EXHIBIT 4.2


 


NEITHER THESE SECURITIES NOR
THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
BY SUCH SECURITIES.


 


VALENTIS, INC.


 


WARRANT


 


	
  Warrant No.
  [  ]

  	
   

  	
  Date of Original Issuance: June 10, 2004

  



 


Valentis,
Inc., a Delaware corporation (the “Company”),
hereby certifies that, for value received,
[                           ]
or its registered assigns (the “Holder”),
is entitled to purchase from the Company up to a total of
[                     ]
shares of common stock, $.001 par value (the “Common
Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal
to $6.98 per share (as adjusted from time to time as provided in Section 9, the
“Exercise Price”), at any time and
from time to time from and after the date hereof and through and including the
fifth year anniversary of the issuance date hereof (the “Expiration Date”), and subject to the
following terms and conditions:


 


This Warrant
is one of a series of warrants issued pursuant to that certain Securities
Purchase Agreement of even date herewith to which the Company and the original
Holder are parties (the “Purchase Agreement”).


 


1.                                       Definitions.  In addition to the terms defined elsewhere
in this Warrant, capitalized terms that are not otherwise defined herein shall
have the meanings given to such terms in the Purchase Agreement.


 


2.                                       Registration of Warrant.  The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to
time.  The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.


 

















 


3.                                       Registration of Transfers.  The Company shall register the transfer of
any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and signed,
to the Company at its address specified herein.  Upon any such registration or transfer, a new Warrant to purchase
Common Stock, in substantially the form of this Warrant (any such new Warrant,
a “New Warrant”), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations
of a holder of a Warrant. Notwithstanding the foregoing, this Warrant is
subject to the transfer restrictions set forth in Section 4.1 of the Purchase
Agreement.


 


4.                                       Exercise and Duration of Warrants.


 


(a)                                  This Warrant shall be exercisable by the registered Holder at
any time and from time to time on or after the date hereof to and including the
Expiration Date.  Subject to Section 11,
at 5:00 p.m., California time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value,
provided, that if the closing sales price of the Common Stock on the Expiration
Date is greater than 102% of the Exercise Price on the Expiration Date, then
this Warrant shall be deemed to have been exercised in full (to the extent not
previously exercised) on a “cashless exercise” basis at 5:00 p.m. California time
on the Expiration Date.


 


(b)                                 Subject to the provisions of this Section 4(b), at any time
after the first anniversary of the Closing Date, if the: (i) VWAP (as defined
below) of the Common Stock for any thirty (30) consecutive Trading Days after
such first anniversary of the Closing Date is greater than $10.00 (as may be
adjusted pursuant to Section 9), (ii) the Warrant Shares are either registered
for resale pursuant to an effective registration statement naming the Holder as
a selling stockholder thereunder (and the prospectus thereunder is available
for use by the Holder as to all then available Warrant Shares) or freely
transferable without volume restrictions pursuant to Rule 144(k) promulgated
under the Securities Act, as determined by counsel to the Company pursuant to a
written opinion letter addressed and in form and substance reasonably
acceptable to the Holder and the transfer agent for the Common Stock, and (iii)
the Company shall have fully honored in accordance with the terms of this
Warrant all Exercise Notices delivered prior to 5:00 p.m. (California time) on
the Call Date (as defined below), then the Company may, subject to Section 11,
require cash exercise pursuant to Section 10(a) hereof of all, but not less
than all, of the portion of this Warrant for which Exercise Notices have not
been delivered by 5:00 p.m. on the Call Date. 
To exercise this right, the Company must deliver to the Holder an
irrevocable written notice (a “Call Notice”), indicating therein that this
Warrant shall be exercised.  If the
conditions for such Call are satisfied from the period from the date of the
Call Notice through and including the Call Date, then, subject to Section 11,
this Warrant shall be deemed to have been exercised in full on a cash basis
pursuant to Section 10(a) hereof at 5:00 p.m. (California time) on the tenth
Trading Day after the date the Call Notice is received by the Holder (such
date, the “Call Date”).  The Holder
shall deliver payment in immediately available funds of the Exercise Price for
the number of Warrant Shares for which this Warrant is required to be exercised
under this subsection promptly but in any event no later than ten business days
following the Call Date. The Company covenants and agrees that it will honor
all Forms of


 


2

















 


Election to Purchase with
respect to Warrant Shares that are tendered from the time of delivery of the
Call Notice through 5:00 p.m. (California time) on the Call Date. “VWAP” means
on any particular Trading Day or for any particular period, the volume weighted
average trading price per share of Common Stock on such date or for such period
as reported by Bloomberg L.P., or any successor performing similar
functions.  The Company and the Holder
agree that, if and to the extent Section 11 of this Warrant would restrict the
ability of the Holder to exercise this Warrant in full in the event of a
delivery of a Call Notice, then notwithstanding anything to the contrary set
forth in the Call Notice, the Call Notice shall be deemed automatically amended
to apply only to such portion of this Warrant as may be exercised by the Holder
by the Call Date in accordance with Section 11.  The Holder will promptly (and, in any event, prior to the Call
Date) notify the Company in writing following receipt of a Call Notice if
Section 11 would restrict its exercise of the Warrant, specifying therein the
number of Warrant Shares so restricted.


 


5.                                       Delivery of Warrant Shares.


 


(a)                                  To effect exercises hereunder, the Holder shall not be
required to physically surrender this Warrant unless the aggregate Warrant
Shares represented by this Warrant is being exercised.  Upon delivery of the Exercise Notice to the
Company (with the attached Warrant Shares Exercise Log) at its address for
notice set forth herein and upon payment of the Exercise Price multiplied by
the number of Warrant Shares that the Holder intends to purchase hereunder, the
Company shall promptly (but in no event later than three Trading Days after the
Date of Exercise (as defined herein)) issue and deliver to the Holder, a
certificate for the Warrant Shares issuable upon such exercise, which, unless
otherwise required by the Purchase Agreement, shall be free of restrictive
legends.  The Company shall, upon
request of the Holder and subsequent to the date on which a registration
statement covering the resale of the Warrant Shares has been declared effective
by the Securities and Exchange Commission, use its best efforts to deliver
Warrant Shares hereunder electronically through the Depository Trust
Corporation or another established clearing corporation performing similar
functions, if available, provided, that, the Company may, but will not be
required to change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through the Depository Trust
Corporation.  A “Date of Exercise” means the date on which
the Holder shall have delivered to Company: (i) the Exercise Notice (with the
Warrant Exercise Log attached to it), appropriately completed and duly signed
and (ii) if such Holder is not utilizing the cashless exercise provisions set
forth in this Warrant, payment of the Exercise Price for the number of Warrant
Shares so indicated by the Holder to be purchased.


 


(b)                                 If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.


 


(c)                                  If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases (in an open
market transaction or otherwise) 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 (1) pay in cash to the Holder the
amount by which (x) the Holder’s total purchase price (including brokerage
commissions, if


 


3

















 


any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue by (B) the closing bid price of the
Common Stock at the time of the obligation giving rise to such purchase
obligation and (2) 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 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.  The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy In.


 


(d)                                 The Company’s obligations to issue and deliver Warrant Shares
in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or
any violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares.  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.


 


6.                                       Charges, Taxes and Expenses.  Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder.  The Holder shall be responsible
for all other tax liability that may arise as a result of holding or transferring
this Warrant or receiving Warrant Shares upon exercise hereof.


 


7.                                       Replacement of Warrant.  If this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary
and reasonable indemnity (which shall not include a surety bond), if
requested.  Applicants for a New Warrant
under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as
the Company may prescribe.  If a New
Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition
precedent to the Company’s obligation to issue the New Warrant.


 


8.                                       Reservation of Warrant Shares.  The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and


 


4

















 


otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which
are then issuable and deliverable upon the exercise of this entire Warrant,
free from preemptive rights or any other contingent purchase rights of persons
other than the Holder (taking into account the adjustments and restrictions of
Section 9). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise
Price in accordance with the terms hereof, be duly and validly authorized,
issued and fully paid and nonassessable.


 


9.                                       Certain Adjustments.  The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9.


 


(a)                                  Stock Dividends and Splits.  If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding
immediately after such event.  Any
adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution, and any adjustment pursuant
to clause (ii) or (iii) of this paragraph shall become effective immediately
after the effective date of such subdivision or combination. If any event
requiring an adjustment under this paragraph occurs during the period that an
Exercise Price is calculated hereunder, then the calculation of such Exercise
Price shall be adjusted appropriately to reflect such event.


 


(b)                                 Pro Rata Distributions.  If the Company, at any time while this
Warrant is outstanding, distributes to all holders of Common Stock (i)
evidences of its indebtedness, (ii) any security (other than a distribution of
Common Stock covered by the preceding paragraph), (iii) rights or warrants to
subscribe for or purchase any security, or (iv) any other asset (in each case,
“Distributed Property”), then, at
the request of any Holder delivered before the 90th day after the record date
fixed for determination of stockholders entitled to receive such distribution,
the Company will deliver to such Holder, within five Trading Days after such
request (or, if later, on the effective date of such distribution), the
Distributed Property that such Holder would have been entitled to receive in
respect of the Warrant Shares for which such Holder’s Warrant could have been
exercised immediately prior to such record date.  If such Distributed Property is not delivered to a Holder
pursuant to the preceding sentence, then upon any exercise of the Warrant that
occurs after such record date, such Holder shall be entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such conversion, the
Distributed Property that such Holder would have been entitled to receive in
respect of such number of Warrant Shares had the Holder been the record holder
of such Warrant Shares immediately prior to such record date.


 


5

















 


(c)                                  Fundamental Transactions.  If, at any time while this Warrant is
outstanding, (1) the Company effects any merger or consolidation of the Company
with or into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (3)
any tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which holders of Common Stock are permitted to tender
or exchange their shares for other securities, cash or property, or (4) the
Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
same amount and kind of securities, cash or property as it would have been
entitled to receive upon the occurrence of such Fundamental Transaction if it
had been, immediately prior to such Fundamental Transaction, the holder of the
number of Warrant Shares then issuable upon exercise in full of this Warrant
(the “Alternate Consideration”).  For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction.  At the
Holder’s request, any successor to the Company or surviving entity in such
Fundamental Transaction shall, issue to the Holder a new warrant substantially
in the form of this Warrant and consistent with the foregoing provisions and
evidencing the Holder’s right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof.. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this paragraph (c) and insuring that the Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction.


 


(d)                                 Number of Warrant Shares.  Simultaneously with any adjustment to the
Exercise Price pursuant to paragraphs (a) of this Section, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment.


 


(e)                                  Calculations.  All calculations under this Section 9 shall
be made to the nearest cent or the nearest 1/100th of a share, as
applicable.  The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Stock.


 


(f)                                    Notice of Adjustments.  Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment,


 


6

















 


including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing
the transactions giving rise to such adjustments and showing in detail the
facts upon which such adjustment is based. 
Upon written request, the Company will promptly deliver a copy of each
such certificate to the Holder and to the Company’s Transfer Agent.


 


(g)                                 Notice of Corporate Events.  If the Company (i) declares a dividend or
any other distribution of cash, securities or other property in respect of its
Common Stock, including without limitation any granting of rights or warrants
to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then, except if such notice and the contents thereof
shall be deemed to constitute material non-public information, the Company
shall deliver to the Holder a notice describing the material terms and
conditions of such transaction, at least 20 calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that
the Holder is given the practical opportunity to exercise this Warrant prior to
such time so as to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any defect
therein shall not affect the validity of the corporate action required to be
described in such notice.  Until the
exercise of this Warrant or any portion of this Warrant, the Holder shall not
have nor exercise any rights by virtue hereof as a stockholder of the Company
(including without limitation the right to notification of stockholder meetings
or the right to receive any notice or other communication concerning the
business and affairs of the Company other than as provided in this Section 9 (h).


 


10.                                 Payment of Exercise Price.
The Holder may pay the Exercise Price in one of the following manners:


 


(a)                                  Cash Exercise.  The Holder may deliver immediately available
funds; or


 


(b)                                 Cashless Exercise.  The Holder may notify the Company in an
Exercise Notice of its election to utilize cashless exercise, in which event
the Company shall issue to the Holder the number of Warrant Shares determined
as follows:


 


X = Y [(A-B)/A]


 


where:


 


X = the number
of Warrant Shares to be issued to the Holder.


 


Y = the number
of Warrant Shares with respect to which this Warrant is being exercised.


 


A = the
average of the closing prices for the five Trading Days immediately prior to
(but not including) the Exercise Date.


 


7

















 


B = the
Exercise Price.


 


For purposes of Rule 144
promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction
shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares shall be deemed to have commenced, on the date this Warrant
was originally issued.


 


11.                                 Limitation on Exercise.  [Investors may individually
elect to omit either or both of clauses (i) and (ii) of this Section 11 upon
first issuance of the Warrant at Closing.]


 


(i)                                     [Notwithstanding anything to the contrary contained herein,
the number of shares of Common Stock that may be acquired by the Holder upon
any exercise of this Warrant (or otherwise in respect hereof) shall be limited
to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned
by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 4.999% of the total number
of issued and outstanding shares of Common Stock (including for such purpose
the shares of Common Stock issuable upon such exercise).  For such purposes, beneficial ownership
shall be determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder.  Each delivery of an Exercise Notice hereunder will constitute a
representation by the Holder that it has evaluated the limitation set forth in
this paragraph and determined that issuance of the full number of Warrant
Shares requested in such Exercise Notice is permitted under this paragraph.
This provision shall not restrict the number of shares of Common Stock which a
Holder may receive or beneficially own in order to determine the amount of
securities or other consideration that such Holder may receive in the event of
a merger or other business combination or reclassification involving the
Company as contemplated in Section 9 of this Warrant. By written notice to the
Company, the Holder may waive the provisions of this Section but any such
waiver will not be effective until the 61st day after such notice is delivered
to the Company.]


 


(ii)                                  [Notwithstanding anything to the contrary contained herein,
the number of shares of Common Stock that may be acquired by the Holder upon
any exercise of this Warrant (or otherwise in respect hereof) shall be limited
to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned
by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 9.999% of the total number
of issued and outstanding shares of Common Stock (including for such purpose
the shares of Common Stock issuable upon such exercise).  For such purposes, beneficial ownership
shall be determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder.  Each delivery of an Exercise Notice hereunder will constitute a representation
by the Holder that it has evaluated the limitation set forth in this paragraph
and determined that issuance of the full number of Warrant Shares requested in
such Exercise Notice is permitted under this paragraph.  This provision shall not restrict the number
of shares of Common Stock which a Holder may receive or beneficially own in
order to determine the amount of securities or other consideration that such
Holder may receive in the event of a merger or other business


 


8

















 


combination or reclassification
involving the Company as contemplated in Section 9 of this Warrant.  This restriction may not be waived.]


 


12.                                 No Fractional Shares.  No fractional shares of Warrant Shares will
be issued in connection with any exercise of this Warrant.  In lieu of any fractional shares which
would, otherwise be issuable, the Company shall pay cash equal to the product
of such fraction multiplied by the closing price of one Warrant Share as
reported by Bloomberg L.P. (or the successor to its function of reporting share
prices) on the date of exercise.


 


13.                                 Exchange Act Filings.  The Holder agrees and acknowledges that it
shall have sole responsibility for making any applicable filings with the U.S.
Securities and Exchange Commission pursuant to Section 13 and 16 of the
Securities Exchange Act of 1934, as amended, as a result of its acquisition of
this Warrant and the Warrant Shares and any future retention or transfer
thereof.


 


14.                                 Notices.  Any and all notices or other communications
or deliveries hereunder (including, without limitation, any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 5:00 p.m.
(California time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day
or later than 5:00 p.m. (California time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given.  The addresses for
such communications shall be:  (i) if to
the Company, to the address set forth in the Purchase Agreement, or (ii) if to
the Holder, to the address or facsimile number appearing on the Warrant
Register or such other address or facsimile number as the Holder may provide to
the Company in accordance with this Section.


 


15.                                 Warrant Agent.  The Company shall serve as warrant agent
under this Warrant.  Upon 30 days’
notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or
any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or
any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business
shall be a successor warrant agent under this Warrant without any further
act.  Any such successor warrant agent shall
promptly cause notice of its succession as warrant agent to be mailed (by first
class mail, postage prepaid) to the Holder at the Holder’s last address as
shown on the Warrant Register.


 


16.                                 Miscellaneous.


 


(a)                                  This Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective successors and assigns.  Subject to the preceding sentence, nothing
in this Warrant shall be construed to give to any Person other than the Company
and the Holder any legal or equitable right, remedy or cause of action under
this Warrant.  This Warrant may be
amended in writing signed by the Company and the Holder and their successors
and assigns and the Warrants issued pursuant to the Purchase Agreement,
including this Warrant,


 


9

















 


may be amended in writing
signed by the Company and the Holders of no less than two-thirds of the Warrant
Shares issuable upon exercise of all such then outstanding Warrants. The
Company shall provide prior notice to all Holders of any proposed waiver or
amendment.


 


(b)                                 All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of this Warrant and the
transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees
or agents) may be commenced in the state and federal courts sitting in the City
of San Francisco (the “California Courts”).  Each party hereto hereby irrevocably submits
to the non-exclusive jurisdiction of the California Courts for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any Proceeding, any claim that it is not personally
subject to the jurisdiction of any California Court, or that such Proceeding
has been commenced in an improper or inconvenient forum. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Warrant and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law.  Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Warrant or the transactions contemplated hereby.  If either party shall commence a Proceeding
to enforce any provisions of this Warrant, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.


 


(c)                                  The headings herein are for convenience only, do not constitute
a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.


 


(d)                                 In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]


 


10

















 


IN WITNESS WHEREOF,
the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.


 


	
   

  	
  VALENTIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


 


SIGNATURE PAGE TO VALENTIS, INC. WARRANT


 

















 


EXERCISE NOTICE


 


To Valentis, Inc.:


 


The
undersigned hereby irrevocably elects to purchase 
                 shares
of common stock, $.001 par value, of Valentis, Inc. (“Common Stock”), pursuant to Warrant No.
[  ], originally issued June 10, 2004
(the “Warrant”), and, if such
Holder is not utilizing the cashless exercise provisions set forth in the
Warrant, encloses herewith
$                
in cash, certified or official bank check or checks or other immediately
available funds, which sum represents the aggregate Exercise Price (as defined
in the Warrant) for the number of shares of Common Stock to which this Exercise
Notice relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant.


 


By its
delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby the Holder
will not beneficially own in excess of the number of shares of Common Stock
(determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 11 of this Warrant to which this
notice relates.


 


The
undersigned requests that certificates for the shares of Common Stock issuable
upon this exercise be issued in the name of


 


PLEASE INSERT SOCIAL SECURITY OR


TAX IDENTIFICATION NUMBER


 


 


(Please print name and address)


 

















 


Warrant Shares Exercise Log


 


 


	
  Date

  	
   

  	
  Number of Warrant

  Shares Available to be

  Exercised

  	
   

  	
  Number of Warrant

  Shares Exercised

  	
   

  	
  Number of Warrant

  Shares Remaining to

  be Exercised

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


FORM OF ASSIGNMENT


 


[To be
completed and signed only upon transfer of Warrant]


 


FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                               
the right represented by the within Warrant to purchase
                 
shares of Common Stock of Valentis, Inc. to which the within Warrant relates
and appoints
                         
attorney to transfer said right on the books of Valentis, Inc. with full power
of substitution in the premises.


 


	
  Dated:

  	
                             ,
         

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform in all respects to name of

  holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address of Transferee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  In the presence of: