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Exhibit 4.1
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.
TARGETED GENETICS CORPORATION
COMMON STOCK WARRANT
This certifies that for value received, FRANCIS CHISARI ("Chisari"), or
registered assigns, is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof (subject to the
provisions of Section 1) and at or prior to 11:59 p.m., Pacific time, on May 15,
2004 (the "Expiration Time"), but not thereafter, to acquire from TARGETED
GENETICS CORPORATION, a Washington corporation (the "Company"), in whole or from
time to time in part, up to a maximum of 25,000 fully paid and nonassessable
shares of Common Stock ("Warrant Stock") at a purchase price per share (the
"Exercise Price") of $3.13. Such number of shares, type of security and Exercise
Price are subject to adjustment as provided herein, and all references to
"Warrant Stock" and "Exercise Price" herein shall be deemed to include any such
adjustment.
1. VESTING OF WARRANTS
The rights to purchase Warrant Stock pursuant to this Warrant shall exercisable
according to the following schedule:
(a) 20% immediately; and
(b) an additional 20% on each anniversary date beginning May 15, 1998.
2. EXERCISE OF WARRANT
Subject to the vesting requirements set forth in Section 1 hereof and to the
termination provisions of Sections 10 and 12 hereof, the purchase rights
represented by this Warrant are exercisable by the registered holder hereof, in
whole or in part, at any time and from time to time at or prior to the
Expiration Time by the surrender of this Warrant and the Notice of Exercise form
attached hereto duly executed to the office of the Company at 1100 Olive Way,
Suite 100, Seattle, Washington 98101 (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder appearing on the books of the Company), and upon
payment of the Exercise Price for the shares thereby purchased (by cash or by
check or bank draft payable to the order of the Company or by cancellation of
indebtedness of the Company to the holder hereof, if any, at the time of
exercise in an amount equal to the purchase price of the shares thereby
purchased); whereupon the holder of this Warrant shall be entitled to receive
from the Company a stock certificate in proper form representing the number of
shares of Warrant Stock so purchased.
3. SECURITIES ACT COMPLIANCE
As a condition of its delivery of the certificates for the Warrant Stock, the
Company may require the registered holder hereof (or the transferee, if any, of
the Warrant Stock in whose name the shares of Warrant Stock are to be
registered) to deliver to the Company, in writing, representations regarding the
purchaser's sophistication, investment intent, acquisition for his, her or its
own account and such other matters as are reasonable and customary for
purchasers of securities in an unregistered private offering and the Company may
place
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conspicuously upon each certificate representing shares of Warrant Stock a
legend substantially in the following form, the terms of which are agreed to by
the registered holder hereof (including any transferee of this Warrant or the
Warrant Stock):
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE
STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED,
OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (I) THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID
SECURITIES, (II) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL
FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION
STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (III)
THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION.
4. ISSUANCE OF SHARES; NO FRACTIONAL SHARES OR SCRIP
Certificates for shares purchased hereunder shall be delivered to the holder
hereof within a reasonable time after the date on which this Warrant shall have
been exercised in accordance with the terms hereof. The Company agrees that the
shares so issued 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 date on which
this Warrant shall have been exercised 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 or check to the holder of this Warrant.
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 Company, 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 the
Assignment Form attached hereto duly executed by the holder hereof.
6. NO RIGHTS AS SHAREHOLDER
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.
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 Company, for a new Warrant of
like tenor and dated as of such exchange. The Company 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 and subject to compliance
with applicable laws, at such office or agency of the Company, and the Company
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 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) upon receipt of indemnity or security reasonably
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental
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thereto, and (in the case of mutilation) upon surrender and cancellation of this
Warrant, the Company will make and deliver a new warrant of like tenor and dated
as of such cancellation, in lieu of this Warrant.
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 shall be
a legal holiday, then such action may be taken or such right may be exercised on
the next succeeding day not a legal holiday.
10. MERGER, SALE OF ASSETS, ETC.
If at any time the Company 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, in a transaction in which
the shareholders of the Company immediately before the transaction will own
immediately after the transaction less than a majority of the outstanding voting
securities of the entity (or its parent) succeeding to the business of the
Company (each such transaction, a "corporate transaction"), then the Company
shall give the holder of this Warrant 20 days' prior written notice of the
proposed effective date of such corporate transaction. The holder of this
Warrant shall have the right, effective as of the consummation of such corporate
transaction, to exercise this Warrant in whole or in part whether or not the
vesting requirements set forth herein have been satisfied; provided, however,
that this Warrant may not be exercised as to any unvested portion if this
Warrant is assumed by the successor entity (or its parent) in the corporate
transaction or replaced with a substantially equivalent warrant (subject to the
same vesting schedule as is contained in Section 1 hereof) for the purchase of
an amount of securities of the successor entity (or its parent) which the holder
of this Warrant would have received in the corporate transaction had the
unexercised portion of this Warrant (including the unvested portion) been
exercised in full immediately prior thereto. If this Warrant has not been
exercised by or on the effective date of such corporate transaction, it shall
terminate.
11. RECLASSIFICATION, CONVERSION, ETC.
If the Company at any time shall, by 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 Company 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.
12. TERMINATION
As consideration for this Warrant, Chisari has entered into that certain
Consulting Agreement with the Company, dated as of May 15, 1997 (the "Consulting
Agreement"). In the event of the breach of any representation or warranty or
covenant of Chisari under the Consulting Agreement, this Warrant shall
immediately terminate and shall be of no further force or effect. Unless
terminated pursuant to this Section 12, or on the effective date of a corporate
transaction as provided in Section 10, this Warrant shall remain in full force
and effect. In particular, this Warrant shall remain in full force and effect if
the Consulting Agreement is terminated, or if the Company abandons the research
program in the Field (as defined in the Consulting
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Agreement), for any reason other than the breach of any representation or
warranty or covenant of Chisari contained therein.
13. REPRESENTATIONS AND WARRANTIES
The Company hereby represents, warrants and covenants to the holder hereof that:
(a) during the period this Warrant is outstanding, the Company 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;
(b) the issuance of this Warrant shall constitute full authority to
the Company's officers who are charged with the duty of executing stock
certificates to execute and issue, or cause to be issued, the necessary
certificates for the shares of Warrant Stock issuable upon exercise of this
Warrant;
(c) the Company has all requisite legal and corporate power to
execute and deliver this Warrant, to sell and issue the Warrant Stock hereunder
and perform its obligations under the terms of this Warrant;
(d) the Warrant Stock, when issued in compliance with the provisions
of this Warrant and the Company's Articles of Incorporation and Bylaws, will be
validly issued, fully paid and nonassessable, and free of any liens or
encumbrances (other than liens or encumbrances created by or imposed upon the
holder of the Warrant Stock), and will be issued in compliance with all
applicable federal and state securities laws.
14. COOPERATION
The Company will not, by amendment of its Articles of Incorporation or through
any reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in the taking of
all such reasonable action as may be necessary or appropriate in order to
protect the rights of the holder of the Warrant against material impairment.
15. GOVERNING LAW
This Warrant shall be governed by and construed in accordance with the laws of
the state of Washington. IN WITNESS WHEREOF, the Company has caused this Warrant
to be executed by its duly authorized officer.
Dated: May 15, 1997
TARGETED GENETICS CORPORATION
By /s/ H. Stewart Parker
Title President & CEO
ACCEPTED: 19 May, 1997
/s/ Francis Chisari
- -------------------
Francis Chisari
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NOTICE OF EXERCISE
To: Targeted Genetics Corporation
(1) The undersigned hereby elects to purchase __________ shares of Common Stock
of Targeted Genetics Corporation pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price in full, together with all
applicable transfer taxes, if any.
(2) 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)
(3) The undersigned represents that 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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ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply
required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to
________________________________________________________________________________
(Please Print)
whose address is________________________________________________________________
(Please Print)
Dated:____________________________________________
Holder's Signature:_______________________________
Holder's Address:_________________________________
__________________________________________________
Guaranteed Signature:___________________________________________________________
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 whatever, 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.
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