Exhibit 10.54
No. CW - __
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF
VAXGEN, INC.
(Void after September 21, 2005)
This certifies that ___________, or its permitted assigns (the "Holder"),
for value received, is entitled to, upon the terms and conditions hereinafter
set forth, subscribe for and purchase from VAXGEN, INC., a Delaware corporation
(the "Company"), having a place of business at 1000 Marina Boulevard, Suite 200,
Brisbane, California 94005, __________ (_______) fully paid and nonassessable
shares (the "Warrant Shares") of the Company's common stock, $0.01 par value per
share ("Common Stock") at the initial exercise price of $0.01 per Warrant Share
(the "Exercise Price") at any time and from time to time, in whole or in part,
up to and including 5:00 p.m. (Pacific time) on September 21, 2005 (the
"Expiration Date") upon surrender to the Company at its principal office (or at
such other location as the Company may advise the Holder in writing) of this
Warrant, with the Form of Subscription attached hereto duly filled in and signed
and upon payment in cash or wire transfer of the aggregate Exercise Price for
the number of shares for which this Warrant is being exercised determined in
accordance with the provisions hereof, or in accordance with the provisions of
Section 1.2 hereof. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 General. This Warrant is exercisable at the option of the
Holder of record hereof, at any time and from time to time and including, up to
the Expiration Date for all or any part of the Warrant Shares (but not for a
fraction of a share) which may be purchased hereunder. The Company agrees that
the Warrant Shares purchased under this Warrant shall be and are deemed to be
issued to the Holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been surrendered, the
completed
1.
and executed Form of Subscription delivered and (except for an exercise effected
pursuant to Section 1.2 hereof) payment made for such shares. Certificates for
the Warrant Shares so purchased, together with any other securities or property
to which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense on or before the later
to occur of (i) the third (3rd) business day following the Company's receipt of
the Form of Subscription by facsimile transmission and (ii) the business day
following the Company's receipt of the original Warrant and Form of Subscription
and, except for an exercise effected pursuant to Section 1.2 hereof, payment for
such shares (the later of (i) and (ii) being referred to herein as the "Delivery
Date"). In case of a purchase of less than all the Warrant Shares which may be
purchased under this Warrant, the Company shall cancel this Warrant and execute
and deliver a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under the Warrant surrendered upon such purchase to the
Holder hereof within a reasonable time; provided, however, that the Holder may
validly exercise this Warrant at any time following such purchase without having
received such new Warrant. Provided that the Holder complies with Section 10.1
of the Warrant Exchange Agreement, dated September 21, 2004 (the "Exchange
Agreement"), the Company shall effect delivery of Warrant Shares to the Holder
by, as long as the Company's transfer agent (the "Transfer Agent") participates
in the Depository Trust Company ("DTC") Fast Automated Securities Transfer
program ("FAST"), crediting the account of the Holder or its nominee at DTC (as
specified in the applicable Exercise Notice) with the number of Warrant Shares
required to be delivered, no later than the close of business on the applicable
Delivery Date. In the event that the Transfer Agent is not a participant in
FAST, or if the Warrant Shares are not otherwise eligible for delivery through
FAST, or if the Holder so specifies in an Exercise Notice or otherwise in
writing, the Company shall effect delivery of Warrant Shares by delivering to
the Holder or its nominee physical certificates representing such Warrant
Shares, no later than the close of business on such Delivery Date. Each stock
certificate so delivered shall be in such denominations of Common Stock as may
be requested by the Holder hereof and shall be registered in the name of such
Holder or in the name of Holder's affiliate and/or subsidiary as may be
requested by the Holder. The Holder shall have the right to pursue actual
damages for the Company's failure to issue and deliver Warrant Shares (without
any restriction legends) on the applicable Delivery Date (including, without
limitation, damages relating to any purchase of Common Stock by the Holder to
make delivery on a sale effected in anticipation of receiving Warrant Shares
upon exercise), and the Holder shall have the right to pursue all other remedies
available to it at law or in equity (including, without limitation, a decree of
specific performance and/or injunctive relief).
1.2 Net Issue Exercise. Notwithstanding any provisions herein
to the contrary, if the fair market value of one share of the Company's Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being exercised) by surrender of this Warrant at the
principal office of the Company together with the executed Form of Subscription
with notice of such election in which event the Company shall issue to the
Holder a number of Warrant Shares computed using the following formula:
X = Y (A-B)
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A
2.
Where X = the number of Warrant Shares to be issued to the Holder
Y = the number of Warrant Shares purchasable under
the Warrant or, if only a portion of the Warrant
is being exercised, the portion of the Warrant
being exercised (at the date of such calculation)
A = the fair market value of one share of the
Company's Common Stock (at the date of such
calculation)
B = Exercise Price (as adjusted to the date of
such calculation)
For purposes of the above calculation, if the Common Stock is traded on
any established stock exchange or traded on the Nasdaq National Market or the
Nasdaq SmallCap Market, then the fair market value of one share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or market (or the exchange or market
with the greatest volume of trading in the Common Stock) on the last market
trading day prior to the day of determination, as reported in The Wall Street
Journal (or such other source as the Company's Board of Directors reasonably
deems reliable). In the event the fair market value of one share of Common Stock
cannot be determined in accordance with the foregoing sentence, such fair market
value shall be the last reported sales price of the Common Stock as reported in
the "pink sheets" by Pink Sheets LLC. In the absence of such markets for the
Common Stock, the fair market value of one share of Common Stock shall be
reasonably determined by the Company's Board of Directors in good faith.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all Warrant Shares which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any securities exchange or market upon
which the Common Stock may be listed or traded; provided, however, that the
Company shall not be required to effect a registration under federal or state
securities laws solely because of such exercise. The Company will not take any
action which would result in any adjustment of the Exercise Price (as set forth
in Section 3 hereof) if the total number of shares of Common Stock issuable
after such action upon exercise of all outstanding warrants, together with all
shares of Common Stock then outstanding and all shares of Common Stock then
issuable upon exercise of all options and upon the conversion of all convertible
3.
securities then outstanding, would exceed the total number of shares of Common
Stock then authorized by the Company's Certificate of Incorporation.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 3. Upon each adjustment of the Exercise Price,
the Holder of this Warrant shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.
3.1 Subdivision or Combination of Stock. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased.
3.2 Dividends in Common Stock, Other Stock, Property,
Reclassification. If at any time or from time to time the holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Common Stock or any shares of stock or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution,
(b) any cash paid or payable otherwise than as a cash
dividend, or
(c) Common Stock or additional stock or other securities
or property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Common Stock issued as a stock split or adjustments in respect of which shall be
covered by the terms of Section 3.1 above),
then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of Warrant Shares
receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had such holder been the holder of record of
such Common Stock as of the date on which holders of Common Stock received or
became entitled to receive such shares or all other additional stock and other
securities and property.
3.3 Reorganization, Reclassification, Consolidation, Merger or
Sale. If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the
4.
Company with another corporation, or the sale of all or substantially all of its
assets or other transaction shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities, or other assets or
property (an "Organic Change"), then, as a condition of such Organic Change,
lawful and adequate provisions shall be made by the Company whereby the Holder
hereof shall thereafter have the right to purchase and receive (in lieu of the
shares of the Common Stock of the Company immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby) such shares
of stock, securities or other assets or property 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 number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby.
In the event of any Organic Change, appropriate provision shall be made by the
Company with respect to the rights and interests of the Holder of this Warrant
such that the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company will not effect any such consolidation,
merger or sale unless, prior to the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall assume by written
instrument the obligation to deliver to such Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase.
3.4 Certain Events. If any change in the outstanding Common
Stock of the Company or any other event occurs as to which the other provisions
of this Section 3 are not strictly applicable or if strictly applicable would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, then the Board of Directors of the Company
shall make an adjustment in the number and class of shares available under the
Warrant, the Exercise Price or the application of such provisions, so as to
protect such purchase rights as aforesaid. The adjustment shall be such as will
give the Holder of the Warrant upon exercise for the same aggregate Exercise
Price the total number, class and kind of shares as such Holder would have owned
had the Warrant been exercised prior to the event and had such Holder continued
to hold such shares until after the event requiring adjustment.
3.5 Notices of Change.
(a) Immediately upon any adjustment in the number or
class of shares subject to this Warrant and of the Exercise Price, the Company
shall give written notice thereof to the Holder, setting forth in reasonable
detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder
at least ten (10) calendar days prior to the date on which the Company closes
its books or takes a record for determining rights to receive any dividends or
distributions 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.
5.
(c) The Company shall give written notice to the Holder
at least ten (10) calendar days prior to the date on which an Organic Change
shall take place, including in such notice the date as of which the Organic
Change is expected to become effective and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for securities or other property, if any, deliverable upon such
Organic Change.
(d) The Company shall initiate the delivery of written
notice to the Holder of any voluntary or involuntary dissolution, liquidation or
winding-up of the Company (the "Dissolution") on the date such Dissolution is
publicly announced, including in such notice the date as of which the
Dissolution is expected to become effective and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property, if any.
4. LISTING. The Company shall file any forms and do any acts as
shall be required from time to time to secure the listing or quotation of the
Warrant Shares with each national securities exchange or automated quotation
system, if any, upon which shares of such securities are then listed or traded
and shall use its commercially reasonable efforts to maintain, so long as any
other shares of such securities shall be so listed or traded, such listing or
quotation of all securities issued or issuable upon the exercise of this
Warrant.
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon
the exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
6. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Common Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
7. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company or any other matters or any rights whatsoever as a stockholder of
the Company. Except as expressly set forth in Section 3 herein, no dividends or
interest shall be payable or accrued in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised. No provisions hereof, in
the absence of affirmative action by the Holder to purchase Warrant Shares, and
no mere enumeration herein of the rights or privileges of the Holder hereof,
shall give rise to any liability of such Holder for the Exercise Price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by its creditors.
8. REPRESENTATIONS OF HOLDER. Holder further represents that it
understands that neither this Warrant nor the Warrant Shares issuable upon the
exercise thereof have been
6.
registered under the Act, and are being offered pursuant to an exemption from
registration contained in the Act based in part upon Holder's representations
contained in this Section 8. Holder represents that by reason of its own, or of
its management's, knowledge and experience in financial and business matters,
Holder is capable of evaluating the merits and risks of its investment in the
Company and has the capacity to protect its own interests in connection with the
issuance of this Warrant and the Warrant Shares issuable upon the exercise
thereof, and is able to bear risk, including a complete loss, of the investment.
Holder represents that it is an "accredited investor" within the meaning set
forth in Regulation D under the Act. Holder represents that it is acquiring such
securities for its own account for investment only, and not with a view towards
their distribution, except pursuant to sales that are registered under the Act
or are exempt from the registration requirements of the Act; provided, however,
that, in making such representation, the Holder does not agree to hold such
securities for any minimum or specific term and reserves the right to sell,
transfer or otherwise dispose of such securities at any time in accordance with
the provisions hereof and with Federal and state securities laws applicable to
such sale, transfer or disposition.
9. TRANSFERABILITY. Subject to compliance with any applicable
securities laws, this Warrant may be transferred, provided that Holder provides
prior written notice of such transfer to the Company, such transferee agrees to
be bound by the obligations hereunder and such transferee agrees to execute
certain documentation requested by the Company including an investment letter.
Upon the transfer of the Warrant, the Company may treat such transferee as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant.
10. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights
and obligations of the Company, of the Holder of this Warrant and of the holder
of Warrant Shares issued upon exercise of this Warrant, shall survive the
exercise of this Warrant.
11. MODIFICATION AND WAIVER. This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
NOTICES. Any notice, request or other document required or permitted to be
given or delivered to the Holder hereof or the Company shall be in writing,
shall refer specifically to this Warrant and shall be delivered and deemed
received in accordance with Section 11.1 of the Exchange Agreement.
BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the covenants and
agreements of the Company shall inure to the benefit of the successors and
permitted assigns of the Holder hereof.
DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
7.
LOST WARRANTS. The Company represents and warrants to the Holder hereof
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of
this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Exercise Price.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this ___ day of September,
2004.
VAXGEN, INC.
By:
---------------------------
Lance K. Gordon
Chief Executive Officer
SUBSCRIPTION FORM
Date: _________________, 200_
VaxGen, Inc.
1000 Marina Boulevard, Suite 200
Brisbane, California 94005
Attn: Chief Financial Officer
Ladies and Gentlemen:
|_| The undersigned hereby elects to exercise the warrant issued to it by
VaxGen, Inc. (the "Company") and dated September ____, 2004 Warrant No.
CW-___ (the "Warrant") and to purchase thereunder
__________________________________ shares of the Common Stock of the
Company (the "Shares") at a purchase price of $0.01 per Share or an
aggregate purchase price of ________________ Dollars ($__________) (the
"Purchase Price"). Pursuant to the terms of the Warrant the undersigned
has delivered the Purchase Price herewith in full in cash or wire
transfer.
|_| The undersigned hereby elects to convert ______________________ percent
(___%) of the value of the Warrant pursuant to the provisions of Section
1.2 of the Warrant.
Very truly yours,
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By:
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2.