Warrant to Purchase Common Stock of ARRAY BIOPHARMA INC

 

 

and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Securities Exchange Act of 1934 (the “ Exchange Act ”) (including shares held by any “group” of which the Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) would exceed 9.98% of the total number of shares of Common Stock then issued and outstanding (the “ 9.98% Cap ”), provided, however, that the 9.98% Cap shall not apply with respect to the issuance of shares of Common Stock pursuant to a Redemption Upon Major Transaction (as defined below) in connection with a Major Transaction (as defined below) covered by the provisions of Section 5(c)(i)(A)(1) below in which the Company is not the surviving entity (a “ Qualified Change of Control Transaction ”) to the extent that the number of shares beneficially owned by the Holder and its affiliates in the successor entity immediately following consummation of such Qualified Change of Control Transaction does not exceed 9.98% of the outstanding common stock of such successor entity and provided, further, that the 9.98% Cap shall only apply to the extent that the Common Stock is deemed to constitute an “equity security” pursuant to Rule 13d-1(i) promulgated under the Exchange Act.  For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission (the “ SEC ”), and the percentage held by the Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Upon the written request of the Holder, the Company shall, within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.

 

“ Affiliate ” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act of 1933, as amended (the “ Securities Act ”). With respect to a Holder of Warrants, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder will be deemed to be an Affiliate of such Holder.

 

“ Business Day ” means  a day on which banks are open for business in The City of New York.

 

“ Holder ” means Deerfield Private Design International, L.P. and any transferee or assignee pursuant to the terms of this Warrant.

 

“ Trading Day ” means any day on which the Common Sock is traded for at least two hours on NASDAQ, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

2. Exercise .

 

(a)  Manner of Exercise. During the period beginning on the earlier of (x) the six-month anniversary of the date a “Disbursement” is made pursuant to Section 2.2 of the Facility Agreement and (y) September 9, 2009 if a “Disbursement Request” shall not have been received pursuant to the terms of the Facility Agreement between the date hereof and the close of business on September 9, 2009, and ending at 5:00 p.m., New York City time on April 29, 2014, this Warrant may be Exercised as to all or any lesser number of full shares of Common Stock covered hereby (the “ Warrant Shares ” or the “ Shares ”) upon surrender of this Warrant, with the Exercise Form attached hereto as Exhibit A (the “ Exercise Form ”) duly completed and executed, together with the full Exercise Price (as defined below, which may be satisfied by a Cash Exercise or a Cashless Exercise, as each is defined below) for each share of Common Stock as to which this Warrant is Exercised, at the office of the Company, Array BioPharma Inc., 3200 Walnut Street, Boulder, CO 80301; Attention: Chief Financial Officer Phone: (303) 381-6663, Fax: (303) 381-6697, or at such other office or agency as the Company may designate in writing, by overnight mail,

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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with an advance copy of the Exercise Form sent to the Company and its transfer agent (“ Transfer Agent ”) by facsimile (such surrender and payment of the Exercise Price hereinafter called the “ Exercise ” of this Warrant).

 

(b) Date of Exercise. The “ Date of Exercise ” of the Warrant shall be defined as the date that the Exercise Form attached hereto as Exhibit A , completed and executed, and the original Warrant are received by the Company and the Exercise Price is satisfied pursuant to Section 3 below.  Upon receipt of the properly completed and executed Exercise Form, the original Warrant and the Exercise Price by the Company, 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 Depository Trust Company (“ DTC ”) account or the date of delivery of the certificates evidencing such Warrant Shares as the case may be.

 

(c) Delivery of Common Stock Upon Exercise. Within three (3) Business Days after any Date of Exercise (the “ Delivery Period ”), the Company shall issue and deliver (or cause its Transfer Agent so to issue and deliver) in accordance with the terms hereof to or upon the order of the Holder that number of shares of Common Stock (“ Exercise Shares ”) for the portion of this Warrant Exercised as shall be determined in accordance herewith. Upon the Exercise of this Warrant or any part thereof, the Company shall, at its own cost and expense, take all reasonable steps, including obtaining and delivering an opinion of counsel, to assure that the Transfer Agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations to be specified at Exercise representing the number of shares of Common Stock issuable upon such Exercise. The Company warrants that no instructions contrary to these instructions have been or will be given to the Transfer Agent and that, unless waived by the Holder, the Exercise Shares will be free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Exercise Shares if the Unrestricted Conditions (as defined in paragraph 2(e)(ii) below) are met.

 

(d) Delivery Failure. In addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Exercise Shares by the end of the Delivery Period (a “ Delivery Failure ”), the Holder will be entitled to revoke all or part of the relevant Exercise Form by delivery of a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described herein shall be payable through the date notice of revocation or rescission is given to the Company.

 

(e) Legends.

 

(i)  Restrictive Legend . The Holder understands that until such time as this Warrant, the Exercise Shares and the Redemption Shares have been registered under the Securities Act as contemplated by the Registration Rights Agreement or otherwise may be sold pursuant to Rule 144 under the Securities Act or an 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, this Warrant, the Exercise Shares and the Redemption Shares, as applicable, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such securities):

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (I) A REGISTRATION STATEMENT REGISTERING SUCH SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE, OR

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR (III) SUCH SECURITIES ARE SOLD PURSUANT TO RULE 144 OR RULE 144A.”

 

“THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 15, 2009, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.”

 

(ii)  Removal of Restrictive Legends . This Warrant, the certificates evidencing the Exercise Shares and any Redemption Shares, as applicable, shall not contain any legend restricting the transfer thereof (including the legend set forth above in subsection 2(e)(i)): (A) while a registration statement (including a Registration Statement, as defined in the Registration Rights Agreement, or any Shelf Registration Statement with respect to Redemption Shares, as defined in Section 4(c) below) covering the resale of such security is effective under the Securities Act, or (B) following any sale of such Warrant, Exercise Shares and/or Redemption Shares pursuant to Rule 144, or (C) if such Warrant, Exercise Shares and/or Redemption Shares are eligible for sale under Rule 144(b)(1)(i), or (D) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC) and the Company shall have received an opinion of counsel of Holder to such effect (collectively, the “ Unrestricted Conditions ”).  The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date (as defined below) if required by the Company’s transfer agent to effect the issuance of the Exercise Shares or any Redemption Shares without a restrictive legend or removal of the legend hereunder. If the Unrestricted Conditions are met at the time of issuance of this Warrant, Exercise Shares and/or Redemption Shares, then such Warrant, Exercise Shares and/or Redemption Shares shall be issued free of all legends.  The Company agrees that following the Effective Date or at such time as the Unrestricted Conditions are met or such legend is otherwise no longer required under this Section 2(e), it will, no later than three (3) Trading Days following the delivery (the “ Unlegended Shares Delivery Deadline ”) by the Holder to the Company or the Transfer Agent of this Warrant and a certificate representing Exercise Shares or Redemption Shares, as applicable, issued with a restrictive legend (such third Trading Day, the “ Legend Removal Date ”), deliver or cause to be delivered to such Holder this Warrant and/or a certificate (or electronic transfer) representing such shares that is free from all restrictive and other legends. For purposes hereof, “ Effective Date ” shall mean the date that the Registration Statement that the Company is required to file pursuant to the Registration Rights Agreement or any Shelf Registration Statement pursuant to Section 4(c) below has been declared effective by the SEC.

 

(iii)  Sale of Unlegended Shares . Holder agrees that the removal of the restrictive legend from this Warrant and any certificates representing securities as set forth in this Section 2(e)(ii) above is predicated upon the Company’s reliance that the Holder will sell this Warrant, Exercise Shares and/or Redemption Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if such securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein.

 

(f) Cancellation of Warrant. This Warrant shall be canceled upon the full Exercise of this Warrant or upon full redemption of this Warrant. As soon as practical after the Date of Exercise, Holder shall be entitled to receive Common Stock for the number of shares purchased upon Exercise of this Warrant, and if this Warrant is not Exercised in full, Holder shall be entitled to receive a new Warrant (containing

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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terms identical to this Warrant) representing any unexercised portion of this Warrant in addition to such Common Stock.

 

(g) Holder of Record. Each person in whose name any Warrant for shares of Common Stock is issued shall, for all purposes, be deemed to be the Holder of record of such shares on the Date of Exercise of this Warrant, irrespective of the date of delivery of the Common Stock purchased upon the Exercise of this Warrant. Nothing in this Warrant shall be construed as conferring upon Holder any rights as a stockholder of the Company.

 

(h) Delivery of Electronic Shares. In lieu of delivering physical certificates representing the Common Stock issuable upon Exercise or legend removal or representing Redemption Shares, provided the Company’s Transfer Agent is participating in the DTC Fast Automated Securities Transfer (“ FAST ”) program, upon written request of the Holder, the Company shall use commercially reasonable efforts to cause its Transfer Agent to electronically transmit the Common Stock issuable to the Holder by crediting the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission (DWAC) system. The time periods for delivery and penalties described herein shall apply to the electronic transmittals described herein.  Any delivery not effected by electronic transmission shall be effected by delivery of physical certificates.

 

(i) Buy-In. In addition to any other rights available to the Holder, if the Company fails to cause its Transfer Agent to transmit to the Holder a certificate or certificates representing the Exercise Shares pursuant to an Exercise on or before the Delivery Period (other than a failure caused by any incorrect or incomplete information provided by Holder to the Company hereunder or the negligence or any act or failure to act of the Transfer Agent), and 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 Exercise Shares which the Holder anticipated receiving upon such Exercise (a “ Buy-In ”), then the Company shall (1) pay in cash to the Holder the amount 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 (A) the number of Exercise Shares that the Company was required to deliver to the Holder in connection with the Exercise at issue times and (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Exercise Shares for which such Exercise was not honored or deliver to the Holder certificate(s) representing 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 to cover the sale of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under subsection (1) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. 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.

 

3. Payment of Warrant Exercise Price .

 

(a) Exercise Price. The Exercise Price (“ Exercise Price ”) shall initially equal $[      ] per share subject to adjustment pursuant to the terms hereof, including but not limited to Section 5 below.

 

Payment of the Exercise Price may be made by either of the following, or a combination thereof, at the

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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election of Holder:

 

(i)  Cash Exercise : The Holder may exercise this Warrant in cash, bank or cashier’s check or wire transfer (a “ Cash Exercise ”); or

 

(ii)  Cashless Exercise : The Holder, at its option, may exercise this Warrant in a cashless exercise transaction. In order to effect a Cashless Exercise, the Holder shall surrender this Warrant at the principal office of the Company together with notice of cashless election, in which event the Company shall issue Holder a number of shares of Common Stock computed using the following formula (a “ Cashless Exercise ”):

 

X = Y (A-B)/A

 

where:    X = the number of shares of Common Stock to be issued to Holder.

 

Y = the number of shares of Common Stock for which this Warrant is being Exercised.

 

A = the Market Price of one (1) share of Common Stock (for purposes of this Section 3(a)(ii), where “ Market Price ,” as of any date, means the average Volume Weighted Average Price (as defined below) of the Company’s Common Stock over the five (5) consecutive Trading Day period immediately preceding the date in question.

 

B = the Exercise Price.

 

As used herein, the “ Volume Weighted Average Price ” for any security as of any date means the volume weighted average sale price on The NASDAQ Global Market (“ NASDAQ ”) as reported by, or based upon data reported by, Bloomberg Financial Markets or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by holders of a majority in interest of the Warrants and the Company (“ Bloomberg ”) or, if NASDAQ is not the principal trading market for such security, the volume weighted average sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or, if no volume weighted average sale price is reported for such security, then the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security that are listed in the over the counter market by the Financial Industry Regulatory Authority, Inc. or in the “pink sheets” by the National Quotation Bureau, Inc. If the Volume Weighted Average Price cannot be calculated for such security on such date in the manner provided above, the volume weighted average price shall be the fair market value as mutually determined by the Company and the Holders of a majority in interest of the Warrants being Exercised for which the calculation of the volume weighted average price is required in order to determine the Exercise Price of such Warrants.

 

For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended, understood and acknowledged that the Common Stock issuable upon Exercise of this Warrant in a Cashless Exercise shall be deemed to have been acquired at the time this Warrant was issued. Moreover, it is intended, understood and acknowledged that the holding period for the Common Stock issuable upon Exercise of this Warrant in a Cashless Exercise shall be deemed to have commenced on the date this Warrant was issued.

 

(b) Dispute Resolution. In the case of a dispute as to the determination of the closing price or the Volume Weighted Average Price of the Company’s Common Stock or the arithmetic calculation of the Exercise Price, Market Price or any Redemption Price, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days of receipt, or deemed receipt, of the Exercise Notice or Redemption Notice, or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile (i) the disputed

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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determination of the closing price or the Volume Weighted Average Price of the Company’s Common Stock to an independent, reputable investment bank selected by the Company and approved by the Holder, which approval shall not be unreasonably withheld or (ii) the disputed arithmetic calculation of the Exercise Price, Market Price or any Major Transaction Warrant Redemption Price to the Company’s independent, outside accountant.  The Company shall use commercially reasonable efforts to cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error, and the Company and the Holder shall each pay one-half of the fees and costs of such investment bank or accountant.

 

4. Transfer and Registration .

 

(a) Transfer Rights. Subject to the provisions of Section 8 of this Warrant, this Warrant may be transferred on the books of the Company, in whole or in part, in person or by attorney, upon surrender of this Warrant properly completed and endorsed. This Warrant shall be canceled upon such surrender and, as soon as practicable thereafter, the person to whom such transfer is made shall be entitled to receive a new Warrant or Warrants as to the portion of this Warrant transferred, and Holder shall be entitled to receive a new Warrant as to the portion hereof retained.

 

(b) Registrable Securities. The Common Stock issuable upon the Exercise of this Warrant has registration rights pursuant to the Registration Rights Agreement.

 

(c) Registration of Redemption Shares.   The Company agrees to prepare and file with the SEC one or more “shelf” registration statement(s) on Form S-3 (the “ Shelf Registration Statement ”) for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act promptly following issuance of this Warrant, and to use its commercially reasonable efforts to cause any such Shelf Registration Statement to become effective as soon as possible after such filing, covering the issuance of a sufficient number of shares of Common Stock that may be deliverable by it upon a redemption of this Warrant under Sections 5(c)(iii) or 11 or in satisfaction of any Failure Payments (as defined in Section 10 below) under Section 10. For so long as all or any portion of this Warrant is outstanding, the Company agrees to use its commercially reasonable efforts to ensure that any Shelf Registration Statement shall continuously be effective and contain a sufficient number of shares of Common Stock available to be issued pursuant to any such Shelf Registration Statement to cover shares estimated by the Company in good faith that may be issuable by it upon a redemption of this Warrant under Sections 5(c)(iii) or 11 or in satisfaction of any Failure Payments under Section 10, including by preparing and filing such amendments (including post-effective amendments) and supplements to any such Shelf Registration Statement and preparing and filing a subsequent Shelf Registration Statement if a previously filed and effective Shelf Registration Statement will no longer deemed current and effective or such Shelf Registration Statement does not cover a sufficient number of shares that may be issuable by the Company upon a redemption of this Warrant under Sections 5(c)(iii) or 11 or in satisfaction of any Failure Payments under Section 10 ; provided, however, in no event shall the Shelf Registration Statement(s) be required to register in the aggregate more than [***] shares of Common Stock.  To the extent the Shelf Registration Statement provided for under this paragraph is effective, at any time that shares of Common Stock are issuable to the Holder upon a redemption of the Warrant under Sections 5(c)(iii) or 11 or in satisfaction of any Failure Payments under Section 10, such shares delivered to the Holder shall be registered pursuant to such Shelf Registration Statement. Notwithstanding anything to the contrary herein (i) the Company may delay or suspend the effectiveness of a Shelf Registration Statement or the use of any prospectus forming a part of a Shelf Registration Statement due to the non-disclosure of material, non-public information concerning Company the disclosure of which at the time is not in its best interest, in the good faith

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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opinion of the Company; provided that no such periods shall individually exceed 90 days or in the aggregate exceed 90 days during any 12-month period and (ii) a delay in the effectiveness of a Shelf Registration Statement caused solely by the filing of a request for confidential treatment shall not be deemed an Event of Failure or an Event of Default herein.

 

5.  Adjustments Upon Certain Events .

 

(a)  Participation . The Holder, as the holder of this Warrant, shall be entitled to receive such dividends paid and distributions of any kind made to the holders of Common Stock of the Company to the same extent as if the Holder had Exercised this Warrant into Common Stock (without regard to any limitations on exercise herein or elsewhere and without regard to whether or not a sufficient number of shares are authorized and reserved to effect any such exercise and issuance) and had held such shares of Common Stock on the record date for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of Common Stock.

 

(b)  Recapitalization or Reclassification. If the Company shall at any time effect a recapitalization, reclassification or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or smaller number of shares, then upon the effective date thereof, the number of shares of Common Stock which Holder shall be entitled to purchase upon Exercise of this Warrant shall be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of shares of Common Stock by reason of such recapitalization, reclassification or similar transaction, and the Exercise Price shall be, in the case of an increase in the number of shares, proportionally decreased and, in the case of decrease in the number of shares, proportionally increased. The Company shall give Holder the same notice it provides to holders of Common Stock of any transaction described in this Section 5(b).

 

(c)  Rights Upon Major Transaction . Certain capitalized terms used in this Section and not defined elsewhere have the meanings given to them below.

 

(i)  Major Transaction.  [***] then the Holder shall have the right to require the Company to redeem all or a portion of the Holder’s outstanding Warrants [***] in accordance with Section 5(c)(iii) below.  In addition, in the event of a Qualified Change of Control Transaction, to the extent the Holder shall not have exercised its right to require the Company to redeem the Holder’s Warrants within the applicable time periods set forth herein, then the Major Transaction shall be treated as an Assumption (as defined below) in accordance with Section 5(c)(ii).  Notwithstanding anything herein to the contrary, the Holder shall have the right to waive its rights under this Section 5(c) with respect to all or any portion of any Major Transaction in which event none of the provisions of this Section 5(c)(i) shall apply.

 

[***]

 

Each of the following events shall constitute a “ Major Transaction ”:

 

(A) a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or other similar event, (1) following which the holders of Common Stock immediately preceding such consolidation, merger, exchange, recapitalization, reorganization, combination or event either (a) no longer hold a majority of the shares of Common Stock or (b) no longer have the ability to elect a majority of the board of directors of the Company or (2) as a result of which shares of Common Stock shall be changed into (or the shares of Common Stock become entitled to receive) the same or a different number of shares of the same or another class or classes of stock or securities of the Company or another entity (collectively, a “ Change of Control Transaction ”);

 

(B) the sale or transfer in one transaction or in a series of related transactions (i) of all or

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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substantially all of the assets of the Company, (ii) of assets for a purchase price equal to more than  [***] , or (iii) of assets that represent 50% or more of the assets [***] ;

 

(C) a purchase, tender or exchange offer made to the holders of outstanding shares of Common Stock, such that following such purchase, tender or exchange offer a Change of Control Transaction shall have occurred and is consummated;

 

(D) the liquidation, bankruptcy, insolvency, dissolution or winding-up (or the occurrence of any analogous proceeding) of the Company; or

 

(E) the shares of Common Stock cease to be listed, traded or publicly quoted on NASDAQ and are not promptly re-listed or requoted on either the New York Stock Exchange, the NYSE Afternext U.S., or the NASDAQ Global Select Market; or the NASDAQ Capital Market; or

 

(F) the Common Stock ceases to be registered under Section 12 of the Exchange Act.

 

For purposes hereof, the following terms have the definitions set forth below:

 

A “ Cash-Out Major Transaction ” means a Major Transaction in which the consideration payable to holders of Common Stock in connection with the Major Transaction consists solely of cash.

 

An “ Eligible Market ” means the over the counter Bulletin Board, the New York Stock Exchange, Inc., the NYSE Arca, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market or the American Stock Exchange.

 

A “ Mixed Major Transaction ” means a Major Transaction in which the consideration payable to the shareholders of the Company consists partially of cash and partially of securities of a Successor Entity.  If the Successor Entity is a Publicly Traded Successor Entity, the percentage of consideration represented by securities of such Successor Entity shall be equal to the percentage that the value of the aggregate anticipated number of shares of the Publicly Traded Successor Entity to be issued to holders of Common Stock of the Company represents in comparison to the aggregate value of all consideration, including cash consideration, in such Mixed Major Transaction, as such values are set forth in any definitive agreement for the Mixed Major Transaction that has been executed at the time of the first public announcement of the Major Transaction or, if no such value is determinable from such definitive agreement, based on the closing market price for shares of the Publicly Traded Successor Entity on its principal securities exchange on the Trading Day preceding the first public announcement of the Mixed Major Transaction. If the Successor Entity is a Private Successor Entity, the percentage of consideration represented by securities of such Successor Entity shall be determined in good-faith by the Company’s Board of Directors

 

[***]

 

A “ Parent Entity ” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of a Major Transaction.

 

A “ Person ” means a limited liability company, a partnership, a joint venture, a corporation or a trust.

 

A “ Publicly Traded Successor Entity ” means a Successor Entity that is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market (as defined below).

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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[***]

 

“ Redemption Shares ” means shares of Common Stock of the Company that may be issuable from time to time pursuant to Section 5(c)(iii), 10 and/or 11 hereof and that are registered for resale under the Securities Act pursuant to an effective registration statement filed by the Company as contemplated by Section 4(c) or, if such a registration statement is not then effective, shares of Common Stock of the Company that are not so registered.

 

A “ Successor Entity ” shall be a Person as defined in Section 5(c)(ii) below.

 

(ii)  Assumption.   The Company shall not enter into or be party to a Major Transaction that is to be treated as an Assumption pursuant to Section 5(c)(i) above unless any Person purchasing the Company’s assets or Common Stock, or any successor entity resulting from such Major Transaction, or if the Warrant is to be exercisable for shares of its Parent Entity (as defined above), its Parent Entity (in each case, a “ Successor Entity ”), shall have assumed in writing all of the obligations of the Company under this Warrant and the Registration Rights Agreement in accordance with the provisions of this subsection (ii) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder prior to such Major Transaction (not to be unreasonably withheld or delayed), including agreements to deliver to each holder of Warrants in exchange for such Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Warrants, including, without limitation, an instrument representing the appropriate number of shares of the Successor Entity, having similar exercise rights as the Warrants (inclu