EXHIBIT 4.3
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
LAWS, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH
TRANSACTION, OR SUCH TRANSACTION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND LAWS, SUCH COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE
EVIDENCED BY AN OPINION OF THE WARRANT HOLDER'S COUNSEL, IN FORM ACCEPTABLE TO
THE CORPORATION, THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT
FROM ANY PROPOSED TRANSFER OR ASSIGNMENT.
COMMON STOCK PURCHASE WARRANT
XXXXXX SYSTEMS, INC.
THIS CERTIFIES that for good and valuable consideration received, Xxxxx
Xxxxxxx Xxxxxxxxxx Associates LLC, or a registered assignee (the "Holder") is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
acquire from Xxxxxx Systems, Inc., a Delaware corporation (the "Corporation"),
up to 150,000 fully paid and nonassessable shares (the "Warrant Stock") of
common stock, par value $0.001 (the "Common Stock"), of the Corporation at a
purchase price of $3.40 per share (the "Exercise Price"). This Common Stock
Purchase Warrant (this "Warrant") is issued pursuant to that March 30, 2004
Retainer Agreement (the "Retainer Agreement") entered into between the
Corporation and Xxxxx Xxxxxxx Xxxxxxxxxx Associates LLC.
1. Vesting and Exercise Periods; Term of Warrant.
This Warrant shall vest (become fully owned by Holder and no longer be
subject to cancellation) as follows: (i) The right to purchase 75,000 Warrant
Shares is vested concurrently with the issuance of this Warrant. (ii) In the
event that the Corporation does not provide Xxxxx Xxxxxxx Xxxxxxxxxx Associates
LLC with written notice of its election to terminate the Retainer Agreement
before December 1, 2004, the right to purchase the remaining 75,000 Warrant
Shares of this Warrant shall become vested on December 31, 2004. If the
Corporation terminates the Retainer Agreement before December 1, 2004, this
Warrant shall, upon such termination, become a warrant to purchase only 75,000
Warrant Shares, and the Holder's right to purchase the remaining 75,000 Warrant
Shares shall be cancelled. The right to exercise this Warrant accumulates, in
arrears, in monthly installments of 8,333.33 shares of Warrant Stock on the last
day of each calendar month commencing on April 30, 2004 and continuing
thereafter until December 31, 2004 (or September 30, 2005 if the Retainer
Agreement is not terminated before December 1, 2004).
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Subject to the foregoing exercise schedule, the foregoing vesting
provisons, and the other terms and conditions set forth herein, the vested and
exercisable portion of this Warrant shall be exercisable, in whole or in part,
at any time on or after the date hereof and at or prior to 11:59 p.m., Pacific
Standard Time, on April 1, 2009 (the "Expiration Time").
2. Exercise of Warrant.
(a) Cash Exercise. This Warrant may be exercised, in whole or in part, by
the Holder during normal business hours on any business day during the Exercise
Period by (i) the delivery to the Corporation of a duly executed Notice of
Exercise (in the form attached to this Warrant) specifying the number of Warrant
Shares to be purchased, (ii) delivery of payment to the Corporation of the
Exercise Price for the number of Warrant Shares specified in the Notice of
Exercise by cash, wire transfer of immediately available funds to a bank account
specified by the Corporation, or by certified or bank cashier's check, and (iii)
the surrender to the Corporation of this Warrant (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft or
destruction).
(b) Cashless Exercise. This Warrant may also be exercised by the Holder
through a cashless exercise, as described in this Section 2(b). This Warrant may
be exercised, in whole or in part, by (i) the delivery to the Corporation of a
duly executed Notice of Exercise specifying the number of Warrant Shares to be
applied to such exercise, and (ii) the surrender to the Corporation of this
Warrant (or an indemnification undertaking with respect to this Warrant in the
case of its loss, theft or destruction). The number of shares of Common Stock to
be issued upon exercise of this Warrant pursuant to this Section 2(b) shall
equal the value of this Warrant (or the portion thereof being canceled) computed
as of the date of delivery of this Warrant to the Corporation using the
following formula:
X = Y(A-B)
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A
Where:
X = the number of shares of Common Stock to be issued to
Holder under this Section 2(b);
Y = the number of Warrant Shares identified in the Notice of
Exercise as being applied to the subject exercise;
A = the Current Market Price on such date; and
B = the Exercise Price on such date
For the purpose of any computation under this Section 2(b), the "Current
Market Price" per share of Common Stock on any day shall mean: (i) if the
principal trading market for such securities is a national or regional
securities exchange, the closing price on such exchange on such day; or (ii) if
sales prices for shares of Common Stock are reported by the Nasdaq National
Market System or Nasdaq Small Cap Market (or a similar system then in use), the
last reported sales price (regular way) so reported on such day; or (iii) if
neither (i) nor (ii) above are applicable, and if bid and ask prices for shares
of Common Stock are reported in the OTC Bulletin Board, the average of the high
bid and low ask prices so reported on such day. Notwithstanding the foregoing,
if there is no reported closing price, last reported sales price, or bid and ask
prices, as the case may be, for the day in question, then the Current Market
Price shall be determined as of the latest date prior to such day for which such
closing price, last reported sales price, or bid and ask prices, as the case may
be, are available, unless such securities have not been traded on an exchange or
in the over-the-counter market for 30 or more days immediately prior to the day
in question, in which case the Current Market Price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Corporation.
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3. Issuance of Shares; No Fractional Shares of Scrip.
Certificates for shares purchased hereunder shall be delivered to the
Holder hereof by the Corporation's transfer agent at the Corporation's expense
within a reasonable time after the date on which this Warrant shall have been
exercised in accordance with the terms hereof. Each certificate so delivered
shall be in such denominations as may be requested by the Holder hereof and
shall be registered in the name of such Holder or, subject to applicable laws,
such other name as shall be requested by the Holder. If, upon exercise of this
Warrant, fewer than all of the shares of Warrant Stock evidenced by this Warrant
are purchased prior to the Expiration Time, one or more new warrants
substantially in the form of, and on the terms in, this Warrant will be issued
for the remaining number of shares of Warrant Stock not purchased upon exercise
of this Warrant. The Corporation hereby represents and warrants that all shares
of Warrant Stock which may be issued upon the exercise of this Warrant will,
upon such exercise, be duly and validly authorized and issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the
issuance thereof (other than liens or charges created by or imposed upon the
Holder of the Warrant Stock). The Corporation agrees that the shares so issued
shall be and will be deemed to be issued to such Holder as the record owner of
such shares as of the close of business on the date on which this Warrant shall
have been surrendered for exercise in accordance with the terms hereof. No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. With respect to any fraction of a share called for
upon the exercise of this Warrant, an amount equal to such fraction multiplied
by the then current price at which each share may be purchased hereunder shall
be paid in cash to the Holder of this Warrant.
4. Registration Rights.
If, at any time the Corporation proposes to register any of its Common
Stock under the Securities Act of 1933, as amended, (other than pursuant to Form
X-0, Xxxx X-0 or a comparable registration statement) it will give written
notice by registered mail, at least twenty (20) days prior to the filing of each
such registration statement, to the Holders of its intention to do so. If the
Holders notify the Corporation within fifteen (15) business days after receipt
of any such notice of its or their desire to include any such securities in such
proposed registration statement, the Corporation shall afford the such Holders
the opportunity to have any their Warrant Shares registered under such
registration statement. Notwithstanding the foregoing, if such registration
statement is an underwritten public offering by the Corporation of its Common
Stock, and if in the good faith judgment of the managing underwriter of such
public offering the inclusion of all of the Warrant Shares requested to be
registered would materially and adversely affect the successful marketing of the
offering, then the number of the Warrant Shares to be included in the offering
shall be reduced in any manner determined by the managing underwriter. The
Corporation shall bear all costs of preparing and filing the registration
statement. The Corporation shall have the right at any time after it shall have
given written notice pursuant to this Section 4 (irrespective of whether a
written request for inclusion of any such securities shall have been made) to
elect not to file any such proposed registration statement, or to withdraw the
same after the filing but prior to the effective date thereof.
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5. Charges, Taxes and Expenses.
Issuance of certificates for shares of Warrant Stock upon the exercise of
this Warrant shall be made without charge to the Holder hereof 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 Corporation,
and such certificates shall be issued in the name of the Holder of this Warrant
or in such name or names as may be directed by the Holder of this Warrant;
provided, however, that in the event certificates for shares of Warrant Stock
are to be issued in a name other than the name of the Holder of this Warrant,
this Warrant when surrendered for exercise shall be accompanied by an Assignment
Form to be provided by the Corporation duly executed by the Holder hereof.
6. No Rights as Stockholders.
This Warrant does not entitle the Holder hereof to any voting rights or
other rights as a stockholder of the Corporation prior to the exercise hereof.
7. Exchange and Registry of Warrant.
This Warrant is exchangeable, upon the surrender hereof by the registered
Holder at the above mentioned office or agency of the Corporation, for a new
Warrant of like tenor and dated as of such exchange. The Corporation shall
maintain at the above-mentioned office or agency a registry showing the name and
address of the registered Holder of this Warrant. This Warrant may be
surrendered for exchange, transfer or exercise, in accordance with its terms, at
such office or agency of the Corporation, and the Corporation shall be entitled
to rely in all respects, prior to written notice to the contrary, upon such
registry.
8. Loss, Theft, Destruction or Mutilation of Warrant.
Upon receipt by the Corporation of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant and in case of
loss, theft or destruction of indemnity or security reasonably satisfactory to
it, and upon reimbursement to the Corporation of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Corporation will make and deliver a new Warrant of like tenor and
dated as of such cancellation, in lieu of this Warrant.
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9. Saturdays, Sundays and 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 that is a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.
10. Merger, Sale of Assets, Etc.
If at any time the Corporation proposes to merge or consolidate with or
into any other corporation, effect any reorganization, or sell or convey all or
substantially all of its assets to any other entity, then, as a condition of
such reorganization, consolidation, merger, sale or conveyance, the Corporation
or its successor, as the case may be, shall enter into a supplemental agreement
to make lawful and adequate provision whereby the Holder shall have the right to
receive, upon exercise of the Warrant, the kind and amount of equity securities
which would have been received upon such reorganization, consolidation, merger,
sale or conveyance by a Holder of a number of shares of common stock equal to
the number of shares issuable upon exercise of the Warrant immediately prior to
such reorganization, consolidation, merger, sale or conveyance. If the property
to be received upon such reorganization, consolidation, merger, sale or
conveyance is not equity securities, the Corporation shall give the Holder of
this Warrant ten (10) business days prior written notice of the proposed
effective date of such transaction, and if this Warrant has not been exercised
by or on the effective date of such transaction, it shall terminate.
11. Subdivision, Combination, Reclassification, Conversion, Etc.
If the Corporation at any time shall by subdivision, combination,
reclassification of securities or otherwise, change the Warrant Stock into the
same or a different number of securities of any class or classes, this Warrant
shall thereafter entitle the Holder to acquire such number and kind of
securities as would have been issuable in respect of the Warrant Stock (or other
securities which were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change) as the result of such change if this Warrant had been exercised in full
for cash immediately prior to such change. The Exercise Price hereunder shall be
adjusted if and to the extent necessary to reflect such change. If the Warrant
Stock or other securities issuable upon exercise hereof are subdivided or
combined into a greater or smaller number of shares of such security, the number
of shares issuable hereunder shall be proportionately increased or decreased, as
the case may be, and the Exercise Price shall be proportionately reduced or
increased, as the case may be, in both cases according to the ratio which the
total number of shares of such security to be outstanding immediately after such
event bears to the total number of shares of such security outstanding
immediately prior to such event. The Corporation shall give the Holder prompt
written notice of any change in the type of securities issuable hereunder, any
adjustment of the Exercise Price for the securities issuable hereunder, and any
increase or decrease in the number of shares issuable hereunder.
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12. Transferability; Compliance with Securities Laws.
(a) This Warrant may not be transferred or assigned in whole or in part
without compliance with all applicable federal and state securities laws by the
transferor and transferee (including the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Corporation, if
requested by the Corporation). Subject to such restrictions, prior to the
Expiration Time, this Warrant and all rights hereunder are transferable by the
Holder hereof, in whole or in part, at the office or agency of the Corporation.
Any such transfer shall be made in person or by the Holder's duly authorized
attorney, upon surrender of this Warrant together with the Assignment Form
attached hereto properly endorsed.
(b) The Holder of this Warrant, by acceptance hereof, acknowledges that
this Warrant and the Warrant Stock issuable upon exercise hereof are being
acquired solely for the Holder's own account and not as a nominee for any other
party, and for investment, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Warrant Stock to be issued upon
exercise hereof except under circumstances that will not result in a violation
of the Securities Act of 1933, as amended, or any state securities laws. Upon
exercise of this Warrant, the Holder shall, if requested by the Corporation,
confirm in writing, in a form satisfactory to the Corporation, that the shares
of Warrant Stock so purchased are being acquired solely for Holder's own account
and not as a nominee for any other party, for investment, and not with a view
toward distribution or resale.
(c) The Warrant Stock has not been and will not be registered under the
Securities Act of 1933, as amended, and this Warrant may not be exercised except
by (i) the original purchaser of this Warrant from the Corporation or (ii) an
"accredited investor" as defined in Rule 501(a) under the Securities Act of
1933, as amended. Each certificate representing the Warrant Stock or other
securities issued in respect of the Warrant Stock upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall be
stamped or otherwise imprinted with a legend substantially in the following form
(in addition to any legend required under applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SAID ACT.
13. Reservation of Shares of Common Stock.
The Corporation hereby agrees that during the period that this Warrant is
outstanding, the Corporation will reserve from its authorized and unissued
common stock a sufficient number of shares to provide for the issuance of
Warrant Stock upon the exercise of this Warrant.
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14. Governing Law.
This Warrant shall be governed by and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed
by its duly authorized officers.
Dated: April 1, 2004
XXXXXX SYSTEMS, INC.
By: _________________________________________________________
Xxxxx Xxxxx, M.D. President & Chief Scientific Officer
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NOTICE OF EXERCISE
To: Xxxxxx Systems, Inc.
(1) The undersigned hereby elects to purchase shares of Common Stock of Xxxxxx
Systems, Inc. pursuant to the terms of the attached Warrant and tenders payment
herewith in the amount of $_________ by [tendering cash or delivering a
certified check or bank cashier's check, payable to the order of the
Corporation] [surrendering ______ shares of Common Stock received upon exercise
of the attached Warrant, which shares have a Current Market Price equal to such
payment] in accordance with the terms thereof, together with all applicable
transfer taxes, if any.
(2) In exercising this Warrant, the undersigned hereby confirms and acknowledges
that the shares of common stock to be issued upon exercise hereof are being
acquired solely for the account of the undersigned and not as a nominee for any
other party, and for investment and that the undersigned will not offer, sell or
otherwise dispose of any such shares of common stock except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
or any state securities laws.
(3) Please issue a certificate or certificates representing said shares of
common stock in the name of the undersigned or in such other name as is
specified below:
--------------------------------------
(Name)
--------------------------------------
(Address)
(4) The undersigned represents that (a) he, she or it is the original purchaser
from the Corporation of the attached Warrant or an 'accredited investor' within
the meaning of Rule 501(a) under the Securities Act of 1933, as amended and (b)
the aforesaid shares of common stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection
with, the distribution thereof and that the undersigned has no present intention
of distributing or reselling such shares.
Date:__________________________
------------------------------
(Signature)
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, hereby sells, assigns, and transfers unto ___________a
Warrant to purchase __________ shares of Common Stock, par value $0.001 per
share, of Xxxxxx Systems, Inc. (the "Corporation"), together with all right,
title, and interest therein, and does hereby irrevocably constitute and appoint
attorney to transfer such Warrant on the books of the Corporation, with full
power of substitution.
Dated:
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By:
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Signature
The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Warrant in every particular, without alteration or
enlargement or any change whatsoever.
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