Exhibit 10.3
Execution Copy
WARRANT
THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR
NOT SUBJECT TO, SUCH REGISTRATION.
February 5, 2007
     Warrant to Purchase up to Four Hundred Twenty One Thousand Nine Hundred
Eighteen (421,918) shares of Common Stock of Cell Genesys, Inc. (the “Company”).
     In consideration for Kingsbridge Capital Limited, an entity organized and
existing under the laws of the British Virgin Islands, whose registered address
is Palm Grove House, 2nd Floor, Road Town, Tortola, British Virgin Islands (the
“Investor”), agreeing to enter into that certain Common Stock Purchase
Agreement, dated as of the date hereof, between the Investor and the Company
(the “Agreement”), the Company hereby agrees that the Investor or any other
Warrant Holder (as hereinafter defined) is entitled, on the terms and conditions
set forth below, to purchase from the Company at any time during the Exercise
Period (as hereinafter defined) up to four hundred twenty one thousand nine
hundred eighteen (421,918) fully paid and nonassessable shares of common stock,
par value $0.001 per share, of the Company (the “Common Stock”) at the Exercise
Price (as hereinafter defined), as the same may be adjusted from time to time
pursuant to Section 6 hereof. The resale of the shares of Common Stock or other
securities issuable upon exercise or exchange of this Warrant is subject to the
provisions of the Registration Rights Agreement. Capitalized terms used herein
and not otherwise defined shall have the meanings given them in the Agreement.
     Section 1. Definitions.
     “Affiliate” shall mean any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by, or is under direct or
indirect common control with any other Person. For the purposes of this
definition, “control,” when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the term “controls” and “controlled” have meanings correlative to the
foregoing.
     “Closing Price” as of any particular day shall mean the closing price per
share of the Company’s Common Stock as reported by Bloomberg L.P. on such day.
     “Exercise Period” shall mean that period beginning six months after the
date of this Warrant and continuing until (i) the expiration of the five year
period thereafter, or (ii) a Funding Default, subject in each case to earlier
termination in accordance with Section 6 hereof.
     “Exercise Price” as of the date hereof shall mean four dollars and
sixty-eight cents ($4.68), representing 145% of the average Closing Price of the
Common Stock during the five (5) Trading Days immediately preceding the date of
this Warrant.

 

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     “Funding Default” shall mean a failure by the Investor to accept a Draw
Down Notice made by the Company and to acquire and pay for the Shares in
accordance therewith within three (3) Business Days following the delivery of
such Shares to the Investor, provided, that such Draw Down Notice was made in
accordance with the terms and conditions of the Agreement (including the
satisfaction or waiver of the conditions to the obligation of the Investor to
accept a Draw Down set forth in Article VII of the Agreement), provided,
further, that such failure was reasonably within the control of the Investor.
     “Per Share Warrant Value” shall mean the difference resulting from
subtracting the Exercise Price from the Closing Price on the Trading Day
immediately preceding the Exercise Date.
     “Person” shall mean an individual, a corporation, a partnership, a limited
liability company, an association, a trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
     “Principal Market” shall mean the NASDAQ Global Select Market, the NASDAQ
Global Market, the NASDAQ Capital Market, the American Stock Exchange or the New
York Stock Exchange, whichever is at the time the principal trading exchange or
market for the Common Stock.
     “SEC” shall mean the United States Securities and Exchange Commission.
     “Trading Day” shall mean any day other than a Saturday or a Sunday on which
the Principal Market is open for trading in equity securities.
     “Warrant Holder” shall mean the Investor or any permitted assignee or
permitted transferee of all or any portion of this Warrant.
     “Warrant Shares” shall mean those shares of Common Stock received or to be
received upon exercise of this Warrant.
     Section 2. Exercise.
     (a) Method of Exercise. This Warrant may be exercised in whole or in part
(but not as to a fractional share of Common Stock), at any time and from time to
time during the Exercise Period, by the Warrant Holder by (i) surrender of this
Warrant, with the form of exercise attached hereto as Exhibit A completed and
duly executed by the Warrant Holder (the “Exercise Notice”), to the Company at
the address set forth in Section 10.04 of the Agreement, accompanied by payment
of the Exercise Price multiplied by the number of shares of Common Stock for
which this Warrant is being exercised (the “Aggregate Exercise Price”) or
(ii) telecopying an executed and completed Exercise Notice to the Company and
delivering to the Company within five (5) Business Days thereafter the original
Exercise Notice, this Warrant and the Aggregate Exercise Price. The later of the
date on which an Exercise Notice is received by the Company in accordance with
clauses (i) or (ii) above or the Company receives payment of the Exercise Price
(unless the Warrant is exercised as provided in Section 2(c) below) shall be
deemed an “Exercise Date.”
     (b) Payment of Aggregate Exercise Price. Subject to paragraph (c) below,
payment of the Aggregate Exercise Price shall be made by wire transfer of
immediately available funds to an account designated by the Company. If the
amount of the payment received by the Company is less than the Aggregate
Exercise Price, the Warrant Holder will be notified of the deficiency and shall
make payment in that amount within three (3) Business Days. In the event the
payment exceeds the Aggregate Exercise Price, the Company will refund the excess
to the Warrant Holder within five (5) Business Days of receipt.

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     (c) Cashless Exercise. In the event that the Warrant Shares to be received
by the Warrant Holder upon exercise of the Warrant may not be resold pursuant to
an effective registration statement or an exemption to the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and applicable state laws, the Warrant Holder may, as an alternative to payment
of the Aggregate Exercise Price upon exercise in accordance with paragraph
(b) above, elect to effect a cashless exercise by so indicating on the Exercise
Notice and including a calculation of the number of shares of Common Stock to be
issued upon such exercise in accordance with the terms hereof (a “Cashless
Exercise”). If a registration statement on Form S-1 or Form S-3 under the
Securities Act, or such other form as deemed appropriate by counsel to the
Company for the registration for the resale by the Warrant Holder of (x) the
shares of Common Stock of the Company that may be purchased under the Agreement,
(y) the Warrant Shares, or (z) any securities issued or issuable with respect to
any of the foregoing by way of exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise, has been declared effective by the SEC and
remains effective, the Company may, in its sole discretion, permit the Warrant
Holder to elect to effect a Cashless Exercise or require the Warrant Holder to
pay the Exercise Price of the Warrant Shares being purchased by the Warrant
Holder under this Warrant. In the event of a Cashless Exercise, the Warrant
Holder shall receive that number of shares of Common Stock determined by
(i) multiplying the number of Warrant Shares for which this Warrant is being
exercised by the Per Share Warrant Value and (ii) dividing the product by the
Closing Price on the Trading Day immediately preceding the Exercise Date,
rounded to the nearest whole share. The Company shall cancel the total number of
Warrant Shares equal to the excess of the number of the Warrant Shares for which
this Warrant is being exercised over the number of Warrant Shares to be received
by the Warrant Holder pursuant to such Cashless Exercise.
     (d) Replacement Warrant. In the event that the Warrant is not exercised in
full, the number of Warrant Shares shall be reduced by the number of such
Warrant Shares for which this Warrant is exercised, and the Company, at its
expense, shall forthwith issue and deliver to or upon the order of the Warrant
Holder a new Warrant of like tenor in the name of the Warrant Holder, reflecting
such adjusted number of Warrant Shares.
     Section 3. Exercise Limitation. The Warrant Holder may not exercise this
Warrant such that the number of Warrant Shares to be received pursuant to such
exercise aggregated with all other shares of Common Stock then owned by the
Warrant Holder beneficially or deemed beneficially owned by the Warrant Holder
would result in the Warrant Holder owning more than 19.9% of all of such Common
Stock as would be outstanding on such Exercise Date, as determined in accordance
with Section 13(d) of the Exchange Act of 1934 and the rules and regulations
promulgated thereunder.
     Section 4. Delivery of Warrant Shares.
     (a) Subject to the terms and conditions of this Warrant, as soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) Business Days thereafter, the Company at its expense
(including, without limitation, the payment by it of any applicable issue taxes)
will cause to be issued in the name of and delivered to the Warrant Holder, or
as the Warrant Holder may lawfully direct, a certificate or certificates for, or
make deposit with the Depositary Trust Company via book-entry of, the number of
validly issued, fully paid and non-assessable Warrant Shares to which the
Warrant Holder shall be entitled on such exercise, together with any other stock
or other securities or property (including cash, where applicable) to which the
Warrant Holder is entitled upon such exercise in accordance with the provisions
hereof.
     (b) This Warrant may not be exercised as to fractional shares of Common
Stock. In the event that the exercise of this Warrant, in full or in part, would
result in the issuance of any fractional share of

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Common Stock, then in such event the Warrant Holder shall receive the number of
shares rounded to the nearest whole share.
     Section 5. Representations, Warranties and Covenants of the Company.
     (a) The Warrant Shares, when issued in accordance with the terms hereof,
will be duly authorized and, when paid for or issued in accordance with the
terms hereof, shall be validly issued, fully paid and non-assessable.
     (b) The Company shall take all commercially reasonable actions and
proceedings as may be required and permitted by applicable law, rule and
regulation for the legal and valid issuance of this Warrant and the Warrant
Shares to the Warrant Holder.
     (c) The Company has authorized and reserved for issuance to the Warrant
Holder the requisite number of shares of Common Stock to be issued pursuant to
this Warrant. The Company shall at all times reserve and keep available, solely
for issuance and delivery as Warrant Shares hereunder, such shares of Common
Stock as shall from time to time be issuable as Warrant Shares.
     (d) From the date hereof through the last date on which this Warrant is
exercisable, the Company shall take all commercially reasonable actions to
ensure that the Common Stock remains listed or quoted on the Principal Market.
     Section 6. Adjustment of the Exercise Price. The Exercise Price and,
accordingly, the number of Warrant Shares issuable upon exercise of the Warrant,
shall be subject to adjustment from time to time upon the happening of certain
events as follows:
     (a) Reclassification, Consolidation, Merger, Mandatory Share Exchange, Sale
or Transfer.
               (i) Upon occurrence of any of the events specified in subsection
(a)(ii) below (the “Adjustment Events”) while this Warrant is unexpired and not
exercised in full, the Warrant Holder may in its sole discretion require the
Company, or any successor or purchasing corporation, as the case may be, without
payment of any additional consideration therefor, to execute and deliver to the
Warrant Holder a new Warrant providing that the Warrant Holder shall have the
right to exercise such new Warrant (upon terms not less favorable to the Warrant
Holder than those then applicable to this Warrant) and to receive upon such
exercise, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money or property receivable upon such Adjustment Event by the
holder of one share of Common Stock issuable upon exercise of this Warrant had
this Warrant been exercised immediately prior to such Adjustment Event. Such new
Warrant shall provide for adjustments that shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 6.
               (ii) The Adjustment Events shall be (1) any reclassification or
change of Common Stock (other than a change in par value, as a result of a
subdivision or combination of Common Stock or in connection with an Excluded
Merger or Sale), (2) any consolidation, merger or mandatory share exchange of
the Company with or into another corporation (other than a merger or mandatory
share exchange with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change other
than a change in par value or as a result of a subdivision or combination of
Common Stock), other than (each of the following referred to as an “Excluded
Merger or Sale”) a transaction involving (A) sale of all or substantially all of
the assets of the Company, (B) any merger, consolidation or similar transaction
where the consideration payable to the shareholders of the Company by the
acquiring Person consists substantially of cash or publicly traded securities,
or a

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combination thereof, or where the acquiring Person does not agree to assume the
obligations of the Company under outstanding warrants (including this Warrant).
In the event of an Excluded Merger or Sale, the Company shall deliver a notice
to the Warrant Holder at least 10 days before the consummation of such Excluded
Merger or Sale, the Warrant Holder may exercise this Warrant at any time before
the consummation of such Excluded Merger or Sale (and such exercise may be made
contingent upon the consummation of such Excluded Merger or Sale), and any
portion of this Warrant that has not been exercised before consummation of such
Excluded Merger or Sale shall terminate and expire, and shall no longer be
outstanding.
     (b) Subdivision or Combination of Shares. If the Company, at any time while
this Warrant is unexpired and not exercised in full, shall subdivide its Common
Stock, the Exercise Price shall be proportionately reduced as of the effective
date of such subdivision, or, if the Company shall take a record of holders of
its Common Stock for the purpose of so subdividing, as of such record date,
whichever is earlier. If the Company, at any time while this Warrant is
unexpired and not exercised in full, shall combine its Common Stock, the
Exercise Price shall be proportionately increased as of the effective date of
such combination, or, if the Company shall take a record of holders of its
Common Stock for the purpose of so combining, as of such record date, whichever
is earlier.
     (c) Stock Dividends. If the Company, at any time while this Warrant is
unexpired and not exercised in full, shall pay a dividend or other distribution
in shares of Common Stock to all holders of Common Stock, then the Exercise
Price shall be adjusted, as of the date the Company shall take a record of the
holders of its Common Stock for the purpose of receiving such dividend or other
distribution (or if no such record is taken, as at the date of such payment or
other distribution), to that price determined by multiplying the Exercise Price
in effect immediately prior to such payment or other distribution by a fraction:
(i) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (ii) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution. The provisions of
this subsection (c) shall not apply under any of the circumstances for which an
adjustment is provided in subsections (a) or (b).
     (d) Liquidating Dividends, Etc. If the Company, at any time while this
Warrant is unexpired and not exercised in full, makes a distribution of its
assets or evidences of indebtedness to the holders of its Common Stock as a
dividend in liquidation or by way of return of capital or other than as a
dividend payable out of earnings or surplus legally available for dividends
under applicable law or any distribution to such holders made in respect of the
sale of all or substantially all of the Company’s assets (other than under the
circumstances provided for in the foregoing subsections (a) through (c)), then
the Warrant Holder shall be entitled to receive upon exercise of this Warrant in
addition to the Warrant Shares receivable in connection therewith, and without
payment of any consideration other than the Exercise Price, the kind and amount
of such distribution per share of Common Stock multiplied by the number of
Warrant Shares that, on the record date for such distribution, are issuable upon
such exercise of the Warrant (with no further adjustment being made following
any such event which causes an adjustment in the number of Warrant Shares
issuable), and an appropriate provision therefor shall be made a part of any
such distribution. The value of a distribution that is paid in other than cash
shall be determined in good faith by the Board of Directors of the Company.
Notwithstanding the foregoing, in the event of a proposed dividend in
liquidation or distribution to the shareholders made in respect of the sale of
all or substantially all of the Company’s assets, the Company shall deliver a
notice to the Warrant Holder at least 10 days before the consummation of such
event, the Warrant Holder may exercise this Warrant at any time before the
consummation of such event (and such exercise may be made contingent upon the
consummation of such event), and any portion of this Warrant that has not been
exercised before consummation of such event shall terminate and expire, and
shall no longer be outstanding.

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     Section 7. Notices. Whenever the Exercise Price or number of Warrant Shares
shall be adjusted pursuant to Section 6 hereof, the Company shall promptly
prepare a certificate signed by its Chief Executive Officer or Chief Financial
Officer setting forth in reasonable detail the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Company’s Board of Directors
made any determination hereunder), and the Exercise Price and number of Warrant
Shares purchasable at that Exercise Price after giving effect to such
adjustment, and shall promptly cause copies of such certificate to be sent by
overnight courier to the Warrant Holder. In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other similar right accruing to a
stockholder by virtue of ownership of shares of the Company’s capital stock, the
Company shall mail to the Warrant Holder, at least five (5) Business Days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
     Section 8. No Impairment. The Company will not, by amendment of its
Certificate or Bylaws or through any reorganization, transfer of assets,
consolidation, merger, dissolution or issue or sale of securities, avoid or seek
to avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Warrant Holder against impairment. Without limiting
the generality of the foregoing, the Company (a) will not increase the par value
of any Warrant Shares above the amount payable therefor on such exercise, and
(b) will take all such action as may be reasonably necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares on the exercise of this Warrant.
     Section 9. Rights As Stockholder. Except as set forth in Section 6 above,
prior to exercise of this Warrant, the Warrant Holder shall not be entitled to
any rights as a stockholder of the Company with respect to the Warrant Shares,
including (without limitation) the right to vote such shares, receive dividends
or other distributions thereon or be notified of stockholder meetings.
     Section 10. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant and, in the case of any such loss, theft or destruction of the Warrant,
upon delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
     Section 11. Governing Law. This Warrant shall be construed under the laws
of the State of New York.
     Section 12. Entire Agreement; Amendments. Except for any written instrument
concurrent or subsequent to the date hereof executed by the Company and the
Investor, this Warrant and the Agreement contain the entire understanding of the
parties with respect to the matters covered hereby and thereby. No provision of
this Warrant may be waived or amended other than by a written instrument signed
by the party against whom enforcement of any such amendment or waiver is sought.

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     Section 13. Restricted Securities.
     (a) Registration or Exemption Required. This Warrant has been issued in a
transaction exempt from the registration requirements of the Securities Act in
reliance upon the provisions of Section 4(2) thereof and Regulation D thereof,
and/or upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to this Warrant. This Warrant
and the Warrant Shares issuable upon exercise of this Warrant may not be resold
except pursuant to an effective registration statement or an exemption to the
registration requirements of the Securities Act and applicable state laws.
     (b) Legend. Any replacement Warrants issued pursuant to Section 2 and
Section 10 hereof and, unless a registration statement has been declared
effective by the SEC and remains effective in accordance with the Securities
Act, with respect thereto, any Warrant Shares issued upon exercise hereof, shall
bear the following legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR
NOT SUBJECT TO, SUCH REGISTRATION.”
     (c) No Other Legend or Stock Transfer Restrictions. No legend other than
the one specified in Section 13(b) has been or shall be placed on the share
certificates representing the Warrant Shares and no instructions or “stop
transfer orders” (so called “stock transfer restrictions”) or other restrictions
have been or shall be given to the Company’s transfer agent with respect thereto
other than as expressly set forth in this Section 13.
     (d) Assignment. Assuming the conditions of Section 13(a) above regarding
registration or exemption have been satisfied, the Warrant Holder may sell,
transfer, assign, pledge or otherwise dispose of this Warrant (each of the
foregoing, a “Transfer”), in whole or in part, but only to an Affiliate of the
Warrant Holder. The Warrant Holder shall deliver a written notice to the
Company, substantially in the form of the Assignment attached hereto as
Exhibit B, indicating the person or persons to whom the Warrant shall be
Transferred and the respective number of Warrant Shares to be covered by the
warrants to be Transferred to each assignee. The Company shall effect the
Transfer within ten (10) days, and shall deliver to the Transferee(s) designated
by the Warrant Holder a Warrant or Warrants of like tenor and terms for the
appropriate number of shares. In connection with and as a condition of any such
proposed Transfer, the Company may request the Warrant Holder to provide an
opinion of counsel to the Warrant Holder in form and substance reasonably
satisfactory to the Company to the effect that the proposed Transfer complies
with all applicable federal and state securities laws.
     (e) Investor’s Compliance. Nothing in this Section 13 shall affect in any
way the Investor’s obligations under any agreement to comply with all applicable
securities laws upon resale of the Common Stock.

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     Section 14. Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be given in
accordance with Section 10.04 of the Agreement.
     Section 15. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.
     Section 16. Company Call Right.
     (a) If a Funding Default occurs, the Company shall have the right to demand
the surrender of this Warrant or any remaining portion thereof, Shares and/or
cash from the Investor as follows (the “Call Right”):
               (i) If the Investor has not previously exercised this Warrant in
full, then this Warrant shall automatically be deemed to have been canceled and
shall have no further force or effect.
               (ii) If, prior to receiving a Call Right Notice, the Investor has
previously exercised this Warrant with respect to some or all of the Warrant
Shares, and the Investor has not previously sold such Warrant Shares, then
Company shall have a right to purchase from the Investor that number of shares
of Common Stock equal to the number of shares of Common Stock issued in
connection with the exercise(s) of the Warrant, at a repurchase price per share
equal to the cash price per share paid by the Investor in connection with such
exercise(s). For greater certainty, (a) if Warrant Shares were exercised for
cash, the purchase price per share under the Call Right shall be equal to the
Exercise Price, (b) if Warrant Shares were exercised on a cashless exercise
basis, the purchase price per share for such Warrant Shares under the Call Right
shall be zero, and (c) if such Warrant Shares were exercised on both a cash and
cashless exercise basis, the purchase price per share under the Call Right shall
be equal to the total amount of cash paid in connection with such cash
exercise(s) divided by the total number of shares of Common Stock issued in
connection with all exercises of the Warrant (whether on a cash or cashless
basis).
               (iii) If, prior to receiving a Call Right Notice, the Investor
has previously exercised this Warrant with respect to some or all of the Warrant
Shares, and the Investor subsequently sold such Warrant Shares, then the
Investor shall remit to the Company the excess, if any, of (x) the proceeds
received by Investor through the sale of such Warrant Shares, over (y) the
aggregate Exercise Price for such Warrant Shares. In the event that the Investor
obtained such Warrant Shares through a Cashless Exercise, then the Investor
shall instead remit to the Company all proceeds received by the Investor through
the sale of such Warrant Shares. For the avoidance of doubt, in the event that
the Investor has sold some or all of the Warrant Shares prior to receiving a
Call Right Notice, then the right set forth in this paragraph (iii) shall
constitute the sole Call Right of the Company with respect to such Warrant
Shares which have been sold.
     (b) The Company may exercise the Call Right by delivering a notice (the
“Call Right Notice”) to the Investor within thirty (30) days after the
occurrence of a Funding Default. On the tenth (10th) Business Day following
delivery of the Call Right Notice to the Investor, the Company shall tender the
purchase price, if any, and the Investor shall tender shares of Common Stock, if
any, to be sold to the Company pursuant to the Call Right Notice, immediately
following which the Company and the Investor shall consummate such purchase and
sale. The Call Right shall survive both the assignment of the

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Warrant by the Investor and the disposition of the Warrant Shares by the
Investor following exercise of the Warrant.
     Section 17. Absence of Presumption. This Warrant shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be drafted.
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     IN WITNESS WHEREOF, this Warrant was duly executed by the undersigned,
thereunto duly authorized, as of the date first set forth above.

            CELL GENESYS, INC.
      By:   /s/ Stephen A. Sherwin         Stephen A. Sherwin, M.D.        Chief
Executive Officer     

     Investor acknowledges and agrees to the terms and conditions of this
Warrant.

            KINGSBRIDGE CAPITAL LIMITED
      By:   /s/ Maria O’Donoghue         Maria O’Donoghue        Director     

SIGNATURE PAGE - WARRANT

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EXHIBIT A TO THE WARRANT
EXERCISE FORM
CELL GENESYS, INC.
     The undersigned hereby irrevocably exercises the right to purchase
                                        shares of Common Stock of Cell Genesys,
Inc., a Delaware corporation (the “Company”), evidenced by the attached Warrant,
and (CIRCLE EITHER (i) or (ii)) (i) tenders herewith payment of the Aggregate
Exercise Price with respect to such shares in full, in the amount of $
                    , in cash, by certified or official bank check or by wire
transfer for the account of the Company or (ii) elects, pursuant to Section 2(c)
of the Warrant, to convert such Warrant into shares of Common Stock of the
Company on a cashless exercise basis, all in accordance with the conditions and
provisions of said Warrant.
     The undersigned requests that stock certificates for such Warrant Shares be
issued, and a Warrant representing any unexercised portion hereof be issued,
pursuant to this Warrant, in the name of the registered Warrant Holder and
delivered to the undersigned at the address set forth below.

         
Dated:
       
 
 
 
   
 
              Signature of Registered Holder    
 
              Name of Registered Holder (Print)    
 
             
Address
       

 

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EXHIBIT B TO THE WARRANT
ASSIGNMENT
     (To be executed by the registered Warrant Holder desiring to transfer the
Warrant)
     FOR VALUED RECEIVED, the undersigned Warrant Holder of the attached Warrant
hereby sells, assigns and transfers unto the persons below named the right to
purchase                                           shares of Common Stock of
Cell Genesys, Inc. (the “Company”) evidenced by the attached Warrant and does
hereby irrevocably constitute and appoint                      attorney to
transfer the said Warrant on the books of the Company, with full power of
substitution in the premises.

         
Dated:
       
 
 
 
   
 
              Signature    
 
        Fill in for new Registration of Warrant:
 
              Name
 
             
Address
       
 
              Please print name and address of assignee
(including
  zip code number)