EXHIBIT 99.4
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THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT.
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 or from time to time commencing six months after the
date of issuance (the "INITIAL EXERCISE DATE") and on or before 5:00 p.m. (New
York Time) on May __, 2010 (the "TERMINATION DATE") but not thereafter, to
subscribe for and purchase from Vasogen Inc., a Canadian corporation (the
"COMPANY"), up to ____________ common shares in the capital 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). The Common
Shares issuable upon exercise of this Warrant are referred to as the "WARRANT
SHARES".
SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
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
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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 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.$3.81468 per share, 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,
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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
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
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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
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.
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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 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
Holder'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
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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
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
makes a distribution or distributions on its Common Shares or any other
equity or equity equivalent securities payable in Common Shares (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
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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 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.
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d) [INTENTIONALLY DELETED].
e) NOTICE TO HOLDERS.
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.
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
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effective date of the event triggering such notice, provided that
it does not extend the Termination Date.
SECTION 4. REQUIREMENTS FOR TRANSFER.
a) For a period of six months after the issuance date of this
Warrant (which shall not be earlier than the closing date of the offering
pursuant to which this Warrant is being issued), neither this Warrant nor
any Warrant Shares issued upon exercise of this Warrant shall be sold,
transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would
result in the effective economic disposition of the securities by any
person for a period of 180 days immediately following the date of
effectiveness or commencement of sales of the offering pursuant to which
this Warrant is being issued, except the transfer of any security:
i. by operation of law or by reason of reorganization
of the Company;
ii. to any NASD member firm participating in the
offering and the officers or partners thereof, if all securities
so transferred remain subject to the lock-up restriction in
Section 4(a) above for the remainder of the time period;
iii. if the aggregate amount of securities of the
Company held by ______________________ or related person do not
exceed 1% of the securities being offered;
iv. that is beneficially owned on a pro-rata basis by
all equity owners of an investment fund, provided that no
participating member manages or otherwise directs investments by
the fund, and participating members in the aggregate do not own
more than 10% of the equity in the fund; or
v. the exercise or conversion of any security, if all
securities received remain subject to the lock-up restriction in
Section 4(a) above for the remainder of the time period.
b) Subject to the foregoing restrictions, the Company agrees
that, at any time or times hereafter (but not more than three (3) years
after May __, 2007), as and when it intends to register any of its
securities under the Securities Act of 1933, as amended (the "Securities
Act") (except in connection with an offering on Form S-8 or an offering
solely related to an acquisition or exchange on a Form X-0, X-0 or
comparable MJDS form or any subsequent similar form) the Company will
notify the Holder of such intention and, upon request from the Holder,
will use its reasonable best efforts to cause the Warrant Shares
designated by the Holder to be registered for resale under the Securities
Act. The number of Warrant Shares to be included in such offering may be
reduced if and to the extent that the underwriter of securities included
in the registration statement and offered by the Company shall be of the
opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company therein; provided, however, that the
percentage of the reduction of such Warrant Shares shall be no greater
than the percentage reduction of securities of other selling shareholders,
as such percentage reductions are determined in the good faith judgment of
the Company. The Company will use its reasonable best efforts to keep such
registration statement (or another registration statement for such
purpose) in effect until at least the second anniversary of the original
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issue date of the Warrant. Notwithstanding the foregoing, this Section
4(b) shall be inoperative to the extent that the Warrant Shares are
already registered under the Securities Act pursuant to an effective
registration statement of the Company.
c) The Company will maintain a register (the "WARRANT
REGISTER") containing the name and address of the registered Holder of
this Warrant. The Holder may change its or his address as shown on the
Warrant Register by written notice to the Company requesting such change.
d) Subject to compliance with applicable securities laws, the
legend set forth at the top of this Warrant and the provisions of this
Section 4, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant with a properly executed
assignment substantially in the form attached hereto at the principal
office of the Company.
e) Until any transfer of this Warrant is made in the Warrant
Register, the Company may treat the registered Holder as the absolute
owner hereof for all purposes; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
f) Upon the surrender by the registered Holder, properly
endorsed, to the Company at the principal office of the Company, the
Company will, subject to the provisions of this Section 4, issue and
deliver to or upon the order of such Holder, at the Company's expense, a
new Warrant or Warrants of like tenor, in the name of the Holder or as the
Holder (upon payment by the Holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face or faces thereof for the
number of Common Shares (or other securities, cash and/or property) then
issuable upon exercise of this Warrant.
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), 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
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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.
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, any reorganization, transfer of assets, consolidation,
merger, dissolution or any other voluntary action, with the
intention of avoiding or seeking 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 non-assessable 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.
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f) JURISDICTION. All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the provisions of the engagement letter
dated among the Company, and Xxxxxx & Xxxxxxx, LLC and JMP Securities LLC
(the "ENGAGEMENT LETTER").
g) 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.
h) 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 Engagement
Letter.
i) 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.
j) 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.
k) 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.
l) AMENDMENT. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
m) 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
12
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions
of this Warrant.
n) 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:
14
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
[ ] the cancellation of such 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:
________________________________________
________________________________________
________________________________________
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.
