ANADYS PHARMACEUTICALS,
INC.
Warrant
To Purchase Common Stock
Warrant No.:
2009-________
Number of Shares of Common Stock:
Date of Issuance: _________ _____, 200___ (“ Issuance
Date ”)
Anadys
Pharmaceuticals, Inc., a Delaware corporation (the “
Company ”), certifies that, for good and valuable
consideration, the receipt and sufficiency of which are
acknowledged,
, the registered holder hereof or its permitted assigns (the
“ Holder ”), is entitled, subject to the terms
set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “ Warrant ”), at any time or times
on or after 180 days from the date hereof (the “
Exercisability Date ”), but not after 5:30 p.m., New
York Time, on the Expiration Date (as defined below),
(
) fully paid and nonassessable shares of Common Stock (as defined
below) (the “ Warrant Shares ”). Except as
otherwise defined herein, capitalized terms in this Warrant shall
have the meanings set forth in Section 15. This Warrant is one
of a series of warrants to purchase shares of Common Stock
(collectively, the “ Warrants ”) issued pursuant
to those certain Subscription Agreements, dated as of June 3,
2009 (the “ Subscription Date ”), by and among
the Company and the investors (the “ Investors
”) referred to therein (the “ Subscription
Agreements ”) pursuant to the Company’s
Registration Statement on Form S-3 (No. 333-158342) (the
“ Registration Statement ”).
(a)
Mechanics of Exercise . Subject to the terms and conditions
hereof (including, without limitation, the limitations set forth in
Section 1(e)), this Warrant may be exercised by the Holder on
any day on or after the Exercisability Date, in whole or in part
(but not as to fractional shares), by (i) delivery of a
written notice, in the form attached hereto as Exhibit A
(the “ Exercise Notice ”), of the Holder’s
election to exercise this Warrant and (ii) payment to the
Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant
is being exercised (the “ Aggregate Exercise Price
”) in cash or wire transfer of immediately available funds.
The Holder shall not be required to surrender this Warrant in order
to effect an exercise hereunder, provided that this Warrant
is surrendered to the Company by the second Trading Day following
the date on which the Company has received each of the Exercise
Notice and the Aggregate Exercise Price (the “ Exercise
Delivery Documents ”). On or before the first Trading Day
following the date on which the Company has received the Exercise
Delivery Documents, the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery
Documents to the Holder and the Company’s transfer agent for
the Common Stock (the “ Transfer Agent ”). The
Company shall deliver any objection to the Exercise Delivery
Documents on or before the second Trading Day following the date on
which the Company has received all of the Exercise Delivery
Documents. In the event of any discrepancy or dispute, the records
of the Company shall be controlling and determinative in
the absence of
manifest error. On or before the third Trading Day following the
date on which the Company has received all of the Exercise Delivery
Documents and after the Company shall have received this Warrant
(the “ Share Delivery Date ”), the Company
shall, (X) provided that the Transfer Agent is participating
in The Depository Trust Company (“ DTC ”) Fast
Automated Securities Transfer Program (the “ FAST
Program ”) and so long as the certificates therefor are
not required to bear a legend regarding restriction on
transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit
Withdrawal Agent Commission system, or (Y), if the Transfer Agent
is not participating in the FAST Program or if the certificates are
required to bear a legend regarding restriction on transferability,
issue and dispatch by overnight courier to the address as specified
in the Exercise Notice, a certificate, registered in the
Company’s share register in the name of the Holder or its
designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise. Upon delivery of the
Exercise Delivery Documents and surrender of this Warrant, the
Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date such
Warrant Shares are credited to the Holder’s DTC account or
the date of delivery of the certificates evidencing such Warrant
Shares, as the case may be. If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the
number of Warrant Shares represented by this Warrant submitted for
exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then the Company shall as soon as
practicable and in no event later than five Trading Days after any
exercise and at its own expense, issue a new Warrant (in accordance
with Section 8(e)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised. The Company shall pay any and all
taxes that may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant; 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 or an affiliate thereof. 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.
(b)
Exercise Price . For purposes of this Warrant, “
Exercise Price ” means $2.75 per share of Common
Stock, subject to adjustment as provided herein.
(c)
Failure to Timely Deliver Shares . In addition to any other
rights available to a Holder, if the Company fails to deliver to
the Holder a certificate representing Warrant Shares by the third
Trading Day after the date on which delivery of such certificate is
required by this Warrant, and if after such third Trading Day 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 that the Holder anticipated receiving
from the Company (a “ Buy-In ”), then the
Company shall, within three Trading Days after the Holder’s
request and in the Holder’s discretion, either (i) pay
cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased less the Exercise Price (the
“ Buy-In Price ”), at which point the
Company’s obligation to deliver such certificate (and to
issue such Common Stock) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or
certificates representing such Common Stock and
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pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common
Stock, times (B) the Closing Price on the date of the event
giving rise to the Company’s obligation to deliver such
certificate.
(d)
Cashless Exercise . Notwithstanding anything contained
herein to the contrary, if neither a registration statement
covering the Warrant Shares nor an exemption from registration
under the Securities Act of 1933, as amended, is available either
for registration of the Warrant Shares or for the resale of the
Warrant Shares, the Holder may, in its sole discretion, exercise
this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such
exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of
shares of Common Stock determined according to the following
formula (a “ Cashless Exercise ”):
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Net Number
=
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(A x B) — (A x C)
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B
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For purposes of
the foregoing formula:
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A=
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the
total number of shares with respect to which this Warrant is then
being exercised.
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B=
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the
Weighted Average Price of the shares of Common Stock (as reported
by Bloomberg) on the date immediately preceding the date of the
Exercise Notice.
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C=
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the
Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise.
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(e)
Limitations on Exercises . (1) The Company shall not
effect the exercise of this Warrant, and the Holder shall not have
the right to exercise this Warrant, to the extent that after giving
effect to such exercise, such Holder (together with such
Holder’s affiliates and any other Persons acting as a group
together) would beneficially own in excess of 4.99% (the “
Maximum Percentage ”) of the shares of Common Stock
outstanding immediately after giving effect to such exercise. For
purposes of the foregoing sentence, the aggregate number of shares
of Common Stock beneficially owned by such Person and its
affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude
shares of Common Stock which would be issuable upon (i) exercise of
the remaining, unexercised portion of this Warrant beneficially
owned by such Person and its affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other
securities of the Company beneficially owned by such Person and its
affiliates (including, without limitation, any convertible notes or
convertible preferred stock or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes
of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), it
being acknowledged 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
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filed in
accordance therewith.. For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as
reflected in (1) the Company’s most recent Form 10-K,
Form 10-Q, Current Report on Form 8-K or other public filing with
the Securities and Exchange Commission, as the case may be,
(2) a more recent public announcement by the Company or
(3) any other notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. For
any reason at any time, upon the written or oral request of the
Holder, where such request indicates that it is being made pursuant
to this Warrant, the Company shall within two Trading Days confirm
orally and in writing to the Holder the number of shares of Common
Stock then outstanding. 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
the Warrants, by the Holder and its affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may increase
or decrease the Maximum Percentage to any other percentage not in
excess of 9.99% specified in such notice; provided , that
(i) any such increase will not be effective until the
61 st
day after such notice is delivered
to the Company and (ii) any such increase or decrease will
apply only to the Holder and not to any other holder of
Warrants.
(f)
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 that the
Holder would otherwise be entitled to purchase upon such exercise,
the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the
Exercise Price.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES .
The Exercise Price and the number of Warrant Shares shall be
adjusted from time to time as follows:
(a)
Adjustment upon Subdivision or Combination of Shares of Common
Stock . If the Company at any time on or after the Subscription
Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares,
the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of Warrant Shares
will be proportionately increased. If the Company at any time on or
after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price
in effect immediately prior to such combination will be
proportionately increased and the number of Warrant Shares will be
proportionately decreased. Any adjustment under this Section 2(a)
shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(b)
Other Events . If any event occurs of the type contemplated
by the provisions of Section 2(a) but not expressly provided for by
such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights
with equity features to the holders of the Company’s equity
securities), then the Company’s Board of Directors will make
an appropriate adjustment in the Exercise Price and the number of
Warrant Shares so as to protect the rights of the Holder;
provided , that no such adjustment pursuant to this
Section 2(b)
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will increase
the Exercise Price or decrease the number of Warrant Shares as
otherwise determined pursuant to this Section 2.
(c) Notwithstanding
anything to the contrary in this Warrant, in no event shall the
Exercise Price be reduced below the par value of the
Company’s Common Stock
3. RIGHTS
UPON DISTRIBUTION OF ASSETS . If the Company shall declare or
make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “ Distribution ”), at any time after the
issuance of this Warrant, then, in each such case:
(a) any
Exercise Price in effect immediately prior to the close of business
on the record date fixed for the determination of holders of shares
of Common Stock entitled to receive the Distribution shall be
reduced, effective as of the close of business on such record date,
to a price determined by multiplying such Exercise Price by a
fraction of which (i) the numerator shall be the Weighted
Average Price of the shares of Common Stock on the Trading Day
immediately preceding such record date minus the value of the
Distribution (as determined in good faith by the Company’s
Board of Directors) applicable to one share of Common Stock, and
(ii) the denominator shall be the Weighted Average Price of
the shares of Common Stock on the Trading Day immediately preceding
such record date; and
(b) the
number of Warrant Shares shall be increased to a number of shares
equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed
for the determination of holders of shares of Common Stock entitled
to receive the Distribution multiplied by the reciprocal of the
fraction set forth in the immediately preceding paragraph (a);
provided , that in the event that the Distribution is of
shares of Common Stock or common stock of a company whose common
shares are traded on a national securities exchange or a national
automated quotation system (“ Other Shares of Common
Stock ”), then the Holder may elect to receive a warrant
to purchase Other Shares of Common Stock in lieu of an increase in
the number of Warrant Shares, the terms of which shall be identical
to those of this Warrant, except that such warrant shall be
exercisable into the number of shares of Other Shares of Common
Stock that would have been payable to the Holder pursuant to the
Distribution had the Holder exercised this Warrant immediately
prior to such record date and with an aggregate exercise price
equal to the product of the amount by which the exercise price of
this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph
(a) and the number of Warrant Shares calculated in accordance
with the first part of this paragraph (b).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS .
(a)
Purchase Rights . In addition to any adjustment
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