Exhibit 4.1


 


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.


 


DECEMBER 15, 2008


 


Warrant to Purchase up to 300,000 shares of Common Stock of BioSante
Pharmaceuticals Inc. (the “Company”).


 


In consideration for Kingsbridge Capital Limited (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
defined below) is entitled, on the terms and conditions set forth below, to
purchase from the Company at any time during the Exercise Period (as defined
below) up to 300,000 fully paid and non-assessable shares of common stock, par
value $0.0001 per share, of the Company (the “Common Stock”) at the
Exercise Price (as defined below), 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 Common Stock as reported by
the Principal Market on such day.


 


“Exercise Period” shall mean that
period beginning six months after the date of this Warrant and continuing until
the earlier of (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 $4.00 per Share, as the same may be adjusted in accordance with the
terms hereof.


 


“Funding Default” shall mean a failure
by 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) Trading Days
following the delivery of such Shares to the Investor, provided 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 average
of the Closing Prices on the five Trading Days 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 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 10.4 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”).  The later of the date on which an Exercise
Notice or payment of the Aggregate Exercise Price (unless this Warrant is
exercised in accordance with Section 2(c) below) is received by the
Company in accordance with this clause (a) shall be deemed an “Exercise
Date.”


 


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(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) Trading Days.  In
the event the payment exceeds the Aggregate Exercise Price, the Company will
refund the excess to the Warrant Holder within five (5) Trading Days of
receipt.


 


(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 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-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 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 average of the Closing Prices on the five Trading Days
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.               Ten Percent 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 that are then
beneficially owned or deemed to be beneficially owned by the Warrant Holder
would result in (i) the Warrant Holder owning more than 9.9% 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 or (ii) the
Company being 


 


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required to file any
notification or report forms under the Hart Scott Rodino Antitrust Improvements
Act of 1976, as amended.


 


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) Trading
Days thereafter, the Company at its expense (including, without limitation, the
payment by it of any applicable issue taxes) will cause to be deposited with
the Depositary Trust Company via book-entry, 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 Common Stock, then in such event the Warrant Holder shall receive the
number of shares rounded down 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 and issued in accordance with the terms hereof, shall be validly
issued, fully paid and non-assessable.


 


(b)           The Company shall
take all commercially reasonable action 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 action to ensure that the Common Stock remains
listed or quoted on the Principal Market.


 


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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, upon surrender by the Warrant Holder of the
Warrant to be replaced, 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, and the Exercise Price shall be
proportionately adjusted, as applicable, such that the aggregate amount to be
paid by the Warrant Holder to acquire all of the Warrant Shares upon exercise
after such Adjustment Event shall be equal to the aggregate amount to be paid
by the Warrant Holder to acquire all of the Warrant Shares upon exercise 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), and (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 stockholders of the Company by the acquiring
Person consists substantially of cash or publicly traded securities, or a
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.


 


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(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
its Common Stock, 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 its Common Stock, 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 event which causes a subsequent 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 stockholders 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 date on which 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, at least 10 days before the date of such payment or
other distribution), the Warrant Holder may exercise this Warrant at any time
before such record date or the date of such payment or other distribution, as
applicable, (and such exercise may be made contingent upon such payment or
other distribution), and any 


 


6

















 


portion of this
Warrant that has not been exercised before such record date or the date of such
payment or other distribution, as applicable, shall terminate and expire, and
shall no longer be outstanding.


 


(e)           Adjustment for
Spin Off.  If, for any reason, prior
to the exercise of this Warrant in full, the Company spins off or otherwise
divests itself of a part of its business or 
operations or disposes all or a part of its assets in a transaction (a “Spin
Off”) in which the Company does not receive compensation for such business,
operations or assets, but causes securities of another entity (“Spin Off
Securities”) to be issued to all or substantially all holders of Common
Stock, then the Company shall cause (i) to be reserved Spin Off Securities
equal to the number thereof  which would
have been issued to the Warrant Holder in the event that the entire unexercised
portion of this Warrant outstanding on the record date (the “Record Date”)
for determining the number of Spin Off Securities to be issued to holders of
Common Stock had been exercised by the Warrant Holder as of the close of
business on the Trading Day immediately prior to the Record Date (the “Reserved
Spin Off Shares”), and (ii) to be issued to the Warrant Holder on the
exercise of all or any unexercised portion of this Warrant, such amount of the
Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares
multiplied by (y) a fraction, of which (I) the numerator is the
unexercised portion of this Warrant then being exercised, and (II) the
denominator is the aggregate amount of the unexercised portion of this Warrant.


 


Section 7.               Notice of Adjustments.  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 delivered to the Warrant Holder by a means set forth in Section 10.4
of the Agreement.


 


Section 8.               No Impairment.  The Company will not, by amendment of its
Charter or Bylaws or through any reorganization, transfer of assets, consolidation,
merger, dissolution or issue or sale of securities, willfully 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 wrongful
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 non-assessable Warrant Shares on the exercise of this Warrant.  Notwithstanding the foregoing, nothing in
this Section 8 shall restrict or impair the Company’s right to effect any
changes to the rights, preferences, privileges or restrictions associated with
the Warrant Shares so long as such changes do not affect the rights,
preferences, privileges or restrictions associated with the Warrant Shares in a
manner adversely different from the effect


 


7
















 


that such changes
have generally on the rights, preferences, privileges or restrictions
associated with all other shares of Common Stock.


 


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.                                      Choice of 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, the Agreement and the Registration Rights 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.


 


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
promulgated thereunder, 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 


 


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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 require (i) 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 and (ii) any
such Transferee to provide customary representations and warranties attendant
to the acquisition of unregistered securities, including without limitation the
Transferee’s investment intent and status as an “accredited investor” within
the meaning of Regulation D.


 


(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.


 


Section 14.                                      Notices.  All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be
given in accordance with Section 10.4 of the Agreement.


 


Section 15.                                      Miscellaneous.  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, Warrant Shares and/or cash from the Investor as
follows (the “Call Right”):


 


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(i)                                     If the Investor has not
previously exercised this Warrant in full, then the Company shall have a right
to demand the surrender of this Warrant, or remaining portion thereof, from the
Investor without compensation, and the Investor shall promptly surrender this
Warrant, or remaining portion thereof. 
Following such demand for surrender, 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 (as defined below), 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 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 exercise 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 the 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) Trading Day
following delivery of the Call Right Notice to the Investor, the Company shall
tender the purchase price, if any, and 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 Warrant by the Investor and the disposition
of the Warrant Shares by the Investor following exercise of the Warrant.


 


[Remainder of Page Intentionally
Left Blank.  Signature Page Follows.]


 


10

















 


IN WITNESS
WHEREOF, this Warrant was duly executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.


 


 


	
   

  	
  BIOSANTE PHARMACEUTICALS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/Phillip B. Donenberg

  
	
   

  	
   

  	
         Phillip B. Donenberg

  
	
   

  	
   

  	
         Chief
  Financial Officer, Treasurer and 

         Secretary

  



 


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


 


 


	
   

  	
  KINGSBRIDGE CAPITAL LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Antony
  Gardner-Hillman

  
	
   

  	
   

  	
    Antony Gardner-Hillman

  
	
   

  	
   

  	
    Director

  



 

















 


EXHIBIT
A TO THE WARRANT


 


EXERCISE
FORM


 


BIOSANTE
PHARMACEUTICALS INC.


 


The
undersigned hereby irrevocably exercises the right to purchase
                              
shares of Common Stock of BioSante Pharmaceuticals 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

  	
   

  



 

















 


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 BioSante Pharmaceuticals 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)