Exhibit 4.1
FACE OF SECURITY
THE NOTE EVIDENCED HEREBY AND THE SHARES OF COMMON STOCK
ISSUABLE
UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR OTHER SECURITIES LAWS. NONE
OF THIS NOTE, THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF OR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE
RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS THE TRANSACTION IS EXEMPT FROM,
OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS
AN "ACCREDITED INVESTOR" (AS DEFINED
IN REGULATION D UNDER SECURITIES ACT), (2)
AGREES THAT IT WILL NOT PRIOR TO (X)
THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(K) UNDER THE SECURITIES ACT OR ANY
SUCCESSOR PROVISION THEREUNDER) AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR
OF ANY PREDECESSOR OF THIS NOTE) OR
THE LAST DAY ON WHICH VAXGEN, INC. (THE
"COMPANY") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF THIS NOTE) AND (Y)
SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED
BY APPLICABLE LAW (THE "RESALE
RESTRICTION TERMINATION DATE"), OFFER, SELL
OR OTHERWISE TRANSFER THIS NOTE OR
THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF EXCEPT (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C)
WHEN AND FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A
PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, OR (D) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON
TO WHOM THIS NOTE OR THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF ARE TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT THE COMPANY, THE
TRUSTEE AND THE REGISTRAR SHALL HAVE THE
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (I) PURSUANT TO CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM AND
(II) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATION OF TRANSFER
IN THE FORM APPEARING ON THE OTHER SIDE OF
THE NOTE IS COMPLETED AND DELIVERED
BY THIS TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
<PAGE>
THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON THE
CONVERSION
HEREOF AND ANY RELATED DOCUMENTATION MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO
TIME TO MODIFY THE RESTRICTIONS ON RESALES
AND OTHER TRANSFERS OF THIS NOTE AND
ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER
OF THIS NOTE AND SUCH SHARES SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS NOTE
AND ANY SUCH SHARES TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.
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VAXGEN, INC.
5 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE APRIL 1, 2010
No. 1
U.S.$ 300,000.00
CUSIP No. 922390 AA 7
ISIN NUMBER : US922390AA76
VaxGen, Inc., a corporation duly organized
and existing under the laws of the
State of Delaware (herein called the
"Company," which term includes any
successor Person under the Indenture
referred to on the reverse hereof), for
value received, hereby promises to pay to
___________., or registered assigns,
the principal sum of THREE HUNDRED THOUSAND
UNITED STATES DOLLARS (U.S.$
300,000.00) (which principal amount may
from time to time be increased or
decreased to such other principal amounts
(which, taken together with the
principal amounts of all other Outstanding
Securities, shall not exceed U.S.
$31,500,000 in the aggregate at any time,
on April 1, 2010, unless redeemed,
repurchased or converted on an earlier
date, and to pay interest thereon, from
April 5, 2005, or from the most recent
Interest Payment Date (as defined below)
to which interest has been paid or duly
provided for, semiannually in arrears on
April 1 and October 1 in each year (each,
an "Interest Payment Date"),
commencing October 1, 2005, at the rate of
5 1/2% per annum, until the principal
hereof is due, and at the rate then in
effect on any overdue principal and
premium, if any, and, to the extent
permitted by law, on any overdue interest.
The interest so payable, and punctually
paid or duly provided for, on any
Interest Payment Date will, as provided in
the Indenture, be paid to the Person
in whose name this Security (or one or more
Predecessor Securities) is
registered at the close of business on the
Regular Record Date for such
interest, which shall be the March 15 and
September 15 (whether or not a
Business Day), as the case may be, next
preceding such Interest Payment Date.
Except as otherwise provided in the
Indenture, any such interest not so
punctually paid or duly provided for will
forthwith cease to be payable to the
Holder on such Regular Record Date and may
either be paid to the Person in whose
name this Security (or one or more
Predecessor Securities) is registered at the
close of business on a Special Record Date
for the payment of such Defaulted
Interest to be fixed by the Company, notice
whereof shall be given to Holders of
Registered Securities not less than ten
days prior to such Special Record Date,
or be paid at any time in any other lawful
manner not inconsistent with the
requirements of any securities exchange on
which the Securities may be listed,
and upon such notice as may be required by
such exchange, all as more fully
provided in the Indenture. Payments of
principal shall be made upon the
surrender of this Security at the option of
the Holder at the Corporate Trust
Office or at such other office or agency of
the Company as may be designated by
it for such purpose in the Borough of
Manhattan, The City of New York, in such
coin or currency of the United States of
America as at the time of payment shall
be legal tender for t he payment of public
and private debts, or at such other
offices or agencies as the Company may
designate, by United States Dollar check
drawn on, or wire transfer to, a United
States Dollar account (such a wire
transfer to be made only to a Holder of an
aggregate principal amount of
Registered Securities in excess of U.S.
$2,000,000 and only if such Holder shall
have furnished wire instructions in writing
to the Trustee no later than 15 days
prior to the relevant payment date)
maintained by the payee. Payment of interest
on this Security may be made by United
States Dollar check mailed to the address
of the Person entitled thereto as such
address shall appear in the Security
Register or, upon written application
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by the Holder to the Security Registrar
setting forth wire instructions not
later than the relevant Record Date, by
wire transfer to a United States dollar
account (such a wire transfer to be made
only to a Holder of an aggregate
principal amount of Registered Securities
in excess of U.S. $2,000,000 and only
if such Holder shall have furnished wire
instructions in writing to the Trustee
no later than 15 days prior to the relevant
payment date) maintained by the
payee.
Except as specifically provided herein and in the Indenture,
the
Company shall not be required to make any
payment with respect to any tax,
assessment or other governmental charge
imposed by any government or any
political subdivision or taxing authority
thereof or therein.
Reference is hereby made to the further provisions of this
Security
set forth on the reverse hereof, which
further provisions shall for all purposes
have the same effect as if set forth at
this place.
Unless the certificate of authentication hereon has been executed
by
the Trustee referred to on the reverse
hereof or an Authenticating Agent by the
manual signature of one of their respective
authorized signatories, this
Security shall not be entitled to any
benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be
duly
executed.
VAXGEN, INC.
By: ____________________________________
Name: ______________________________
Title: _____________________________
Dated: April 5, 2005
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<PAGE>
This is one of the Securities referred to in the
within-mentioned
Indenture.
U.S. Bank National Association,
as Trustee
By: __________________________________
Authorized Signatory
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REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of
the
Company designated as its "5 1/2%
Convertible Senior Subordinated Notes due
April 1, 2010" (herein called the
"Securities"), limited in aggregate principal
amount to U.S. $31,500,000, issued and to
be issued under an Indenture, dated as
of April 5, 2005 (herein called the
"Indenture"), between the Company and U.S.
Bank National Association, as Trustee
(herein called the "Trustee," which term
includes any successor trustee under the
Indenture), to which Indenture and all
indentures supplemental thereto reference
is hereby made for a statement of the
respective rights, limitations of rights,
duties and immunities thereunder of
the Company, the Trustee, the holders of
Senior Debt and the Holders of the
Securities and of the terms upon which the
Securities are, and are to be,
authenticated and delivered. As provided in
the Indenture and subject to certain
limitations set forth therein, Registered
Securities are exchangeable for a like
aggregate principal amount of Registered
Securities of any authorized
denominations as requested by the Holder
surrendering the same upon surrender of
the Registered Security or Registered
Securities to be exchanged at the
Corporate Trust Office. The Trustee upon
such surrender by the Holder will issue
the new Registered Securities in the
requested denominations.
No sinking fund is provided for the Securities.
The Securities are subject to redemption at the option of the
Company at any time prior to April 1, 2010
("Provisional Redemption"), in whole
or in part, upon not less than 30 nor more
than 60 days' notice to the Holders
prior to the Redemption Date at a
Redemption Price equal to 100% of the
principal amount, together, in each case,
with accrued and unpaid interest
(including, Liquidated Damages, if any) to,
but excluding, the Redemption Date
plus the Interest Make-Whole Payment;
provided, that (a) the Closing Sale Price
of the Common Stock has exceeded 150% of
the Conversion Price then in effect for
at least 20 Trading Days within a period of
30 consecutive Trading Days ending
on the Trading Date immediately before the
date of mailing of the Redemption
Notice and (2) the Registration Statement
covering resale of the Securities and
the Underlying Common Stock (as defined in
the Purchase Agreement) is effective
and available for use for the 30 days
following the Redemption Day, unless
registration thereof is not required. Upon
any Provisional Redemption, the
Company will pay to the Holders cash
(except as set forth below) with respect to
the Securities called for Provisional
Redemption, including any Security
converted after the date of the notice of
Provisional Redemption and before to
the date of the Provisional Redemption.
Notwithstanding the foregoing, the
Company may make the Interest Make-Whole
Payment in (a) cash, (b) subject to
certain conditions set forth below in the
Indenture, Common Stock or Successor
Common Stock or (c) a combination of cash
and Common Stock or Successor Common
Stock.
In the event of a redemption of the Securities, the Company will
not
be required (a) to register the transfer or
exchange of Registered Securities
for a period of 15 days immediately
preceding the date notice is given
identifying the serial numbers of the
Securities called for such redemption (it
being understood that the Company will not
be required to identify the serial
numbers of Outstanding Securities if all
such Securities are called for
redemption) or
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(b) to register the transfer or exchange of
any Registered Security, or portion
thereof, called for redemption.
In any case where the due date for the payment of the principal
of,
premium, if any, or interest (including
Liquidated Damages, if any) on any
Security or the last day on which a Holder
of a Security has a right to convert
his Security shall be, at any Place of
Payment or Place of Conversion, as the
case may be, a day on which banking
institutions at such Place of Payment or
Place of Conversion are authorized or
obligated by law or executive order to
close, then payment of principal, premium,
if any, or interest (including
Liquidated Damages, if any) or delivery for
conversion of such Security need not
be made on or by such date at such place
but may be made on or by the next
succeeding day at such place which is not a
day on which banking institutions
are authorized or obligated by law or
executive order to close, with the same
force and effect as if made on the date for
such payment or the date fixed for
redemption or repurchase, or by such last
day for conversion, and no interest
shall accrue on the amount so payable for
the period from and after such due
date.
Subject to and upon compliance with the provisions of the
Indenture,
the Holder of this Security is entitled, at
its option, at any time following
the original issue date of the Securities
and on or before the close of business
on April 1, 2010, or in case this Security
or a portion hereof is called for
redemption or the Holder hereof has
exercised his right to require the Company
to repurchase this Security or such portion
hereof, then in respect of this
Security until and including, but (unless
the Company defaults in making the
payment due upon redemption or repurchase,
as the case may be) not after, the
close of business on
