EXHIBIT 10.2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
Dated: October 12, 2004
HALOZYME THERAPEUTICS, INC.
COMMON STOCK PURCHASE WARRANT
_________ SHARES
NO. PW- ____
1. Number of Shares Subject to Warrant. FOR VALUE RECEIVED, subject to
the terms and conditions herein set forth, ____________________ (the "Holder")
is entitled to purchase from Halozyme Therapeutics, Inc., a Nevada corporation
(the "Company"), ___________ shares of the Company's Common Stock (the "Warrant
Shares"), at a price per share equal to $2.25 per share (the "Warrant Price"),
upon exercise of this Common Stock Purchase Warrant (the "Warrant") pursuant to
the provisions set forth herein.
This Warrant is one of a series of warrants (the "Offering Warrants")
issued pursuant to that certain Securities Purchase Agreement dated October 12,
2004 by and among the Company, the Holder and the other signatories thereto (the
"Purchase Agreement"). The Holder is subject to certain restrictions and
entitled to certain rights as set forth in the Purchase Agreement and that
certain Registration Rights Agreement dated October 12, 2004 by and among the
Company, the Holder and the other signatories thereto (the "Registration Rights
Agreement").
2. Adjustment of Exercise Price and Number of Shares. The number of
shares of Common Stock issuable upon exercise of this Warrant (or any shares of
stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Warrant Price therefor are subject to
adjustment upon the occurrence of the following events:
(a) Adjustment for Subdivisions, Stock Dividends and Combinations.
In case the Company shall at any time subdivide the outstanding shares of the
Common Stock or shall issue a stock dividend with respect to the Common Stock,
the Warrant Price in effect immediately prior to such subdivision or the
issuance of such dividend shall be proportionately decreased, and the number of
Warrant Shares for which this Warrant may be exercised immediately prior to such
subdivision or the issuance of such dividend shall be proportionately increased.
In case the Company shall at any time combine the outstanding shares of the
Common Stock, the Warrant Price in effect immediately prior to such combination
shall be proportionately increased, and the number of Warrant Shares for which
this Warrant may be exercised immediately prior to such combination shall be
proportionately decreased. In each of
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the foregoing cases, the adjustment shall be effective at the close of business
on the date of such subdivision, dividend or combination, as the case may be.
(b) Reclassifications, Exchanges, Substitutions, In-Kind
Distributions. Upon any reclassification, exchange, substitution or other event
that results in a change of the number and/or class of the securities issuable
upon exercise or conversion of this Warrant or upon the payment of a dividend in
securities or property other than shares of Common Stock, the Holder shall be
entitled to receive, upon exercise of this Warrant, the number and kind of
securities and property that Holder would have received if this Warrant had been
exercised immediately before the record date for such reclassification,
exchange, substitution, or other event or immediately prior to the record date
for such dividend. The Company or its successor shall promptly issue to Holder a
new warrant for such new securities or other property. The new warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 2 including, without
limitation, adjustments to the Warrant Price and to the number of securities or
property issuable upon exercise or conversion of the new warrant. The provisions
of this Section 2(b) shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events and successive dividends.
(c) Adjustment for Capital Reorganization, Consolidation or
Merger. If any capital reorganization of the capital stock of the Company, or
any consolidation or merger of the Company with or into another corporation, or
the sale of all or substantially all of the Company's assets to another
corporation shall be effected in such a way that holders of the Company's
capital stock will be entitled to receive stock, securities or assets with
respect to or in exchange for the Company's capital stock, then in each such
case the Holder, upon the exercise of this Warrant, at any time after the
consummation of such capital reorganization, consolidation, merger, or sale,
shall be entitled to receive, in lieu of the stock or other securities and
property receivable upon the exercise of this Warrant prior to such
consummation, the stock or other securities or property to which such Holder
would have been entitled upon such consummation if such Holder had exercised
this Warrant immediately prior to the consummation of such capital
reorganization, consolidation, merger, or sale, all subject to further
adjustment as provided in this Section 2; and in each such case, the terms of
this Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
(d) Certificate of Adjustment. In each case of an adjustment or
readjustment of the Warrant Price, the Company, at its own expense, shall cause
its Chief Financial Officer to compute such adjustment or readjustment in
accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to the Holder. The certificate shall set forth such
adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based. No adjustment of the Warrant Price shall be
required to be made unless it would result in an increase or decrease of at
least one cent, but any adjustments not made because of this sentence shall be
carried forward and taken into account in any subsequent adjustment otherwise
required hereunder.
(e) Fractional Shares. No fractional shares shall be issuable upon
exercise or conversion of the Warrant and the number of shares to be issued
shall be rounded down to the
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nearest whole share. If a fractional share interest arises upon any exercise or
conversion of the Warrant, the Company shall eliminate such fractional share
interest by paying the Holder an amount computed by multiplying the fractional
interest by the fair market value of a full share.
3. Termination. This Warrant shall terminate and no longer be
exercisable at 5:00 p.m., California time, on October 12, 2009. Notwithstanding
the foregoing, immediately prior to the time this Warrant would otherwise expire
pursuant to the preceding sentence, and contingent upon the surrender of this
Warrant within one (1) month of the deemed exercise described below, this
Warrant shall automatically be deemed exercised in full pursuant to the
provisions of Section 6(b) below as if this Warrant had been surrendered and the
notice of Net Exercise had been provided pursuant thereto without any further
action on behalf of the Holder if such exercise would result in the issuance of
a positive number of Warrant Shares; provided that the deemed exercise of this
Warrant shall only occur if the conditions precedent for the availability of a
Net Exercise set forth in Section 6(b) are otherwise satisfied.
4. No Shareholder Rights. This Warrant, by itself, as distinguished
from any Warrant Shares purchased hereunder, shall not entitle the Holder to any
of the rights of a shareholder of the Company.
5. Reservation of Stock. The Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise or conversion of this Warrant.
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 the necessary certificates for the Warrant Shares issuable
upon the exercise or conversion of this Warrant.
6. Exercise of Warrant.
(a) Delivery of Notice of Exercise. This Warrant may be exercised in
whole or in part by the Holder, at any time from and after April 15, 2005 and
prior to the termination of this Warrant, by the surrender of this Warrant at
the principal office of the Company, together with the Notice of Exercise and,
in the event the Warrant or the Warrant Shares shall not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), the Investment
Representation Letter, each in the form attached hereto as Attachments 1 and 2,
respectively, duly completed and executed, specifying that portion of the
Warrant that is to be exercised and accompanied by payment in full of the
Warrant Price in wire transfer or by certified check with respect to the Warrant
Shares being purchased. This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the Warrant
Shares issuable upon such exercise shall be treated for all purposes as the
holder of such shares of record as of the close of business on such date. As
promptly as practicable after such date, the Company shall issue and deliver to
the person or persons entitled to receive the same a certificate or certificates
for the number of full Warrant Shares issuable upon such exercise.
(b) Net Exercise Provision. Commencing one year after the date of
original issuance of this Warrant, at any such time that the Registration
Statement (as defined in the Registration Rights Agreement) filed with respect
to the Warrant Shares is not effective and
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available for resale of such Warrant Shares (but specifically excluding any time
during which any suspension of the Registration Statement is in effect), in lieu
of exercising this Warrant for cash, the Holder may elect during such time to
receive shares equal to the value of this Warrant (or the portion thereof being
exercised) by surrender of this Warrant at the principal office of the Company
together with notice of such election (a "Net Exercise"). In such case, the
Company shall issue to such Holder a number of Warrant Shares computed using the
following formula:
Y(A - B)
X= -----------
A
Where:
X = The number of Warrant Shares to be issued to the Holder.
Y = The number of Warrant Shares purchasable under this Warrant or,
if only a portion of the Warrant is being exercised, the number
of Warrant Shares represented by the portion of the Warrant
being cancelled (at the date of such calculation).
A = The fair market value of one Warrant Share (at the date of
such calculation).
B = The Exercise Price(as adjusted to the date of such calculation).
For purposes of this Section 6(b), the fair market value of a Warrant Share
shall mean the average of the closing prices of the Company's Common Stock
quoted in the over-the-counter market in which the Company's Common Stock is
traded or the closing price quoted on any exchange or electronic securities
market on which the Company's Common Stock is listed, whichever is applicable,
for the five (5) trading days prior to the date of determination of fair market
value (or such shorter period of time during which such shares of Common Stock
were traded over-the-counter or on such exchange). If the Company's Common Stock
is not traded on the over-the-counter market, an exchange or an electronic
securities market, the fair market value shall be the price per share of Common
Stock that the Company could obtain from a willing buyer for Common Stock sold
by the Company from authorized but unissued Common Stock, as such prices shall
be determined in good faith by the Company's Board of Directors.
7. Limitations on Exercise.
(a) The Holder may not exercise the Warrant hereunder to the
extent such exercise would result in the Holder (including its affiliates and
any other individuals or entities whose beneficial ownership of Common Stock
would be aggregated with the Holder's for purposes of Section 13(d) of the
Exchange Act) beneficially owning (as determined in accordance with Section
13(d) of the Exchange Act and the rules thereunder) in excess of 9.999% of the
then issued and outstanding shares of Company Common Stock, including shares
issuable upon exercise of the Warrant held by the Holder after application of
this Section. This restriction may not be waived.
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(b) The Company shall have no obligation to verify compliance with
this Section 7, other than to issue Warrant Shares in accordance with the
exercise notice of each Holder. It shall be the responsibility of each Holder to
determine such Holder's compliance with this Section 7, and each delivery of a
notice of exercise by a Holder will constitute a representation by such Holder
that it has evaluated the limitations set forth in this Section 7 and
determined, based on the most recent public filings by the Company with the
Securities and Exchange Commission, that the issuance of the full number of
Warrant Shares requested in such notice of exercise is permitted under this
Section 7.
8. Transfer of Warrant. This Warrant and the Warrant Shares issuable
upon exercise of this Warrant shall be freely transferable, subject to
compliance with this Section 8, the Registration Rights Agreement and all
applicable laws, including, but not limited to the Act. If, at the time of the
surrender of this Warrant in connection with any transfer of this Warrant or the
resale of the Warrant Shares, this Warrant or the Warrant Shares, as applicable,
shall not be registered under the Act, the Company may require, as a condition
of allowing such transfer (i) that the Holder or transferee of this Warrant or
the Warrant Shares as the case may be, furnish to the Company a written opinion
of counsel that is reasonably acceptable to the Company to the effect that such
transfer may be made without registration under the Act (provided that, in the
event that the Warrant or Warrant Shares are to be transferred to an affiliate
of the Holder, no such written opinion of such Holder's counsel shall be
required; provided further that, the Holder and/or the proposed transferee shall
provide any documentation and/or back-up certificates reasonably requested by
counsel to the Company in order that counsel to the Company may render any
opinion as may be required by the Company's transfer agent), (ii) that the
Holder or transferee execute and deliver to the Company an investment
representation letter in form and substance acceptable to the Company and
substantially in the form attached as Attachment 2 hereto, (iii) that the
transferee be an "accredited investor" as defined in Rule 501(a) promulgated
under the Act, and (iv) the transferee shall agree in writing to be bound by all
of the terms and obligations under, and to receive all of the benefits under,
the Registration Rights Agreement as a holder of Warrant Shares thereunder.
9. Amendments. Neither this Warrant nor any term hereof may be amended
or waived orally, but only by an instrument in writing signed by the Company and
either (a) holders of Offering Warrants exercisable for a majority of the
Warrant Shares issuable upon exercise of the then outstanding Offering Warrants,
provided that such amendment or waiver does not adversely affect the Holder
without adversely affecting all holders of Offering Warrants in a similar manner
or (b) the Holder.
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10. Miscellaneous. This Warrant shall be governed by the laws of the
State of New York, without giving effect to any conflict of laws principles to
the contrary. The headings in this Warrant are for purposes of convenience and
reference only, and shall not be deemed to constitute a part hereof. All notices
and other communications from the Company to the Holder of this Warrant shall be
delivered personally or by facsimile transmission or mailed by overnight
courier, postage prepaid, to the address or facsimile number furnished to the
Company in writing by the last Holder of this Warrant who shall have furnished
an address or facsimile number to the Company in writing, and if mailed shall be
deemed given on the first business day following delivery to the overnight
courier.
HALOZYME THERAPEUTICS, INC.
By:___________________________________________
Jonathan E. Lim, M.D.
President and Chief Executive Officer
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ATTACHMENT 1
NOTICE OF EXERCISE
TO:
HALOZYME THERAPEUTICS, INC.
1. The undersigned hereby elects to purchase ________ shares of the
Common Stock of Halozyme Therapeutics, Inc. 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, in the following manner:
(TM) Cash in the amount of $____________.
(TM) Warrant Shares pursuant to the Net Exercise Provision of Section
6(b) of the attached Warrant.
2. Please issue a certificate or certificates representing said shares
of Common Stock, or such other security issuable upon exercise of the Warrant,
in the name of the undersigned or in such other name as is specified below:
__________________________
(Name)
__________________________
(Address)
________________________________ ___________________________________
(Date)
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ATTACHMENT 2
INVESTMENT REPRESENTATION STATEMENT
WARRANT SHARES
(AS DEFINED IN THE ATTACHED WARRANT) OF
HALOZYME THERAPEUTICS, INC.
In connection with the purchase of the above-listed securities, the undersigned
hereby represents to Halozyme Therapeutics, Inc. (the "Company") as follows:
(a) The securities to be received upon the exercise of the Warrant (the
"Warrant Shares") will be acquired for investment for its own account; not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and the undersigned has no present intention of selling, granting
participation in or otherwise distributing the same, but subject, nevertheless,
to any requirement of law that the disposition of its property shall at all
times be within its control. By executing this Statement, the undersigned
further represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person, with respect to any Warrant Shares issuable upon
exercise of the Warrant.
(b) The undersigned understands that the Warrant Shares issuable upon
exercise of the Warrant at the time of issuance may not be registered under the
Securities Act, and applicable state securities laws, on the ground that the
issuance of such securities is exempt pursuant to Section 4(2) of the Securities
Act and state law exemptions relating to offers and sales not by means of a
public offering, and that the Company's reliance on such exemptions is
predicated on the undersigned's representations set forth herein.
(c) The undersigned agrees that until the underlying Warrant Shares are
subject to an effective registration statement, in no event will it make a
disposition of any Warrant Shares acquired upon the exercise of the Warrant
unless and until (i) it shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (ii) it shall have
either (A) furnished the Company with an opinion of counsel satisfactory to the
Company and Company's counsel to the effect that appropriate action necessary
for compliance with the Securities Act and any applicable state securities laws
has been taken or an exemption from the registration requirements of the
Securities Act and such laws is available, and the proposed transfer will not
violate any of said laws, or (B) provided such other evidence reasonable
satisfactory to the Company that the proposed transfer will not violate any of
said laws.
(d) The undersigned acknowledges that an investment in the Company is
highly speculative and represents that it is able to fend for itself in the
transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment. The undersigned
represents that it has had the opportunity to ask questions of the Company
concerning the Company's business and assets and to obtain any additional
information which it considered necessary to verify the
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accuracy of or to amplify the Company's disclosures, and has had all questions
which have been asked by it satisfactorily answered by the Company.
(e) The undersigned acknowledges that the Warrant Shares issuable upon
exercise of the Warrant must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is available.
The undersigned is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the existence of a public market for the shares, the availability
of certain current 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 transactions
directly with a "market makers" (as provided by Rule 144(f)) and the number of
shares being sold during any three-month period not exceeding specified
limitations.
(f) The undersigned represents and agrees that once the underlying
Warrant Shares are subject to an effective registration statement, any transfer
of such shares not otherwise exempt from the registration requirements of the
Securities Act will be made in accordance with the "Plan of Distribution"
section of the prospectus contained in such registration statement, and all
applicable prospectus delivery requirements will be met in connection with such
transfer.
Dated:______________________
Entity:_______________________________
By:___________________________________
Printed Name:_________________________
Title:________________________________
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