Document:

Prepared by R.R. Donnelley Financial -- Employee Stock Purchase Plan

  
 EXHIBIT 10.23 
 GENSTAR
THERAPEUTICS CORPORATION 
  
 EMPLOYEE STOCK PURCHASE PLAN 
 

  
 GENSTAR THERAPEUTICS CORPORATION 
 EMPLOYEE STOCK PURCHASE PLAN 
  
 1.    Purpose.    This Employee Stock
Purchase Plan (the “Plan”) is intended to serve as an incentive to and to encourage stock ownership by certain eligible employees of Genstar Therapeutics Corporation, a Delaware corporation, and certain affiliates as set forth below (the
“Corporation”), so that they may acquire or increase their proprietary interest in the success of the Corporation, and to encourage them to remain in the service of the Corporation. This Plan is intended to qualify as an employee stock
purchase plan, as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”). 
  
 2.    Administration. 
  
 2.1 Committee.    The
Plan shall be administered by the Board of Directors of the Corporation (“Board of Directors”) or a committee of two or more members appointed by the Board of Directors (the “Committee”) who are Non-Employee Directors, as such
term is defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended, and outside directors, as defined in Treasury Regulations § 1.162-27(e)(3). The Committee shall select one of its members as Chairman
and shall appoint a Secretary, who need not be a member of the Committee. The Committee shall hold meetings at such times and places as it may determine and minutes of such meetings shall be recorded. Acts by a majority of the Committee in a meeting
at which a quorum is present and acts approved in writing by a majority of the members of the Committee shall be valid acts of the Committee. 
  
 2.2 Term.    If the Board of Directors selects a Committee, the members of the Committee shall serve on the Committee for a period of time as determined by the Board of Directors and shall
be subject to removal by the Board of Directors at any time. The Board of Directors may terminate the function of the Committee at any time and resume all powers and authority previously delegated to the Committee. 
  
 2.3 Authority.    The Committee shall have sole discretion and authority to prescribe, amend and rescind
the rules and regulations relating to the Plan and to make all other determinations necessary and advisable for the administration of the Plan. 
  
 2.4 Interpretation.    The interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it
shall be final and binding on all parties having an interest in this Plan or any option granted hereunder. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted
under the plan. 
  
 2.5 Agent.    The Committee may employ such legal counsel,
consultants, brokers and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion 
 

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 received from any such counsel or consultant and any computation received from any such
consultant, broker or agent. The Committee may, in its sole discretion, designate an agent (“Agent”) to administer the Plan, keep records, send statements of account to employees and to perform other duties relating to the Plan, as the
Committee may request from time to time. 
  
 3.    Eligibility. 
  
 3.1 General.    Except as otherwise provided in Section 3.2, all regular employees of the Corporation, or
any “parent” or “subsidiary” corporation of the Corporation, as defined in Section 424 of the Code (“Parent” or “Subsidiary”) (i) whose customary employment is at least 20 hours per week and (ii) who are
employed on an Enrollment Date (as defined below) are eligible to participate (“Eligible Employee”). All Eligible Employees who elect to participate in this Plan shall have the same rights and privileges except as provided in Section 3.5.
Notwithstanding the above, employees of a Parent or Subsidiary shall only be Eligible Employees if the Committee designates such corporation as a participant. For purposes of this Plan, the term “Corporation” shall also include any Parent
or Subsidiary, if applicable. 
  
 3.2 Excluded Eligible Employees.    Notwithstanding
any other provision in this Agreement, no employee can be granted the right to purchase stock under this Plan if such employee (i) is customarily not employed by the Corporation for more than five months a year, or (ii) immediately after the right
to purchase such stock is granted, owns stock possessing 5% or more of the total combined voting power or value of all classes of the Corporation’s stock (or of the Corporation’s Parent or Subsidiary.) For purposes of determining stock
ownership, the rules of Section 424(d) of the Code shall apply, and stock which the employee may purchase under outstanding options, including rights to purchase stock under this Plan, shall be treated as stock owned by the employee. 

 
 3.3 Semi-Annual Offerings.    Until the Plan is terminated, the Plan will be implemented by
semi-annual offerings of the right to purchase the Corporation’s common stock pursuant to this Plan (the “Offerings”) beginning on the 1st day of May and the 1st day of November in each year and terminating on April 30 of
the second year thereafter (24 months) for the Offering beginning May 1 and on October 31 of the second year thereafter (24 months) for the Offering beginning November 1 of such year (“Offering Period”); provided, however, that each
semi-annual Offering may, in the discretion of the Committee exercised prior to the commencement thereof, be changed to semi-annual or annual Offerings with a shorter duration. Each May 1st and November 1st in an Offering Period shall be an
“Enrollment Date.” As used in the Plan, “Entry Date” means the May 1 or November 1, as the case may be, on which the particular Offering Period begins and “Termination Date” means the April 30 or October 31, as the case
may be, on which the particular Offering Period terminates. 
 

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 3.4 Participation. 
  
 3.4.1 Eligible Employees who wish to participate in the Plan shall execute a form (“Enrollment Form”) to be furnished by the
Corporation, indicating that they authorize and instruct the Corporation to deduct from their semi-monthly pay a specified percentage of their respective Base Compensation (as defined below), to be applied to the purchase of stock pursuant to this
Plan for each individual’s account. Enrollment Forms will be effective as of the next Enrollment Date. All payroll deductions made for a participant shall be credited to his account under the Plan. A participant may not make any separate cash
payment into such account. Subject to Section 3.5, each participant may designate any whole percentage of his or her base salary or any fixed dollar amount per pay period to be contributed to the Plan on his or her behalf; provided that any fixed
dollar amount shall not exceed 15% of such Eligible Employee’s Base Compensation for such Offer. Upon the participant’s written request to the Corporation, the amount of the payroll deduction will be changed as of the next Enrollment Date
(as defined above) following such request. Any election by a member to decrease his or her payroll deductions to 0% shall be deemed to be an election to withdraw from the Plan effective immediately following the purchase of shares on the next
Termination Date. Nonparticipating employees who are eligible or become eligible may execute payroll deduction authorizations and become participants in the Plan as of the Enrollment Date after which they first satisfy the eligibility requirements
set forth in Section 3.1. The election by the participant must be received prior to the Enrollment Date. Payroll deductions will commence with pay checks issued not later than the next pay period after the Enrollment Date following receipt of the
executed Enrollment Form. 
  
 3.4.2 Re-Enrollment Upon Expiration of Offering Period. At the end of a
participant’s then-current Offering Period, the participant automatically shall be enrolled in the next succeeding Offering Period (a “Re-enrollment”) unless, in a manner and at a time specified by the Corporation, but in no event
later than the day before the first day of such succeeding Offering Period, the participant notifies the Corporation in writing of the participant’s desire not to be so enrolled. Re-enrollment shall be at the same percentage of contributions as
the participant’s prior participation unless the participant by timely written notice changes the percentage of contribution. No participant shall be automatically re-enrolled whose participation terminates by operation of Section 3.11 or who,
during the preceding Offering Period, has reduced his or her percentage of contribution to 0% or has notified the Corporation in writing of the participant’s withdrawal from participation in the Plan. 
  
 3.5 Limitation on Participation.    An Eligible Employee may not elect to contribute to the Plan more than
the lesser of $25,000 or 15% of such Eligible Employee’s Base Compensation (as defined below) for the calendar year. “Base Compensation” means the base compensation paid in cash to a participant by the Corporation, including salaries
and wages, but excluding bonuses, incentive compensation, commissions, overtime pay, moving or relocation allowances, car allowances, imputed income attributable to cars, taxable fringe benefits and similar items. In addition, a participant may not
elect to make such contributions to the Plan which would permit stock with a fair market value exceeding $25,000 to be purchased for his or her account in any 
 

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 calendar year under all stock purchase plans of the Corporation as determined under Section 423
of the Code. For this purpose, the fair market value of the stock will be determined at the time that the participant is granted the right to purchase Stock. All share amounts set forth herein are subject to adjustment as provided in Section 5.

  
 3.6 Purchase of Stock.    Unless a participant gives written notice to the
Corporation as hereinafter provided, a participant’s option to acquire stock with payroll deductions made during any Offering Period will be deemed to have been exercised automatically on the Termination Date applicable to such Offering for the
purchase of the number of full shares of stock which the accumulated payroll deductions in his account at that time will purchase at the applicable option price (but not in excess of the number of shares, for which options have been granted to the
employee pursuant to Section 4.1), and any excess in the participant’s account at that time will be returned to the participant. Any unexercised options on any Termination Date shall terminate and be null and void. 
  
 3.7 Delivery of Stock.    As promptly as practicable after the Termination Date of each Offering, the
Corporation will deliver to each participant, as appropriate, the stock purchased upon exercise of an option. 
  
 3.8 Discontinuing Payroll Deductions.    If a participant wishes to discontinue employee contributions entirely, he or she may do so by filing a new enrollment form at any time. Payroll withholding shall cease as
soon as reasonably practicable after such form has been received by the Corporation. Discontinuation of payroll deductions shall be treated as an election to withdraw from the Plan and amounts standing to the Participant’s credit prior to his
or her election to discontinue contributions shall be distributed to him or her in accordance with Section 3.9. 
  
 3.9 Withdrawal or Termination.    A participant may elect to withdraw from the Plan by filing the prescribed form with the Corporation at any time. If the participant withdraws from the Plan, the participant will
be returned all accumulated payroll deductions, without interest. A participant who discontinues contributions to the Plan under Section 3.8, or withdraws from the Plan under this Section may again become a participant, if he or she is then an
Eligible Employee, by following the procedure described in Section 3.4. 
  
 3.10 Payment of
Interest.    No interest will be paid or allowed on any money paid into the Plan or credited to the account of any participant. 
  
 3.11 Termination.    In the event of a participant’s death or termination of employment, the discontinuance of the Plan by the
Corporation, the election of the employee to withdraw from the Plan for any reason, or in the event the employee is no longer an Eligible Employee, all of such participant’s accumulated payroll deductions contributed to the Plan during the
Offering Period in which such withdrawal or termination occurs will be distributed, without interest, to his or her name or order, or in the event of death, to the name of his or her legal representative, as promptly as practicable. 

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 3.12 Limitation on Subscriptions.    The total
number of shares of stock available for purchase under the Plan is 1,000,000 shares, subject to adjustment as set forth in Section 5. In the event that the aggregate number of shares that all participants elect to purchase on a Termination Date
exceeds the maximum number of shares remaining available for issuance under this Section, then the number of shares to which each participant is entitled shall be determined by multiplying the number of shares available for issuance by a fraction,
the numerator of which is the number of shares that such participant has elected to purchase and the denominator of which is the number of shares that all participants have elected to purchase. 
  

3.13 Expenses.    All costs of maintaining records and executing transfers will be borne by the Corporation. 
  
 3.14 Fair Market Value.    The fair market value of a share of stock on any relevant date shall be
determined in accordance with the following provisions: 
  
 3.14.1 If the stock at the time is neither listed nor
admitted to trading on any stock exchange nor traded in the over-the-counter market, then the fair market value shall be the value of the stock as determined by the Board of Directors in their last valuation of the Stock, after taking into account
such factors as the Board of Directors shall deem appropriate. 
  
 3.14.2 If the stock is not at the time listed
or admitted to trading on any stock exchange but is traded in the over-the-counter market, the fair market value shall be the mean between the highest bid and lowest asked prices (or, if such information is available, the closing selling price) of
one share of stock on the date in question in the over-the-counter market, as such prices are reported by the National Association of Securities Dealers through its NASDAQ system or any successor system. If there are no reported bid and asked prices
(or closing selling price) for the stock on the date in question, then the mean between the highest bid price and lowest asked price (or the closing selling price) on the last preceding date for which such quotations exist shall be determinative of
fair market value. 
  
 3.14.3 If the stock is at the time listed or admitted to trading on any stock exchange,
then the fair market value shall be the closing selling price of one share of stock on the date in question on the stock exchange determined by the Committee to be the primary market for the stock, as such price is officially quoted in the composite
tape of transactions on such exchange. If there is no reported sale of stock on such exchange on the date in question, then the fair market value shall be the closing selling price on the exchange on the last preceding date for which such quotation
exists. 
  
 4.    Granting of Options. 
  
 4.1 Number of Option Shares.    Subject to Section 3.5, on the Entry Date of each Offering, a participating employee shall be deemed to have
been granted an option to purchase a 
 

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 maximum number of shares of the stock of the Corporation equal to $75,000 divided by the fair
market value of a share determined at the grant date of such purchase right. The market value of the Corporation’s stock shall be determined as provided in Section 3.14. 
  
 4.2 Option Price.    The option price of stock purchased with payroll deductions made during an Offering for a participant therein shall be
the lower of (i) 85% of the fair market value of the stock of the Corporation on the Entry Date or (ii) 85% of the fair market value on the date of purchase as set forth in Section 3.6. 
  
 5.    Adjustments upon Changes in Capitalization. 
  
 5.1 Subdivision or Consolidation.    Subject to any required action by shareholders of the Corporation, the number of shares of stock covered by each out­standing option, and the
exercise price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares of stock of the Corporation resulting from a subdivision or consolidation of shares or the payment of a stock dividend (but only on
the stock) or any other increase or decrease in the number of such shares effected without receipt of consideration by the Corporation including, but not limited to, a stock split, reverse stock split, recapitalization, combination or
reclassification. Any fraction of a share subject to an option that would otherwise result from an adjustment pursuant to this Section shall be rounded downward to the next full number of shares without other compensation or consideration to the
holder of such option. 
  
 5.2 Capital Transactions.    Upon a sale or exchange of all
or substantially all of the assets of the Corporation, a merger or consolidation in which the Corporation is not the surviving corporation, a merger, reorganization or consolidation in which the Corporation is the surviving corporation and
shareholders of the Corporation exchange their stock for securities or property, a liquidation of the Corporation or similar transaction (“Capital Transaction”), this Plan and each option to purchase stock issued under this Plan shall
terminate, unless such options are assumed by a successor corporation in the Capital Transaction, on the date of such Capital Transaction; provided, however, that unless the outstanding options are assumed by a successor corporation in the Capital
Transaction, then the day prior to the date of the Capital Transaction shall be a Termination Date and the funds held in each participant’s account shall be used to purchase the number of full shares of stock at the applicable option price (but
not in excess of the number of shares for which options have been granted to the participant pursuant to Section 4.1) and any excess in the participant’s account at that time will be returned to the participant. 
  
 5.3 Adjustments.    To the extent that the foregoing adjustments relate to stock or securities of the
Corporation, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. 
  
 5.4 Ability to Adjust.    The grant of an option pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, 

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 reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or
any part of its business or assets. 
  
 5.4 Notice of Adjustment.    Whenever the
Corporation shall take any action resulting in any adjustment provided for in this Section, the Corporation shall forthwith deliver notice of such action to each participant, which notice shall set forth the number of shares subject to the option
and the exercise price thereof resulting from such adjustment. 
  
 5.5 Limitation on
Adjustments.    Any adjustment, assumption or substitution shall not provide any participant with any additional benefit under his or her option and shall comply with Section 425 of the Code, if applicable. 

 
 6.    Transferability.    Options granted under this Plan may not be sold, pledged, assigned
or transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised during the lifetime of a participant only by such participant. Any transfer in violation of this provision shall void such option. No
option shall be pledged or hypothecated in any way, nor shall any option be subject to execution, attachment or similar process. 
  
 7.    Rights as a Shareholder.    A participant shall have no rights as a shareholder with respect to any stock underlying any option until the date of the issuance to such participant a
certificate for such shares. No adjustment shall be made for dividends (ordinary or extra­ordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 6. 
  
 8.    No Right of
Employment.    Neither the grant nor exercise of any option nor anything in this Plan shall impose upon the Corporation or any other corporation any obligation to employ or continue to employ any participant. The right of the
Corporation and any other corporation to terminate any employee shall not be diminished or affected because an option has been granted to such employee. 
  
 9.    Amendment or Termination of the Plan.    The Board of Directors of the Corporation may, subject to any requested shareholder approval, amend, suspend, discontinue
or terminate the Plan, or revise or amend it in any respect whatsoever. The Board of Directors of the Corporation shall be entitled to terminate the Plan at anytime in their sole discretion. Upon termination of the Plan, all accumulated payroll
deductions contributed to the Plan during the Offering Period in which such termination occurs will be distributed without interest to participants and participants’ options to purchase stock under this Plan will be canceled, as of the date of
the Plan termination. 
  
 10.    Term of Plan.    This Plan is effective on the date
the Plan is adopted by the Board of Directors and options may be granted pursuant to the Plan from time to time until March 31, 2011. 
  
 11.    Approval of Board of Directors and Shareholders.    The Plan shall not take effect until approved by the Board of Directors of the Corporation. This Plan shall be approved by a vote of
the 
 

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 shareholders by April 11, 2002. In the event such shareholder vote is not obtained, all options granted hereunder,
whether vested or unvested, shall be rescinded and shall be null and void. 
  
 12.    Application of
Funds.    The proceeds received by the Corporation from the sale of stock pursuant to options may be used for general corporate purposes. 
  
 13.    Reservation of Shares.    The Corporation, during the term of this Plan, shall at all times reserve and keep available such number
of shares of stock as shall be sufficient to satisfy the requirements of the Plan. 
  
 14.    No Obligation
to Exercise Option.    The granting of an option shall not impose any obligation upon the participant to exercise such option. 
  
 15.    Withholding Taxes.    Notwithstanding anything else to the contrary in the Plan, the exercise of any option shall be conditioned upon payment by such participant
in cash, or other provisions satisfactory to the Committee of all local, state and federal withholding taxes applicable, in the Committee’s judgment, to the exercise or to later disposition of shares acquired upon exercise of an option.

  
 16.    Securities Laws Compliance.    Notwithstanding anything contained herein,
the Corporation shall not be obligated to grant any option under this Plan or to sell, issue or effect any transfer of any share pursuant to this Plan unless such grant, sale, issuance or transfer is at such time effectively (i) registered or exempt
from registration under the Act, and (ii) qualified or exempt from qualification under the California Corporate Securities Law of 1968 and any other applicable state securities laws. As a condition to exercise of any option, each participant shall
make such representations as may be deemed appropriate by counsel to the Corporation for the Corporation to use any available exemption from registration under the Act or qualification under any applicable state securities law. 

 
 17.    Restrictive Legends.    The certificates issued pursuant to this Plan shall bear any
applicable legends that may be desirable or necessary as determined in the sole and absolute discretion of the Corporation. 
  
 18.    Notices.    Any notice to be given under the terms of this Agreement shall be addressed to the Corporation in care of its Secretary at its principal office, and any notice to be given to
participant shall be addressed to such participant at the address maintained by the Corporation for such person or at such other address as the participant may specify in writing to the Corporation. 
  
 19.    Effect of Plan.    The provisions of the Plan shall, in accordance with its terms, be binding
upon, and inure to the benefit of, all successors of each employee participating in the Plan, including, without limitation, such employee’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver,
trustee in bankruptcy or representative of creditors of such employee. 

	

 

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 20.    Arbitration.    In the event of any
dispute between the Corporation and a participant regarding this Plan, the dispute and any issue as to the arbitrability of such dispute, shall be settled to the exclusion of a court of law, by arbitration in San Diego, California, by a panel of
three arbitrators (each party shall choose one arbitrator and the third shall be chosen by the two arbitrators so selected) in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The decision of a
majority of the arbitrators shall be final and binding upon the parties. All costs of the arbitration and the fees of the arbitrators shall be allocated between the parties as determined by a majority of the arbitrators, it being the intention of
the parties that the prevailing party in such a proceeding be made whole with respect to its expenses. 
  
 21.    Governing Law.    This Agreement shall be governed by the laws of the State of California. 
  
 22.    Descriptive Headings.    Titles to Sections are solely for information purposes. 
  
 23.    Information.    All participants in the Plan shall be distributed financial statements of the Corporation at least annually.

  
 24.    Rule 16(b).    To the extent required, the Plan is intended to comply
with Rule 16(b)(3) of the Exchange Act as then in effect or any successor provisions (“Rule 16(b)(3)”) and the Committee shall interpret and administer the provisions of the Plan in a manner consistent therewith. Any provisions
inconsistent with Rule 16(b)(3) shall be inoperative and shall not affect the validity of the Plan. The Committee may establish and adopt written administrative guidelines, designed to facilitate compliance with Section 16(b) of the Exchange Act and
Rule 16(b)(3), as it may deem necessary or proper for the administration and operation of the Plan and the transaction of business thereunder. 
  
 As adopted by the Board of Directors effective April 12, 2001. 
  

	 	GE
	NSTAR THERAPEUTICS CORPORATION, 
 

	 	a Delaware corporation 
 

  

	 	By
	:                                      
        
 

	 	Ch
	ief Executive Officer 
 

 

 9Prepared by R.R. Donnelley Financial -- Common Stock Purchase Warrant

  
 EXHIBIT 10.24 
  
 NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
ONLY AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASON­ABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT AND IS IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE HEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS ON THEIR TRANSFER PURSUANT TO TERMS SET FORTH IN THIS WARRANT. 
  
 Warrant to Purchase Shares

 of Common Stock 
 (Subject to Adjustment) 
  
 GENSTAR THERAPEUTICS CORPORATION 
  
 COMMON STOCK PURCHASE WARRANT

 Void after October 18, 2006 
  
 GenStar Therapeutics Corporation, a Delaware
corporation (the “Company”), hereby certifies that, for value received, SCO Financial Group LLC, or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time
before 5:00 p.m. Pacific time, on October 18, 2006 (the “Expiration Time”), 89,500 fully paid and nonassessable shares of Common Stock of the Company at a purchase price per share equal to the Warrant Price (as defined herein) and
otherwise in accordance with the terms hereof. The number and character of such shares of Common Stock and the Warrant Price therefor are subject to adjustment as provided below. 
  
 As used herein the following terms, unless the context otherwise requires, have the following respective meanings: 
  
 (a) The term “Company” shall mean GenStar Therapeutics Corporation and any corporation that shall succeed to or assume the obligations of the Company hereunder. 
  
 (b) The term “Control Transaction” shall mean (i) the sale by the Company of all or substantially all of its assets or (ii) any transaction or
series of related transactions by the Company (including, without limitation, any reorganization, merger or consolidation) which results in the transfer of at least fifty percent (50%) of the outstanding voting power of the Company; provided,
however, that a reorganization, merger or similar transaction shall not be deemed a Control Transaction if (x) the stockholders of the Company immediately prior to such 
 

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 transaction maintain beneficial ownership and voting control of a majority of the outstanding voting securities of the surviving entity in the same relative
proportions as they did prior to such transaction or (y) the members of the Board of Directors of the Company immediately prior to such transaction comprise a majority of the Board of Directors of the surviving entity. 
  
 (c) The term “holder” shall mean the holder of this Warrant or any permitted transferee or assignee thereof. 
  
 (d) The term “Original Issuance Date” shall mean October 19, 2001. 
  
 (f) The term “Warrant” shall mean this Warrant. 
  
 (g)
The term “Warrant Price” shall mean $2.35 per share. 
  
 (h) The term “Warrant Shares” shall mean the shares of
Common Stock or other securities of the Company issuable upon exercise of this Warrant, subject to adjustment hereunder from time to time. 
  
 1.    Initial Exercise Date; Expiration.    This Warrant may be exercised in full at any time prior to the Expiration Time, and shall expire immediately thereupon.
Notwithstanding the foregoing, this Warrant shall expire and no longer be exercisable immediately prior (and subject to) the closing of any Control Transaction. The Company shall provide the holder of this Warrant with at least 15 days prior notice
of the occurrence of any event that would constitute a Control Transaction. 
  
 2.    Exercise of
Warrant. 
  
 (a) This Warrant may be exercised in full by the holder hereof by surrender of this Warrant,
with the form of subscription attached hereto duly executed by such holder, to the Company at its principal office, accompanied by payment in accordance with Section 2(b) hereof, of the aggregate Warrant Price of the Warshy;rant Shares to be
purchased hereunder. 
  
 (b) In lieu of payment in cash, payment of the aggregate Warrant Price upon exercise of
the Warrant may be made by (i) surrender to the Company of debt or equity securities of the Company having a fair market value equal to the aggregate exercise price of the Warrant Shares being purchased upon such exercise (provided that for purposes
of this subparagraph, the fair market value of the Common Stock shall equal the Market Price of the Common Stock as set forth below, and the fair market value of any note or other debt security shall be deemed to be equal to the aggregate
outstanding principal amount thereof plus all accrued and unpaid interest thereon) or (ii) delivery of a written notice to the Company that the holder is exercising the Warrant by authorizing the Company to withhold from issuance a number of Warrant
Shares issuable upon such exercise of the Warrant which when multiplied by the Market Price (as set forth below) is equal to the aggregate Warrant Price of the Warrant Shares being purchased upon such exercise (and such withheld shares shall no
longer be issuable under this Warrant). 
  
 (c) The Market Price of the Company’s Common Stock as of a
particular date (the “Determination Date”) shall be calculated as follows: 
 

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 (i) If the Company’s Common Stock is traded on an exchange or is quoted
on the National Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”) National Market System or the Nasdaq Smallcap Market, then the average of the closing or last sale prices, respectively, reported for the twenty (20)
business days immediately preceding the Determination Date; 
  
 (ii) If the Company’s Common Stock is not
traded on an exchange or on the Nasdaq National Market System or the Nasdaq Smallcap Market but is traded in the over-the-counter market, then the average of the means of the closing bid and asked prices reported for the twenty (20) business days
immediately preceding the Determination Date; 
  
 (iii) If the Company’s Common Stock is not traded on an
exchange, on the Nasdaq National Market System or the Nasdaq Smallcap Market or in the over-the-counter market, then the fair market value of the Common Stock as of the day immediately preceding the Determination Date, as determined by the
Company’s board of directors in good faith. 
  
 3.    When Exercise
Effective.    The exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the business day on which the holder surrenders this Warrant to the Company and satisfies all of
the requirements of Section 2, and at such time the person in whose name any certificate for Warrant Shares ­shall be issuable upon such exercise, as provided in Section 2, shall be deemed to be the record holder of such Warrant Shares for all
purposes. 
  
 4.    Delivery on Exercise.    As soon as practicable after the
exercise of this Warrant, the Company at its expense will cause to be issued in the name of and delivered to the holder hereof, or as such holder may direct, a certificate or certificates for the number of fully paid and nonassessable Warrant Shares
­as to which such holder shall be entitled on such exercise, together with cash, in lieu of any fraction of a Warrant Share, equal to such fraction of the Market Price of one full share of Common Stock. 
  
 5.    Adjustment of Warrant Price and Number of Warrant Shares.    Notwithstanding anything to the
contrary in this Warrant: 
  
 (a) Adjustments.    The Warrant Price per share shall be
subject to adjustment from time to time as follows: 
  
 (i) Stock Splits and Stock
Dividends.    If the number of shares of Common Stock outstanding at any time after the Original Issuance Date is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split–up of shares
of Common Stock, then, on the date such payment is made or such change is effective, the Warrant Price per share shall be proportionately decreased and the number of Warrant Shares shall be increased in proportion to such increase of
out­standing shares. Such adjustment shall become effective at the close of business on the date the dividend, subdivision or split-up becomes effective. 
 

 3 

  
 (ii) Reverse Stock Splits.    If the number of
shares of Common Stock outstanding at any time after the Original Issuance Date is decreased by a combination of the outstanding shares of Common Stock, then, on the effective date of such combination, the Warrant Price per share shall be
proportionately increased and the number of Warrant Shares shall be decreased in proportion to such decrease in outstanding shares. Such adjustment shall become effective at the close of business on the date the combination becomes effective.

  
 (iii) All calculations under this Subsection (a) shall be made to the nearest cent or to the nearest one
hundredth (1/100) of a share, as appropriate. 
  
 (b) Minimal Adjustments.    No
adjustment in the Warrant Price per share need be made if such adjustment would result in a change in the Warrant Price per share of less than $0.01. Any adjustment of less than $0.01 which is not made shall be carried forward and shall be made at
the time of and together with any subsequent adjustment which, on a cumulative basis, amounts to an adjustment of $0.01 or more in the Warrant Price per share. 
  
 6.    Notice of Adjustments.    Whenever the number of Warrant Shares or the Warrant Price per share shall be adjusted pursuant to Section 5 hereof, the Company shall
provide notice by first class mail to the holder of this Warrant setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the number of Warrant
Shares and the Warrant Price per share after giving effect to such adjustment. 
  
 7.    No
Impairment.    The Company (a) will not increase the par value of any shares of stock receivable on the exercise of this Warrant above the amount payable there­for on such exercise, (b) will at all times reserve and keep
available a number of its authorized shares of Common Stock, free from all preemptive rights therein, which will be sufficient to permit the exercise of this Warrant, and (c) shall take all such action as may be necessary or appropriate in order
that all Warrant Shares as may be issued pursuant to the valid exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.

  
 8.    Exchange of Warrants.    Subject to the provisions of Section 9 below, on
surrender for exchange of this Warrant, properly endorsed to the Company, the Company at its expense will issue and deliver to or on the order of the holder thereof a new Warrant of like tenor, in the name of such holder or as such holder may
direct, calling in the aggregate on the face thereof for the number of Warrant Shares called for on the face of the Warrant so surrendered. 
  
 9.    Replacement of Warrants.    On receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement 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. 
 

 4 

  
 10.    Investment Intent.    The holder hereof,
by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of the Warrant Shares, such holder will deliver to the Company a written statement that the securities acquired by the
holder upon exercise hereof are for the account of the holder for investment and are not acquired with a view to, or for sale in connection with, any distribution thereof (or any portion thereof) and with no present intention (at any such time) of
offering and distributing such securities (or any portion thereof), and make other representations which the Company may reasonably require in order to comply with the restrictions of state and federal securities laws relating to the sale and
disposition on “restricted securities,” as that term is defined in Rule 144 of the Securities Act. 
  
 11.    Transfer Restrictions.    The holder hereof acknowledges that the Warrants and Warrant Shares may not be transferred. 
  
 12.    Registration Rights.    The shares of Common Stock issued or issuable upon exercise of the Warrant shall be deemed “Registrable
Securities” and the holders of such shares (the “Holders”) shall be entitled to registration rights with respect thereto as set forth in this Section 12. At any time if the Company proposes to register any of its Common Stock under
the Securities Act (other than a registration on Form S-4 or S-8 or any successor form thereto), whether or not for sale for its own account, in a manner which would permit registration of Registrable Securities for sale for cash to the public under
the Securities Act, it will each such time give prompt written notice to the Holder of its intention to do so at least thirty (30) days prior to the anticipated filing date of the registration statement relating to such registration. Such notice
shall offer each such Holder the opportunity to include in such registration statement such number of Registrable Securities as each such Holder may request. Upon the written request of any such Holder made within twenty (20) days after the receipt
of the Company’s notice (which request shall specify the number of Registrable Securities intended to be disposed of and the intended method of disposition thereof), the Company shall use its reasonable commercial efforts to effect the
registration under the Securities Act of all Registrable Securities which the Company has been so requested to register, to the extent required to permit the disposition (in accordance with such intended methods thereof) of the Registrable
Securities so requested to be registered, provided that: 
  

	 	a.
	 
	if, at any time after giving such written notice of its intention to register any of its securities and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Holder of Registrable Securities and thereupon shall
be relieved of its obligation to register any Registrable Securities in connection with such registration 
 

  

	 	b.
	 
	If the registration referred to in the second sentence of this Section 12 is to be an underwritten secondary registration on behalf of holders of securities (other than
Registrable Securities) of the Company (the “Other Holders”), and the managing underwriter advises the Company in writing that in its good faith opinion such offering would be materially and adversely affected by the

 

 

 5 

 inclusion therein of the Registrable Securities requested to be included therein, the Company shall include in such registration the
amount of securities (including Registrable Securities) that such managing underwriter advises allocated pro rata among the Other Holders and the Holders on the basis of the number of remaining securities (including Registrable
Securities) requested to be included therein by each Other Holder and each Holder; 
  

	 	c.
	 
	the Company shall not be required to effect any registration of Registrable Securities under this Section 12 incidental to the registration of any of its securities in
connection with mergers, acquisitions, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans; and 
 

  

	 	d.
	 
	The Company agrees to pay all Registration Expenses with respect to any offerings pursuant to this Section 12; provided that in no event shall the Company be responsible
for underwriters’ fees and commissions payable with respect to any Registrable Securities. Registration Expenses shall include all accounting fees, printing, postage and other fees including attorneys’ fees not to exceed $2,500 for special
counsel to the holder associated with the registration of the Registrable Securities. 
 

  
 13.    Notices.    All notices referred to in this Warrant shall be in writing and shall be delivered personally (including by express courier) or by first class mail, and will be deemed to
have been given when so delivered or mailed (i) to the Company, at its principal executive offices and (ii) to the holder of this Warrant, at such holder’s address as it appears in the records of the Company (unless otherwise indicated by such
holder). 
  
 14.    Miscellaneous.    This Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of California without regard for its conflict of law principles. The headings in this Warrant are for pur­poses of reference only, and shall not limit or otherwise affect
any of the terms hereof. 
 

 6 

  
 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and attested by its duly
authorized officers and to be dated October 19, 2001. 
  
 
	 GENSTAR THERAPEUTICS CORPORATION
 
	 
	 By: ____________________________
 
	 Lee R. McCracken
 President and Chief Business Officer
 

 
  
 [Signature Page to Purchase Warrant] 
  

 7 

  
 FORM OF SUBSCRIPTION 
  
 (To be signed only on exercise of Warrant) 
  
 TO: GenStar Therapeutics Corporation 

 
 The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase rights represented by such Warrant for,
and to purchase thereunder,             * shares of Common Stock of GenStar Therapeutics Corporation and herewith: 
  
 (Check one) 
  
  ̈        makes pay­ment of $_________ therefor; or 
  
  ̈        surrenders
__________ shares of __________ stock of GenStar Therapeutics Corporation or 
             $ __________ of aggregate indebtedness; or 
  
  ̈        elects to “net exercise” the Warrant pursuant to
Section 2(b)(ii) of the Warrant and authorizes 
             GenStar Therapeutics
Corporation to withhold from issuance the appropriate number of 
             Warrant
Shares as specified therein. 
  
 
	 __________________________________________
 
	 (Signature must conform in all respects to name of holder as specified on the face of the Warrant) 
 
	 __________________________________________
 
	  
 __________________________________________
 
	             (Address)
 

 
  
 Dated: 
  

                                      
                
 *Insert here the number of shares as to which the
Warrant is being exercised. 
 

 8

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