ARIAD
PHARMACEUTICALS, INC.
WARRANT
TO PURCHASE COMMON STOCK
To
Purchase [
]
Shares of Common Stock
Date
of Issuance: February 25, 2009
VOID
AFTER FEBRUARY 25, 2012
THIS
CERTIFIES THAT, for value received, [
], or permitted registered assigns (the “ HOLDER
”), is entitled to subscribe for and purchase at the Exercise
Price (defined below) from ARIAD Pharmaceuticals, Inc., a Delaware
corporation (the “ COMPANY ”), up to [
] shares of the common stock of the Company, par value $0.001 per
share (the “ COMMON STOCK ”). This warrant is
one of a series of warrants issued by the Company as of the date
hereof (individually a “ WARRANT ”;
collectively, the “ WARRANTS ”) pursuant to that
certain subscription agreement between the Company and the Holder,
dated as of February 19, 2009 (the “ SUBSCRIPTION
AGREEMENT ”).
1.
DEFINITIONS . Capitalized terms used herein but not
otherwise defined herein shall have their respective meanings as
set forth in the Subscription Agreement. As used herein, the
following terms shall have the following respective
meanings:
(A)
“ Eligible Market ” means any of the New York
Stock Exchange, the American Stock Exchange, The NASDAQ Global
Market, The NASDAQ Global Select Market or The NASDAQ Capital
Market.
(B)
“ Exercise Period ” shall mean the period
commencing six (6) months after the date hereof and ending
5:00 P.M. New York City time on February 25, 2012, unless
sooner terminated as provided below.
(C)
“ Exercise Price ” shall mean $2.15 per share,
subject to adjustment pursuant to Section 4
below.
(D)
“ Exercise Shares ” shall mean the shares of
Common Stock issuable upon exercise of this Warrant.
(E)
“ Trading Day ” shall mean (a) any day on
which the Common Stock is listed or quoted and traded on its
primary Trading Market, (b) if the Common Stock is not then
listed or quoted and traded on any Eligible Market, then a day on
which trading occurs on the OTC Bulletin Board (or any successor
thereto), or (c) if trading does not occur on the OTC Bulletin
Board (or any successor thereto), any Business Day.
(F)
“ Trading Market ” shall mean the NASDAQ Global
Market or any other Eligible Market, or any national securities
exchange, market or trading or quotation facility on which the
Common Stock is then listed or quoted.
2.
EXERCISE OF WARRANT . The rights represented by this Warrant
may be exercised in whole or in part at any time during the
Exercise Period, by delivery of the following to the Company at its
address set forth on the signature page hereto (or at such other
address as it may designate by notice in writing to the
Holder):
(A) An
executed Notice of Exercise in the form attached hereto;
(B) Payment
of the Exercise Price either (i) in cash or by check, or
(ii) pursuant to Section 2.1 below; and
Execution
and delivery of the Notice of Exercise shall have the same effect
as cancellation of the original Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of
Exercise Shares, if any.
Certificates
for shares purchased hereunder shall be transmitted by the
Company’s transfer agent (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 system if the
Company is a participant in such system, and otherwise by physical
delivery to the address specified by the Holder in the Notice of
Exercise within three (3) business days from the delivery to
the Company of the Notice of Exercise, surrender of this Warrant
and payment of the aggregate Exercise Price as set forth above.
This Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company.
The
person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be
deemed to have become the holder of record of such shares on the
date on which this Warrant was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of
such certificate or certificates, except that, if the date of such
surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become
the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are
open.
Subject
to Section 2.4 , to the extent permitted by law, the
Company’s obligations to issue and deliver Exercise Shares in
accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any person or entity or any
action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other person or entity of any
obligation to the Company or any violation or alleged violation of
law by the Holder or any other person or entity, and irrespective
of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the
issuance of Exercise Shares. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver Exercise
Shares upon exercise of this Warrant as required pursuant to the
terms hereof.
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2.1
NET EXERCISE . If during the Exercise Period, the Holder is
not permitted to sell Exercise Shares pursuant to the Registration
Statement, as defined in the Subscription Agreement, and the fair
market value of one share of the Common Stock is greater than the
Exercise Price (at the date of calculation as set forth below), in
lieu of exercising this Warrant by payment of cash or by check, the
Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Notice of Exercise
in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following
formula:
Where
X = the number of Exercise Shares to be issued to the
Holder
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Y
=
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the
number of shares of Common Stock purchasable under this Warrant or,
if only a portion of this Warrant is being exercised, the portion
of this Warrant being canceled (at the date of such
calculation)
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A
=
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the
fair market value of one share of the Company’s Common Stock
(at the date of such calculation)
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B
=
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Exercise
Price (as adjusted to the date of such calculation)
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For
purposes of the above calculation, the “fair market
value” of one share of Common Stock shall mean (i) the
average of the closing sales prices for the shares of Common Stock
on the Nasdaq Global Market or other Eligible Market where the
Common Stock is listed or traded as reported by Bloomberg Financial
Markets (or a comparable reporting service of national reputation
selected by the Company and reasonably acceptable to the Holder if
Bloomberg Financial Markets is not then reporting sales prices of
such security) (collectively, “ Bloomberg ”) for
the five (5) consecutive trading days immediately prior to the
Exercise Date, or (ii) if the Nasdaq Global Market is not the
principal Trading Market for the shares of Common Stock, the
average of the reported sales prices reported by Bloomberg on the
principal Trading Market for the Common Stock during the same
period, or, if there is no sales price for such period, the last
sales price reported by Bloomberg for such period, or (iii) if
neither of the foregoing applies, the last sales price of such
security in the over-the-counter market on the pink sheets or
bulletin board for such security as reported by Bloomberg, or if no
sales price is so reported for such security, the last bid price of
such security as reported by Bloomberg or (iv) if fair market
value cannot be calculated as of such date on any of the foregoing
bases, the fair market value shall be as determined by the Board of
Directors of the Company in the exercise of its good faith
judgment.
2.2
ISSUANCE OF NEW WARRANTS . Upon any partial exercise of this
Warrant, the Company, at its expense, will forthwith and, in any
event within five business days, issue and deliver to the Holder a
new warrant or warrants of like tenor, registered in the name
of
3
the
Holder, exercisable, in the aggregate, for the balance of the
number of shares of Common Stock remaining available for purchase
under this Warrant.
2.3
PAYMENT OF TAXES AND EXPENSES . The Company shall pay any
recording, filing, stamp or similar tax which may be payable in
respect of any transfer involved in the issuance of, and the
preparation and delivery of certificates (if applicable)
representing, (i) any Exercise Shares purchased upon exercise
of this Warrant and/or (ii) new or replacement warrants in the
Holder’s name or the name of any transferee of all or any
portion 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 issuance, delivery or
registration of any certificates for Exercise Shares or Warrants in
a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result
of holding or transferring this Warrant or receiving Exercise
Shares upon exercise hereof.
2.4
EXERCISE LIMITATIONS; HOLDER’S RESTRICTIONS . 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, such Holder
(together with such Holder’s affiliates), as set forth on the
applicable Notice of Exercise, would beneficially own in excess of
9.9% of the number of shares of the Common Stock outstanding
immediately after giving effect to such issuance. For purposes of
this Section 2.4 , the number of shares of Common Stock
beneficially owned by such Holder 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 the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by such
Holder or any of its affiliates and (B) exercise or conversion
of the unexercised or nonconverted portion of any other securities
of the Company (including, without limitation, any other shares of
Common Stock or Warrants) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by such Holder or any of its affiliates. Except as set forth
in the preceding sentence, for purposes of this Section 2.4
, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act, it being acknowledged by a
Holder that the Company is not representing to such Holder that
such calculation is in compliance with Section 13(d) of the
Exchange Act and such Holder is solely responsible for any
schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this
Section 2.4 applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by
such Holder) and of which a portion of this Warrant is exercisable
shall be in the sole discretion of a Holder, and the submission of
a Notice of Exercise shall be deemed to be each Holder’s
determination of whether this Warrant is exercisable (in relation
to other securities owned by such Holder) and of which portion of
this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to
verify or confirm the accuracy of such determination. For purposes
of this Section 2.4 , 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 (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may
be, (y) a more recent public announcement by the Company or
(z) any other notice by the Company or the Company’s
Transfer Agent setting forth
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