Document:

Exhibit 4.3

 

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 24, 2005

  

 

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 $3.51 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.

 

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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 $6.00 (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

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written notice (a “Call Notice”), indicating therein
that this Warrant shall be exercised.  If the conditions for such Call are
satisfied with respect to subsections (ii) and (iii) above 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 Exercise Notices 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.

 

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(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 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.

 

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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 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)

 

5

 

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.

 

(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

 

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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, 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 (g).

 

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

 

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(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.

 

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

 

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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 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

 

9

 

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, 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

 

10

 

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]

 

11

 

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:

  	
  Benjamin F. McGraw, III, Pharm.D.

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
					

 

 

SIGNATURE PAGE TO VALENTIS,
INC. WARRANT

 

 

EXERCISE
NOTICE

 

To Valentis, Inc.:

 

Ladies and Gentlemen:

 

	
  o

  	
   

  	
  The undersigned hereby elects to exercise
  the warrant issued to it by Valentis, Inc. (the “Company”) and dated June
  24, 2005 Warrant No.  W-         (the “Warrant”) and to purchase thereunder                                              
  shares of the Company’s common stock (the “Shares”) at a purchase price of                                                                                 Dollars
  ($                       )
  per Share or an aggregate purchase price of                                                                                                     
  Dollars ($                            )
  (the “Purchase Price”).

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The undersigned hereby elects to utilize
  cashless exercise option and convert                                          
  percent (            %)
  of the value of the Warrant pursuant to the provisions of Section 10(b) of
  the Warrant.

  

 

Pursuant to the terms of the Warrant the
undersigned has delivered, if applicable, the Purchase Price herewith in full
in cash or by certified check or wire transfer.

 

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

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature must conform in all respects to
  name of

  holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Please provide social security number or
  Taxpayer identification number.

  
					

 

 

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:Exhibit
10.1

 

iBASIS,
INC.

 

June 21, 2005

 

To:          JMG Triton Offshore Fund, Ltd.

JMG Capital Partners, L.P.

11601 Wilshire Blvd., Suite 2180

Los Angeles,  CA  90025

 

 

Re:          8% Secured Convertible Notes due
2007 

 

Ladies and Gentlemen:

 

Reference is hereby made to
that certain Indenture (the “Indenture”),
dated as of June 18, 2004, by and between iBasis, Inc. (the “Company”) a Delaware corporation, the
Subsidiary Guarantors named therein, and The Bank of New York, a New York
banking corporation, relating to the Company’s 8% Secured Convertible Notes due
2007 (the “Notes”).  Capitalized terms used herein without
definition shall have the meanings given to such terms in the Indenture.

 

1.             Exercise of Conversion Privilege.  Pursuant to Section 15.2 of the Indenture, and
in consideration for the payment described in paragraph 2 below, JMG Triton Offshore Fund, Ltd. and JMG Capital
Partners, L.P. (together, “JMG”) are exercising their conversion
privilege with respect to $8.0 million aggregate principal amount of Notes currently
held by JMG (the “JMG Notes”), and have
delivered a conversion notice in accordance with the requirements of Section
15.2 of the Indenture to effect such conversion.  In connection with such conversion, and upon
the surrender and conversion of the JMG Note at the Conversion Price in
accordance with the requirements of Section 15.2 of the Indenture, the Company
shall issue and deliver to JMG an aggregate of 4,324,324 shares of Common
Stock, $0.001 par value per share of the Company (the “Conversion Shares”), as well as a check in payment for any
fractional shares.

 

2.             Additional Consideration. As an inducement to JMG
to exercise its conversion privilege, and as a condition precedent to such
conversion, the Company shall also pay JMG a cash payment of $480,000.

 

3.             Electronic Delivery of Shares.  To be completed only  if the undersigned elects to
receive delivery of the Conversion Shares electronically, rather than in
certificated form, in which case the undersigned will have to provide the
following information in consultation with the undersigned’s broker:

 

	
  Broker’s Name:

  	
   

  	
   

  
	
   

  
	
  Account No.:

  	
   

  	
   

  
	
   

  
	
  DTC Participant
  No.:

  	
   

  	
   

  
					

 

 

Broker
Information:

 

	
  Name:

  	
   

  	
   

  
	
   

  
	
  Phone No.:

  	
   

  	
   

  
	
   

  
	
  Fax No.:

  	
   

  	
   

  
						

 

The undersigned
hereby acknowledges that the foregoing information is true, correct and
complete, and the undersigned hereby releases, and agrees to hold harmless, the
Company from any losses or liability the undersigned may suffer as a result of
the electronic delivery of any shares of Conversion Shares the undersigned may be
entitled to receive in connection with the Conversion pursuant to the foregoing
instructions.  The undersigned further
agrees and acknowledges that if the undersigned completes this section entitled
“Electronic Delivery of Shares”, the undersigned will not be receiving any
certificates representing the Conversion Shares, and that electronic delivery
of the Conversion Shares may not be available to any individual that may be
considered an affiliate of the Company under applicable law and the delivery of
the Conversion Shares pursuant to this Section 3 shall satisfy in all respects
the Company’s obligation, and the Company shall have not liability in
connection therewith, to issue the Conversion Shares pursuant to Section 1
hereof and the Indenture.

 

4.             Counterparts. 
This letter agreement may be signed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  Please
contact Richard G. Tennant, at 781-505-7500 should you have any questions
regarding this letter agreement.

 

[The remainder of this page is intentionally left
blank.]

 

 

	
   

  	
  Sincerely yours,

  
	
   

  	
   

  
	
   

  	
  iBASIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Tennant

  	
   

  
	
   

  	
  Name:

  	
  Richard G. Tennant

  
	
   

  	
  Title:

  	
  Vice President,
  Finance and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  JMG Triton Offshore Fund, Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeff Landry

  	
   

  	
   

  
	
  Name: Jeff Landry

  	
   

  
	
  Title:   Authorized Person

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  JMG Capital Partners, L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeff Landry

  	
   

  	
   

  
	
  Name: Jeff Landry

  	
   

  
	
  Title:   Authorized Person

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