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Exhibit 4.1
FORM OF
WARRANT
NEITHER THESE SECURITIES NOR THE
SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
THRESHOLD PHARMACEUTICALS,
INC.
WARRANT
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Dated: [
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2008 |
Threshold Pharmaceuticals,
Inc., a Delaware corporation (the “ Company ”),
hereby certifies that, for value received,
or its registered assigns (the “ Holder ”), is
entitled to purchase from the Company up to a total of
shares of common stock, $0.001 par value per share (the “
Common Stock ”), of the Company (each such share, a
“ Warrant Share ” and all such shares, the
“ Warrant Shares ”) at an exercise price equal
to $0.39 per share (as adjusted from time to time as provided in
Section 9, the “ Exercise Price ”), at any
time and on or after the date hereof (the “ Initial
Exercise Date ”) and through and including the date that
is sixty (60) months from the date hereof (the “
Expiration Date ”), subject to the following terms and
conditions. This Warrant (this “ Warrant ”) is
one of a series of similar warrants issued pursuant to that certain
Securities Purchase Agreement, dated as of July 9, 2008, by
and among the Company and the Investors identified therein (the
“ Purchase Agreement ”). All such warrants are
referred to herein, collectively, as the “ Warrants
.”
1. Definitions . In
addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Purchase Agreement.
2. Registration of
Warrant . 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 record 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 notice to
the contrary.
3. Registration of
Transfers . The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of
this Warrant, with the Form of Assignment attached hereto duly
completed and signed, to the Company at its address specified in
the Purchase Agreement. Upon any such registration of transfer, a
new warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new warrant, a “ New Warrant
”), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall
be issued to the transferring Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance by
such transferee of all of the rights and obligations of a holder of
a Warrant.
4. Exercise and Duration
of Warrants .
(a) This Warrant shall be
exercisable by the registered Holder at any time and from time to
time on or after the Initial Exercise Date and including the
Expiration Date. At 6:30 P.M., New York City time on the Expiration
Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value.
(b) A Holder may exercise
this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “ Exercise
Notice ”), appropriately completed and duly signed, and
(ii) payment of the Exercise Price for the number of Warrant
Shares as to which this Warrant is being exercised (which may take
the form of a “cashless exercise” if so indicated in
the Exercise Notice), and the date such items are delivered to the
Company (as determined in accordance with the notice provisions
hereof) is an “ Exercise Date .” The Holder
shall not be required to deliver the original Warrant in order to
effect an exercise hereunder. Execution and delivery of the
Exercise Notice 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 Warrant Shares.
5. Delivery of Warrant
Shares .
(a) Upon exercise of this
Warrant, the Company shall promptly issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder
and in such name or names as the Holder may designate, a
certificate for the Warrant Shares issuable upon such exercise,
free of restrictive legends unless a legend is required to be
placed on the certificate pursuant to Section 4.1 of the
Purchase Agreement. The Holder, or any Person so designated by the
Holder to receive Warrant Shares, shall be deemed to have become
the holder of record of such Warrant Shares as of the Exercise
Date. The Company shall, upon the written request of the Holder and
provided that the Transfer Agent is participating in The Depository
Trust Company (“ DTC ”) Fast Automated
Securities Transfer Program, use its commercially reasonable
efforts, to credit such aggregate number of Warrant Shares 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 (“
DWAC ”); provided , that the Holder provides
the Company the reasonably necessary details to effect the
foregoing DWAC delivery.
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(b) This Warrant is
exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. Upon surrender of this
Warrant following one or more partial exercises, the Company shall
issue or cause to be issued, at its expense, a New Warrant
evidencing the right to purchase the remaining number of Warrant
Shares.
(c) If within three Trading
Days after the Company’s receipt of an Exercise Notice the
Company shall fail to issue and deliver a certificate to the Holder
and register the shares of Common Stock issuable pursuant to the
Exercise Notice on the Company’s share register or credit the
Holder’s balance account with DTC for the number of shares of
Common Stock to which the Holder is entitled upon such exercise,
and if on or after such 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 shares of Common
Stock issuable upon such exercise 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
(the “ Buy-In Price ”), at which point the
Company’s obligation to deliver such certificate (and to
issue such shares of Common Stock) or credit such Holder’s
balance account with DTC shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or
certificates representing such shares of Common Stock or credit
such Holder’s balance account with DTC and 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 Bid Price on the date of
exercise. For purposes of this Warrant, “ Closing Bid
Price ” shall mean, for any security as of any date, the
last closing bid price for such security on the Trading Market, as
reported by the Bloomberg Financial Markets (“
Bloomberg ”), or, if the Trading Market begins to
operate on an extended hours basis and does not designate the
closing bid price, then the last bid price of such security prior
to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if
the Trading Market is not the principal securities exchange or
trading market for such security, the last closing bid price or
last trade price, respectively, of such security on the Eligible
Market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the average of the bid
prices, or the ask prices, respectively, of any market makers for
such security as reported in the “pink sheets” by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the
Closing Bid Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid
Price of such security on such date shall be the fair market value
as mutually determined by the Company and the Holder.
(d) The Company’s
obligations to issue and deliver Warrant 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 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 of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other
Person, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to the Holder in
connection with
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the issuance of Warrant
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 certificates representing shares of
Common Stock upon exercise of this Warrant as required pursuant to
the terms hereof.
6. Charges, Taxes and
Expenses . Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding
tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificates, all of which taxes
and expenses shall be paid by the Company; 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. 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.
7. Replacement of
Warrant . If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only
upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable bond
or indemnity, if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe.
8. Reservation of Warrant
Shares . The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the
purpose of enabling it to issue Warrant Shares upon exercise of
this Warrant as herein provided, the number of Warrant Shares which
are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent
purchase rights of persons other than the Holder (after giving
effect to the adjustments and restrictions of Section 9, if
any). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and nonassessable. The
Company will take all such action as may be necessary to assure
that such shares of Common Stock may be issued as provided herein
without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation
system upon which the Common Stock may be listed.
9. Certain Adjustments
. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.
(a) Stock Dividends and
Splits . If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that
is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares,
or (iii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the
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Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any
adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or
(iii) of this paragraph shall become effective immediately
after the effective date of such subdivision or
combination.
(b) Pro Rata
Distributions . If the Company, at any time while this Warrant
is outstanding, distributes to holders of Common Stock
(i) evidences of its indebtedness, (ii) any security
(other than a distribution of Common Stock covered by the preceding
paragraph), (iii) rights or warrants to subscribe for or
purchase any security, or (iv) cash or any other asset (in
each case, “ Distributed Property ”), then in
each such case the Holder shall be entitled upon exercise of this
Warrant for the purchase of any or all of the Warrant Shares, to
receive the amount of Distributed Property which would have been
payable to the Holder had such Holder been the holder of such
Warrant Shares on the record date for the determination of
stockholders entitled to such Distributed Property. The Company
will at all times set aside in escrow and keep available for
distribution to such holder upon exercise of this Warrant a portion
of the Distributed Property to satisfy the distribution to which
such Holder is entitled pursuant to the preceding
sentence.
(c) Fundamental
Transactions . If, at any time while this Warrant is
outstanding, (i) the Company effects any merger or
consolidation of the Company with or into another Person,
(ii) the Company effects any sale of all or substantially all
of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders
of Common Stock owning more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the
Person or Persons making or affiliated with the Persons making the
tender or exchange offer) tender or exchange their shares for other
securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property
(other than as a result of a subdivision or combination of shares
of Common Stock covered by Section 9(a) above) (in any such
case, a “ Fundamental Transaction ”), then the
Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or
property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of
the number of Warrant Shares then issuable upon exercise in full of
this Warrant (the “ Alternate Consideration ”).
The aggregate Exercise Price for this Warrant will not be affected
by any such Fundamental Transaction, but the Company shall
apportion such aggregate Exercise Price among the Alternate
Consideration in a reasonable
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