Exhibit 4.1
THE SECURITIES PRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NO SALE, GIFT, TRANSFER OR OTHER DISPOSITION THEREOF OR OF ANY
INTEREST THEREIN SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH
SECURITIES ARE (I) REGISTERED PURSUANT TO THE PROVISIONS OF
SUCH ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES OR ‘BLUE SKY’ LAWS OR (II) EXEMPT FROM SUCH
REGISTRATION.
Void after
,
2014
FORM OF
WARRANT TO PURCHASE
SHARES
OF
CAPITAL STOCK
OF
ARROWHEAD RESEARCH
CORPORATION,
A Delaware corporation
This certifies that
(the “ Holder ”), or assigns, for value
received, is entitled to purchase from Arrowhead Research
Corporation (the “ Company ”), subject to
the terms set forth below, including the terms and conditions set
forth in Section , a maximum of
fully-paid and non-assessable shares (subject to adjustment as
provided herein) of the Company’s Common Stock, $0.001 par
value (“ Common Stock ”), for cash at a
price of $0.50 per share (the “ Exercise Price
”) (subject to adjustment as provided herein) at any time or
from time to time on or after [December ,
2009] 1
, (the “ Initial
Exercise Date ”), and up to and including 5:00 p.m.
(New York City Time) on June 30, 2014 (the “
Expiration Date ”) upon surrender to the
Company at its principal office (or at such other location as the
Company may advise the Holder in writing) of this Warrant properly
endorsed with the Notice of Subscription attached hereto duly
completed and signed and upon payment in cash or by check of the
aggregate Exercise Price for the number of shares for which this
Warrant is being exercised determined in accordance with the
provisions hereof. The Exercise Price is subject to adjustment as
provided in Section 4 of this Warrant. This Warrant is issued
subject to the following terms and conditions:
1. Exercise, Limitations on
Exercise .
1.1 Exercise . The Holder may
exercise this Warrant at any time or from time to time on or after
the Initial Exercise Date and on or prior to the Expiration Date,
for all or any part of the Warrant Shares (but not for a fraction
of a share of Common Stock) which may be purchased hereunder, as
that number may be adjusted pursuant to Section 4 of this Warrant.
Except as set forth below, the Company agrees that the Warrant
Shares purchased under this Warrant shall be and are deemed to be
issued to the Holder hereof as the record owner of such Warrant
Shares as of the close of business on the date on which this
Warrant shall have been surrendered, properly endorsed, the
completed and executed Notice of Subscription delivered, and
payment in cash made for such Warrant Shares (such date, a “
Date of Exercise ”). Certificates for the
Warrant Shares so purchased, together with any other securities or
property to which the Holder hereof is entitled upon such exercise,
shall be delivered to the Holder hereof by the Company at the
Company’s expense as soon as practicable after the rights
represented by this
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Date to be
inserted that is 6 months + 1 day from issuance.
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Warrant have been so exercised, but in any event
not later than the third trading day following the Date of
Exercise. In case of a purchase of less than all the Warrant Shares
which may be purchased under this Warrant, the Company shall cancel
this Warrant and execute and deliver to the Holder hereof within a
reasonable time a new Warrant or Warrants of like tenor for the
balance of the Warrant Shares purchasable under the Warrant
surrendered upon such purchase. Each stock certificate so delivered
shall be registered in the name of such Holder and issued with
legends in accordance with the Subscription Agreement pursuant to
which this Warrant was originally issued (the “
Subscription Agreement ”).
1.2 Limitations on Exercise .
If, at the Date of Exercise, the Company has an insufficient number
of shares of Common Stock authorized and available for issuance
under its Certificate of Incorporation to permit the issuance of
the underlying shares, then the Warrant shall be exercised for
Common Stock only to the extent that shares are available and, with
respect to the remaining shares of Common Stock that cannot be
issued, the attempted exercise shall be deemed not made and the
Company shall promptly provide written notice of the limitation to
the Holder, informing the Holder of the portion of the Warrant that
cannot then be exercised and returning the unused portion of the
exercise price. If the Holder then wishes to exercise that portion
of the Warrant notwithstanding the limitations on availability of
Common Stock, then the Holder may elect to instead exercise this
Warrant for 1/100 th of
a share of Series A Convertible Preferred Stock, par value $0.001
per share (the “ Preferred Stock ”) with
a price per 1/100 th of
a share of Preferred Stock equal to the Exercise Price per full
share of Common Stock (as may be adjusted from time to time as set
forth herein). The rights, preferences and privileges of the
Preferred Stock shall be as set forth in the Subscription
Agreement. The shares of Common Stock and/or Preferred Stock that
may be issued under this Warrant are hereinafter referred to as the
“ Warrant Shares . ”
2. Cashless Exercise during
Restrictive Event .
2.1 Cashless Exercise . If a
“Restrictive Event” (as defined below) exists at a time
when this Warrant is exercised, then the Warrant shall be exercised
at such time only 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:
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(A) =
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the closing
price of the Company’s Common Stock on the business day
immediately prior to the Exercise Date (the “ Fair
Market Value ”);
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(B)
=
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the Exercise
Price of the Warrants, as adjusted; and
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(X)
=
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the number of
Warrant Shares issuable upon exercise of the Warrants in accordance
with the terms of this Warrant.
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If the Warrant is exercised on a
cashless basis as set forth above and Preferred Stock is to be
issued upon exercise per Section 1.2, then the number of
shares of Preferred Stock to be issued shall be determined as set
forth above, with the value of 1/100 of a share of Preferred Stock
to equal the value of a single share of Common Stock.
2.2 Company-Elected
Conversion . The Company shall provide to the Holder prompt
written notice of any time that the Company is unable to issue
Warrant Shares because (a) the Securities and Exchange
Commission (the “ Commission ”) has
either not declared effective the Registration Statement (as
defined in the Subscription Agreement) or has issued a stop order
with respect to the Registration Statement, (b) the Commission
otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently,
(c) the Company has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently or
(d) for
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any other reason (each, a “
Restrictive Event ”). To the extent that a
Restrictive Event occurs after the Holder has exercised this
Warrant in accordance with Section 1 but prior to the delivery of
the Warrant Shares, the Company shall (i) if the Fair Market
Value of the Warrant Shares is greater than the Exercise Price,
provide written notice to the Holder that the Company will deliver
that number of Warrant Shares to the Holder as should be delivered
in a “cashless exercise” in accordance with
Section 2.1, and return to the Holder all consideration paid
to the Company in connection with the Holder’s attempted
exercise of this Warrant pursuant to Section 1 (a “
Company-Elected Conversion ”), or (ii) at
the election of the Holder to be given within five (5) days of
receipt of notice of a Company-Elected Conversion, the Holder shall
be entitled to rescind the previously submitted Notice of Exercise
and the Company shall return all consideration paid by Holder for
such shares upon such rescission.
3. Shares to be Fully Paid .
The Company covenants and agrees that all Warrant Shares, will,
upon issuance and, if applicable, payment of the applicable
Exercise Price, be duly authorized, validly issued, fully paid and
non-assessable, and free of all preemptive rights, liens and
encumbrances, except for restrictions on transfer provided for
herein.
4. Adjustment of Exercise Price
and Number of Shares . The Exercise Price and the total number
of Warrant Shares shall be subject to adjustment from time to time
upon the occurrence of certain events described in this Section 4.
Upon each adjustment of the Exercise Price, the Holder of this
Warrant shall thereafter be entitled to purchase, at the Exercise
Price resulting from such adjustment, the number of shares obtained
by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such
adjustment.
a. Subdivision or Combination of
Stock . In the event the outstanding shares of the
Company’s Common Stock shall be increased by a stock dividend
payable in Common Stock, stock split, subdivision, or other similar
transaction occurring after the date hereof (an “ Upward
Adjustment Event ”) into a greater number of shares of
Common Stock, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately reduced and the number of
Common Stock issuable hereunder proportionately increased; if this
Warrant is being exercised to purchase shares of Preferred Stock
following an Upward Adjustment Event, the Exercise Price shall be
unaffected by such event, but the Common Stock conversion ratio for
the Preferred Stock shall be adjusted so that upon the conversion
of any Preferred Stock into Common Stock, the Holder would receive
the name number of shares of Common Stock as if the Warrant had
originally been exercised for Common Stock. Conversely, in the
event the outstanding shares of the Company’s Common Stock
shall be decreased by reverse stock split, combination,
consolidation, or other similar transaction occurring after the
date hereof into a lesser number of shares of Common Stock, the
Exercise Price in effect immediately prior to such combination
shall be proportionately increased and the number of Common Stock
issuable hereunder proportionately decreased and a corresponding
change in the conversion ratio for the Preferred Stock shall be
similarly adjusted.
b. Reclassification . If any
reclassification of the capital stock of the Company or any
reorganization, consolidation, merger, or any sale, lease, license,
exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all, of the business
and/or assets of the Company (each, a “
Reclassification Event ”) shall be effected in
such a way that holders of Common Stock shall be entitled to
receive stock, securities, or other assets or property, then, as a
condition of such Reclassification Event lawful and adequate
provisions shall be made whereby the Holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of
Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such
shares of stock, securities, or other assets or property as may be
issued or payable with respect to or
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in exchange for a number of outstanding shares
of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In any Reclassification
Event, appropriate pr
