EXHIBIT 10.20
THIS WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK ISSUABLE UPON ITS
EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE OR TRANSFER THEREOF MAY
BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
No. W-3
FORM OF
COMMON STOCK PURCHASE WARRANT
-----------------------------
GENETIC VECTORS, INC., a Florida corporation (the "COMPANY"), hereby
certifies that, for value received, CAPITAL RESEARCH LTD., a Delaware
corporation (the "HOLDER"), or its registered permitted assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
Fifty Thousand (50,000) shares of fully paid and non-assessable shares of common
stock, par value $0.001 per share (the "COMMON STOCK"), of the Company at a
purchase price per share of $0.01 (the "PURCHASE PRICE"). The number and
character of such shares of Common Stock are subject to adjustment as provided
herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "COMPANY" shall include Genetic Vectors, Inc., a Florida
corporation, and any corporation which shall succeed or assume the obligations
of the Company hereunder.
(b) The term "COMMON STOCK" includes the Company's Common Stock, par value
$0.001 per share, as authorized on the date hereof of the Agreement and any
other securities into which or for which any of such Common Stock may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
1. EXERCISE OF WARRANT.
1.1. FULL EXERCISE. This Warrant may be exercised in full by the
Holder by surrender of this Warrant, with the form of subscription attached
hereto as Exhibit "A" (the "SUBSCRIPTION FORM") duly executed by the Holder, to
the Company at its principal office, accompanied by payment, in cash or by
certified or official bank check or wire transfer payable to the order of the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Purchase Price.
1.2. PARTIAL EXERCISE. This Warrant may be exercised in part by
surrender of this Warrant in the manner and at the place provided in Section 1.1
except that the amount payable by the holder on such partial exercise shall be
the amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the Subscription Form by (b) the Purchase Price. On
any such partial exercise the Company will issue and deliver to or upon the
order of the holder hereof a new Warrant or Warrants of like tenor, in the name
of the holder hereof or such holder (upon payment by such holder of any
applicable transfer taxes) may request, reflecting in the aggregate on the face
or faces thereof for the number of shares of Common Stock for which such Warrant
or Warrants may still be exercised.
2. DELIVERY OF STOCK CERTIFICATES, ETC. ON EXERCISE. As soon as practical
after the exercise of this Warrant in full or in part, the Company, at its
expense (including the payment by it of any applicable issue taxes), will cause
to be issued in the name of and delivered to the Holder hereof, as such Holder
(upon payment by the Holder of any applicable transfer taxes and, if requested
by the Company, demonstration by the Holder of compliance with applicable
securities laws) may direct, a certificate or certificates for the number of
fully paid and non-assessable shares of Common Stock to which such Holder shall
be entitled on such exercise, plus, in lieu of any fractional share to which
such Holder would otherwise be entitled, cash equal to such fraction multiplied
by the then-current market value of one full share, together with any other
stock or other securities and property (including cash, where applicable) to
which such holder is entitled upon such exercise pursuant to Section 1 or
otherwise.
3. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
3.1. REORGANIZATION. If the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other person or party,
or (c) transfer all or substantially all of its properties or assets to any
other person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, the Holder of this Warrant, on the exercise
hereof as provided in Section 1 at any time after the consummation of such
reorganization, consolidation or merger or the effective date of such
dissolution as the case may be, shall receive, in lieu of the Common Stock
issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which such Holder
would have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised this Warrant
immediately prior thereto, all subject to further adjustment thereafter as
provided herein.
3.2. CONTINUATION OF TERMS. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided herein.
3.3. ADDITIONAL WARRANTS. Upon the satisfaction of either (a) the
Company's full payment of all of the outstanding obligations under that certain
Promissory Note (the "NOTE") of even date herewith made by the Company and
payable to the Holder or (b) a closing of an offering of securities, whether
2
through one or more private placements or secondary public offerings, in which
the Company raises gross proceeds from such transaction or transactions of at
least $1,500,000, the Company shall grant to the Holder additional warrants to
purchase from the Company at any time or from time to time before 5:00 p.m.,
Eastern Time, on the fifth anniversary of the grant of such additional warrants
to the Holder, One-Hundred Fifty-Thousand (150,000) shares of fully paid and
non-assessable Common Stock at a purchase price per share of $5.50 (the
"PURCHASE PRICE").
All warrants to be granted pursuant to the immediately preceding sentence shall
be granted pursuant to a new Warrant in the same form as this Warrant, except
that such Warrant shall contain the following provision:
Any provision herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be made in respect
of the issuance of additional shares of Common Stock of
the Company (or upon the conversion or exchange of
securities convertible or exchangeable into shares of
Common Stock) unless after the date hereof (a) the
aggregate consideration to be received by the Company for
the issuance of such additional shares of Common Stock,
whether through one or more private placements or
secondary public offerings (or upon the conversion or
exchange of securities convertible or exchangeable into
shares of Common Stock), is at least $500,000 and (b) the
consideration per share for an additional share of Common
Stock (or the conversion or exchange price with respect to
securities convertible or exchangeable into shares of
Common Stock) to be issued by the Company is less than
$4.00. In such event, the Purchase Price shall be reduced
to a price (calculated to the nearest cent) determined by
multiplying such Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issue plus the
number of shares of Common Stock which the aggregate
consideration received by the Company for the total number
of additional shares of Common Stock so issued would
purchase at such Purchase Price in effect immediately
prior to such issuance, and the denominator of which shall
be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of such
additional shares of Common Stock so issued.
5. RIGHT TO ATTEND BOARD MEETINGS. The Holder shall have the right to
have a single representative present (either in person or by telephone) at all
meetings of the Board of Directors of the Company for so long as any portion of
the Note remains unpaid. Such representative shall not be deemed to be a
director and shall have no voting rights.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
3
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the 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 against
dilution or other impairment.
7. NOTICES OF RECORD DATE, ETC. In the event of:
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities (other than this issue of Common Stock on exercise of the Warrant),
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend distribution or right, and stating the amount
and character of such dividend, distribution or right; (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or wind-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up; and (iii) the amount and character of any stock or other securities,
or rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant and the persons or class of persons to whom
such proposed issue or grant is to be offered or made. Such notice shall be
mailed at least twenty (20) days prior to the date specified in such notice on
which any such action is to be taken.
8. CERTAIN DELIVERIES. The Company shall deliver to the Holder copies of
all documents filed by the Company with the Securities and Exchange Commission.
In addition and for so long as any portion of the Note remains unpaid, the
Company shall deliver to the Holder copies of its monthly financial statements.
Such financial statements shall be delivered on or before the thirtieth day of
each month for the immediately preceding month.
9. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will
at all times reserve and keep available, solely for issuance and delivery on the
exercise of the Warrant, all shares of Common Stock from time to time issuable
on the exercise of the Warrant.
4
10. EXCHANGE OF WARRANT. On surrender of the Warrant, properly endorsed,
to the Company, the Company at its expense will issue and deliver to or on the
order of the holder thereof a new Warrant or Warrants of like tenor, in the name
of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes and, if requested by the Company, demonstration by such holder of
compliance with applicable securities laws) may direct, calling in the aggregate
on the face or faces thereof for the number of shares of Common Stock called for
on the face or faces of the Warrant or Warrants so surrendered.
11. REPLACEMENT OF WARRANT. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of the Warrant and,
in the case of any such loss, theft or destruction of the Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of such warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. NEGOTIABILITY. This Warrant is issued upon the following terms, to all
of which each holder or owner hereof by the taking hereof consents and agrees:
(a) subject to compliance with all applicable securities laws, title
to this Warrant may be transferred by endorsement (by the holder hereof
executing the Form of Assignment attached hereto as Exhibit "B") and delivery in
the same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a BONA FIDE
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such BONA FIDE
purchaser, and each such BONA FIDE purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
13. NOTICES. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be considered
as duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or (b) five days after mailing if mailed
from within the continental United States by registered or certified mail,
return receipt requested to the party entitled to receive the same, if to the
Company, to Genetic Vectors, Inc., 0000 X.X. 00xx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000 Attention: Xxxx X. XxXxxx, Xx., with a copy to Xxxxxxx X. Xxxxxx,
Esq., Xxxxxxxxxxx & Xxxxxxxx LLP, 000 X. Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxx,
Xxxxxxx 00000, and if to the Holder, at the address of such Holder shown on the
books of the Company. Any party may change his or its address by giving notice
to the other party stating his or its new address. Commencing on the 10th day
after the giving of such notice, such newly designed address shall be such
5
party's address for the purpose of all notices or other communications required
or permitted to be given pursuant to this Agreement.
14. GOVERNING LAW. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Florida, without regard to its conflicts of law principles. All parties hereto
(i) agree that any legal suit, action or proceeding arising out of or relating
to this Agreement shall be instituted only in a federal or state court in
Miami-Dade County, Florida; (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding; and (iii) irrevocably submit to the jurisdiction of such federal or
state court in Miami-Dade County, Florida in any such suit, action or
proceeding, but such consent shall not constitute a general appearance or be
available to any other person who is not a party to this Agreement. All parties
hereto agree that the mailing of any processing any suit, action or proceeding
in accordance with the notice provisions of this Agreement shall constitute
personal service thereof.
15. ENTIRE AGREEMENT; WAIVER OF BREACH. This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it may
not be modified or amended in any manner other than as provided herein, and no
waiver of any breach or condition of this Agreement shall be deemed to have
occurred unless such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver of any
subsequent breach or condition of a like or different nature.
16. SEVERABILITY. If any provision of this Agreement shall be held invalid
or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
17. AMENDMENT. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
18. ATTORNEYS' FEES AND COSTS. In the event of any litigation arising
under or relating to this Warrant, the prevailing party in such dispute shall be
entitled to recover its costs and expenses, including reasonable attorney fees,
from the other.
19. RESTRICTIONS ON TRANSFERABILITY; RESTRICTIVE LEGEND. The holder
acknowledges that the shares of Common Stock issuable upon exercise of this
Warrant are subject to restrictions under applicable Federal and state
securities laws. Each certificate representing shares of Common Stock issued
shall, upon the exercise of this Warrant, bear the following legends in addition
to such other restrictive legends as may be required by law:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "ACT"), or any state securities
laws, and no sale or transfer thereof may be effected without an effective
registration statement or an opinion of counsel for the holder, satisfactory to
6
the Company, that such registration is not required under the Act and any
applicable state securities laws."
Dated: January 19, 1999
GENETIC VECTORS, INC.
By:_________________________________________
Title:______________________________________
AGREED TO AND ACCEPTED:
CAPITAL RESEARCH LTD.
By:_________________________________
Its:________________________________
Date:_______________________________
7
EXHIBIT "A"
-----------
FORM OF EXERCISE
----------------
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder _____ shares of
Common Stock of ____________________, herewith makes payment of $__________
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to, whose address is:
__________________________________________________
__________________________________________________
__________________________________________________
Dated:___________________.
____________________________________________
Signature
(Signature must conform to name of holder as
specified on the face of the Warrant)
____________________________________________
Print Name
____________________________________________
Street Address
____________________________________________
City, State and Zip Code
____________________________________________
Person's Social Security Number or Tax
Identification Number
A-1
EXHIBIT "B"
-----------
FORM OF ASSIGNMENT
------------------
(TO BE SIGNED ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns, and transfers
unto ___________________ the right represented by the within Warrant to purchase
shares of Common Stock of ___________________ to which the within Warrant
relates, and appoints ___________________ as its attorney to transfer such right
on the books of _________________ with full power of substitution in the
premises.
Dated:_________________.
____________________________________________
Signature
(Signature must conform to name of holder as
specified on the face of the Warrant)
____________________________________________
Print Name
____________________________________________
Street Address
____________________________________________
City, State and Zip Code
____________________________________________
Person's Social Security Number or Tax
Identification Number
Signed in the presence of:
__________________________________
B-1
