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EXHIBIT 10.4
AVIGEN, INC.
COMMON STOCK AND WARRANT
PURCHASE AGREEMENT
OCTOBER 29, 1999
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NOTICE TO ALL PURCHASERS:
IN MAKING AN INVESTMENT DECISION PURCHASERS MUST RELY ON THEIR OWN EXAMINATION
OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
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COMMON STOCK AND WARRANT
PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 29 day of October 1999
(the "Effective Date"), by and among AVIGEN, INC., a Delaware corporation with
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), each of those persons and entities,
severally and not jointly, that have signed this agreement as a Placement Agent
on the signature page hereof (each, a "Placement Agent" and collectively, the
"Placement Agents"), and each of those persons and entities, severally and not
jointly, listed as a Purchaser on the Schedule of Purchasers attached as Exhibit
A hereto (each, a "Purchaser" and collectively, the "Purchasers").
AGREEMENT
In consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company, the Placement Agent and each Purchaser (severally and
not jointly) hereby agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES. Subject to the terms
and conditions of this Agreement, the Company has or before the Closing (as
defined below) will have authorized the sale and issuance of (a) up to 2,000,000
shares of its Common Stock (the "Common Stock"), (b) Warrants, each in
substantially the form attached hereto as Exhibit B (each a "Warrant" and
collectively the "Warrants"), to purchase up to 400,000 shares the "Warrant
Shares") of the Company's Common Stock. The shares of Common Stock sold
hereunder and the Common Stock issuable upon exercise of the Warrants together
shall be referred to herein as the "Shares." The Shares and the Warrants shall
be referred to herein as the "Securities."
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES.
2.1 SALE OF UNITS. At the Closing (as defined in Section 3), the Company
will sell to each Purchaser, and each Purchaser will purchase from the Company,
at a purchase price equal to five (5) times the closing price of the Company's
stock as quoted on the Nasdaq National Market ("Nasdaq") on the Closing Date
plus twelve and one-half ($0.125) cents per "Unit," the number of Units set
forth next to such Purchaser's name on the Schedule of Purchasers attached
hereto as Exhibit A (the "Schedule of Purchasers"). As used herein, a Unit is
comprised of (i) five shares of Common Stock, and (ii) one warrant to purchase
one share of Common Stock.
2.2 SEPARATE AGREEMENT. Each Purchaser shall severally, and not jointly,
be liable for only the purchase of the Units that appear on Exhibit A hereto and
that relate to such Purchaser. The Company's agreement with each of the
Purchasers is a separate agreement, and the sale of Units to each of the
Purchasers is a separate sale.
SECTION 3. CLOSING AND DELIVERY.
3.1 CLOSING. The Closing of the purchase and sale of the first Units to
be sold pursuant to this Agreement (the "Initial Units") shall be held on
October 29, 1999, at the offices
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of Cooley Godward LLP, 5 Palo Alto Square, 3000 El Camino Real, Palo Alto,
California, or on such other date and place as may be agreed to by the Company
and the Purchasers. The closing of the purchase and sale of the Initial Units,
together with each subsequent closing of the purchase and sale of any of the
Securities pursuant to Section 3.3 shall herein be referred to collectively as
the "Closing."
The Company shall give at least two (2) business days prior written
notice to the Purchasers, in a manner provided for in Section 11 hereof, of the
date, time and location of the Closing. At or prior to the Closing, each
Purchaser shall execute any related agreements or other documents required to be
executed hereunder, dated as of the date of the Closing (the "Closing Date").
3.2 DELIVERY OF THE UNITS AT THE CLOSING. At the Closing, the Company
shall deliver to each Purchaser stock certificates and Warrants registered in
the name of such Purchaser, or in such nominee name(s) as designated by such
Purchaser, representing the number of shares of Common Stock and Warrants to be
purchased by such Purchaser at the Closing as set forth in the Schedule of
Purchasers. The name(s) in which the stock certificates and Warrants are to be
issued to each Purchaser are set forth in the Stock Certificate and Warrant
Questionnaire in the form attached hereto as Appendix I, as completed by each
Purchaser.
3.3 SUBSEQUENT SALES OF SHARES. At any time on or before the 60th day
following the closing of the Initial Units, the Company may sell up to the
balance of the authorized Securities not sold at the closing of the Initial
Units. All such sales shall be made on the terms and conditions set forth in
this Agreement, including, without limitation, the representations and
warranties by such Purchasers as set forth in Section 5. Any Securities sold
pursuant to this Section 3.3 shall be deemed to be "Securities" for all purposes
under this Agreement and any purchasers thereof shall be deemed to be
"Purchasers" for all purposes under this Agreement.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit C, the Company hereby represents and warrants to, and covenants with,
the Purchasers and the Placement Agent as follows:
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as it is currently being conducted.
4.2 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENTS. The
Company's execution, delivery and performance of this Agreement have been duly
authorized under Delaware law by all requisite corporate action by the Company,
and will not violate any law or the Company's Amended and Restated Certificate
of Incorporation or Bylaws of the Company or any material provision of any
material indenture, mortgage, agreement, contract or other material instrument
to which the Company is a party or by which the Company or any of its properties
or assets is bound as of the date hereof, or result in a breach of or constitute
(upon notice or lapse of time or both) a default under any such material
indenture, mortgage, agreement, contract or other material instrument or result
in the creation or imposition of any
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lien, security interest, mortgage, pledge, charge or other encumbrance, of any
material nature whatsoever, upon any properties or assets of the Company. Upon
the execution and delivery, and assuming the valid execution and delivery of
this Agreement by each of the Purchasers, this Agreement will constitute a valid
and binding obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Company in Section 9.4 hereof may be legally unenforceable.
4.3 ISSUANCE, SALE AND DELIVERY OF THE SHARES AND THE WARRANTS. When
issued and paid for in accordance with this Agreement or the applicable form of
Warrant, the Securities will be validly issued and outstanding, fully paid and
non-assessable, and will be issued in compliance with all applicable federal and
state securities laws and the applicable rules of the National Association of
Securities Dealers.
4.4 ADDITIONAL INFORMATION. The Company represents and warrants that the
information contained in the following documents, which the Company has
furnished to the Purchasers, or will furnish if requested by the Purchasers
prior to the Closing, is or will be true and correct in all material respects as
of their respective filing dates:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1999 (without exhibits unless specifically requested);
(b) the Company's Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed with the SEC since June 30, 1998, if any (without
exhibits unless specifically requested); and
(c) Notice of Annual Meeting and Proxy Statement for the
Company's 1999 Annual Meeting of Stockholders.
4.5 NO MATERIAL CHANGE. As of the date hereof, there has been no
material adverse change in the financial condition or results of operations of
the Company since June 30, 1999, or end of the quarter for which the Company has
filed a Quarterly Report on Form 10-Q, if later, except that the Company
continues to incur losses.
4.6 SEC REPORTS.
(a) The Company has filed with the Commission all reports ("SEC
Reports") required to be filed by it under the Securities Exchange Act of 1934
(the "Exchange Act") since June 30, 1999. All of the SEC Reports filed by the
Company comply in all material respects with the requirements of the Exchange
Act. None of the SEC Reports contains, as of the respective dates thereof, any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made. All financial
statements contained in the SEC Reports have been prepared in accordance with
generally accepted accounting principles
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consistently applied throughout the period indicated ("GAAP"), except that
unaudited financial statements are subject to normal recurring year-end audit
adjustments and do not contain the footnotes required under GAAP. Each balance
sheet presents fairly in accordance with GAAP the financial position of the
Company as of the date of such balance sheet, and each statement of operations,
of stockholders' equity and of cash flows presents fairly in accordance with
GAAP the results of operations, the stockholders' equity and the cash flows of
the Company for the periods then ended, in each case except that unaudited
financial statements are subject to normal recurring year-end audit adjustments
and do not contain the footnotes required under GAAP.
(b) No event has occurred since June 30, 1999 requiring the
filing of an SEC Report that has not heretofore been filed and furnished or made
available to the Purchasers.
(c) The SEC Reports and this Agreement taken together as a whole
will not, as of the Closing Date, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein, or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (other than information
relating to the Placement Agent furnished by the Placement Agent expressly for
use in the Agreement as to which the Company makes no representation or
warranty).
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS AND
PLACEMENT AGENTS.
Each Purchaser, severally and not jointly, represents and warrants to
and covenants with the Company that:
(a) Purchaser, taking into account the personnel and resources it
can practically bring to bear on the purchase of the Securities contemplated
hereby, either alone or together with the advice of such Purchaser's purchaser
representative, is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in shares presenting
an investment decision like that involved in the purchase of the Securities,
including investments in securities issued by the Company, and has requested,
received, reviewed and considered, either alone or with such Purchaser's
purchaser representative, all information Purchaser deems relevant in making an
informed decision to purchase the Securities.
(b) Purchaser is acquiring the Securities being acquired by
Purchaser pursuant to this Agreement in the ordinary course of its business and
for its own account for investment only and with no present intention of
distributing any of such Securities or any arrangement or understanding with any
other persons regarding the distribution of such Securities, except in
compliance with Section 5(c).
(c) Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the securities purchased
hereunder except in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), applicable blue sky laws, and the rules and regulations
promulgated thereunder.
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(d) Purchaser has completed or caused to be completed the Stock
Certificate and Warrant Questionnaire and the Registration Questionnaire,
attached hereto as Appendix I and Appendix II, respectively, for use in
preparation of the Registration Statements to be filed by the Company, and the
answers thereto are true and correct to the best knowledge of Purchaser as of
the date hereof and will be true and correct as of the effective date of the
applicable Registration Statement (provided that Purchaser shall be entitled to
update such information by providing notice thereof to the Company prior to the
effective date of such Registration Statement).
(e) Purchaser has, in connection with its decision to purchase
the Securities, relied with respect to the Company and its affairs solely upon
the information delivered to Purchaser as described in Sections 4.4 and 5(a)
above and the representations and warranties of the Company contained herein.
(f) Purchaser is an "accredited Purchaser" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act or a Qualified
Institutional Buyer within the meaning of Rule 144A promulgated under the
Securities Act.
(g) Purchaser has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions contemplated hereby
and has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. Upon the execution and delivery of this Agreement
by Purchaser, this Agreement shall constitute a valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except (i) as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally, (ii) as limited by equitable principles generally,
including any specific performance, and (iii) as to those provisions of Section
9.4 relating to indemnity or contribution.
(h) Purchaser hereby represents that such Purchaser is satisfied
as to the full observance of the laws of such Purchaser's jurisdiction in
connection with any invitation to subscribe for the Securities or any use of
this Agreement, including (i) the legal requirements with such Purchaser's
jurisdiction for the purchase of the Securities, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, which may be relevant to the purchase, holding,
redemption, sale, or transfer of the Securities. Such Purchaser's subscription
and payment for, and such Purchaser's continued beneficial ownership of, the
Securities will not violate any applicable securities or other laws of such
Purchaser's jurisdiction.
For purposes of this Section 5, the term "Purchaser" shall also refer to
each Placement Agent with respect to the warrants issued to the Placement Agent
in connection with the transactions under this Agreement and the shares of
Common Stock issuable upon exercise thereof as fully as of such warrants were
Warrants and such shares were Shares.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
each Purchaser and
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Placement Agent herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchasers and Placement Agents of the securities being purchased and the
payment therefor.
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The
Company's obligation to complete the sale and issuance of the Securities and
deliver shares of Common Stock and Warrants to each Purchaser, individually, as
set forth in the Schedule of Purchasers shall be subject to the following
conditions to the extent not waived by the Company:
7.1 RECEIPT OF PAYMENT. The Company shall have received payment, by
check or wire transfer of immediately available funds, in the full amount of the
purchase price for the number of Units being purchased by such Purchaser at the
Closing as set forth in the Schedule of Purchasers.
7.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by such Purchaser in Section 5 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date.
7.3 COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by such Purchaser on or prior to the Closing
Date shall have been performed or complied with in all material respects.
7.4 NO GENERAL SOLICITATION; BLUE SKY. The Company shall have received
such assurances as it may reasonably request from the Placement Agent that the
Shares were not offered or sold by any form of general solicitation or
advertising and a list from the Placement Agent of states where Shares are being
sold.
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. Each
Purchaser's obligation to accept delivery of the Units and to pay for the
securities evidenced thereby shall be subject to the following conditions to the
extent not waived by such Purchaser:
8.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 4 hereof shall be true and correct
when made, and shall be true and correct as of the Closing Date.
8.2 COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by the Company shall have been performed or
complied with in all material respects.
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES
ACT.
9.1 REGISTRATION PROCEDURES AND EXPENSES. The Company is obligated to do
the following:
(a) Within the later to occur of (i) sixty (60) days following
the Closing Date for the last sale of Units hereunder or (ii) January 14, 2000
(the "Filing Date"), the Company shall use its reasonable efforts to prepare and
file with the Commission a registration statement
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in order to register with the Commission the sale by the Purchasers, from time
to time, of the Shares through Nasdaq or the facilities of any national
securities exchange on which the Company's Common Stock is then traded, or in
privately-negotiated transactions (a "Registration Statement"). The Company will
use its reasonable efforts to ensure that the Registration Statement is declared
effective within 60 days of the filing date of the Registration Statement with
the Commission.
(b) The Company shall use reasonable efforts to prepare and file
with the Commission (i) such amendments and supplements to the Registration
Statement and the prospectus used in connection therewith, (ii) such SEC Reports
and (iii) such other filings required by the Commission, as may be necessary to
keep the Registration Statement continuously effective until the earlier of (i)
second anniversary of the first date on which no Warrants remain unexercised or
unexpired or (ii) date on which all Securities held by and issuable to
Purchasers may be sold during any ninety (90) period under Rule 144 (or
successor rule promulgated by the SEC); provided, however, that in the event of
a Suspension Period (as defined below), the Company shall extend the period of
effectiveness of such Registration Statement by the aggregate number of days of
each such Suspension Period. The Company may suspend use of the prospectus when
it deems necessary, in its reasonable judgment, until such time as the Company
subsequently authorizes use of the prospectus (each such period, a "Suspension
Period"). Upon the declaration of a Suspension Period, the Company shall use
reasonable best efforts to end the Suspension Period as quickly as possible.
Notwithstanding the foregoing, the Company shall not allow a Suspension Period
to continue for more than 60 days unless the Company shall deliver to the
Purchasers a second notice, which shall have the effect of extending the
Suspension Period by up to an additional 30 days. In no event shall the Company
extend a Suspension Period beyond such 90 day period. The Company shall not
under any circumstances be entitled to exercise its rights under this
subparagraph to effect a Suspension Period more than two times in any 12 month
period. Each Purchaser agrees that such Purchaser will not sell any Shares
pursuant to the prospectus beginning at the time the Company gives such
Purchaser notice of the suspension of the prospectus and ending at the time the
Company gives such Purchaser notice of the termination of the Suspension Period.
Each Purchaser further agrees to promptly notify the Company of the sale of all
of such Purchaser's Securities.
(c) In order to facilitate the public sale or other disposition
of all or any of the Shares by each Purchaser, the Company shall furnish to each
Purchaser with respect to the Shares registered under the Registration Statement
such number of copies of prospectuses and preliminary prospectuses as such
Purchaser reasonably requests in conformity with the requirements of the
Securities Act.
(d) The Company shall file documents required of the Company for
normal blue sky clearance in states specified in writing by each Purchaser;
provided, however, that the Company shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is not
now so qualified or has not so consented.
(e) Other than fees and expenses, if any, of counsel or other
advisers to the Purchasers, which fees and expenses shall be borne by the
Purchasers except as provided under Section 12.8 below, the Company shall bear
all expenses (exclusive of underwriting discounts
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and commissions) in connection with the procedures in paragraphs (a) through (d)
of this Section 9.1.
9.2 TRANSFER OF SECURITIES AFTER REGISTRATION. Each Purchaser agrees
that such Purchaser will not effect any disposition of the Shares or the
Warrants that would constitute a sale within the meaning of the Securities Act,
except:
(i) pursuant to the Registration Statement, in which case
such Purchaser shall submit the certificates evidencing the Shares to the
transfer agent accompanied by a separate "Purchaser's Certificate" (A) in the
form of Appendix III attached hereto, (B) executed by such Purchaser or by an
officer of, or other authorized person designated by, such Purchaser, and (C) to
the effect that (1) the Shares have been sold in accordance with the
Registration Statement and (2) the requirement of delivering a current
prospectus has been satisfied; or
(ii) in a transaction exempt from registration under the
Securities Act, in which case such Purchaser shall, prior to effecting such
disposition, submit to the Company an opinion of counsel in form and substance
reasonably satisfactory to the Company to the effect that the proposed
transaction is in compliance with the Securities Act.
9.3 LEGENDS. Each certificate representing Shares shall (unless
otherwise permitted by the provisions of the Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws or as provided
elsewhere in this Agreement):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR BASED ON OTHER
WRITTEN EVIDENCE IN THE FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION
IS IN COMPLIANCE THEREWITH.
9.4 INDEMNIFICATION. As used in this Section 9.4 the following terms
shall have the following respective meanings:
(a) "Selling Stockholder" shall mean a Purchaser of Securities
under this Agreement, and any transferee of such a Purchaser who is entitled to
resell Shares pursuant to the Registration Statement;
(b) "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 9.1; and
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(c) "Untrue Statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any Untrue
Statement on or after the effective date of the Registration Statement, or arise
out of any failure by the Company to fulfill any undertaking included in the
Registration Statement and the Company will reimburse such Selling Stockholder
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided,
however, that the Company shall not be liable to such Selling Stockholder in any
such case to the extent that such loss, claim, damage or liability arises out
of, or is based upon, an Untrue Statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Selling Stockholder specifically for use in
preparation of the Registration Statement, or the failure of such Selling
Stockholder to comply with the covenants and agreements contained in Section 9.1
or 9.2 hereof respecting sale of the Shares or any statement or omission in any
Prospectus that is corrected in any subsequent Prospectus that was delivered to
the Selling Stockholder prior to the pertinent sale or sales by the Selling
Stockholder.
Each Purchaser, severally and not jointly, agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act, each officer of the Company who
signs the Registration Statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company (or any
such officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any failure to comply with the covenants and agreements contained in
Section 9.1 or 9.2 hereof respecting sale of the Shares, or any Untrue Statement
contained in the Registration Statement on or after the effective date thereof
if such Untrue Statement was made in reliance upon and in conformity with
written information furnished by or on behalf of such Purchaser specifically for
use in preparation of the Registration Statement, and such Purchaser will
reimburse the Company (or such officer, director or controlling person), as the
case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided that in no event shall any indemnity by a Purchaser under this
Section 9.4 exceed the gross proceeds received by such Purchaser from the sale
of Shares covered by such Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 9.4, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be
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entitled to participate therein, and, to the extent it shall wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
person. After notice from the indemnifying person to such indemnified person of
its election to assume the defense thereof, such indemnifying person shall not
be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof;
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate, in the opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel for all
indemnified parties.
9.5 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 4, Section 5 or this Section 9 upon the transferability of
the Shares shall cease and terminate as to any particular number of the Shares
when such Shares shall have been sold or otherwise disposed of in accordance
with the intended method of disposition set forth in the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
9.6 INFORMATION AVAILABLE. So long as the Registration Statement is
effective covering the resale of Shares owned by the Purchasers, the Company
will furnish, upon request, to the Purchasers:
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Stockholders, within 120 days after the end of
each fiscal year of the Company), one copy, excluding exhibits, of (i) its
Annual Report to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted auditing standards
certified by a national firm of certified public accountants); (ii) its Annual
Report on Form 10-K; (iii) its quarterly reports on Form 10-Q; and (iv) its
current reports on Form 8-K, if any;
(b) upon the request of any Purchaser, all exhibits excluded by
the parenthetical to subparagraph (a) of this Section 9.6, in the form generally
available to the public; and
(c) upon the reasonable request of any Purchaser, an adequate
number of copies of the prospectuses to supply to any other party requiring such
prospectuses.
9.7 CHANGES IN PURCHASER INFORMATION. Each Purchaser agrees to promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding Purchaser or such Purchaser's plan of
distribution set forth in such Registration Statement. The Placement Agent
agrees to promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding the Placement Agent set forth in
such Registration Statement.
10
13
9.8 LIQUIDATED DAMAGES. The Company acknowledges and agrees that the
Purchasers will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if the Company fails to fulfill its
obligations hereunder and a Registration Statement is not declared effective by
the Commission on or before 90 days after the Filing Date (the "Registration
Date"), then the Company shall pay to each Purchaser, as liquidated damages and
not as a penalty for each thirty day (30) period (the "Liquidation Period")
during which the Securities remain unregistered beyond the Registration Date
either (i) the number of shares of the Company's Common Stock equal to one
percent (1.0%) (the "Liquidation Amount") of the aggregate purchase price paid
for the Shares purchased under the Agreement divided by the market value
(determined as of the close of business on the last tracking date of the
Liquidation Period) of a share of Common Stock ( the "Liquidation Shares"), or,
at the option of the Company, (ii) a cash payment equal to the Liquidation
Amount. The provisions of this Section are not exclusive and shall in no way
limit the Company's obligations under the Agreement.
The Company shall notify each Purchaser within five (5) days of the
Liquidation Period and the Company shall pay the Liquidation Amount due on the
Securities to each Purchaser of record as at the end of each Liquidation Period
on the first business day of each month in which such Liquidation Amount shall
accrue.
SECTION 10. BROKER'S FEE. The Company and each Purchaser (severally and
not jointly) hereby represent that, except for amounts to be paid to the
Placement Agent by the Company as described in Section 12.8 hereof, there are no
brokers or finders entitled to compensation in connection with the sale of the
Units, and shall indemnify each other for any such fees for which they are
responsible.
SECTION 11. NOTICES. ALL NOTICES, REQUESTS, CONSENTS AND OTHER
COMMUNICATIONS HEREUNDER SHALL BE IN WRITING, SHALL BE SENT BY CONFIRMED
FACSIMILE OR MAILED BY FIRST-CLASS REGISTERED OR CERTIFIED AIRMAIL, OR
NATIONALLY RECOGNIZED OVERNIGHT EXPRESS COURIER, POSTAGE PREPAID, AND SHALL BE
DEEMED GIVEN WHEN SO SENT IN THE CASE OF FACSIMILE TRANSMISSION, OR WHEN SO
RECEIVED IN THE CASE OF MAIL OR COURIER, AND ADDRESSED AS FOLLOWS:
(a) if to the Company, to:
Avigen, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy so mailed to:
▇▇▇▇▇▇ Godward LLP
Five ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11
14
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person at such other place as the Company shall
designate to the Purchasers and the Placement Agent in writing;
and
(b) if to the Purchasers or the Placement Agent, at the address
as set forth at the end of this Agreement, or at such other address or addresses
as may have been furnished to the Company in writing.
SECTION 12. MISCELLANEOUS.
12.1 WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision
hereof may be changed, waived, discharged, terminated, modified or amended
except upon the written consent of the Company and holders of at least a
majority of the Shares.
12.2 HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
12.3 SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
12.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
12.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
12.7 ENTIRE AGREEMENT. This Agreement and other documents delivered
pursuant hereto, including the exhibits, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
12.8 PAYMENT OF FEES AND EXPENSES. Each of the Company and the
Purchasers shall bear its own expenses and legal fees incurred on its behalf
with respect to this Agreement and the transactions contemplated hereby (the
"Offering"); provided, that the Company shall reimburse the Purchaser for the
reasonable fees and expenses of one special counsel to the Purchasers. The fees
and expenses of the special counsel to the Purchasers for which the Company
shall be liable hereunder shall in no event exceed $10,000 in the aggregate.
Purchasers acknowledge that each Placement Agent will receive a cash commission
equal to 7.0% of the aggregate gross proceeds
12
15
from the sale of the Units for which they acted as placement agent, and common
stock warrants equal to 10.0% of the number of Shares sold, for which they acted
as placement agent, at an exercise price equal to 110% of the closing price. If
any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
13
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY:
AVIGEN, INC.
By:
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D.
President and Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14
17
COMPANY: PURCHASER:
AVIGEN, INC.
By: Signature:
--------------------------------- -------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D.
President and Chief Executive Officer Print Name:
------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇▇ Print Title:
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ -----------------------
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Print Company:
---------------------
Print Address:
---------------------
---------------------
---------------------
---------------------
Date:
------------------------------
U.S. Dollar Amount Invested: $
---------------------
Contact (Placement Agent):
---------------------
PLACEMENT AGENT:
Signature:
---------------------------------
Print Name:
--------------------------------
Print Title:
-------------------------------
Print Company:
-----------------------------
Print Address:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Date:
--------------------------------------
15
18
EXHIBIT A
SCHEDULE OF PURCHASERS
NAME NO. OF UNITS TOTAL COST OF
SHARES
TOTAL
A-1
19
EXHIBIT B
FORM OF WARRANT
20
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 THE
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 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.
AVIGEN, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
NO. ________ ________ Shares
FOR VALUE RECEIVED, AVIGEN, INC., a Delaware corporation (the
"Company"), with its principal office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereby certifies that __________ ("Holder"), or its
assigns, is entitled, subject to the provisions of this Warrant, to purchase
from the Company, at any time before 5:00 p.m. (Pacific Time) on the expiration
date of [five years from closing date]; provided, however, that the expiration
date shall be extended by one day for each day since the issuance of this
Warrant on which there has been effective a Suspension Period, as that term is
defined in the Common Stock and Warrant Purchase Agreement dated [__________
___], 1999, pursuant to which this Warrant was issued (the "Expiration Date"),
the number of fully paid and nonassessable shares of Common Stock of the Company
set forth above, subject to adjustment as hereinafter provided.
Holder may purchase such number of shares of Common Stock at a purchase
price per share (as appropriately adjusted pursuant to Section 6 hereof) of
_____ Dollars and _____ Cents ($____) (the "Exercise Price"). The term "Common
Stock" shall mean the aforementioned Common Stock of the Company, together with
any other equity securities that may be issued by the Company in addition
thereto or in substitution therefor as provided herein.
SECTION 1. EXERCISE OF WARRANT.
(a) This Warrant may be exercised in whole or in part on any
business day prior to the Expiration Date by presentation and surrender hereof
to the Company at its principal office at the address set forth in the initial
paragraph hereof (or at such other address as the Company may hereafter notify
Holder in writing) with the Purchase Form annexed hereto duly executed and
accompanied by proper payment of the Exercise Price in lawful money of the
United States of America in the form of a check, subject to collection, for the
number of Warrant Shares specified in the Purchase Form. If this Warrant should
be exercised in part only, the Company shall, upon surrender of this Warrant,
execute and deliver a new Warrant evidencing the rights of Holder thereof to
purchase the balance of the Warrant Shares purchasable hereunder. Upon receipt
by the Company of this Warrant and such Purchase Form, together with proper
payment of the Exercise Price, at such office, Holder shall be deemed to be the
holder of
1.
21
record of the Warrant Shares, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such Warrant
Shares shall not then be actually delivered to Holder. The Company shall pay any
and all documentary stamp or similar issue or transfer taxes payable in respect
of the issue or delivery of the Warrant Shares.
SECTION 2. RESERVATION OF SHARES. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale (other than as provided in the
Company's certificate of incorporation and any restrictions on sale set forth
herein or pursuant to applicable federal and state securities laws) and free and
clear of all preemptive rights.
SECTION 3. FRACTIONAL INTEREST. The Company will not issue a fractional
share of Common Stock upon exercise of a Warrant. Instead, the Company will
deliver its check for the current market value of the fractional share. The
current market value of a fraction of a share is determined as follows: multiply
the current market price of a full share by the fraction of a share and round
the result to the nearest cent.
The current market price of a share of Common Stock for purposes of this
Section only is the Quoted Price (as defined in Section 6(b) below) of the
Common Stock on the last trading day prior to the exercise date.
SECTION 4.ASSIGNMENT OR LOSS OF WARRANT.
(a) Except as provided in Section 9, Holder shall be entitled,
without obtaining the consent of the Company, to assign its interest in this
Warrant in whole or in part to any person or persons. Subject to the provisions
of Section 9, upon surrender of this Warrant to the Company or at the office of
its stock transfer agent or warrant agent, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company
shall, without charge, execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees named in such instrument of assignment (any such
assignee will then be a "Holder" for purposes of this Warrant) and, if Holder's
entire interest is not being assigned, in the name of Holder, and this Warrant
shall promptly be canceled.
(b) Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnification satisfactory to the Company, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
SECTION 5. RIGHTS OF HOLDER. Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of Holder are limited to those expressed in this Warrant. Nothing
contained in this Warrant shall be construed as conferring upon Holder hereof
the right to vote or to consent or to receive notice as a
2.
22
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.
SECTION 6.ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number
and kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
beginning of certain events, as follows:
(a) Adjustment for Change in Capital Stock. If at any time after
the date hereof the Company:
(A) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(B) subdivides its outstanding shares of Common Stock into
a greater number of shares;
(C) combines its outstanding shares of Common Stock into a
smaller number of shares;
(D) makes a distribution on its Common Stock in shares of
its capital stock other than Common Stock; or
(E) issues by reclassification of its Common Stock any
shares of its capital stock;
then the number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price in effect immediately prior to such action shall
be adjusted so that Holder may receive upon exercise of this Warrant and payment
of the same aggregate consideration the number of shares of capital stock of the
Company which Holder would have owned immediately following such action if
Holder had exercised this Warrant immediately prior to such action.
The adjustment shall become effective immediately after
the record date in the case of a dividend or distribution and immediately after
the effective date in the case of a subdivision, combination or
reclassification.
(b) Current Market Price. The "current market price" per share of
Common Stock on any date is the average of the Quoted Prices of the Common Stock
for the 30 consecutive trading days commencing 45 trading days before the date
in question. The "Quoted Price" of the Common Stock is the last reported sales
price of the Common Stock as reported by the Nasdaq National Market, or the
primary national securities exchange on which the Common Stock is then quoted;
provided, however, that if the Common Stock is neither traded on the Nasdaq
National Market nor on a national securities exchange, the price referred to
above shall be the price reflected on the Nasdaq National Market, or if the
Common Stock is not then traded
3.
23
on the Nasdaq National Market, the price reflected in the over-the counter
market as reported by the National Quotation Bureau, Inc. or any organization
performing a similar function.
(c) Minimum Adjustment. No adjustment in the Exercise Price of
this Section 6 shall be required unless such adjustment would require an
increase or decrease of at least twenty-five cents ($.25) in such Exercise
Price; provided, however, that any adjustments which by reason of this
subsection are not required to be made, shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 6
shall be made to the nearest cent or to the nearest share, as the case may be.
(d) Deferral of Issuance or Payment. In any case in which an
event covered by this Section 6 shall require that an adjustment in the Exercise
Price be made effective as of a record date, the Company may elect to defer
until the occurrence of such event (i) issuing to Holder, if this Warrant is
exercised after such record date, the shares of Common Stock and other capital
stock of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock or other capital stock of the Company, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to such
adjustment, and (ii) paying to Holder by check any amount in lieu of the
issuance of fractional shares pursuant to Section 3.
(e) When No Adjustment Required. No adjustment need be made for a
change in the par value of the Common Stock. To the extent this Warrant becomes
exercisable into cash, no adjustment need be made thereafter as to the cash, and
interest will not accrue on the cash.
(f) Notice of Certain Actions. In the event that:
(A) the Company shall authorize the issuance to all
holders of its Common Stock of rights, warrants, options or convertible
securities to subscribe for or purchase shares of its Common Stock or of any
other subscription rights, warrants, options or convertible securities; or
(B) the Company shall authorize the distribution to all
holders of its Common Stock of evidences of its indebtedness or assets (other
than dividends paid in or distributions of the Company's capital stock for which
the Exercise Price shall have been adjusted pursuant to subsection (a) of this
Section 6 or cash dividends or cash distributions payable out of consolidated
current or retained earnings as shown on the books of the Company and paid in
the ordinary course of business); or
(C) the Company shall authorize any capital reorganization
or reclassification of the Common Stock (other than a subdivision or combination
of the outstanding Common Stock and other than a change in par value of the
Common Stock) or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required (other
than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or change of the
Common Stock outstanding), or of the conveyance or transfer of the properties
and assets of the Company as an entirety or substantially as an entirety; or
4.
24
(D) the Company is the subject of a voluntary or
involuntary dissolution, liquidation or winding-up procedure; or
(E) the Company proposes to take any action that would
require an adjustment of the Exercise Price pursuant to this Section 6;
then the Company shall cause to be mailed by first-class mail to Holder, at
least twenty (20) days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date as of which the holders of
Common Stock of record to be entitled to receive any such rights, warrants or
distributions are to be determined, or (y) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding-up 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 shares of Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up.
SECTION 7. OFFICERS' CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 6, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office an officers' certificate showing the adjusted Exercise Price determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the chairperson, president or chief financial
officer of the Company and by the secretary or any assistant secretary of the
Company. Each such officers' certificate shall be made available at all
reasonable times for inspection by Holder.
SECTION 8. RECLASSIFICATION, REORGANIZATION, CONSOLIDATION OR MERGER. In
the event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock and other than a change in the par
value of the Common Stock) or in the event of any consolidation or merger of the
Company with or into another corporation (other than a merger in which the
Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in the
event of any sale, lease, transfer or conveyance to another corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, the Company shall, as a condition precedent to such transaction, cause
effective provisions to be made so that Holder shall have the right thereafter,
by exercising this Warrant, to purchase the kind and amount of shares of stock
and other securities and property (including cash) receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
that might have been received upon exercise of this Warrant immediately prior to
such reclassification, capital reorganization, change, consolidation, merger,
sale or conveyance. Any such provision shall include provisions for adjustments
in respect of such shares of stock and other securities and property that shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 8 shall similarly apply
to successive reclassifications, capital reorganizations and changes of shares
of Common Stock and to successive consolidations, mergers, sales or conveyances.
In the event that in connection with any such capital reorganization, or
5.
25
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for, or of, a security of the Company other than
Common Stock, any such issue shall be treated as an issue of Common Stock
covered by the provisions of subsection (a) of Section 6.
SECTION 9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. This
Warrant may not be exercised and neither this Warrant nor any of the Warrant
Shares, nor any interest in either, may be offered, sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in
whole or in part, except in compliance with applicable United States federal and
state securities or Blue Sky laws and the terms and conditions hereof. Each
Warrant shall bear a legend in substantially the same form as the legend set
forth on the first page of this Warrant. Each certificate for Warrant Shares
issued upon exercise of this Warrant, unless at the time of exercise such
Warrant Shares are acquired pursuant to a registration statement that has been
declared effective under the Act, and applicable blue sky laws shall bear a
legend substantially in the following form:
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 THE 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
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.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provision of this Section 9
shall be binding upon all subsequent holders of certificates for Warrant Shares
bearing the above legend and all subsequent holders of this Warrant, if any.
SECTION 10. MODIFICATION AND WAIVER. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by Holder.
SECTION 11. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to Holder or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to Holder at its address as
shown on the books of the Company or to the Company at the address indicated
therefor in the first paragraph of this Warrant.
6.
26
SECTION 12. 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, without
regard to its conflicts of laws principles.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of [_________ ___],
1999.
AVIGEN, INC.
By:
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D.
President and Chief Executive Officer
7.
27
PURCHASE FORM
Dated ___________, 19____
The undersigned hereby irrevocably elects to exercise the within Warrant
No. _________ to purchase _________ shares of Common Stock and hereby makes
payment of $_____________ in payment of the exercise price thereof.
HOLDER
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
28
ASSIGNMENT FORM
Dated _________, 19____
FOR VALUE RECEIVED, ________________ hereby sells, assigns and transfers
unto __________________________________________________ (the "Assignee"),
(please type or print in block letters)
________________________________________________________________________________
(insert address)
its right to purchase up to _______ shares of Common Stock represented by this
Warrant No. _________ and does hereby irrevocably constitute and appoint
____________________________ attorney, to transfer the same on the books of the
Company, with full power of substitution in the premises.
HOLDER
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
29
EXHIBIT C
SCHEDULE OF EXCEPTIONS
The inclusion of any matter as part of this Schedule should not be
interpreted as indicating that the Company has determined that such matter is
necessarily material to the Purchaser.
SECTIONS 4.4; 4.5; AND 4.6
ADDITIONAL INFORMATION; NO MATERIAL CHANGE; SEC REPORTS
The Company is currently exploring potential strategic transactions such
as corporate partnerships, collaborations and mergers and acquisitions. There
can be no assurance that the Company's efforts in this regard will result in the
consummation of any such transaction.
30
APPENDIX I
AVIGEN, INC.
STOCK CERTIFICATE AND WARRANT QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares and Warrants are to be registered in (this
is the name that will appear on your stock certificate(s) and warrant(s)).
You may use a nominee name if appropriate:
---------------------------------
2. The relationship between the Purchaser of the Securities and the Registered
Holder listed in response to item 1 above:
---------------------------------
3. The mailing address of the Registered Holder listed in response to item 1
above:
---------------------------------
---------------------------------
---------------------------------
4. The Social Security Number or Tax Identification Number of the Registered
Holder listed in the response to item 1 above:
-----------------------------
31
APPENDIX II
AVIGEN, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the following information, as of October 31, 1999:
(1) (2)
Number (or Percentage) of shares Number of shares, if any, which
acquired which are being included will be owned after completion
in the Registration Statement of sale of Shares included in
the Registration Statement
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Proxy Statement in connection with the
Company's 1999 Annual Meeting of Stockholders?
Yes____No____
If yes, please indicate the nature of any such relationships:
-------------------
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32
APPENDIX III
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
--------------------------------------------------------------------------------
[fill in official name of
______________________hereby certifies that he/she [said institution] is the
Purchaser individual or institution]
of the Shares evidenced by the attached stock certificate(s) and as such, sold
such Shares on __________________________ in accordance with registration
statement [date]
number ________________________________________________________________ and the
[fill in the number of or otherwise identify registration statement]
requirement of delivering a current prospectus and current annual, quarterly and
reports (Forms 10-K, 10-Q, and 8-K) by the Company has been complied with in
connection with such sale.
Print or Type:
Name of Purchaser (Individual or Institution):
Name of Individual representing Purchaser (if an Institution):
Title of Individual representing Purchaser (if an Institution):
Signature by:
Individual Purchaser or Individual
representing Purchaser:
33
TABLE OF CONTENTS
PAGE
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES...........................................1
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES.....................................1
2.1 Sale of Units.................................................................1
2.2 Separate Agreement............................................................1
SECTION 3 CLOSING AND DELIVERY...............................................................1
3.1 Closing.......................................................................1
3.2 Delivery of the Units at the Closing..........................................2
3.3 Subsequent Sales of Shares....................................................2
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY..........................2
4.1 Organization and Qualification................................................2
4.2 Due Execution, Delivery and Performance of the Agreements.....................2
4.3 Issuance, Sale and Delivery of the Shares and the Warrants....................3
4.4 Additional Information........................................................3
4.5 No Material Change............................................................3
4.6 SEC Reports...................................................................3
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
AND PLACEMENT AGENTS.........................................................4
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS............................5
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING................................6
7.1 Receipt of Payment............................................................6
7.2 Representations and Warranties Correct........................................6
7.3 Covenants Performed...........................................................6
7.4 No General Solicitation; Blue Sky.............................................6
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING..............................6
8.1 Representations and Warranties Correct........................................6
8.2 Covenants Performed...........................................................6
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT....................6
9.1 Registration Procedures and Expenses..........................................6
9.2 Transfer of Securities After Registration.....................................8
9.3 Legends.......................................................................8
34
TABLE OF CONTENTS
(CONTINUED)
PAGE
9.4 Indemnification...............................................................8
9.5 Termination of Conditions and Obligations....................................10
9.6 Information Available........................................................10
9.7 Changes in Purchaser Information.............................................10
9.8 Liquidated Damages...........................................................11
SECTION 10. BROKER'S FEE....................................................................11
SECTION 11. NOTICES.........................................................................11
SECTION 12. MISCELLANEOUS...................................................................12
12.1 Waivers and Amendments.......................................................12
12.2 Headings.....................................................................12
12.3 Severability.................................................................12
12.4 Governing Law................................................................12
12.5 Counterparts.................................................................12
12.6 Successors and Assigns.......................................................12
12.7 Entire Agreement.............................................................12
12.8 Payment of Fees and Expenses.................................................12
ATTACHMENTS:
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Warrant
Exhibit C - Schedule of Exceptions
Appendix I - Stock Certificate and Warrant Questionnaire
Appendix II - Registration Statement Questionnaire
Appendix III - Purchaser's Certificate of Subsequent Sale
ii