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by such
Holder or its affiliates since the date as of which such number of
outstanding Common Shares was reported. The "Beneficial Ownership
Limitation" shall be 4.99% of the number of Common Shares outstanding
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immediately after giving effect to the issuance of Common Shares
issuable upon exercise of this Warrant. The Beneficial Ownership
Limitation provisions of this Section 2(d) may be waived by such
Holder, at the election of such Holder, upon not less than 61 days'
prior notice to the Company to change the Beneficial Ownership
Limitation to 9.99% of the number of Common Shares outstanding
immediately after giving effect to the issuance of Common Shares upon
exercise of this Warrant, and the provisions of this Section 2(d) shall
continue to apply. Upon such a change by a Holder of the Beneficial
Ownership Limitation from such 4.99% limitation to such 9.99%
limitation, the Beneficial Ownership Limitation may not be waived by
such Holder. The provisions of this paragraph shall be implemented in a
manner otherwise than in strict conformity with the terms of this
Section 2(d) 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.
e) MECHANICS OF EXERCISE.
i. AUTHORIZATION OF WARRANT SHARES. The Company
covenants that all Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of
any transfer occurring contemporaneously with such issue).
ii. DELIVERY OF CERTIFICATES UPON EXERCISE.
Certificates for shares purchased hereunder 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 the Company is a participant in
such system, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise, in either
case, within 3 Trading Days from the delivery to and receipt by
the Company of the Notice of Exercise Form, surrender of this
Warrant (if required) and payment of the aggregate Exercise
Price as set forth above ("WARRANT SHARE DELIVERY DATE"). This
Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company. The Warrant Shares
shall be deemed to have been issued, and the Holder or any
other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all
purposes, as of the date the Warrant has been exercised by
payment to the Company of the Exercise Price and all taxes
required to be paid by the Holder, if any, pursuant to Section
2(e)(vii) prior to the issuance of such shares, have been paid.
iii. DELIVERY OF NEW WARRANTS UPON EXERCISE. If this
Warrant shall have been exercised in part, the Company shall,
at the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder
a new Warrant evidencing the rights of the Holder to purchase
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the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant.
iv. 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 this Section 2(e)(iv) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such
exercise.
v. 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 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) Common
Shares 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 Common Shares 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 Common Shares that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Shares having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise
of Common Shares 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 deliver certificates representing Common Shares upon
exercise of the Warrant as required pursuant to the terms
hereof.
vi. NO FRACTIONAL SHARES OR SCRIP. No fractional
shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant. As to any fraction of a
share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.
vii. CHARGES, TAXES AND EXPENSES. Issuance of
certificates for Warrant Shares shall be made without charge to
the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of
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which taxes and expenses shall be paid by the Company, and such
certificates shall be issued in the name of the Holder or in
such name or names as may be directed by the Holder; PROVIDED,
HOWEVER, that in the event certificates for Warrant Shares are
to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by
the Assignment Form attached hereto duly executed by the
Holder; and the Company may require, as a condition thereto,
the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.
viii. CLOSING OF BOOKS. The Company will not close
its shareholder books or records in any manner which prevents
the timely exercise of this Warrant, pursuant to the terms
hereof.
SECTION 3. CERTAIN ADJUSTMENTS.
a) SHARE DIVIDENDS AND SPLITS. If the Company, at any time
while this Warrant is outstanding: (A) pays a share dividend or
otherwise make a distribution or distributions on its Common Shares or
any other equity or equity equivalent securities payable in Common
Shares (which, for avoidance of doubt, shall not include any Common
Shares issued by the Company pursuant to this Warrant), (B) subdivides
outstanding Common Shares into a larger number of shares, (C) combines
(including by way of reverse stock split) outstanding Common Shares
into a smaller number of Common Shares, or (D) issues by
reclassification of Common Shares any shares of the Company, then in
each case the Exercise Price shall be adjusted by multiplying the
Exercise Price then in effect by a fraction of which the numerator
shall be the number of Common Shares (excluding treasury shares, if
any) outstanding immediately before such event, and of which the
denominator shall be the number of Common Shares outstanding
immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted. Any
adjustment made pursuant to this Section 3(a) shall become effective
immediately after the record date for the determination of shareholders
entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
b) FUNDAMENTAL TRANSACTION. If, at any time while this
Warrant is outstanding, (A) the Company effects any merger or
consolidation of the Company with or into another Person, (B) the
Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Shares prior to such an offer do
not retain at least a majority of voting power of the Company or (D)
the Company effects any reclassification of the Common Shares or any
compulsory share exchange pursuant to which the Common Shares are
effectively converted into or exchanged for other securities, cash or
property (in any such case, a "FUNDAMENTAL TRANSACTION"), then, upon
any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been issuable
upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, upon exercise of
this Warrant, the number of Common Shares of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and
any additional consideration (the "ALTERNATE CONSIDERATION") receivable
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upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the number of
Common Shares for which this Warrant is exercisable immediately prior
to such event. For purposes of any such exercise, the determination of
the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one Common Share in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate
Consideration. If holders of Common Shares are given any choice as to
the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and
evidencing the Holder's right to exercise such warrant into Alternate
Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of
this Section 3(c) and insuring that this Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction. Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction
that is (1) an all cash transaction, (2) a "Rule 13e-3 transaction" as
defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental
Transaction involving a person or entity not traded on a national
securities exchange, the Nasdaq Global Select Market, the Nasdaq Global
Market, or the Nasdaq Capital Market, the Company or any successor
entity shall pay at the Holder's option, exercisable at any time
concurrently with or within 30 days after the consummation of the
Fundamental Transaction, an amount of cash equal to the value of this
Warrant as determined in accordance with the Black Scholes Option
Pricing Model obtained from the "OV" function on Bloomberg L.P. using
(i) a price per Common Share equal to the VWAP of the Common Shares for
the Trading Day immediately preceding the date of consummation of the
applicable Fundamental Transaction, (ii) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of the date of consummation of the
applicable Fundamental Transaction and (iii) an expected volatility
equal to the 100 day volatility obtained from the "HVT" function on
Bloomberg L.P. determined as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction.
c) CALCULATIONS. All calculations under this Section 3
shall be made to the nearest cent or the nearest 1/100th of a share, as
the case may be. For purposes of this Section 3, the number of Common
Share deemed to be issued and outstanding as of a given date shall be
the sum of the number of Common Shares (excluding treasury shares, if
any) issued and outstanding.
d) VOLUNTARY ADJUSTMENT BY COMPANY. The Company may at any
time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.
e) NOTICE TO HOLDERS.
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i. ADJUSTMENT TO EXERCISE PRICE. Whenever the
Exercise Price is adjusted pursuant to this Section 3, the
Company shall promptly mail to each Holder a notice setting
forth the Exercise Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment
or in lieu thereof shall forward such publicly filed documents
that disclose the same information or indicate where such
publicly filed documents can be accessed electronically.
ii. NOTICE TO ALLOW EXERCISE BY HOLDER. If (A) the
Company shall declare a dividend (or any other distribution) on
the Common Shares; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common
Shares; (C) the Company shall authorize the granting to all
holders of the Common Shares rights or warrants to subscribe
for or purchase any shares of capital of any class or of any
rights; (D) the approval of any shareholders of the Company
shall be required in connection with any reclassification of
the Common Shares, any consolidation or merger to which the
Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Shares are
converted into other securities, cash or property; (E) the
Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear
upon the Warrant Register (as defined below) of the Company, at
least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice or shareholder
information stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be
taken, the date as of which the holders of the Common Shares of
record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected
that holders of the Common Shares of record shall be entitled
to exchange their Common Shares for securities, cash or other
property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the
failure to mail such notice or shareholder information or any
defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in
such notice. The Holder is entitled to exercise this Warrant
during the 20-day period commencing on the date of such notice
to the effective date of the event triggering such notice,
provided that it does not extend the Termination Date.
SECTION 4. TRANSFER OF WARRANT.
a) TRANSFERABILITY. This Warrant and all rights hereunder
are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto
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duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
b) NEW WARRANTS. This Warrant may be divided or combined
with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
c) WARRANT REGISTER. The Company shall register this
Warrant, upon records to be maintained by the Company for that purpose
(the "WARRANT REGISTER"), in the name of the record Holder hereof from
time to time. The Company may deem and treat the registered Holder of
this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
SECTION 5. MISCELLANEOUS.
a) TITLE TO WARRANT. Prior to the Termination Date and
subject to compliance with applicable laws and Section 4 of this
Warrant, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company by the Holder
in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly
endorsed.
b) NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant
does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the
surrender of this Warrant and the payment of the aggregate Exercise
Price (or by means of a cashless exercise, when applicable), the
Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business
on the later of the date of such surrender or payment.
c) LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The
Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant or any share certificate relating to the
Warrant Shares, and in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender
and cancellation of such Warrant or share certificate, if mutilated,
the Company will make and deliver a new Warrant or share certificate of
like tenor and dated as of such cancellation, in lieu of such Warrant
or share certificate.
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d) SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal
holiday in Canada or the United States, then such action may be taken
or such right may be exercised on the next succeeding day not a
Saturday, Sunday or legal holiday.
e) AUTHORIZED SHARES.
The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized
and unissued Common Shares a sufficient number of shares to
provide for the issuance of the Warrant Shares upon the
exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant
shall constitute full authority to its officers who are
charged with the duty of executing share certificates to
execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be
issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading
Market upon which the Common Shares may be listed.
Except and to the extent as waived or consented to
by the Holder, the Company shall not by any action,
including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of
this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect
the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing,
the Company will (a) take all such action as may be necessary
or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares
upon the exercise of this Warrant, and (b) use commercially
reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.
Before taking any action which would result in an
adjustment in the number of Warrant Shares for which this
Warrant is exercisable or in the Exercise Price, the Company
shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
f) JURISDICTION. All questions concerning the
construction, validity, enforcement and interpretation of this Warrant
shall be determined in accordance with the provisions of the Purchase
Agreement.
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g) RESTRICTIONS. The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal
securities laws.
h) NONWAIVER AND EXPENSES. No course of dealing or any
delay or failure to exercise any right hereunder on the part of the
Holder shall operate as a waiver of such right or otherwise prejudice
the Holder's rights, powers or remedies, notwithstanding the fact that
all rights hereunder terminate on the Termination Date. If the Company
willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient to
cover any costs and expenses including, but not limited to, reasonable
attorneys' fees, including those of appellate proceedings, incurred by
the Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies hereunder.
i) NOTICES. Any notice, request or other document required
or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the
Purchase Agreement.
j) LIMITATION OF LIABILITY. No provision hereof, in the
absence of any affirmative action by the Holder to exercise this
Warrant or purchase Warrant Shares, and no enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Shares or as a
shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
k) REMEDIES. The Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant.
The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be
adequate.
l) SUCCESSORS AND ASSIGNS. Subject to applicable
securities laws, this Warrant and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors
of the Company and the successors and permitted 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 or holder of Warrant Shares.
m) AMENDMENT. This Warrant may be modified or amended or
the provisions hereof waived with the written consent of the Company
and the Holder.
n) SEVERABILITY. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall
be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
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o) HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.
Dated: May __, 2007
VASOGEN INC.
By:
--------------------------
Name:
Title:
NOTICE OF EXERCISE
TO: VASOGEN INC.
(1) The undersigned hereby elects to purchase _________
Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[_] in lawful money of the United States; or
[_] when applicable, the number of Warrant Shares as
is necessary, in accordance with the formula set forth
in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is
specified below:
______________________________________
The Warrant Shares shall be delivered to the following: provide for DWAC
instructions
______________________________________
______________________________________
______________________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
___________________________________________________________ whose address is
_____________________________________________________________________________.
_____________________________________________________________________________
Dated: ______________, _______
Holder's Signature: _____________________________________
Holder's Address: _____________________________________
_____________________________________
Signature Guaranteed: ______________________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
