Exhibit 4.1
COMMON STOCK PURCHASE
WARRANT
AVI BIOPHARMA,
INC.
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Cusip
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Warrant Shares:
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Initial Exercise Date: February 25,
2010
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THIS COMMON STOCK PURCHASE WARRANT
(the “ Warrant ”) certifies that, for value
received,
(the “ Holder ”) is entitled, upon the terms and
subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the six month
anniversary of the date hereof (the “ Initial Exercise
Date ”) and on or prior to 5:00 p.m. Pacific time on
August 25, 2014 (the “ Termination Date ”)
but not thereafter, to subscribe for and purchase from AVI
Biopharma, Inc., an Oregon corporation (the “
Company ”), up to
shares (the “ Warrant Shares ”) of Common
Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).
Section 1
.
Definitions
. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in
that certain Underwriting Agreement (the “ Underwriting
Agreement ”), dated August 20, 2009, between the
Company and the signatories thereto.
Section 2
.
Exercise .
a)
Exercise of Warrant
. Exercise of the purchase
rights represented by this Warrant may be made, in whole or in
part, at any time or times on or after the Initial Exercise Date
and on or before the Termination Date by delivery to the Company
(or such other office or agency of the Company as it may designate
by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company) of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto;
and, within three (3) Trading Days of the date said Notice of
Exercise is delivered to the Company, the Company shall have
received payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn
on a United States bank of, if available, pursuant to the cashless
exercise procedure specified in Section 2(c) below.
Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which
case, the Holder shall surrender this Warrant to the Company for
cancellation within three (3) Trading Days of the date the
final Notice of Exercise is delivered to the Company. Partial
exercises of this Warrant resulting in purchases of a portion of
the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver any
objection to any Notice of Exercise Form within 1 Business Day
of receipt of such notice. The Holder and
any
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assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of
this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount
stated on the face hereof.
b)
Exercise Price
. The exercise price per share
of the Common Stock under this Warrant shall be $1.78 ,
subject to adjustment hereunder (the “ Exercise Price
”).
c)
Cashless Exercise
. If at the time of exercise
hereof there is no effective registration statement registering, or
the prospectus contained therein is not available for use, the
issuance of the Warrant Shares to the Holder, then this Warrant may
also be exercised, in whole or in part, at such time by means of a
“cashless exercise” in which the Holder shall be
entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
(A) = the
VWAP on the Trading Day immediately preceding the date on which
Holder elects to exercise this Warrant by means of a
“cashless exercise,” as set forth in the applicable
Notice of Exercise;
(B) = the Exercise Price of this Warrant, as adjusted
hereunder; and
(X) = the
number of Warrant Shares that would be issuable upon exercise of
this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless
exercise.
“ VWAP ” means,
for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average
price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then
listed or quoted as reported by Bloomberg L.P. (“
Bloomberg ”) (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York
City time), (b) if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted
for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published
by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by
the Company.
d)
Mechanics of Exercise
.
i.
Delivery of Certificates Upon Exercise . Certificates
for shares purchased hereunder shall be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s
prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“ DWAC ”) system if
the Company is then a participant in
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such system, and otherwise by
physical delivery to the address specified by the Holder in the
Notice of Exercise by the date that is three (3) Trading Days
after the latest of (A) the delivery to the Company of the
Notice of Exercise Form, (B) surrender of this Warrant (if
required) and (C) payment of the aggregate Exercise Price as
set forth above (including by cashless exercise, if permitted)
(such date, the “ Warrant Share Delivery Date
”). This Warrant shall be deemed to have been exercised
on the first date on which all of the foregoing have been delivered
to the Company. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 2(d)(vi) prior
to the issuance of such shares, having been paid. If the Company
fails for any reason to deliver to the Holder certificates
evidencing the Warrant Shares subject to a Notice of Exercise by
the Warrant Share Delivery Date, the Company shall pay to the
Holder, in cash, as liquidated damages and not as a penalty, for
each $1,000 of Warrant Shares subject to such exercise (based on
the VWAP of the Common Stock on the date of the applicable Notice
of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the fifth Trading Day after such liquidated damages begin to
accrue) for each Trading Day after such Warrant Share Delivery Date
until such certificates are delivered or the Holder rescinds such
exercise.
ii.
Delivery of New Warrants Upon Exercise . If this
Warrant shall have been exercised in part, the Company shall, at
the request of the Holder and upon surrender of this Warrant
certificate, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this
Warrant.
iii. Rescission
Rights . If the Company fails to cause the Transfer Agent
to transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to
Section 2(d)(i) by the Warrant Share Delivery Date, then,
the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise . In addition to any other
rights available to the Holder, if the Company fails to cause the
Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after
such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) or the Holder’s
brokerage firm
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otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “ Buy-In ”), then the Company shall
(A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option
of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not
honored (in which case such exercise shall be deemed rescinded) or
deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if
the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the
immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
v. No
Fractional Shares or Scrip . No fractional shares or
scrip representing fractional shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which
the Holder would otherwise be entitled to purchase upon such
exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price or round up to the
next whole share.
vi. Charges,
Taxes and Expenses . Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by the
Holder; provided , however , that in the event
certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form
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attached hereto duly executed by the
Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.
vii. Closing of
Books . The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise
Limitations . The
Company shall not effect any exercise of this Warrant, and the
Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent
that after giving effect to such issuance after exercise as set
forth on the applicable Notice of Exercise, the Holder (together
with the Holder’s Affiliates, and any other Persons acting as
a group together with the Holder or any of the Holder’s
Affiliates), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include
the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which such determination is being made, but
shall exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates and (ii) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by
the Holder or any of its Affiliates. Except as set forth in
the preceding sentence, for purposes of this Section 2(e),
beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such
calculation is in compliance with Section 13(d) of the
Exchange Act and the Holder is solely responsible for any schedules
required to be filed in accordance therewith. To the
extent that the limitation contained in this
Section 2(e) applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by
the Holder together with any Affiliates) and of which portion of
this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant
is exercisable, in each case subject to the Beneficial Ownership
Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. In
addition, a determination as to any group status as contemplated
above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this
Section 2(e), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the Commission, as
the case may be, (B) a more recent public announcement by the
Company or (C) a more recent written notice by the Company or
the Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of the
Holder, the
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Company shall within two Trading
Days confirm orally and in writing to the Holder the number of
shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of
the Company, including this Warrant, by the Holder or its
Affiliates since the date as of which such number of outstanding
shares of Common Stock was reported. The “
Beneficial Ownership Limitation ” shall be 4.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Holder, upon not
less than 61 days’ prior notice to the Company, may increase
or decrease the Beneficial Ownership Limitation provisions of this
Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant
held by the Holder and the provisions of this
Section 2(e) shall continue to apply. Any such
increase or decrease will not be effective until the 61
st day after such notice is delivered to the
Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this
paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The
limitations contained in this paragraph shall apply to a successor
holder of this Warrant.
Section 3
.
Certain Adjustments
.
a)
Stock Dividends and
Splits . If the Company,
at any time while this Warrant is outstanding: (i) pays a
stock dividend or otherwise makes a distribution or distributions
on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock
issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a
larger number of shares, (iii) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a
smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the
Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after
such event, and the number of shares issuable upon exercise of this
Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain
