Exhibit 4.2
Warrant No. W-2
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 ACQUIRED UPON EXERCISE HEREUNDER, SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF 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.
COMMON STOCK PURCHASE
WARRANT
To Purchase Shares of Common Stock of
EXACT SCIENCES
CORPORATION
THIS COMMON STOCK PURCHASE WARRANT
(the “ Warrant ”) certifies that, for value
received, MAYO Foundation for Medical Education and Research
(“ Mayo ”, and together with any other
registered holder(s) hereunder, the “ Holder
”), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth,
to subscribe for and purchase from EXACT Sciences Corporation, a
Delaware corporation (the “ Company ”), up to
Two Hundred Fifty Thousand (250,000) shares (the “ Warrant
Shares ”) of Common Stock, par value $0.01 per share, of
the Company (the “ Common Stock ”). The
purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in
Section 2(b).
Section 1.
License Agreement . This Warrant is being issued in
connection with that certain License Agreement (the “
License Agreement ”), dated June 11, 2009,
between the Company and Mayo, as consideration for the Know-How (as
defined in the License Agreement) as services provided to the
Company thereunder.
Section 2.
Exercise .
a)
Exercise of Warrant .
i.
Vesting . The Warrant Shares shall vest, and the
Holder shall be entitled to exercise this Warrant with respect to
such Warrant Shares, according to the following schedule (in each
case subject to share adjustment pursuant to Section 3):
(A) 62,500 Warrant Shares shall vest on the first anniversary
of the date hereof; (B) 62,500 Warrant Shares shall vest on
the second anniversary of the date hereof; (C) 62,500 Warrant
Shares shall vest on the third anniversary of the date hereof; and
(D) 62,500 Warrant Shares shall vest on the fourth anniversary
of the date hereof, with each such vesting date becoming the
“ Initial Exercise Date ” for such Warrant
Shares vesting on such date. Once the Warrant Shares have
vested pursuant to this Section 2(a)(i), the Holder may
exercise this
Warrant with respect to such Warrant
Shares at any time on or after the Initial Exercise Date for such
Warrant Shares up until the close of business on the six-year
anniversary of such Initial Exercise Date (each such six-year
anniversary date being a “ Termination Date ”)
but not thereafter. This Warrant shall become void and shall
cease to be exercisable following the Termination Date for the
Warrant Shares vesting on the fourth anniversary of the date
hereof, or June 11, 2019 (such date, subject to adjustment
pursuant to Section 3(b), the “ Final Termination
Date ”). As used in this Warrant, the terms
“Initial Exercise Date” and “Termination
Date” shall mean the Initial Exercise Date and Termination
Dates, respectively, as may be applicable to each of the four
vesting dates for the Warrant Shares.
ii.
Exercise . Subject to compliance with applicable
securities laws, 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 applicable Initial Exercise Date and on or before
the applicable Termination Date by delivery to the Company of a
duly executed facsimile copy of the Notice of Exercise
Form annexed hereto (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 such Holder appearing on the books of the
Company); provided , however , within five Trading
Days (as defined below) of the date said Notice of Exercise is
delivered to the Company, if this Warrant is exercised in full, the
Holder shall have surrendered this Warrant to the Company and the
Company shall have received payment of the aggregate Exercise Price
of the Warrant Shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank.
Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full. 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. 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 five Business
Days (as defined below) of receipt of such notice. In the
event of any dispute or discrepancy, the records of the Company
shall be controlling and determinative in the absence of manifest
error. 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, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount
stated on the face hereof. As used in this Warrant, “
Trading Day ” means a day on which the Common Stock is
traded on one of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in
question: the Nasdaq Capital Market, the American Stock Exchange,
the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq
Global Select Market or the OTC Bulletin Board (each, a “
Trading Market ”). If for any period prior to
the Final Termination Date the Common Stock ceases to trade on a
Trading Market, the term “ Business Day ”,
meaning any day other than a Saturday, Sunday or legal holiday,
shall replace the term “Trading Day” in this Warrant
for such period.
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b)
Exercise Price . The per share exercise price of the
Common Stock under this Warrant shall be $1.90, subject to
adjustment hereunder (the “ Exercise Price
”).
c)
Cashless Exercise . This Warrant may also be exercised
at any time in whole or in part by means of a “cashless
exercise” in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A)
= the VWAP on the Trading Day
immediately preceding the date of such election;
(B)
= the Exercise Price of this
Warrant, as adjusted; and
(X)
= the number of Warrant Shares for
which the cashless exercise is elected that are issuable upon
exercise of this Warrant in accordance with the terms of this
Warrant by means of a cash exercise rather than a cashless
exercise.
For the purposes of this
Section 2(c), “ VWAP ” means, for any date,
the price determined by the first of the following clauses that
applies: (i) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price
of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or
quoted for trading as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to
4:02 p.m. (New York City time); (ii) if the Common Stock
is not then quoted for trading on a Trading Market and if prices
for the Common Stock are then reported in the “Pink
Sheets” published by Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so
reported; or (iii) in all other cases, the fair market value
of a share of Common Stock as determined by an independent
appraiser selected in good faith and paid for by the Company and
reasonably acceptable to the Holder.
d)
Mechanics of Exercise .
i.
Authorization of Warrant Shares . 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,
be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
ii.
Delivery of Certificates Upon Exercise . Certificates
for shares purchased hereunder shall be transmitted by the transfer
agent of the Company 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 a participant in such
system, and otherwise by physical delivery to the address specified
by the Holder in the Notice of Exercise within three Trading Days
from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant (if required) and payment of the
aggregate Exercise Price as set forth above (“ Warrant
Share Delivery Date ”). This Warrant shall be
deemed to have been exercised on the date the Exercise Price is
received by the Company. The Warrant Shares shall be deemed
to have been
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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 exercised by payment to the Company
of the Exercise Price.
iii.
Restrictive Legend . The Holder understands that unless
Warrant Shares may be sold pursuant to Rule 144 under the
Securities Act or another 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, the Warrant Shares may bear a restrictive legend in
substantially the form included on this Warrant (and a
stop-transfer order may be placed against transfer of the
certificates for such securities).
iv.
Delivery of New Warrants Upon Exercise . If this
Warrant shall have
