Document:

Exhibit 4.2

NEITHER
THESE WARRANTS NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER THE ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.

	
  No.[        ]

  	
   

  
	
   

  	
   

  
	
  Original Issuance: 

  	
   

  	
  , 2006

  	
  Warrants
  

  	
   

  
					

 

FERMAVIR
PHARMACEUTICALS, INC.

WARRANTS

FermaVir
Pharmaceuticals, Inc., a Florida corporation (“FermaVir”), certifies that, for value  received,                               , or
registered assigns (the “Holder”), is
the owner of                                 (            ) Warrants
of FermaVir (the “Warrants”). Each
Warrant entitles the Holder to purchase from FermaVir at any time prior to the
Expiration Date (as defined below) one share of the common stock of FermaVir
(the “Common Stock”) for $1.00 per
share (the “Exercise Price”), on the terms and
conditions hereinafter provided.  The
Exercise Price and the number of shares of Common Stock purchasable upon
exercise of each Warrant are subject to adjustment as provided in this
Certificate. The Warrants have been issued as part of an authorized class of
300,000 warrants of like tenor.

1.             Expiration Date; Exercise

1.1           Expiration Date.   The Warrants shall expire on
June 30, 2012 (the “Expiration Date”).

1.2           Manner of Exercise.   The Warrants are
exercisable by delivery to FermaVir of the following (the “Exercise Documents”): (a) this
Certificate (b) a written notice of election to exercise the Warrants; and
(c) payment of the Exercise Price in cash, by check or by “net” exercise
as contemplated by Section 1.3 of this Certificate. Within three business
days following receipt of the foregoing, FermaVir shall execute and deliver to
the Holder: (a) a certificate or certificates representing the aggregate
number of shares of Common Stock purchased by the Holder, and (b) if less
than all of the Warrants evidenced by this Certificate are exercised, a new
certificate evidencing the Warrants not so exercised.

1.3           Net Exercise.   In lieu of
the payment methods set forth in Section 1.2 above, the Holder may elect
to exchange all or some of the Warrant for the number of shares of Common Stock
computed using the following formula:

 

 

	
  

  	
  X = 

  	
  Y (A-B)

  	
   

  
	
   

  	
   

  	
  A

  	
   

  

 

Where X = the number of shares of Common Stock to be issued to Holder.

Y = the number of shares of Common Stock purchasable under the Warrants
being exchanged (as adjusted to the date of such calculation).

A = the
Market Price on the date of receipt by FermaVir of the exercise documents.

B = the
Exercise Price of the Warrants being exchanged (as adjusted in accordance with
the terms of Section 2 hereof).

The “Market Price” on any
trading day shall be deemed to be the average of the last reported sale price
of the Common Stock for the five trading days immediately preceding  such day, or, in the case no such reported
sales take place on any day, the last reported sale price on the preceding
trading day on which there was a last reported sales price, as officially
reported by the principal securities exchange in which the shares of Common
Stock are listed or admitted to trading or by the Nasdaq Stock Market, or if
the Common Stock is not listed or admitted to trading on any national securities
exchange or the Nasdaq Stock Market, the last sale price, or if there is no
last sale price, the closing bid price, as furnished by the National
Association of Securities Dealers, Inc. (such as through the OTC Bulletin
Board) or a similar organization or if Nasdaq is no longer reporting such
information. If the Market Price cannot be determined pursuant to the sentence
above, the Market Price shall be determined in good faith (using customary
valuation methods) by the Board of Directors of FermaVir based on the
information best available to it, including recent arms-length sales of Common
Stock to unaffiliated persons.

1.4           Restriction
on “Net” Exercise. Notwithstanding any other provision of this Certificate,
Holder shall not be permitted to effect a “net” exercise of the Warrants if on
the date of exercise the resale of the underlying shares by Holder has been
registered under the Securities Act of 1933, as amended, (the “Securities Act”) pursuant to a
registration statement which is then in effect, and on such date the Holder
shall be permitted to resell such shares pursuant to such registration
statement.

1.5           Warrant
Exercise Limitation. Notwithstanding any other provision of this
Certificate, or the total number of shares of Common Stock otherwise available
for purchase by Holder hereunder, if as of the date of exercise FermaVir has a
class of securities registered under Section 12 of the Securities Exchange
Act of 1934, as amended, Holder may not exercise any Warrants under this Section 1
if immediately following such exercise Holder would beneficially own 5% or more
of the outstanding Common Stock of FermaVir. For this purpose, a representation
of the Holder that following such exercise it would not beneficially own 4.99%
or more of the outstanding Common Stock of FermaVir shall be conclusive and
binding upon FermaVir.

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2.             Adjustments of Exercise Price and Number and Kind of
Conversion Shares

2.1           In the event that FermaVir shall at any time hereafter (a) pay
a dividend in Common Stock or securities convertible into Common Stock; (b) subdivide
or split its outstanding Common Stock; (c) combine its outstanding Common
Stock into a smaller number of shares; then the number of shares to be issued
immediately after the occurrence of any such event shall be adjusted so that
the Holder thereafter may receive the number of shares of Common Stock it would
have owned immediately following such action if it had exercised the Warrants
immediately prior to such action and the Exercise Price shall be adjusted to reflect
such proportionate increases or decreases in the number of shares.

2.2           In case of any reclassification of the outstanding shares
of Common Stock (other than a change covered by Section 2.1 hereof or a
change which solely affects the par value of such shares) or in the case of any
merger or consolidation or merger in which FermaVir is not the continuing
corporation and which results in any reclassification or capital reorganization
of the outstanding shares), the Holder shall have the right thereafter (until
the Expiration Date) to receive upon the exercise hereof, for the same
aggregate Exercise Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property receivable
upon such reclassification, capital reorganization, merger or consolidation, by
a Holder of the number of shares of Common Stock obtainable upon the exercise
of the Warrants immediately prior to such event; and if any reclassification
also results in a change in shares covered by Section 2.1, then such
adjustment shall be made pursuant to both this Section 2.2 and Section 2.1
(without duplication). The provisions of this Section 2.2 shall similarly
apply to successive reclassifications, capital reorganizations and mergers or
consolidations, sales or other transfers.

3.             Reservation of Shares.   FermaVir
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, such number of shares of Common Stock as shall
from time to time be issuable upon exercise of the Warrants. If at any time the
number of authorized but unissued shares of Common Stock shall not be
sufficient to permit the exercise of the Warrants, FermaVir shall promptly seek
such corporate action as may necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.

4.             Certificate as to Adjustments.   In
each case of any adjustment in the Exercise Price, or number or type of shares
issuable upon exercise of these Warrants, the Chief Financial Officer of
FermaVir shall compute such adjustment in accordance with the terms of these
Warrants and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based, including a statement of
the adjusted Exercise Price. FermaVir shall promptly send (by facsimile and by
either first class mail, postage prepaid or overnight delivery) a copy of each
such certificate to the Holder.

5.             Loss or Mutilation.   Upon
receipt of evidence reasonably satisfactory to FermaVir of the ownership of and
the loss, theft, destruction or mutilation of this Certificate, and of
indemnity reasonably satisfactory to it, and (in the case of mutilation) upon
surrender and cancellation of these Warrants, FermaVir will execute and deliver
in lieu thereof a new Certificate of like tenor as the lost, stolen, destroyed
or mutilated Certificate.

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6.             Representations and Warranties of
FermaVir.   FermaVir hereby represents and warrants to Holder
that:

6.1           Due Authorization.   All corporate action on
the part of FermaVir, its officers, directors and shareholders necessary for (a) the
authorization, execution and delivery of, and the performance of all
obligations of FermaVir under, these Warrants, and (b) the authorization,
issuance, reservation for issuance and delivery of all of the Common Stock
issuable upon exercise of these Warrants, has been duly taken. These Warrants
constitute a valid and binding obligation of FermaVir enforceable in accordance
with their terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors’ rights generally and to general equitable principles.

6.2           Organization.   FermaVir is a corporation duly
organized, validly existing and in good standing under the laws of the State
referenced in the first paragraph of this Certificate and has all requisite
corporate power to own, lease and operate its property and to carry on its
business as now being conducted and as currently proposed to be conducted.

6.3           Valid Issuance of Stock.   Any shares of Common
Stock issued upon exercise of these Warrants will be duly and validly issued,
fully paid and non-assessable.

6.4           Governmental
Consents.   All consents, approvals, orders, authorizations or
registrations, qualifications, declarations or filings with any federal or
state governmental authority on the part of FermaVir required in connection
with the consummation of the transactions contemplated herein have been
obtained.

7.             Representations and Warranties of Holder.   Holder hereby represents
and warrants to FermaVir that:

7.1           Holder is acquiring the Warrants for its own account, for
investment purposes only.

7.2           Holder understands that an investment in the Warrants
involves a high degree of risk, and Holder has the financial ability to bear
the economic risk of this investment in the Warrants, including a complete loss
of such investment. Holder has adequate means for providing for its current
financial needs and has no need for liquidity with respect to this investment.

7.3           Holder has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Warrants and in protecting its own interest in connection
with this transaction.

7.4           Holder understands that the Warrants have not been
registered under the Securities Act or under any state securities laws. Holder
is familiar with the provisions of the Securities Act and Rule 144
thereunder and understands that the restrictions on transfer on the Warrants
may result in Holder being required to hold the Warrants for an indefinite
period of time.

7.5           Holder agrees not to sell, transfer, assign, gift, create
a security interest in, or otherwise dispose of, with or without consideration
(collectively, “Transfer”) any of
the Warrants except pursuant to an effective registration statement under the
Securities Act or an exemption from registration. As a further condition to any
such Transfer, except in the event that such Transfer is

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made pursuant to an effective registration
statement under the Securities Act, if in the reasonable opinion of counsel to
FermaVir any Transfer of the Warrants by the contemplated transferee thereof
would not be exempt from the registration and prospectus delivery requirements
of the Securities Act, FermaVir may require the contemplated transferee to
furnish FermaVir with an investment letter setting forth such information and
agreements as may be reasonably requested by FermaVir to ensure compliance by
such transferee with the Securities Act.

8.             Notices of Record Date.

In
the event:

8.1           FermaVir shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
these Warrants), for the purpose of entitling them to receive any dividend or
other distribution, or any right to subscribe for or purchase any shares of
stock of any class or any other securities or to receive any other right; or

8.2           of any consolidation or merger of FermaVir with or into
another corporation, any capital reorganization of FermaVir, any
reclassification of the capital stock of FermaVir, or any conveyance of all or
substantially all of the assets of FermaVir to another corporation in which
holders of FermaVir’s stock are to receive stock, securities or property of
another corporation; or

8.3           of any voluntary dissolution, liquidation or winding-up of
FermaVir; or

8.4           of any redemption or conversion of all outstanding Common
Stock;

then,
and in each such case, FermaVir will mail or cause to be mailed to the Holder a
notice specifying, as the case may be, (a) the date on which a record is
to be taken for the purpose of such dividend, distribution or right, or (b) the
date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation, winding-up, redemption or conversion is
to take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such stock or securities as at the time are
receivable upon the exercise of these Warrants), shall be entitled to exchange
their shares of Common Stock (or such other stock or securities), for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation
or winding-up. FermaVir shall use all reasonable efforts to ensure such notice
shall be delivered at least 5 days prior to the date therein specified.

9.            Registration Rights.

9.1   Definitions.   For
purposes of this Section 9, the following terms shall have the meanings
set forth below:

9.1.1        A
“Blackout Event”
means any of the following: (a) the possession by FermaVir of material
information that is not ripe for disclosure in a registration statement or
prospectus, if the disclosure of such information in the Registration Statement
or the prospectus constituting a part thereof would be materially detrimental
to the business and affairs of FermaVir, as determined reasonably and in good
faith by the Board of Directors of FermaVir; or (b) any material
engagement or activity by FermaVir which would, in the reasonable and good
faith 

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determination of the Board of Directors of FermaVir, be materially
adversely affected by disclosure in a registration statement or prospectus at
such time.

9.1.2       
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

9.1.3        “Included  Shares”
shall mean any Registrable Shares included in a Registration.

9.1.4       
“Registrable Shares” shall mean
the shares of Common Stock (or such stock or securities as at the time are
receivable upon the exercise of these Warrants) issuable upon exercise of the
Warrants and any other Warrants and or other securities issued to Holder in
respect of the Warrants as a result of stock split, stock dividend or
reclassification of such shares.

9.1.5        “Registration” shall mean a registration of securities under
the Securities Act pursuant to Section 9.2 of this Agreement.

9.1.6        “Registration Period” with respect to any Registration Statement
the period commencing the effective date of the Registration Statement and
ending upon withdrawal or termination of the Registration Statement.

9.1.7        “Registration Statement” shall mean the registration
statement, as amended from time to time, filed with the SEC in connection with
a Registration.

9.1.8       
“SEC” shall mean
the Securities and Exchange Commission.

9.2   Piggyback
Registration.   If, on or prior to the one-year anniversary of the
original issuance of this Warrant, FermaVir shall determine to register any
Common Stock under the Securities Act for sale in connection with a public
offering of Common Stock (other than pursuant to an employee benefit plan or a
merger, acquisition or similar transaction), FermaVir will give written notice
thereof to Holder and will include in such Registration Statement any of the
Registrable Shares which Holder may request be included (“Included Shares”) by a writing delivered to
FermaVir within 15 days after the notice given by FermaVir to Holder; provided,
however, that if the offering is to be firmly underwritten, and the
representative of the underwriters of the offering refuse in writing to include
in the offering all of the shares of Common Stock requested by FermaVir and
others, the shares to be included shall be allocated first to FermaVir and any
shareholder who initiated such Registration and then among the others based on
the respective number of shares of Common Stock held by such persons. If
FermaVir decides not to, and does not, file a Registration Statement with
respect to such Registration, or after filing determines to withdraw the same
before the effective date thereof, FermaVir will promptly so inform Holder, and
FermaVir will not be obligated to complete the registration of the Included
Shares included therein.

9.3   Certain
Covenants.   In connection with any Registration:

9.3.1        FermaVir
shall take all lawful action such that the Registration Statement, any
amendment thereto and the prospectus forming a part thereof does not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading. Upon

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becoming aware of the occurrence of any event or the discovery of any
facts during the Registration Period that make any statement of a material fact
made in the Registration Statement or the related prospectus untrue in any
material respect or which material fact is omitted from the Registration
Statement or related prospectus that requires the making of any changes in the
Registration Statement or related prospectus so that it will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
are made, not misleading (taking into account any prior amendments or
supplements), FermaVir shall promptly notify Holder, and, as soon as reasonably
practicable prepare (but in no event more than five business days in the case
of a supplement or seven business days in the case of a post-effective
amendment) and file with the SEC a supplement or post-effective amendment to
the Registration Statement or the related prospectus or file any other required
document so that, as thereafter delivered to a purchaser of Shares from Holder,
such prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. FermaVir
shall use its reasonable best efforts to keep the Registration Statement
effective at all times during the period continuing until the earliest of (i) the
date that is nine months after the last day of the calendar month following the
month in which the Registration Statement is declared effective, (ii) the
date when the Holder may sell all Registrable Securities under Rule 144
without volume or other restrictions or limits or (iii) the date the
Holder no longer owns any of the Registrable Securities,

9.3.2        At least three
business days prior to the filing with the SEC of the Registration Statement
(or any amendment thereto) or the prospectus forming a part thereof (or any
supplement thereto), FermaVir shall provide draft copies thereof to Holder and
shall consider incorporating into such documents such comments as Holder (and
its counsel) may propose to be incorporated therein. Notwithstanding the
foregoing, no prospectus supplement, the form of which has previously been
provided to Holder, need be delivered in draft form to Holder.

9.3.3        FermaVir
shall promptly notify Holder upon the occurrence of any of the following events
in respect of the Registration Statement or the prospectus forming a part
thereof: (i) the receipt of any request for additional information from
the SEC or any other federal or state governmental authority, the response to
which would require any amendments or supplements to the Registration Statement
or related prospectus; (ii) the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; or (iii) the receipt of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.

9.3.4        FermaVir shall
furnish to Holder with respect to the Included Shares registered under the
Registration Statement (and to each underwriter, if any, of such Shares) such
number of copies of prospectuses and such other documents as Holder may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the  Included Shares by
Holder pursuant to the Registration Statement.

9.3.5        In
connection with any registration pursuant to Section 9.2, FermaVir shall
file or cause to be filed such documents as are required to be filed by
FermaVir for normal Blue Sky clearance in states specified in writing by
Holder; provided, however, that FermaVir shall not be

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required to qualify to do business or consent to service of process in
any jurisdiction in which it is not now so qualified or has not so consented.

9.3.6        FermaVir
shall bear and pay all expenses incurred by it and Holder (other than
underwriting discounts, brokerage fees and commissions and fees and expenses of
more than one law firm) in connection with the registration of the Shares
pursuant to the Registration Statement.

9.3.7        As
a condition to including Registrable Shares in a Registration Statement, Holder
must provide to FermaVir such information regarding itself, the Registrable
Shares held by it and the intended method of distribution of such Shares as
shall be required to effect the registration of the Registrable Shares and, if
the offering is being underwritten, Holder must provide such powers of
attorney, indemnities and other documents as may be reasonably requested by the
managing underwriter.

9.3.8        Following
the effectiveness of the Registration Statement, upon receipt from FermaVir of
a notice that the Registration Statement contains an untrue statement of
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, Holder will immediately discontinue
disposition of Included Shares pursuant to the Registration Statement until
FermaVir notifies Holder that it may resume sales of Included Shares and, if
necessary, provides to Holder copies of the supplemental or amended prospectus.

9.4   Blackout
Event.   FermaVir shall not be obligated to file a post-effective
amendment or supplement to the Registration Statement or the prospectus constituting
a part thereof during the continuance of a Blackout Event; provided, however,
that no Blackout Event may be deemed to exist for more than 60 days. Without
the express written consent of Holder, if required to permit the continued sale
of Shares by Holder, a post-effective amendment or supplement to Registration
Statement or the prospectus constituting a part thereof must be filed no later
than the 21st day following commencement of a Blackout
Event.

9.5   Rule 144.   With
a view to making available to Holder the benefits of Rule 144, FermaVir
agrees, during the period from July 1, 2007 until June 30, 2008,
unless the shares issuable to the Holder may be sold pursuant to an effective
Registration Statement, to:

9.5.1        comply
with the provisions of paragraph (c)(1) of Rule 144; and

9.5.2        file
with the SEC in a timely manner all reports and other documents required to be
filed by FermaVir pursuant to Section 13 or 15(d) under the Exchange
Act; and, if at any time it is not required to file such reports but in the
past had been required to or did file such reports, it will, upon the request
of a Holder, make available other information as required by, and so long as
necessary to permit sales of its Shares pursuant to, Rule 144.

9.6   FermaVir
Indemnification.   FermaVir agrees to indemnify and hold harmless
Holder, and its officers, directors and agents, and each person, if any, who
controls Holder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange
Act from and against any and all losses, claims, damages and liabilities
caused by (i) any violation or alleged violation by FermaVir of the
Securities Act, Exchange Act, any state securities laws or any rule or
regulation promulgated

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under the Securities Act, Exchange Act or any state securities laws, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus relating to the Included Shares (as
amended or supplemented if FermaVir shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or (iii) caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
furnished in writing to FermaVir by Holder or on Holder’s behalf expressly for
use therein.

9.7   Holder
Indemnification. Holder agrees to indemnify and hold harmless FermaVir, its
officers, directors and agents and each person, if any, who controls FermaVir
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from FermaVir
to Holder, but only with respect to information furnished in writing by Holder
or on Holder’s behalf expressly for use in any registration statement or
prospectus relating to the Registrable Shares, or any amendment or supplement
thereto, or any preliminary prospectus.

9.8   Indemnification
Procedures. In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 9, such person (an “Indemnified Party”) shall promptly notify
the person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the
Indemnifying Party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such Indemnified Party, and shall assume
the payment of all fees and expenses; provided that the failure of any
Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent (and only
to the extent that) that the Indemnifying Party is materially prejudiced by
such failure to notify. In any such proceeding, any Indemnified Party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) in the reasonable judgment of such
Indemnified Party representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such Indemnified Parties
(including in the case of Holder, all of its officers, directors and
controlling persons) and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, the Indemnified Parties shall designate such firm in writing to the
Indemnifying Party. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with
such consent, or if there be a final judgment for the plaintiff, the
Indemnifying Party shall indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason
of such settlement or judgment. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such

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settlement includes an unconditional release of such Indemnified Party
from all liability arising out of such proceeding.

9.9   Contribution.
To the extent any indemnification by an Indemnifying Party is prohibited or
limited by law, the Indemnifying Party agrees to make the maximum contribution
with respect to any amounts for which, he, she or it would otherwise be liable
under this Section 9.6 to the fullest extent permitted by law; provided,
however, that (i) no contribution shall be made under circumstances where
a party would not have been liable for indemnification under this Section 9.6
and (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning used in the Securities Act) shall be
entitled to contribution from any party who was not guilty of such fraudulent
misrepresentation.

10.          Nontransferability.   Holder may not sell or transfer any Warrants
to any person without registration under the Securities Act or providing an
opinion of counsel acceptable to the Company that such transfer may lawfully be
made without such registration. Any such purported transfer shall not be
effective as between such purported transferee and FermaVir.

11.          Severability.   If
any term, provision, covenant or restriction of these Warrants is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of these
Warrants shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.

12.          Notices.   All
notices, requests, consents and other communications required hereunder shall
be in writing and shall be effective when delivered or, if delivered by
registered or certified mail, postage prepaid, return receipt requested, shall
be effective on the third day following deposit in United States mail: to the
Holder, at the Holder’s address of
record in the Company’s warrant register; and if addressed to FermaVir,
at FermaVir Pharmaceuticals, Inc.,
420 Lexington Avenue, Suite 445, New York, NY 10170, or such other
address as FermaVir may designate in writing.

13.          No Rights as Shareholder.   The
Holder shall have no rights as a shareholder of FermaVir with respect to the
shares issuable upon exercise of the Warrants until the receipt by FermaVir of all
of the Exercise Documents.

	
  

  	
  FERMAVIR PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Geoffrey W. Henson, Chief Executive Officer

  

 

 10

EXHIBIT
“A”

NOTICE OF EXERCISE

(To be signed only upon exercise
of the Warrants)

To:          FermaVir
Pharmaceuticals, Inc.

The undersigned hereby
elects to purchase shares of Common Stock (the “Warrant
Shares”) of FermaVir Pharmaceuticals, Inc. (“FermaVir”), pursuant to the terms of the enclosed warrant
certificate (the “Certificate”).
The undersigned tenders herewith payment of the exercise price pursuant to the
terms of the Certificate.

The
undersigned hereby represents and warrants to, and agrees with, FermaVir as
follows:

1.             Holder is acquiring the Warrant
Shares for its own account, for investment purposes only.

2.             Holder understands that an
investment in the Warrant Shares involves a high degree of risk, and Holder has
the financial ability to bear the economic risk of this investment in the
Warrant Shares, including a complete loss of such investment. Holder has
adequate means for providing for its current financial needs and has no need
for liquidity with respect to this investment.

3.             Holder has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in the Warrant Shares and in protecting
its own interest in connection with this transaction.

4.             Holder understands that the Warrant
Shares have not been registered under the Securities Act or under any state
securities laws. Holder is familiar with the provisions of the Securities Act
and Rule 144 thereunder and understands that the restrictions on transfer
on the Warrant Shares may result in Holder being required to hold the Warrant
Shares for an indefinite period of time.

5.             Holder agrees not to sell,
transfer, assign, gift, create a security interest in, or otherwise dispose of,
with or without consideration (collectively, “Transfer”)
any of the Warrant Shares except pursuant to an effective registration
statement under the Securities Act or an exemption from registration. As a
further condition to any such Transfer, except in the event that such Transfer
is made pursuant to an effective registration statement under the Securities
Act, if in the reasonable opinion of counsel to FermaVir any Transfer of the
Warrant Shares by the contemplated transferee thereof would not be exempt from
the registration and prospectus delivery requirements of the Securities Act,
FermaVir may require the contemplated transferee to furnish FermaVir with an
investment letter setting forth such information and agreements as may be
reasonably requested by FermaVir to ensure compliance by such transferee with the
Securities Act.

 

 

Each certificate evidencing the Warrant Shares
will bear the following legend:

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.

6.             Immediately following this exercise
of Warrants, if as of the date of exercise FermaVir  has a class 
of securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended, the undersigned will not beneficially own
five percent (5%) or more of the then outstanding Common Stock of FermaVir
(based on the number of shares outstanding set forth in the most recent
periodic report filed by FermaVir with the Securities and Exchange Commission
and any additional shares which have been issued since that date of which
Holder is aware have been issued).

	
  Number of Warrants
  Exercised:

  	
   

  	
   

  
	
   

  	
   

  
	
  Net Exercise

  	
   

  	
   Yes 

  	
   

  	
   No

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
								

 

 2Exhibit 10.1

ACKNOWLEDGEMENT
AND AMENDMENT NO. 2

REGARDING EMPLOYMENT AGREEMENT

Reference is made to that certain Employment Agreement
(“Employment Agreement”) between ARTISTdirect, Inc., a Delaware
corporation (the “Company”), and Jonathan V. Diamond (“Employee”), effective July 28,
2005. Capitalized terms used herein and not defined shall have the meanings
given to them in the Employment Agreement.

For valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto acknowledge and agree that the date “July 1,
2006” set forth in the second sentence of Section 2 of the Employment
Agreement shall be deleted and replaced with “August 31, 2006.”  The parties hereto acknowledge and agree that
there will be no further extensions of such date.

Except as expressly set forth in this Acknowledgement
and Amendment No. 2, the terms and provisions of the Employment Agreement
shall continue unmodified and in full force and effect.   This Acknowledgement and Amendment No. 2
shall be governed and construed under the laws of the State of California, and
shall be binding on and shall inure to the benefit of the parties and their
respective successors and permitted assigns.

IN WITNESS
WHEREOF, the parties hereto have duly executed this Acknowledgement and Amendment
No. 2, effective as of the 19th day of June, 2006.

	
  “EMPLOYEE”

  	
   

  	
  “COMPANY”

  
	
   

  	
   

  	
   

  
	
  Jonathan V. Diamond

  	
   

  	
  ARTISTdirect, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jonathan V. Diamond

  	
   

  	
  By:

  	
  /s/ Frederick W. Field

  
	
  Jonathan V. Diamond

  	
   

  	
   

  	
  Frederick W. Field

  
	
   

  	
   

  	
  Its:

  	
  Chairman

  

 

 1

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