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EXHIBIT 10.9
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR
DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION.
WARRANT TO PURCHASE SHARES OF SERIES C PREFERRED STOCK
________________________ 2000
THIS CERTIFIES THAT, for value received, GENERAL ELECTRIC CAPITAL CORPORATION,
("Holder") is entitled to subscribe for and purchase shares of the fully paid
and nonassessable Series C Preferred Stock (the "Shares" or the "Preferred
Stock") of Xcyte Therapies, Inc., a Delaware corporation (the "Company"), at the
Warrant Price (as hereinafter defined), subject to the provisions and upon the
terms and conditions hereinafter set forth. As used herein, the term "Series C
Preferred Stock" shall mean the Company's presently authorized Series C
Preferred Stock and any stock into which such Series C Preferred Stock may
hereafter be converted or exchanged.
1. Warrant Price. The Warrant Price shall initially be One and 67/100 dollars
($1.67) per share, subject to adjustment as provided in Section 7 below. The
number of shares for which this Warrant shall be exercisable shall be the
greater of Fourteen Thousand Three Hundred Seventy One (14,371) Shares or the
number of shares calculated by multiplying the amount of the credit facility
utilized during the funding period, and any extension thereof, by 4% and then
dividing by the Warrant Price.
2. Conditions to Exercise. The purchase right represented by this Warrant may
be exercised at any time, or from time to time, in whole or in part during the
term commencing on the date hereof and ending on the earlier of:
(a) 5:00 P.M. Pacific time on the seventh anniversary of the date of this
Warrant, or
(b) the effective date of the merger of the Company with or into, the
consolidation of the Company with, or the sale by the Company of all or
substantially all of its assets or all or substantially all of its shares to
another corporation or other entity (other than such a transaction wherein the
shareholders of the Company retain or obtain a majority of the voting capital
stock of the surviving, resulting, or purchasing corporation); provided that the
Company shall notify the registered Holder of this Warrant of the proposed
effective date of the merger, consolidation, or sale at least 20 days prior to
the effectiveness thereof, and the Holder shall be entitled to give notice of
exercise of this Warrant contingent upon the closing of such transaction.
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In the event that, although the Company shall have given notice of a
transaction pursuant to subparagraph (b) of this Section 2, the transaction does
not close within 90 days of the day specified by the Company, unless otherwise
elected by the Holder any exercise of the Warrant subsequent to the giving of
such notice shall be rescinded and the Warrant shall again be exercisable until
terminated in accordance with this Paragraph 2.
3. Method of Exercise: Payment; Issuance of Shares; Issuance of New Warrant.
(a) Cash Exercise. Subject to Section 2 hereof, the purchase right
represented by this Warrant may be exercised by the Holder hereof, in whole or
in part, by the surrender of this Warrant (with a duly executed Notice of
Exercise in the form attached hereto) at the principal office of the Company (as
set forth in Section 18 below) and by payment to the Company, by check, of an
amount equal to the then applicable Warrant Price per share multiplied by the
number of shares then being purchased. In the event of any exercise of the
rights represented by this Warrant, certificates for the shares of stock so
purchased shall be in the name of, and delivered to, the Holder hereof, or as
such Holder may direct (subject to the terms of transfer contained herein and
upon payment by such Holder hereof of any applicable transfer taxes). Such
delivery shall be made within 30 days after exercise of the Warrant and at the
Company's expense and, unless this Warrant has been fully exercised or expired,
a new Warrant having terms and conditions substantially identical to this
Warrant and representing the portion of the Shares, if any, with respect to
which this Warrant shall not have been exercised, shall also be issued to the
Holder hereof within 30 days after exercise of the Warrant.
(b) Net Issue Exercise. In lieu of exercising this Warrant pursuant to
Section 3(a), Holder may elect to receive shares equal to the value of this
Warrant (or of any portion thereof remaining unexercised) by surrender of this
Warrant at the principal office of the Company together with notice of such
election, in which event the Company shall issue to Holder the number of shares
of the Company's Preferred Stock computed using the following formula:
X=Y(A-B)
------
A
Where X = the number of shares of Preferred Stock to be issued to
Holder.
Y = the number of shares of Preferred Stock purchasable under
this Warrant (at the date of such calculation).
A = the Fair Market Value of one share of the Company's
Preferred Stock (at the date of such calculation).
B = Warrant Price (as adjusted to the date of such calculation).
(c) Fair Market Value. For purposes of this Section 3, Fair Market Value of
one share of the Company's Preferred Stock shall mean:
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(i) In the event of an exercise in connection with an Initial
Public Offering, the per share Fair Market Value for the
Preferred Stock shall be the Offering Price at which the
underwriters initially sell Common Stock to the public multiplied
by the number of shares of Common Stock into which each share of
Preferred Stock is then convertible; or
(ii) The average of the closing bid and asked prices of Common
Stock quoted in the Over-The-Counter Market Summary, the last
reported sale price quoted on the Nasdaq National Market ("NNM")
or on any exchange on which the Common Stock is listed, whichever
is applicable, as published in the Western Edition of the Wall
Street Journal for the twenty (20) trading days prior to the date
of determination of Fair Market Value, multiplied by the number
of shares of Common Stock into which each share of Preferred
Stock is then convertible; or
(iii) In the event of an exercise in connection with a merger,
acquisition or other consolidation in which the Company is not
the surviving entity, the per share Fair Market Value for the
Preferred Stock shall be the value to be received per share of
Preferred Stock by all holders of the Preferred Stock in such
transaction as determined by the Board of Directors; or
(iv) In any other instance, the per share Fair Market Value for
the Preferred Stock shall be as determined in good faith by the
Company's Board of Directors.
In the event of 3(c)(iii) or 3(c)(iv), above, the Company's Board
of Directors shall prepare a certificate, to be signed by an
authorized officer of the Company, setting forth in reasonable
detail the basis for and method of determination of the per share
Fair Market Value of the Preferred Stock. The Board will also
certify to the Holder that this per share Fair Market Value will
be applicable to all holders of the Company's Preferred Stock.
Such certification must be made to Holder at least thirty (30)
business days prior to the proposed effective date of the merger,
consolidation, sale, or other triggering event as defined in
3(c)(iii) or 3(c)(iv).
(d) Automatic Exercise. To the extent this Warrant is not previously
exercised, it shall be automatically exercised in accordance with Sections 3(b)
and 3(c) hereof (even if not surrendered) immediately before: (i) its expiration
or (ii) the consummation of any consolidation or merger of the Company, or any
sale or transfer of a majority of the Company's assets or shares pursuant to
Section 2(b).
4. Representations and Warranties of Holder and Restrictions on Transfer
Imposed by the Securities Act of 1933.
(a) Representations and Warranties by Holder. The Holder represents and
warrants to the Company with respect to this purchase as follows:
(i) The Holder has substantial experience in evaluating and
investing in private placement transactions of securities of
companies similar to the Company
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so that the Holder is capable of evaluating the merits and risks
of its investment in the Company and has the capacity to protect
its interests.
(ii) The Holder is acquiring the Warrant and the Shares of
Preferred Stock issuable upon exercise of the Warrant
(collectively the "Securities") for investment for its own
account and not with a view to, or for resale in connection with,
any distribution thereof. The Holder understands that the
Securities have not been registered under the Securities Act of
1933, as amended (the "Act") by reason of a specific exemption
from the registration provisions of the Act which depends upon,
among other things, the bona fide nature of the investment intent
as expressed herein. In this connection, the Holder understands
that, in the view of the Securities and Exchange Commission (the
"SEC"), the statutory basis for such exemption may be unavailable
if this representation was predicated solely upon a present
intention to hold the Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or
until an increase or decrease in the market price of the
Securities or for a period of one year or any other fixed period
in the future.
(iii) The Holder acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or an
exemption from such registration is available. The Holder is
aware of the provisions of Rule 144 promulgated under the Act
("Rule 144") which permits limited resale of securities purchased
in a private placement subject to the satisfaction of certain
conditions, including, in case the securities have been held for
more than one but less than two years, the existence of a public
market for the shares, the availability of certain public
information about the Company, the resale occurring not less than
one year after a party has purchased and paid for the security to
be sold, the sale being through a "broker's transaction" or in a
transaction directly with a "market maker" (as provided by Rule
144(f)) and the number of shares or other securities being sold
during any three-month period not exceeding specified
limitations.
(iv) The Holder further understands that at the time the Holder
wishes to sell the Securities there may be no public market upon
which such a sale may be effected, and that even if such a public
market exists, the Company may not be satisfying the current
public information requirements of Rule 144, and that in such
event, the Holder may be precluded from selling the Securities
under Rule 144 unless (a) a one-year minimum holding period has
been satisfied and (b) the Holder was not at the time of the sale
nor at any time during the three-month period prior to such sale
an affiliate of the Company.
(v) The Holder has had an opportunity to discuss the Company's
business, management and financial affairs with its management
and an opportunity to review the Company's facilities. The Holder
understands that such discussions, as well as the written
information issued by the Company, were intended to describe
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the aspects of the Company's business and prospects which it
believes to be material but were not necessarily a thorough or
exhaustive description.
(b) Legends. Each certificate representing the Securities shall be
endorsed with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION"
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT
TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144
OF THE SECURITIES AND EXCHANGE COMMISSION, OR (IF REASONABLY
REQUIRED BY THE COMPANY) AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM
SUCH REGISTRATION.
The Company need not enter into its stock records a transfer of Securities
unless the conditions specified in the foregoing legend are satisfied. The
Company may also instruct its transfer agent not to allow the transfer of any of
the Shares unless the conditions specified in the foregoing legend are
satisfied.
(c) Removal of Legend and Transfer Restrictions. The legend relating
to the Act endorsed on a certificate pursuant to paragraph 4(b) of this Warrant
shall be removed and the Company shall issue a certificate without such legend
to the Holder of the Securities if (i) the Securities are registered under the
Act and a prospectus meeting the requirements of Section 10 of the Act is
available or (ii) the Holder provides to the Company an opinion of counsel for
the Holder reasonably satisfactory to the Company, a no-action letter or
interpretive opinion of the staff of the SEC reasonably satisfactory to the
Company, or other evidence reasonably satisfactory to the Company, to the effect
that public sale, transfer or assignment of the Securities may be made without
registration and without compliance with any restriction such as Rule 144.
5. Condition of Transfer or Exercise of Warrant. It shall be a condition to any
transfer or exercise of this Warrant that at the time of such transfer or
exercise, the Holder shall provide the Company with a representation in writing
that the Holder or transferee is acquiring this Warrant and the shares of
Preferred Stock to be issued upon exercise for investment purposes only and not
with a view to any sale or distribution, or will provide the Company with a
statement of pertinent facts covering any proposed distribution. As a further
condition to any transfer of this Warrant or any or all of the shares of
Preferred Stock issuable upon exercise of this Warrant, other than a transfer
registered under the Act, the Company may request a legal opinion, in form and
substance satisfactory to the Company and its counsel, reciting the pertinent
circumstances surrounding the proposed transfer and stating that such transfer
is exempt from the registration and prospectus delivery requirements of the Act.
Each certificate evidencing the shares issued upon exercise of the Warrant or
upon any transfer of the shares (other than a transfer registered under the Act
or any subsequent transfer of shares so registered) shall, at the Company's
option,
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if the Shares are not freely saleable under Rule 144(k) under the Act, contain a
legend in form and substance satisfactory to the Company and its counsel,
restricting the transfer of the shares to sales or other dispositions exempt
from the requirements of the Act.
As further condition to each transfer, at the request of the Company, the
Holder shall surrender this Warrant to the Company and the transferee shall
receive and accept a Warrant, of like tenor and date, executed by the Company.
6. Stock Fully Paid; Reservation of Shares. All Shares which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
fully paid and nonassessable, and free from all taxes, liens, and charges with
respect to the issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for issuance upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Preferred Stock
to provide for the exercise of the rights represented by this Warrant.
7. Adjustment for Certain Events. The number and kind of securities purchasable
upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:
(a) Reclassification or Merger. In case of any reclassification or change of
securities of the class issuable upon exercise of this Warrant (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any
merger of the Company with or into another corporation (other than a merger with
another corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant), or in case of
any sale of all or substantially all of the assets of the Company, then, unless
this Warrant shall have expired pursuant to Section 2(b), the Company, or such
successor or purchasing corporation, as the case may be, shall duly execute and
deliver to the Holder a new Warrant (in form and substance satisfactory to the
Holder of this Warrant), or the Company shall make appropriate provision without
the issuance of a new Warrant, so that the Holder shall have the right to
receive, at a total purchase price not to exceed that payable upon the exercise
of the unexercised portion of this Warrant, and in lieu of the shares of
Preferred Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification, change, merger or sale by a Holder of the number of
shares of Preferred Stock then purchasable under this Warrant, or in the case of
such a merger or sale in which the consideration paid consists all or in part of
assets other than securities of the successor or purchasing corporation, at the
option of the Holder, the securities of the successor or purchasing corporation
having a value at the time of the transaction equivalent to the value of the
Preferred Stock purchasable upon exercise of this Warrant at the time of the
transaction. Any new Warrant shall provide for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 4. The provisions of this subparagraph (a) shall similarly apply to
successive reclassifications, changes, mergers and transfers.
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(b) Subdivision or Combination of Shares. If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its
outstanding shares of Preferred Stock, the Warrant Price shall be
proportionately decreased and the number of Shares issuable hereunder shall be
proportionately increased in the case of a subdivision and the Warrant Price
shall be proportionately increased and the number of Shares issuable hereunder
shall be proportionately decreased in the case of a combination.
(c) Stock Dividends and Other Distributions. If the Company at any time
while this Warrant is outstanding and unexpired shall (i) pay a dividend with
respect to Preferred Stock payable in Preferred Stock, then the Warrant Price
shall be adjusted, from and after the date of determination of shareholders
entitled to receive such dividend or distribution, to that price determined by
multiplying the Warrant Price in effect immediately prior to such date of
determination by a fraction (A) the numerator of which shall be the total number
of shares of Preferred Stock outstanding immediately prior to such dividend or
distribution, and (B) the denominator of which shall be the total number of
shares of Preferred Stock outstanding immediately after such dividend or
distribution; or (ii) make any other distribution with respect to Preferred
Stock (except any distribution specifically provided for in Sections 6(a) and
6(b)), then, in each such case, provision shall be made by the Company such that
the Holder of this Warrant shall receive upon exercise of this Warrant a
proportionate share of any such dividend or distribution as though it were the
Holder of the Preferred Stock (or Common Stock issuable upon conversion thereof)
as of the record date fixed for the determination of the shareholders of the
Company entitled to receive such dividend or distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in the Warrant
Price, the number of Shares purchasable hereunder shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number of Shares
purchasable immediately prior to such adjustment in the Warrant Price by a
fraction, the numerator of which shall be the Warrant Price immediately prior to
such adjustment and the denominator of which shall be the Warrant Price
immediately thereafter.
8. Notice of Adjustments. Whenever any Warrant Price or the kind or number of
securities issuable under this Warrant shall be adjusted pursuant to Section 7
hereof, the Company shall prepare a certificate signed by an officer of the
Company setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price and number or kind of shares issuable upon
exercise of the Warrant after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by certified or registered mail, return
receipt required, postage prepaid) within thirty (30) days of such adjustment to
the Holder of this Warrant as set forth in Section 18 hereof.
9. Transferability of Warrant. This Warrant is transferable on the books of the
Company at its principal office by the registered Holder hereof upon surrender
of this Warrant properly endorsed, subject to compliance with Section 5 and
applicable federal and state securities laws. The Company shall issue and
deliver to the transferee a new Warrant representing the Warrant so transferred.
Upon any partial transfer, the Company will issue and deliver to Holder a new
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Warrant with respect to the Warrant not so transferred. Holder shall not have
any right to transfer any portion of this Warrant to any direct competitor of
the Company.
10. No Fractional Shares. No fractional share of Preferred Stock will be issued
in connection with any exercise hereunder, but in lieu of such fractional share
the Company shall make a cash payment therefor upon the basis of the Warrant
Price then in effect.
11. Charges, Taxes and Expenses. Issuance of certificates for shares of
Preferred Stock upon the exercise of this Warrant shall be made without charge
to the Holder for any United States or state of the United States documentary
stamp tax or other incidental expense with respect to 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.
12. No Shareholder Rights Until Exercise. This Warrant does not entitle the
Holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof.
13. Registry of Warrant. The Company shall maintain a registry showing the name
and address of the registered Holder of this Warrant. This Warrant may be
surrendered for exchange or exercise, in accordance with its terms, at such
office or agency of the Company, and the Company and Holder shall be entitled to
rely in all respects, prior to written notice to the contrary, upon such
registry.
14. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft, or
destruction, of indemnity reasonably satisfactory to it, and, if mutilated, upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant, having terms and conditions substantially identical to this
Warrant, in lieu hereof.
15. Miscellaneous.
(a) Issue Date. The provisions of this Warrant shall be construed and shall
be given effect in all respect as if it had been issued and delivered by the
Company on the date hereof.
(b) Successors. This Warrant shall be binding upon any successors or assigns
of the Company.
(c) Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California.
(d) Headings. The headings used in this Warrant are used for convenience
only and are not to be considered in construing or interpreting this Warrant.
(e) Saturdays, Sundays, Holidays. 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 or a Sunday or
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shall be a legal holiday in the State of California, then such action may be
taken or such right may be exercised on the next succeeding day not a legal
holiday.
16. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation 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 action as may be necessary or appropriate in order to protect
the rights of the Holder hereof against impairment.
17. Addresses. Any notice required or permitted hereunder shall be in writing
and shall be mailed by overnight courier, registered or certified mail, return
receipt required, and postage prepaid, or otherwise delivered by hand or by
messenger, addressed as set forth below, or at such other address as the Company
or the Holder hereof shall have furnished to the other party.
18. "Market Stand-Off" Agreement. Holder hereby agrees that for a period of up
to 180 days following the effective date of the first registration statement of
the Company covering common stock (or other securities) to be sold on behalf of
the Company in an underwritten public offering, it will not, to the extent
requested by the Company and any underwriter, sell or otherwise transfer or
dispose of (other than to donees or transferees who agree to be similarly bound)
any of the Shares at any time during such period except common stock included in
such registration; provided, however, that all officers and directors of the
Company who hold securities of the Company or options to acquire securities of
the Company and all other persons with registration rights enter into similar
agreements.
If to the Company: Xcyte Therapies, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Director of Finance
If to the Holder: General Electric Capital Corporation
0000 Xx Xxxxxx Xxxx
Xxxxx X-00
Xxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, EVP/GM
IN WITNESS WHEREOF, XCYTE THERAPIES, INC. has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated as of 1/10, 2000.
By: /s/ Xxxxxx Xxx Xxxxxxxx
-------------------------
Name: Xxxxxx Xxx Xxxxxxxx
----------------------
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Title: President & CEO
----------------------
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NOTICE OF EXERCISE
TO:
1. The undersigned Warrantholder ("Holder") elects to acquire shares of the
Series C Preferred Stock (the "Preferred Stock") of
_________________________________, (the "Company"), pursuant to the
terms of the Stock Purchase Warrant dated _____________ ____ 1999, (the
"Warrant").
2. The Holder exercises its rights under the Warrant as set forth below:
( ) The Holder elects to purchase _______________ shares of
Preferred Stock as provided in Section 3(a) and tenders
herewith a check in the amount of $_____ as payment of the
purchase price.
( ) The Holder elects to convert the purchase rights
into shares of Preferred Stock as provided in
Section 3(b)'of the Warrant.
3. The Holder surrenders the Warrant with this Notice of Exercise.
4. The Holder represents that it is acquiring the aforesaid shares of
Preferred Stock for investment and not with a view to or for resale in
connection with distribution and that the Holder has no present
intention of distributing or reselling the shares.
5. Please issue a certificate representing the shares of the Preferred
Stock in the name of the Holder or in such other name as is specified
below:
Name:
Address:
Taxpayer I.D.:
----------------------------------------
(Holder)
By:
------------------------------------
Title:
---------------------------------
Date:
---------------------------------
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