COMMON STOCK PURCHASE
WARRANT
SPECTRUM PHARMACEUTICALS,
INC.
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Warrant Shares:
_________
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Issue Date: May __, 2009
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Warrant Number:
_________
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THIS
COMMON STOCK PURCHASE WARRANT (the “ Warrant ”)
certifies that, for value received, ____________ (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 November ___, 2009 (the “
Initial Exercise Date ”) and on or prior to the close
of business on February ___, 2010 (the “ Termination
Date ”) but not thereafter, to subscribe for and purchase
from Spectrum Pharmaceuticals, Inc., a Delaware corporation (the
“ Company ”), up to ______ shares (the “
Warrant Shares ”) of 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 . Definitions . Capitalized terms used
and not otherwise defined herein shall have the meanings set forth
in that certain Securities Purchase Agreement (the “
Purchase Agreement ”), dated May 27, 2009, among
the Company and the purchasers signatory thereto.
a) Exercise of
Warrant . 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 Initial Exercise 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) Trading 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, if available, pursuant to the cashless exercise procedure
specified in Section 2(c) below. 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, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. 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
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the date of
such purchases. The Company shall deliver any objection to any
Notice of Exercise Form within 3 Business Days of receipt of such
notice. In the event of any dispute or discrepancy, the
Company’s records shall govern. 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.
b) Exercise
Price . The exercise price per share of the Common Stock under
this Warrant shall be $5.11, subject to adjustment hereunder (the
“ Exercise Price ”).
c) Cashless
Exercise . If at the time of exercise hereof both
(i) there is no effective registration statement registering,
or the prospectus contained therein is not available for the
issuance of the Warrant Shares to the Holder and (ii) all of
the Warrant Shares are not then registered for resale by Holder
into the market at market prices from time to time on an effective
registration statement for use on a continuous basis (or the
prospectus contained therein is not available for use), then this
Warrant may also be exercised, in whole or in part, at such time 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:
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(A)
=
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the
VWAP on the Trading Day immediately preceding the date on which
Holder elects to exercise this Warrant by means of a
“cashless exercise,” as set forth in the applicable
Notice of Exercise;
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(B)
=
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the
Exercise Price of this Warrant, as adjusted hereunder;
and
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(X)
=
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the
number of Warrant Shares that would be issuable upon exercise of
this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless
exercise.
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“
VWAP ” means, for any date, the price determined by
the first of the following clauses that applies: (a) 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 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), (b) if the Common Stock is
then quoted on the OTC Bulletin Board, the volume weighted average
price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board, (c) if the Common Stock is
not then listed or quoted on a Trading Market or the OTC Bulletin
Board and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink OTC Markets, Inc. (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 (d) in all other cases, the fair
market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Company and
reasonably acceptable to the Holders of a majority in interest of
the Securities then outstanding, the fees and expenses of which
shall be paid by the Company.
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d)
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 and either (A) there is an
effective Registration Statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or
(B) this Warrant is being exercised via cashless exercise, and
otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise by the date that is three
(3) Trading Days after the latest of (A) the delivery to the
Company of the Notice of Exercise Form and receipt of the DWAC
request from the Holder’s prime broker (if applicable), (B)
surrender of this Warrant (if required) and (C) payment of the
aggregate Exercise Price as set forth above (including by cashless
exercise, if permitted) (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 cashless exercise, if permitted) and all
taxes required to be paid by the Holder, if any, pursuant to
Section 2(d)(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, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of
delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
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(d)(i) by
the Warrant Share Delivery Date, then, the Holder will have the
right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise . In addition to any other rights
available to the Holder, 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 an exercise on or
before the Warrant Share Delivery Date, and
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if after such
date the Holder is required by its broker to purchase (in an open
market transaction or otherwise) or the Holder’s brokerage
firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “
Buy-In ”), then the Company shall (A) pay in cash
to the Holder the amount, if any, by which (x) the
Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased
exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the
immediately preceding sentence the Company shall be required to pay
the Holder $1,000. Notwithstanding the foregoing, the Company shall
not be required to make the payments set forth herein in the case
of uncertificated Warrant Shares if the Holder fails to timely file
a request with the Depository Trust Company to receive such
uncertificated Warrant Shares. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in
respect of the Buy-In and, upon request of the Company, evidence of
the amount of such loss. 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
certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof.
v. 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.
vi. 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
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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.
vii. Closing of
Books . The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
e)
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 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(e), 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(e) 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 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 noncompliance with the Beneficial Ownership
Limitation. In addition, a determination as to any group status as
contemplated above shall be determined in
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accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), 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 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 Trading 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, includin
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