Document:

ex4-1.htm

EXHIBIT 4.1

 

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (I) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

 

AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS INVOLVED.

 

INTEREST WARRANT TO PURCHASE COMMON STOCK OF

 

TENGION, INC.

 

	
Warrant Shares:  [·]

	
Issue Date: [·]

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, as consideration for interest payments owed to [·] (the “Holder”) under the Senior Secured Notes issued in connection with the financing completed by Tengion, Inc., a Delaware corporation (the “Company”) in October 2012 and under the Terms of the Facility Agreement, dated October 2, 2012, as amended from time to time, entered into by the Company, the Holder and certain lenders identified therein, the Holder is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Exercisability Date”) and on or prior to the close of business on the tenth anniversary of the Exercisability Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from the Company, up to [·] shares (the “Warrant Shares”) of common stock of the Company (“Common Stock”).

 

Section 1.                      Definitions.  Capitalized terms used herein shall have the meanings given to them herein.  As used herein, “business day” means any day on which the New York Stock Exchange, Inc., NASDAQ or the OTC market is open for trading

 

Section 2.                      Exercise.

 

a) Exercise of Warrant.  Except as provided in Section 2.g, exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Exercisability Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and, within three (3) business days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or, pursuant to the cashless exercise procedure specified in Section 2.c below.  Once the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, the Holder shall surrender this Warrant to the Company for cancellation within three (3) business days of the date the final Notice of Exercise is delivered to the Company.  Until this Warrant is surrendered pursuant to Section 2.e.(ii), partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  In the event that this Warrant is not surrendered for a balance Warrant pursuant to Section 2.e.(ii), the Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise Form within one (1) business day of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, if a balance Warrant has not been issued to the Holder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

 

  

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b) Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $0.001 (the “Exercise Price”).

 

c) Method of Exercise.  If and only if a registration statement covering the issuance of the Warrant Shares is then effective, a registered Holder may exercise this Warrant through a cash exercise (a “Cash Exercise”).  If there is no effective registration statement covering the issuance of the Warrant Shares or if the Holder otherwise elects, a registered Holder may exercise this Warrant through a cashless exercise (a “Cashless Exercise”) as described below.  The Holder may effect a Cashless Exercise by surrendering this Warrant to the Company and noting on the Notice of Exercise that the Holder wishes  effect a Cashless Exercise, upon which the Company shall issue, or cause to be issued, to the Holder the number of Warrant Shares equal to determined as follows:

 

X = Y x (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 the Warrant is being exercised;

 

A = the Market Price of one (1) share of Common Stock (for purposes of this provision, where “Market Price,” as of any date, means the Volume Weighted Average Price (as defined herein) of the Company’s Common Stock during the ten (10) consecutive Trading Day period immediately preceding the date in question; and

 

B = the Exercise Price.

 

As used herein, the “Volume Weighted Average Price” for any security as of any date means the volume weighted average sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg Financial Markets or an equivalent, reliable reporting service mutually acceptable to and hereinafter mutually agreed to by the Company and the Holder (“Bloomberg”) or, if no volume weighted average sale price is reported for such security, then the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security that are listed in the over the counter market by the Financial Industry Regulatory Authority, Inc. or on the “over the counter” Bulletin Board (or any successor) or in the “pink sheets” (or any successor) by the OTC Markets Group, Inc. If the Volume Weighted Average Price cannot be calculated for such security on such date in the manner provided above, the Volume Weighted Average Price shall be the fair market value as mutually determined by the Company and the Holder. “Trading Day” shall mean any day on which the Common Stock is traded for any period on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

 

  

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d) Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant, to the extent not exercised prior thereto, shall be automatically exercised via Cashless Exercise pursuant to Section 2.c.

 

e) Mechanics of Exercise.

 

i. Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted by the transfer agent to the Holder by crediting the account of the Holder’s prime broker with the depository trust company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is then a participant in such system or by physical delivery of the certificates for the shares to the address specified by the Holder in the Notice of Exercise by the date that is three (3) business days after the latest of (A) the delivery to the Company of the Notice of Exercise Form, (B) surrender of this Warrant (if the exercise is a Cashless Exercise) and (C) payment of the aggregate Exercise Price as set forth above if the exercise is a Cash Exercise (such date, the “Warrant Share Delivery Date”).  This Warrant shall be deemed to have been exercised on the first date on which all of the foregoing have been delivered to the Company.  The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been properly exercised, with payment to the Company of the Exercise Price (or by surrender of this Warrant and Notice of Exercise if a Cashless Exercise) and all taxes required to be paid by the Holder, if any, pursuant to Section 2.e.(vi) prior to the issuance of such shares, having been paid.

 

ii. Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, upon surrender of this Warrant, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the Warrant Shares for which this Warrant has not been exercised, which new Warrant shall in all other respects be identical with this Warrant.

 

 

 

 

  

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iii. Rescission Rights.  If the Company fails to cause the transfer agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2.e.(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.

 

iv. No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

v. Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

f) Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company including, without limitation, any other  securities of the Company or any Company subsidiary consolidated in the Company’s financial statements which would entitle the holder thereof to acquire at any time Common Stock (“Common Stock Equivalents”) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 2(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2.f. applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion 

 

 

 

  

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of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are in non-compliance with the Beneficial Ownership Limitation.   In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2.f., in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two (2) business days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding as established by (A), (B) or (C) above, as applicable.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 9.985% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

Section 3.                      Certain Adjustments.

 

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

 

  

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b) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

c) Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price and the number of Warrant Shares issuable hereunder is adjusted pursuant to this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price and number of Warrant Shares for which this Warrant is exercisable after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Exercise by Holder. If during the term in which this Warrant may be exercised by the Holder (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property (each such event in this clause (D), a “Fundamental Transaction”), or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record 

 

 

 

  

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shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein, and the Holder shall be entitled to provide in any Exercise Notice delivered during such period that the exercise of this Warrant is conditioned upon the occurrence of the event described in such notice.  In the event that the Holder has not exercised this Warrant prior to the closing of any Fundamental Transaction, than the provisions of Section 4 shall apply.

 

Section 4.                      Assumption.                      The Company shall not enter into or be party to any Fundamental Transaction that is to be treated as described in this Section 4, unless any party purchasing the Company’s assets or Common Stock, or any successor entity resulting from such Fundamental Transaction (in each case, a “Successor Entity”), assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4 pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction (such approval not to be unreasonably withheld, conditioned or delayed), including agreements to deliver to each Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, representing the appropriate number of shares of the Successor Entity, having similar exercise rights as this Warrant, reasonably satisfactory to the Holder. Upon the occurrence of any Fundamental Transaction, any Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to such Fundamental Transaction, such shares of common stock (or their equivalent) of the Successor Entity, as adjusted in accordance with the provisions of this Warrant. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the exercise of this Warrant other than any applicable beneficial ownership limitations.

 

 

  

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Section 5.                      Transfer of Warrant.

 

a) Transferability.  Subject to compliance with applicable securities laws, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 5.a., as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall include reference to the initial issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto and the Warrant number.

 

c) Warrant Register. 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 written notice to the contrary.

 

 

 

  

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d) Representation by the Holder.  The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act of 1933, as amended (the “Securities Act”) or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 6.                      Legends

 

 

	
a)  

	
Restrictive Legend. The Holder understands that unless this Warrant or the Warrant Shares have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 under the Securities Act or an exemption from registration under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, this Warrant and the Warrant Shares, as applicable, may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such securities):

 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING, WITHOUT LIMITATION, PURSUANT TO RULES 144 OR 144A UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED “4(1) AND A HALF” SALE.”

 

	
b)  

	
 (ii) Removal of Restrictive Legends. This Warrant nor the Warrant Shares, as applicable, shall not contain any legend restricting the transfer thereof (including the legend set forth above in subsection 6.a: (A) while a registration statement covering the sale or resale of such security is effective under the Securities Act, or (B) following any sale of such Warrant and/or Warrant Shares pursuant to Rule 144, or (C) if such Warrant or Warrant Shares, as the case may be, are eligible for sale under Rule 144(b)(1), or (D) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC) (collectively, the “Unrestricted Conditions”). The Company shall cause its counsel to issue a legal opinion to the transfer agent of the Company promptly after the effective date of such registration statement, or at such other time as the Unrestricted Conditions have been satisfied, if required by the Company’s transfer agent to effect the issuance of the Warrant Shares, as applicable, without a restrictive legend or removal of the legend hereunder. If the Unrestricted Conditions are met at the time of issuance of the Warrant Shares, then the Warrant Shares shall be issued free of all legends. The Company agrees that following the effective date of such registration statement or at such time as the Unrestricted Conditions are met or such legend is otherwise no longer required under this Section 6.b, it will, no later than three (3) Trading Days following the delivery (the “Unlegended Shares Delivery Deadline”) by the Holder to the Company of this Warrant or a certificate representing Exercise Shares, as applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Holder this Warrant and/or a certificate (or electronic transfer) representing such shares that is free from all restrictive and other legends. 

 

 

  

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c)  (iii) Sale of Unlegended Shares. The Holder agrees that the removal of the restrictive legend from this Warrant and any certificates representing securities as set forth in Section 2(e) above is predicated upon the Company’s reliance that the Holder will sell this Warrant or any Warrant Shares, as applicable, pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if such securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein.

 

Section 7.                      Miscellaneous.

 

a) No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2.e.

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a business day, then, such action may be taken or such right may be exercised on the next succeeding business day.

 

d) Authorized Shares.  The Company covenants it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the ate in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

 

  

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Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the laws of the State of New York.

 

f) Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

 

  

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g) Notices.  The Company shall provide Holder with prompt written notice of all actions taken pursuant to this Warrant. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing, will be mailed (a) if within the domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile or (b) if delivered from outside the United States, by International Federal Express or facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic confirmation of receipt, and will be delivered and addressed as follows:

 

	
  

	
(i)

	
if to the Company, to:

Tengion Inc.

3929 Westpoint Boulevard, Suite G

Winston-Salem, NC 27103

Attn: A. Brian Davis, Chief Financial Officer and Vice President, Finance

Facsimile: 336-722-2436

 

With Copies to:

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199

Attn: Marc Rubenstein

Facsimile: 617-951-7050

	
  

	
(ii) if to the Holder, at the address of the Holder appearing on the books of the Company.

h) Limitation of Liability.  No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

 

 

  

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i) Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

j) Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

k) Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

l) Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

m) Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

(Signature Page Follows)

 

 

 

  

13

  

 

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

 

 

	
TENGION, INC.

 

 

 

	
By:__________________________________________

     Name:

     Title:

 

 

 

  

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NOTICE OF EXERCISE

TO:  TENGION, INC.

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

[  ] in lawful money of the United States; or

[ ] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2.c., to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2.c.

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

[SIGNATURE OF HOLDER]

Name of Investing Entity: ______________________________________________________________

 

Signature of Authorized Signatory of Investing Entity: ________________________________________

 

Name of Authorized Signatory: __________________________________________________________

 

Title of Authorized Signatory: ___________________________________________________________

 

Date: _______________________________________________________________________________

 

  

15

  

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [__________] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s Signature:                                _____________________________

Holder’s Address:                                _____________________________

_____________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

 

 16ex10-1.htm

EXHIBIT 10.1

 

AMENDMENT AGREEMENT TO THE WARRANTS AND NOTES

This Amendment Agreement to (i) the warrants (the “Warrant”) to purchase shares of common stock, par value, $0.001 per share ("Common Stock") of Tengion, Inc.,  a Delaware corporation (the “Company)  issued to [                          ] (the “Investor”) on October 2, 2012 and (ii) the Senior Secured Convertible Note (the “Note”)  issued to the Investor on October 2, 2012 in connection with a financing completed by the Company on October 2, 2012 (the “2012 Financing”), is entered into this 14th day of February, 2013, by and between the Company and the Investor. Terms not defined herein shall have the applicable meanings provided for such terms in the Warrant and Note.

RECITALS

A.           The Company, the Investor and certain other parties entered into that certain Securities Purchase Agreement, dated as of October 2, 2012 (the "Purchase Agreement"), pursuant to which the Company issued and the Investor purchased the Note and Warrant.

 

B.           The Company, the Investor and certain other parties entered into that certain Facility Agreement, dated as of October 2, 2012 (as amended by the Consent and Amendment and Second Consent and Amendment entered into by the Company and the Investors dated December 31, 2012 and January 30, 2013, respectively, the "Facility Agreement"), which agreement governs the terms and conditions under which the Note was issued by the Company, including (i) certain events of default and monetary penalties upon the occurrence of certain events, including a Registration Failure (as defined in the Note), (ii) a limitation on payment of interest on the Note in Common Stock if such issuance were to result in an Investor holding more than 9.985% of the total number outstanding shares of the Company (the “9.985% Limitation”), (iii) a consent right of the Investor in order for the Company to incur additional Indebtedness and permit Liens and (iv) the consequence of the occurrence of a Major Transaction.

 

C.           The Company, the Investor and certain other parties entered into that certain Registration Rights Agreement, dated as of October 2, 2012 (as amended by the Consent and Amendment and Second Consent and Amendment entered into by the Company and the Investors December 31, 2012 and January 30, 2013, respectively, the "Registration Rights Agreement" and together with the Purchase Agreement, Note, Warrant and Facility Agreement, the "Applicable Transaction Documents"), which imposes certain obligations on the Company to register the shares of Common Stock underlying the Notes and Warrants with the Securities and Exchange Commission (the "SEC") for resale by the Investors on or before February 15, 2013, and provides for certain monetary penalties in the event of a Registration Failure (as defined in the Registration Rights Agreement).

 

D.           On November 5, 2012, the Company filed a registration statement on Form S-1, as amended (the “Registration Statement”), seeking to register the shares of Common Stock underlying the Note and Warrant to comply with its obligations under the Registration Rights Agreement, and the SEC has requested that the Company either withdraw the Registration Statement or reduce the amount of shares being registered to an amount equal to one third of the Company’s public float (the “1/3 Cap”).

 

 

  

1

  

 

 

E.           The Company intends to pursue an additional round of financing during 2013.

 

F.           The Company and Investors are willing to amend the Applicable Transaction Documents to, among other things, (i) provide for certain amendments relating to the registration of the shares of common stock underlying the Notes and Warrants of the Company compliant with the 1/3 Cap imposed by the SEC, (ii) include a notice requirement for shareholders selling shares under a registration statement filed by the Company, (iii) permit the Company to satisfy its interest obligations under the Notes through the issuance of shares of restricted Common Stock or certain warrants to purchase shares of Common Stock , (iv) extend the interest payment date of April 1, 2013 with respect to the Notes under the Applicable Transaction Documents to April 2, 2013, (v) extend the Registration Deadline under the Registration Rights Agreement to a day that is one hundred and eighty (180) calendar days following the date on which the Notes and Warrants were issued and (vi) to permit the Company to complete an additional round of financing without further action required by Investors.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1. Amendments to the Warrant

a. The Company and the Investor hereby agree to amend the second sentence of under Section 1 to read in its entirety as follows:

“This Warrant was issued in conjunction with that certain Securities Purchase Agreement (the “SPA”), the Facility Agreement, as amended from time to time,  (the “Facility Agreement”) and the Registration Rights Agreement, as amended from time to time (“Registration Rights Agreement”) by and between the Company and _________________, each originally dated October 2, 2012, entered into in conjunction herewith.”

b. The Company and the Investor hereby agree to add the following as the last paragraph of  Section 5(c):

“Notwithstanding any provision herein or in the Transaction Documents to the contrary, the issuance of any securities in connection with the proposed financing that the Company intends to complete in 2013, consisting of shares of Common Stock, convertible debt or warrants with a price per share of Common Stock and an exercise and/ or conversion price under such convertible debt and warrants of not less than the conversion price in effect under the terms of the Notes immediately following such transaction, and which will result in gross proceeds of not more than $30 million (excluding any proceeds that may be received upon conversion of any notes or the exercise of any warrants issued in the 2013 Financing), including the issuance of any securities upon conversion or exercise of any securities issued in connection with such financing, shall be disregarded as an issuance of shares of Common Stock for purposes of clause (D) of the definition of  "Major Transaction.”

 

 

 

  

2

  

 

2. Amendments to the Notes:

a. The Company and the Investor hereby agree to add as the last paragraph of Section 1(ix) the following:

“The Company intends to complete a proposed offering of Company securities in 2013, consisting of shares of Common Stock, convertible debt or warrants with a price per share of Common Stock and an exercise and/ or conversion price under such convertible debt and warrants of not less than the conversion price in effect under the terms of the Notes immediately following such transaction, which will result in gross proceeds of not more than $30 million (excluding any proceeds that may be received upon conversion of any notes or the exercise of any warrants issued in the 2013 Financing).  Notwithstanding any provision herein to the contrary, the issuance of any securities in connection with the 2013 Financing, including the issuance of any securities upon conversion or exercise of any securities issued in connection with the 2013 Financing, shall be disregarded as an issuance of shares of Common Stock for purposes of clause (D) of the definition of  "Major Transaction.”

b.  The Company and the Investor hereby agree to amend Section 1(xii) in its entirety as follows:

 (xii)           “Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of October 2, 2012, as amended from time to time, by and among the Company and the investors party to the Securities Purchase Agreement.

 

[Signature Pages Follow]

 

 

  

3

  

 

 

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by their duly authorized representatives as of the date first above written.

 

Tengion, Inc.

 

 

	
By:

	
_________________________________

 

	
  

	
A. Brian Davis

 

	
  

	
Chief Financial Officer and VP Finance

 

 

 

 

Investor

 

By:           _________________________________

Name:

Title:

 

 

 

 

 

4

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