EXHIBIT B
THIS WARRANT, AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE REOFFERED OR SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO (1) REGISTRATION OR
(2) AN OPINION OF COUNSEL FOR THE COMPANY OR OTHER COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. THIS
WARRANT IS ALSO SUBJECT TO THE TERMS OF AN INVESTMENT AGREEMENT DATED MAY 22,
2001.
WARRANT
To Purchase Shares of Common Stock of
AVI BIOPHARMA, INC.
June 20, 2001
AVI BioPharma, Inc., an Oregon corporation (the "Company"), for value
received, hereby certifies that Medtronic Asset Management, Inc., a Minnesota
corporation, or its registered assigns (the "Holder") is entitled, subject to
the terms set forth below, upon exercise of this Warrant to purchase from the
Company 3,000,000 shares of Common Stock, $0.0001 par value, of the Company (as
further defined in Section 5 below, "Common Stock"). Until adjusted as provided
by the terms of this Warrant, the exercise price per share (the "Exercise
Price") shall be $10. The shares issuable upon exercise of this Warrant, as
adjusted from time to time pursuant to the provisions of this Warrant, are
hereinafter referred to as the "Warrant Shares."
This Warrant is further subject to the following provisions, terms and
conditions:
1. TERM. Subject to Section 13 below, this Warrant may be exercised
by the Holder, in whole or in part, at any time before the close of business
on the date five years after the date hereof.
2. MANNER OF EXERCISE. This Warrant may be exercised by the Holder,
in whole or in part (but not as to any fraction of a share of Common Stock),
by surrendering this Warrant, with the Exercise Form attached hereto as
EXHIBIT A filled in and duly executed by such Holder or by such Holder's duly
authorized attorney, to the Company at its principal office accompanied by
payment of the Exercise Price in the amount of the Exercise Price multiplied
by the number of shares as to which the Warrant is being exercised. The
Exercise Price may be paid in the form of a check or wire transfer of funds.
3. EFFECTIVE DATE OF EXERCISE. Each exercise of this Warrant shall be
deemed effective as of the close of business on the day on which this Warrant
is surrendered to the Company as provided in Section 2 or Section 3(a) above.
At such time, the person
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or persons in whose name or names any certificates for Warrant Shares shall be
issuable upon such exercise shall be deemed to have become the holder or holders
of record of the Warrant Shares represented by such certificates. Within 10 days
after the exercise of this Warrant in full or in part, the Company will, at its
expense, cause to be issued in the name of and delivered to the Holder or such
other person as the Holder may (upon payment by such Holder of any applicable
transfer taxes) direct: (i) a certificate or certificates for the number of full
Warrant Shares to which such Holder is entitled upon such exercise, and (ii)
unless this Warrant has expired, a new Warrant or Warrants (dated the date
hereof and in form identical hereto) representing the right to purchase the
remaining number of shares of Common Stock, if any, with respect to which this
Warrant has not then been exercised.
4. ADJUSTMENTS TO EXERCISE PRICE. The above provisions are, however,
subject to the following:
(a) (i) If the Company shall at any time after the date of this
Warrant subdivide or combine the outstanding shares of Common Stock
or declare a dividend payable in Common Stock, then the number of
shares of Common Stock for which this Warrant may be exercised as of
immediately prior to the subdivision, combination or record date for
such dividend payable in Common Stock shall forthwith be
proportionately decreased, in the case of combination, or increased,
in the case of subdivision or dividend payable in Common Stock.
(ii) If the Company shall at any time after the date of this
Warrant subdivide or combine the outstanding shares of Common
Stock or declare a dividend payable in Common Stock, the Exercise
Price in effect immediately prior to the subdivision, combination
or record date for such dividend payable in Common Stock shall
forthwith be proportionately increased, in the case of
combination, or decreased, in the case of subdivision or dividend
payable in Common Stock.
(b) If any capital reorganization or reclassification of the
capital stock of the Company, or share exchange, combination, consolidation
or merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected in
such a way that holders of Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock, then,
as a condition of such reorganization, reclassification, share exchange,
combination, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the Holder shall thereafter have the right to receive
upon exercise of this Warrant, upon the basis and upon the terms and
conditions specified in this Warrant and in lieu of the shares of the Common
Stock of the Company into which this Warrant could be exercisable or
convertible, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the maximum number of shares of such stock
issuable upon exercise of this Warrant, and in any such case appropriate
provisions shall be made with respect to the rights and interests of Holder
to the end that the provisions hereof (including without limitation
provisions for
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adjustments of the Exercise Price and of the number of shares purchasable upon
exercise of this Warrant) shall thereafter be applicable, as nearly as may be,
in relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company shall not effect any such share exchange,
combination, consolidation, merger or sale, unless prior to the consummation
thereof the successor corporation (if other than the Company) resulting from
such share exchange, combination, consolidation or merger or the corporation
purchasing such assets shall assume by written instrument executed and mailed to
the Holder, at the last address of such Holder appearing on the books of the
Company, the obligation to deliver to such Holder such shares of stock,
securities or assets that, in accordance with the foregoing provisions, such
Holder may thereafter be entitled to receive upon exercise of this Warrant.
(c) If at any time after the date of this Warrant the Company
distributes to all holders of Common Stock any assets (excluding ordinary
cash dividends), debt securities, or any rights or warrants to purchase debt
securities, assets or other securities (excluding Common Stock covered by
Sections 5(a) or (b)), the Exercise Price shall be adjusted in accordance
with the formula:
E(1) = E x (O x M) - F
--------------------
O x M
where:
E(1) = the adjusted Exercise Price.
E = the current Exercise Price.
M = the average market price of Common Stock
for the 30 consecutive trading days
commencing 45 trading days before the
record date mentioned below.
O = the number of shares of Common Stock
outstanding on the record date mentioned
below.
F = the fair market value on the record date
of the aggregate of all assets, securities,
rights or warrants distributed. The
Company's Board of Directors shall determine
the fair market value in the exercise of its
reasonable judgment.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive
the distribution.
(d) Upon any adjustment of the Exercise Price, then and in
each such case, the Company shall give written notice thereof, by first
class mail or equivalent, postage prepaid, addressed to the Holder of
this Warrant at the address of such Holder as shown on the books of the
Company, which notice shall state the Exercise Price resulting from
such adjustment and the increase or decrease, if any, in the number of
shares for which this Warrant may be exercised, setting forth in
reasonable detail the method of calculation and the facts upon which
such calculation is based.
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5. COMMON STOCK. As used herein, the term "Common Stock" shall mean
and include the Company's presently authorized shares of common stock and
shall also include any capital stock of any class of the Company hereafter
authorized that is not limited to a fixed sum or percentage in respect of the
rights of the holders thereof to participate in dividends or in the
distribution, dissolution or winding up of the Company.
6. NO VOTING RIGHTS. This Warrant shall not entitle the Holder to any
voting rights or other rights as a shareholder of the Company unless and
until exercised or converted pursuant to the provisions hereof.
7. EXERCISE OR TRANSFER OF WARRANT OR RESALE OF COMMON STOCK. The
Holder, by acceptance hereof, agrees to give written notice to the Company
before exercising this Warrant, or transferring this Warrant, in whole or in
part, or transferring any shares of Common Stock issued upon the exercise
hereof, of such Holder's intention to do so, describing briefly the manner of
any proposed transfer. Such notice shall include an opinion of counsel
reasonably satisfactory to the Company that (i) the proposed exercise or
transfer may be effected without registration or qualification under the
Securities Act of 1933, as amended (the "Act"), and any applicable state
securities or blue sky laws, or (ii) the proposed exercise or transfer has
been registered under such laws. Upon delivering such notice, such Holder
shall be entitled to exercise or transfer this Warrant or such Warrant
Shares, all in accordance with the terms of the notice delivered by such
Holder to the Company; provided, that an appropriate legend may be endorsed
on the certificates for such shares respecting restrictions upon transfer
thereof necessary or advisable in the opinion of counsel to the Company to
prevent further transfer that would be in violation of Section 5 of the Act
and applicable state securities or blue sky laws.
If in the opinion of counsel to the Company or other counsel
reasonably acceptable to the Company the proposed exercise, transfer or
disposition of this Warrant or the Warrant Shares described in the written
notice given pursuant to this Section 8 may not be effected without
registration of this Warrant or the Warrant Shares, the Company shall
promptly give written notice thereof to the Holder within 10 days after the
Company receives such notice, and such holder will limit its activities in
respect to such as, in the opinion of such counsel, is permitted by law.
Further, notwithstanding anything above to the contrary, this
Warrant may not be transferred by the Holder hereof in warrant form except to
a subsidiary of the Holder.
8. COVENANTS OF THE COMPANY. The Company covenants and agrees that
all shares that may be issued upon exercise of this Warrant will, upon
issuance, be duly authorized and issued, fully paid, nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof. The
Company further covenants and agrees that the Company will at all times have
authorized, and reserved for the purpose of issuance upon exercise hereof, a
sufficient number of shares of its Common Stock to provide for the exercise
of this Warrant.
9. CERTAIN NOTICES. The Holder shall be entitled to receive from the
Company immediately upon declaration thereof and at least 20 days prior to
the record date for determination of shareholders entitled thereto or to vote
thereon (or, if no record date is
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set, prior to the event), written notice of any event that could require an
adjustment pursuant to Section 5 hereof or of the dissolution or liquidation of
the Company. All notices under this Warrant shall be in writing and shall be
delivered personally or by telecopy (receipt confirmed) to such party (or, in
the case of an entity, to an executive officer of such party) or shall be sent
by a reputable express delivery service or by certified mail, postage prepaid
with return receipt requested, addressed as follows:
if to the Holder, to:
Medtronic, Inc.
000 Xxxxxxxxx Xxxxxxx XX
Xxxxxxxxxxx, XX 00000-0000
with separate copies thereof addressed to
Attention: General Counsel
Mail Stop LC400
Telecopier No.: (000) 000-0000
and
Attention: Vice President and Chief Development Officer
Mail Stop LC390
Telecopier No.: (000) 000-0000
if to the Company to:
AVI BioPharma, Inc.
Xxx XX Xxxxxxxx
Xxxxxxxx, XX 00000
Attn: President
With separate copies to:
Xxxxxx X. Xxxxx, Esq.
XXXXXX, XXXXX & RE, P,.C.
000 XX Xxxxxxxxxx Xxx
Xxxx, XX 00000
Any party may change the above-specified recipient and/or mailing
address by notice to all other parties given in the manner herein prescribed.
All notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by telecopy) or on the day shown on the return
receipt (if delivered by mail or delivery service).
10. REGISTRATION RIGHTS. The Holders of this Warrant and the Warrant
Shares are entitled to the rights and benefits of all of the terms,
provisions and conditions of that certain Registration Rights Agreement dated
of even date herewith between the Company and Medtronic Asset Management,
Inc., provided an express sharing or assignment of such rights and benefits
is made to each such Holder by such Holder's
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transferor. Notwithstanding the foregoing or any provisions of the Registration
Rights Agreement to the contrary, the Holder agrees not to sell or transfer any
Warrant Shares for at least thirty-two (32) days after conversion or exercise of
this Warrant which resulted in the issuance of such Warrant Shares.
11. MISCELLANEOUS.
(a) No amendment, modification or waiver of any provision of this
Warrant shall be effective unless the same shall be in writing and signed
by the holder hereof.
(b) This Warrant shall be governed by and construed in accordance with
the laws of the State of Oregon.
12. CANCELLATION RIGHTS. The Company may cancel this Warrant, to the
extent it remains unexercised, at any time if the Daily Price has exceeded
$20.00 for 20 consecutive trading days immediately preceding the date of notice
of such cancellation, upon 190 days' notice given in accordance with Section 10
and Holder's failure to exercise this Warrant within such notice period. No
consideration or price shall be payable by the Company for such cancellation.
For the purpose of the foregoing sentence, the term "Daily Price" shall mean,
for any relevant day, the closing bid price on that day as reported by the
principal exchange or quotation system on which prices for the Common Stock are
reported, and such $20.00 shall be subject to adjustment in the same manner in
which the Exercise Price is subject to adjustment under Section 4 and the Holder
is entitled to notice thereof under Section 4(d). The Holder may exercise this
Warrant in whole or in part at any time during such 190-day notice period. This
Warrant shall no longer be exercisable in whole or in part from and after the
191st day after such notice.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its authorized officer and dated as of the date stated above.
AVI BIOPHARMA, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: CEO
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EXHIBIT A
NOTICE OF EXERCISE OF WARRANT -- To Be Executed by the Registered Holder in
Order to Exercise the Warrant
The undersigned hereby irrevocably elects to exercise the attached
Warrant to purchase, for cash pursuant to Section 2 thereof, ________________
shares of Common Stock issuable upon the exercise of such Warrant. The
undersigned requests that certificates for such shares be issued in the name of
__________________________________. If this Warrant is not fully exercised, the
undersigned requests that a new Warrant to purchase the balance of shares
remaining purchasable hereunder be issued in the name of ____________________.
Date: ___________, 20__
------------------------------------
[name of registered Holder]
------------------------------------
[signature]
------------------------------------
[street address]
------------------------------------
[city, state, zip]
------------------------------------
[tax identification number]
