Contract
Exhibit 10.2
THIS WARRANT AND 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 SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED
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.
AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST RELY ON THEIR OWN
ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS INVOLVED.
SO LONG AS ANY OF THE SENIOR NOTES (AS DEFINED HEREIN) REMAIN OUTSTANDING EACH HOLDER OF THIS
WARRANT COVENANTS AND AGREES BY ACCEPTANCE OF THIS WARRANT THAT (I) THE COMPANY WILL NOT MAKE (AND
THE HOLDER HEREOF SHALL NOT BE ENTITLED TO RECEIVE) ANY CASH PAYMENT UNDER OR IN RESPECT OF THIS
WARRANT OTHER THAN A REDEMPTION PAYMENT IN CONNECTION WITH A MAJOR TRANSACTION PURSUANT TO SECTION
5 HEREOF IN THE EVENT THE HOLDER OF THE SENIOR NOTES DOES NOT ELECT TO REQUIRE THE REDEMPTION OF
THE SENIOR NOTES IN RESPECT OF SUCH MAJOR TRANSACTION (A “PERMITTED REDEMPTION PAYMENT”) AND (II)
THIS WARRANT MAY NOT BE AMENDED WITHOUT THE CONSENT OF THE CURRENT HOLDER OF THE SENIOR NOTES,
(III) THIS WARRANT AND THE PAYMENTS OF ANY AMOUNTS IN RESPECT HEREOF (OTHER THAN A PERMITTED
REDEMPTION PAYMENT) ARE EXPRESSLY SUBORDINATED AND JUNIOR TO THE SENIOR NOTES AND (IV) IT WILL NOT
ASSERT ANY CLAIMS OR CAUSES OF ACTION AGAINST THE COMPANY THAT WOULD REQUIRE THE PAYMENT BY THE
COMPANY TO THE HOLDER HEREOF OF ANY AMOUNT OTHER THAT A PERMITTED REDEMPTION PAYMENT.
Warrant to Purchase |
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695,145 shares
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Warrant Number 1 |
Warrant to Purchase Common Stock
of
THIRD WAVE TECHNOLOGIES, INC.
of
THIRD WAVE TECHNOLOGIES, INC.
THIS CERTIFIES that DEERFIELD PRIVATE DESIGN FUND, L.P. or any subsequent holder hereof (“Holder”)
has the right to purchase from THIRD WAVE TECHNOLOGIES, INC., a Delaware corporation, (the
“Company”), SIX HUNDRED NINETY-FIVE THOUSAND ONE HUNDRED FORTY-FIVE (695,145) fully paid and
nonassessable shares, of the Company’s common stock, $0.001 par value per share (“Common Stock”),
subject to adjustment as provided herein, at a price equal to the Exercise Price as defined in
Section 3 below, at any time during the Term (as defined below).
Holder agrees with the Company that this Warrant to Purchase Common Stock of the Company (this
“Warrant” or this “Agreement”) is issued and all rights hereunder shall be held subject to all of
the conditions, limitations and provisions set forth herein.
This Warrant shall be deemed to be issued on December 10, 2007 (“Date of Issuance”). The term of
this Warrant begins on the Date of Issuance and ends at 5:00 p.m., New York City time, on the date
that is five (5) years after the Date of Issuance (the “Term”). This Warrant was issued in
conjunction with that certain Facility Agreement (the “Facility Agreement”) and the Registration
Rights Agreement (“Registration Rights Agreement”) by and between the Company and Deerfield Private
Design Fund, L.P. and certain other parties, each dated December 10, 2007, entered into in
conjunction herewith.
Notwithstanding anything herein to the contrary, the Company shall not issue to the Holder, and the
Holder may not acquire, a number of shares of Common Stock upon exercise of this Warrant to the
extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by
the Holder 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 of the Company then issued and outstanding. 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.
“Holder” means Deerfield Private Design Fund, L.P. and any transferee or assignee pursuant to the
terms of this Warrant.
(a) Manner of Exercise. During the Term, 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,
Third Wave Technologies, Inc., 000 X. Xxxx Xxxx, Xxxxxxx, XX 00000; Phone: (000) 000-0000, Fax:
(000) 000-0000, or at such other office or agency as the Company may designate in writing, by
overnight mail, 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, is sent by facsimile to
the Company, provided that the original Warrant and Exercise Form are received by the Company and
the Exercise Price is satisfied, each as soon as practicable and in any event within two (2)
business days thereafter. Alternatively, the Date of Exercise shall be defined as the date the
original Exercise Form is received by the Company and the Exercise Price is paid, if Holder has not
sent advance notice by facsimile. Upon delivery of the duly completed and executed Exercise Form to
the Company by facsimile or otherwise, 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 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 necessary action, 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 in the Exercise Form representing the number of shares of
Common Stock issuable upon such Exercise. Holder may not revoke its Exercise or alter its
designations following delivery of the Exercise Notice except as otherwise expressly provided
herein. The Company warrants that no instructions other than these instructions have been or will
be given to the Transfer Agent and that, unless waived by the Holder, this Warrant and 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 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 to use its best efforts to effect delivery of the Exercise Shares
by the end of the Delivery Period (a “Delivery Failure”), the Holder will be entitled prior to
delivery of the Exercise Shares 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.
| “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN EXEMPTION FROM |
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| REGISTRATION UNDER SAID ACT INCLUDING, WITHOUT LIMITATION, PURSUANT TO RULES 144 OR 144A UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED “4(1) AND A HALF” SALE.” | ||
| “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 DECEMBER 10, 2007, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND A CERTAIN HOLDER 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.” |
(f) Cancellation of Warrant. This Warrant shall be canceled upon the full Exercise of this Warrant,
and, as soon as practical after the Date of Exercise, Holder shall be entitled to receive Common
Stock for the number of shares purchased upon such Exercise of this Warrant, and if this Warrant is
not Exercised in full, Holder shall be entitled to receive a new Warrant (containing terms
identical to this Warrant) representing any unexercised portion of this Warrant in addition to such
Common Stock.
(g) Holder of Record. Except as set forth in Sections 5(a) and 5(j) hereof, 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, provided the Company’s Transfer Agent is
participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program and provided further that the Holder provides the Transfer Agent with information required
in order to issue shares of Common Stock to the Holder electronically, upon written request of the
Holder, the Company shall use its best efforts to cause its Transfer Agent to electronically
transmit the Common Stock issuable upon Exercise 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, or electronic
shares through DWAC, representing the Exercise Shares pursuant to an Exercise on or before the
Delivery Period, 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 was entitled to receive 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 not later than the expiration of the Delivery Period, times
(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 the number of
shares of Common Stock that would have been issued had the Company timely complied with its
Exercise and delivery obligations under Section 2(c). For example, if the Holder purchases Common
Stock having a total purchase
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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
clause (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.
(a) Exercise Price. The Exercise Price (“Exercise Price”) shall initially equal $8.36 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 election of Holder:
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(ii), where “Market Price,” as of any date, means the Volume Weighted Average Price (as defined herein) of the Company’s Common Stock during the ten (10) 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 National Association of Securities Dealers 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. “Trading Day” shall mean any day on which the Common Sock is traded for any period on NASDAQ, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. |
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
transaction 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 transaction 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 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 cause the investment
4
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. If the determination or calculation of
such investment bank or accountant is equal to the determination or calculation of the Company,
then the expenses of the investment bank or accountant shall be borne by the Holder. Otherwise such
expenses shall be borne by the Company. Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
(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 another entity (collectively, a “Change of Control Transaction”);
(B) the sale or transfer of significant assets of the Company, which shall for purposes of this
subsection (B) mean a sale or transfer of assets in one transaction or a series of related
transactions for a purchase price of more than $75,000,000 or a sale or transfer of more than 48%
of the Company’s assets in one transaction or a series of related transactions;
(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;
(D) the liquidation, bankruptcy, insolvency, dissolution or winding-up (or the occurrence of any
analogous proceeding) affecting the Company; or
(E) the shares of Common Stock cease to be listed, traded or publicly quoted on the NASDAQ Global
Market and are not promptly re-listed or requoted on either the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Capital Market.
5
(iii) Notice; Major Transaction Redemption Right. At least thirty (30) days prior to the
consummation of any Major Transaction, but, in any event, on the first to occur of (x) the date of
the public announcement of such Major Transaction if such announcement is made before 4:00 p.m.,
New York City time, or (y) the day following the public announcement of such Major Transaction if
such announcement is made on and after 4:00 p.m., New York City time, the Company shall deliver
written notice thereof via facsimile and overnight courier to the Holder (a “Major Transaction
Notice”). At any time during the period beginning after the Holder’s receipt of a Major Transaction
Notice and ending five (5) Trading Days prior to the consummation of such Major Transaction, the
Holder may require the Company to redeem (a “Redemption Upon Major Transaction”) all or any portion
of this Warrant by delivering written notice thereof (“Major Transaction Redemption Notice”) to the
Company, which Major Transaction Redemption Notice shall indicate the portion of the principal
amount (the “Redemption Principal Amount”) of the Warrant that the Holder is electing to have
redeemed. The portion of this Warrant subject to redemption pursuant to this Section 5(c)(iii)
shall be redeemed by the Company in cash at a price (the “Major Transaction Warrant Redemption
Price”) equal to the calculation of the “Intrinsic Value” as determined in accordance with Schedule
I hereto of the remaining outstanding portion of the Warrant.
(v) Injunction. Following the receipt of a Major Transaction Redemption Notice from the Holder, in
the event that the Company attempts to consummate a Major Transaction without placing the Major
Transaction Warrant Redemption Price in escrow in accordance with subsection (iv) above or without
payment of the Major Transaction Warrant Redemption Price to the Holder upon consummation of such
Major Transaction, the Holder shall have the right to apply for an injunction in any state or
federal courts sitting in the City of New York, borough of Manhattan to prevent the closing of such
Major Transaction until the Major Transaction Redemption Price is paid to the Holder, in full.
Redemptions required by this Section 5(c) shall be made in accordance with the provisions of
Section 12 and shall have priority to payments to holders of Common Stock in connection with a
Major Transaction. To the extent redemptions required by this
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Section 5(c)(iii) are deemed or determined by a court of competent jurisdiction to be prepayments of the
Warrant by the Company, such redemptions shall be deemed to be voluntary prepayments.
Notwithstanding anything to the contrary in this Section 5, until the Major Transaction Redemption
Price is paid in full, this Warrant may be exercised, in whole or in part, by the Holder into
shares of Common Stock, or in the event the Exercise Date is after the consummation of the Major
Transaction, shares of publicly traded common stock (or their equivalent) of the Successor Entity
pursuant to Section 5(c). The parties hereto agree that in the event of the Company’s redemption of
any portion of the Warrant under this Section 5(c), the Holder’s damages would be uncertain and
difficult to estimate because of the parties’ inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment opportunity for the Holder.
Accordingly, any redemption premium due under this Section 5(c) is intended by the parties to be,
and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment
opportunity and not as a penalty.
For purposes hereof:
“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.
“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.
“Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.
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For the purposes of the foregoing adjustments, in the case of the issuance of any Convertible
Securities or Options, the maximum number of shares of Common Stock issuable upon exercise,
exchange or conversion of such Convertible Securities or Options shall be deemed to be outstanding,
provided that no further adjustment shall be made upon the actual issuance of Common Stock upon
exercise, exchange or conversion of such Convertible Securities or Options, and provided further
that to the extent such Convertible Securities or Options expire or terminate unconverted or
unexercised, then at such time the Exercise Price shall be readjusted as if such portion of such
Convertible Securities or Options had not been issued.
For purposes of this Section 5(f), if an event occurs that triggers more than one of the above
adjustment provisions, then only one adjustment shall be made and the calculation method which
yields the greatest downward adjustment in the Exercise Price shall be used.
For purposes of determining the adjusted Exercise Price under this Section 5(f), the following
shall be applicable:
For purposes hereof:
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly
convertible into or exercisable or exchangeable for Common Stock.
“Options” means any rights, warrants or options to subscribe for or purchase Common Stock or
Convertible Securities.
“Per Share Selling Price” shall include the amount actually paid by third parties for each
share of Common Stock in a sale or issuance by the Company. A sale of shares of Common Stock shall
include the sale or issuance of Convertible Securities or Options, and in such circumstances the
Per Share Selling Price of the Common Stock covered thereby shall also include the exercise,
exchange or conversion price thereof (in addition to the consideration received by the Company upon
such sale or issuance). In case of any such security issued in a transaction in which the purchase
price or the conversion, exchange or exercise price is directly or indirectly subject to adjustment
or reset based on a future date, future trading prices of the Common Stock, specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common
Stock, or otherwise (but excluding standard stock split anti-dilution provisions or
weighted-average anti-dilution provisions similar to that set forth herein, provided that any
actual reduction of such price under any such security pursuant to such weighted-average
anti-dilution provision shall be included and cause an adjustment hereunder), the Per Share Selling
Price shall be deemed to be the lowest conversion, exchange, exercise or reset price at which such
securities are converted, exchanged, exercised or reset or might have been converted, exchanged,
exercised or reset, or the lowest adjustment, as the case may be, over the life of such securities.
If shares are issued for a consideration other than cash, the Per Share Selling Price shall be the
fair value of such consideration as determined in good faith by independent certified public
accountants mutually acceptable to the Company and the Holder. In the event the Company directly
or indirectly effectively reduces the conversion, exercise or exchange price for any Convertible
Securities or Options which are currently outstanding, then the Per Share Selling Price shall equal
such effectively reduced conversion, exercise or exchange price .
8
No fractional shares or scrip representing fractional shares shall be issuable upon the Exercise of
this Warrant, but on Exercise of this Warrant, Holder may purchase only a whole number of shares of
Common Stock. If, on Exercise of this Warrant, Holder would be entitled to a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall
be disregarded and the number of shares of Common Stock issuable upon Exercise shall be the next
higher number of shares.
From and after the date hereof, the Company shall at all times reserve for issuance such number of
authorized and unissued shares of Common Stock (or other securities substituted therefor as herein
above provided) as shall be sufficient for the Exercise of this Warrant and payment of the Exercise
Price. If at any time the number of shares of Common Stock authorized and reserved for issuance is
below the number of shares sufficient for the Exercise of this Warrant (a “Share Authorization
Failure”) (based on the Exercise Price in effect from time to time), the Company will promptly take
all corporate action necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special meeting of stockholders to authorize additional shares to
meet the Company’s obligations under this Section 7, in the case of an insufficient number of
authorized shares, and using its best efforts to obtain stockholder approval of an increase in such
authorized number of shares. The Company covenants and agrees that upon the Exercise of this
Warrant, all shares of Common Stock issuable upon such Exercise shall be duly and validly issued,
fully paid and nonassessable and not subject to preemptive rights, rights of first refusal or
similar rights granted or provided by the Company to any person or entity.
9
The occurrence of each of the following shall be considered to be an “Event of Failure.”
| (i) A Delivery Failure occurs, where a “Delivery Failure” shall be deemed to have occurred if the Company fails to use its best efforts to deliver Exercise Shares to the Holder within any applicable Delivery Period; | ||
| (ii) A Legend Removal Failure occurs, where a “Legend Removal Failure” shall be deemed to have occurred if the Company fails to use its best efforts to issue this Warrant and/or Exercise Shares without a restrictive legend, or fails to use its best efforts to remove a restrictive legend, when and as required under Section 2(e) hereof; | ||
| (iii) a Transfer Delivery Failure occurs, where a “Transfer Delivery Failure” shall be deemed to have occurred if the Company fails to use its best efforts to deliver a Warrant within any applicable Transfer Delivery Period; and | ||
| (iv) a Registration Failure (as defined below). |
For purpose hereof, “Registration Failure” means that (A) the Company fails to file with the SEC on
or before the Filing Deadline (as defined in the Registration Rights Agreement) any Registration
Statement required to be filed pursuant to Section 2(a) of the Registration Rights Agreement, or
(B) the Company fails to use its best efforts to obtain effectiveness with the SEC, prior to the
Registration Deadline (as defined in the Registration Rights Agreement), and, if such Registration
Statement is not so filed prior to the Registration Deadline, as soon as possible thereafter, of
any Registration Statement (as defined in the Registration Rights Agreement) that is required to be
filed pursuant to Section 2(a) of the Registration Rights Agreement, or fails to use best efforts
to keep such Registration Statement current and effective as required in Section 3 of the
Registration Rights Agreement, (C) the Company fails to file any amendment to the Registration
Statement, or any additional Registration Statement required to be filed pursuant to Section 3(b)
of the Registration Rights Agreement within twenty (20) days of the applicable Registration Trigger
Date (as defined in the Registration Rights Agreement), or fails to use its best efforts to cause
such amendment and/or new Registration Statement to become effective as soon as practicable
thereafter, or (iv) any Registration Statement required to be filed under the Registration Rights
Agreement, after its initial effectiveness and during the Registration Period (as defined in the
Registration Rights Agreement), lapses in effect or sales of all of the Registrable Securities (as
defined in the Registration Rights Agreement) cannot otherwise be made thereunder (whether by
reason of the Company’s failure to amend or supplement the prospectus included therein in
accordance with the Registration Rights Agreement, the Company’s failure to file and use best
efforts to obtain effectiveness with the SEC of an additional Registration Statement or amended
Registration Statement required pursuant to Section 3 of the Registration Rights Agreement or
otherwise), or (D) the Company fails to provide a commercially reasonable written response to any
comments to any Registration Statement submitted by the SEC within twenty (20) days of the date
that such SEC comments are received by the Company.
(b) Failure Payments; Black-Scholes Determination. The Company understands that any Event of
Failure (as defined above) could result in economic loss to the Holder. In the event that any Event
of Failure occurs, as compensation to the Holder for such loss, the Company agrees to pay (as
liquidated damages and not as a penalty) to the Holder an amount payable (i) in cash, if the Senior
Notes are no longer outstanding, or (ii) if any of the Senior Notes are outstanding, in shares of
Common Stock that are valued for these purposes at 95% of the Volume Weighted Average Price on the
date of such calculation (“Failure Payments”), in each case, equal to 18% per annum (or the maximum
rate permitted by applicable law, whichever is less) of the Black-Scholes value (as determined
below) of the remaining unexercised portion of this Warrant on the date of such Event of Failure
(as recalculated on the first business day of each month thereafter for as long as Failure Payments
shall continue to accrue), which shall accrue daily from the date of such Event of Failure until
the Event of Failure is cured, accruing daily and compounded monthly, provided, however, in the
event the Failure Payments are paid in shares of Common Stock, the Holder shall receive up to such
amount of shares of Common Stock such that Holder 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 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) shall not collectively beneficially own
greater than 9.98% of the total number of shares of the Common Stock then issued and outstanding.
For purposes of clarification, it is
agreed and understood that Failure Payments shall continue to accrue following any Event of Default
until the applicable Default Amount is paid in full.
10
Notwithstanding the above, in the event that the Company (i) has, by the Filing Deadline (as
defined the Registration Rights Agreement) filed a Registration Statement (as defined in the
Registration Rights Agreement) covering the number of shares required by the Registration Rights
Agreement, and (ii) has responded in writing to any comments to the Registration Statement that the
Company has received from the SEC, within seven (7) Business Days of such receipt, and nevertheless
the SEC has not declared effective a Registration Statement covering the full number of Warrant
Shares issuable upon exercise of the Warrants by the Registration Deadline (as defined in the
Registration Rights Agreement) then, the Failure Payments attributable to such late Registration
Effectiveness (if any, recognizing that no such Failure Payments shall be due if the Company used
its best efforts to obtain effectiveness with the SEC prior to the Registration Deadline) shall be
reduced from 18% to 15% (calculated as set forth above). The Company shall pay any payments
incurred under this Section in cash or cash equivalent upon demand or, if not demanded sooner,
within five business (5) days of the end of each calendar month. Failure Payments are in addition
to any Shares that the Holder is entitled to receive upon Exercise of this Warrant.
For purposes hereof, the “Black-Scholes” value of a Warrant shall be determined by use of the Black
Scholes Option Pricing Model using the criteria set forth on Schedule 1 hereto.
(c) Payment of Accrued Failure Payments. The accrued Failure Payments for each Event of Failure
shall be paid in immediately available funds on or before the fifth (5th) day of each month
following a month in which Failure Payments accrued. Except as provided in Section 11 hereof,
Failure Payments shall be the Company’s sole and exclusive liability and the Holder’s sole and
exclusive remedy, with respect to such Event of Failure. Notwithstanding the above, if a
particular Event of Failure results in an Event of Default pursuant to Section 11 hereof, then the
Failure Payment, for that Event of Failure only, shall be considered to have been satisfied upon
payment to the Holder of an amount equal to the greater of (i) the Failure Payment, or (ii) the
Default Amount, payable in accordance with Section 11, and, except as provided in Section 11
hereof, the payment by the Company of such greater amount shall constitute the Holder’s sole and
exclusive remedy, and the Company’s sole and exclusive liability, with respect to such Event of
Failure.
(d) Maximum Interest Rate. Nothing contained herein or in any document referred to herein or
delivered in connection herewith shall be deemed to establish or require the payment of a rate of
interest or other charges in excess of the maximum permitted by applicable law. In the event that
the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against amounts owed by the
Company to the Holder and thus refunded to the Company.
(i) Registration Failure. A Registration Failure occurs and remains uncured for a period of more
than forty five (45) days;
(ii) Delivery Failure. A Delivery Failure (as defined above) occurs and remains uncured for a
period of more than twenty (20) days; or at any time, the Company announces or states in writing
that it will not honor its obligations to issue shares of Common Stock to the Holder upon Exercise
by the Holder of the Exercise rights of the Holder in accordance with the terms of this Warrant;
(iii) Legend Removal Failure. A Legend Removal Failure (as defined above) occurs and remains
uncured for a period of twenty (20) days; and
(iv) Corporate Existence; Major Transaction. The Company has effected a Major Transaction without
paying the Major Transaction Warrant Redemption Price to the Holder pursuant to Section 5(c)(iii)
or, if the Holder did not elect a Redemption Upon Major Transaction, the Company has failed to meet
the Assumption requirements of Section 5(c)(iii) prior to effecting a Major Transaction.
(i) Mandatory Redemption Amount. If any Events of Default shall occur then, unless waived by the
Holder, upon the occurrence and during the continuation of any Event of Default, at the option of
the Holder, such option exercisable through the delivery of written notice to the Company by such
Holder (the “Default Notice”), the outstanding amount of this Warrant shall be immediately redeemed
by the Company and the Company shall pay to the Holder (a “Mandatory Redemption”), in full
satisfaction of its obligations hereunder, an amount (A) in cash, if the Senior Notes are no longer
outstanding, or (B) if any of the Senior Notes are outstanding, in shares of Common Stock (the
“Mandatory Redemption Amount” or the “Default Amount”), in each case, equal to the greater of (1)
the Black-Scholes value (as determined in accordance with Section 10(b)) of the remaining
unexercised portion of this Warrant on the date of such Default Notice and (2) the Black-Scholes
value (also as determined in accordance with Section 10(b)) of the remaining unexercised portion of
this Warrant on the Trading Day immediately preceding the date that the Mandatory Redemption Amount
is paid to the Holder, provided, however, in the event the Mandatory Redemption Amount is paid in
shares of Common Stock, Holder shall receive up to such amount of shares of Common Stock such that
Holder 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 Exchange Act (including shares held by any “group” of which the Holder is a member,
but excluding shares beneficially owned by virtue of ownership of securities or rights to acquire
securities that have limitations on the right to convert, exercise or purchase
11
similar to the
limitation set forth herein) shall not collectively beneficially own greater than 9.98% of the
total number of shares of Common Stock then issued and outstanding.
The Mandatory Redemption Amount shall be payable, in cash or cash equivalent, within five (5)
business days of the Date of the applicable Default Notice.
(ii) Liquidated Damages. The parties hereto acknowledge and agree that the sums payable as Failure
Payments or pursuant to a Mandatory Redemption shall give rise to liquidated damages and not
penalties. The parties further acknowledge that (i) the amount of loss or damages likely to be
incurred by the Holder is incapable or is difficult to precisely estimate, (ii) the amounts
specified bear a reasonable proportion and are not plainly or grossly disproportionate to the
probable loss likely to be incurred by the Holder, and (iii) the parties are sophisticated business
parties and have been represented by sophisticated and able legal and financial counsel and
negotiated this Agreement at arm’s length.
The Default Amount, together with all other amounts payable hereunder, shall immediately become due
and payable, all without demand, presentment or notice, all of which hereby are expressly waived,
together with all costs, including, without limitation, legal fees and expenses, of collection, and
the Holder shall be entitled to exercise all other rights and remedies available at law or in
equity.
For purposes hereof, a “Lawsuit” shall mean any lawsuit, arbitration or other dispute resolution
filed by either party herein pertaining to any of this Warrant, the Facility Agreement and the
Registration Rights Agreement.
“Surety Bond Value,” for the Warrants shall mean 130% of the of the Black-Scholes value of the
remaining unexercised portion of this Warrant on the Trading Day immediately preceding the date
that such bond goes into effect).
(d) Injunction And Posting Of Bond. In the event that the Event of Default referred to in
subsection (c) above pertains to the Company’s failure to deliver unlegended shares of Common Stock
to the Holder pursuant to a Warrant Exercise, legend removal request, or otherwise, the Company may
not refuse such unlegended share delivery based on any claim that such Holder or any one associated
or affiliated with such Holder has been engaged in any violation of law, unless an injunction from
a court, on prior notice to Holder, restraining and or enjoining Exercise of all or part of said
Warrant shall have been sought and obtained by the Company and the Company has posted a Surety Bond
for the benefit of such Holder in the amount of the Bond Amount, which Surety Bond shall remain in
effect until the completion of litigation of the dispute and the proceeds of which shall be payable
to such Holder to the extent Holder obtains judgment.
12
such Redemption Principal Amount, (y) the Company shall immediately return
this Warrant, or issue a new Warrant to the Holder representing the portion of this Warrant that
was submitted for redemption and (z) the Exercise Price of this Warrant or such new Warrant shall
be adjusted to the lesser of (A) the Exercise Price as in effect on the date on which the
applicable Redemption Notice is voided and (B) subject to the limitations contained in Section 5(d)
hereof, the lowest closing price for the Common Stock on NASDAQ, or, if NASDAQ is not the principal
trading market for the Common Stock, the principal securities exchange or other securities market
on which the Common Stock is then being traded, during the period beginning on and including the
date on which the applicable Redemption Notice is delivered to the Company and ending on and
including the date on which the applicable Redemption Notice is voided. The Holder’s delivery of a
notice voiding a Redemption Notice and exercise of its rights following such notice shall not
affect the Company’s obligations to make any payments of Failure Payments which have accrued prior
to the date of such notice with respect to the Warrant subject to such notice.
Nothing in this Warrant shall be construed to confer upon any person other than the Company and
Holder any legal or equitable right, remedy or claim under this Warrant and this Warrant shall be
for the sole and exclusive benefit of the Company and Holder.
All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. The parties hereby waive all rights to a trial by
jury. If either party shall commence an action or proceeding to enforce any provisions of this
Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably
satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the
Company shall execute and deliver a new Warrant of like tenor and date.
Notices or demands pursuant to this Warrant to be given or made by Holder to or on the Company
shall be sufficiently given or made if sent by certified or registered mail, return receipt
requested, postage prepaid, and addressed, until another address is designated in writing by the
Company, to the address set forth in Section 2(a) above. Notices or demands pursuant to this
Warrant to be given or made by the Company to or on Holder shall be sufficiently given or made if
sent by certified or registered mail, return receipt requested, postage prepaid, and addressed, to
the address of Holder set forth in the Company’s records, until another address is designated in
writing by Holder.
THIRD WAVE TECHNOLOGIES, INC. |
||
| |
||
By:
|
/s/ Xxxxx Xxxxxx | |
Print Name:
|
Xxxxx Xxxxxx | |
Title:
|
President and CEO | |
13
EXHIBIT A
EXERCISE FORM FOR WARRANT
TO: THIRD WAVE TECHNOLOGIES, INC.
The undersigned hereby irrevocably Exercises the right to purchase of
the shares of Common Stock (the “Common Stock”) of THIRD WAVE TECHNOLOGIES, INC., a Delaware
corporation (the “Company”), evidenced by the attached warrant (the “Warrant”), and herewith makes
payment of the Exercise Price with respect to such shares in full, all in accordance with the
conditions and provisions of said Warrant.
1. The undersigned agrees not to offer, sell, transfer or otherwise dispose of any of the Common
Stock obtained on Exercise of the Warrant, except in accordance with the provisions of Section 8(a)
of the Warrant.
2. The undersigned requests that any stock certificates for such shares be issued free of any
restrictive legend, if appropriate, and a warrant representing any unexercised portion hereof be
issued, pursuant to the Warrant in the name of the undersigned and delivered to the undersigned at
the address set forth below.
3. The undersigned is exercising the attached Warrant pursuant to:
¨ Cash Exercise ¨ Cashless Exercise
Dated:
Signature
Print Name
Address
NOTICE
The signature to the foregoing Exercise Form must correspond to the name as written upon the face
of the attached Warrant in every particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Warrant)
desiring to transfer the Warrant)
FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the “Warrant”) hereby sells,
assigns and transfers unto the person or persons below named the right to purchase
shares of the Common Stock of THIRD WAVE TECHNOLOGIES, INC., a Delaware corporation,
evidenced by the attached Warrant and does hereby irrevocably constitute and appoint
attorney to transfer the said Warrant on the books of the Company, with full power of
substitution in the premises.
Dated: |
||||
| Signature | ||||
| Fill in for new registration of Warrant: | ||||
| Name | ||||
| Address | ||||
| Please print name and address
of assignee (including zip code number) |
||||
The signature to the foregoing Assignment must correspond to the name as written upon the face of
the attached Warrant in every particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT C
FORM OF OPINION
______, 20__
[___________]
Re: Third Wave Technologies, Inc. (the “Company”)
Dear Sir:
[______]
(“[______]”) intends to transfer ______ Warrants (the “Warrants”) of
the Company to ______ (“______”) without registration under the Securities Act of
1933, as amended (the “Securities Act”). In connection therewith, we have examined and
relied upon the truth of representations contained in an Investor Representation Letter
attached hereto and have examined such other documents and issues of law as we have
deemed relevant.
Based on and subject to the foregoing, we are of the opinion that the transfer of the
Warrants by ______ to
______ may be effected without registration under the Securities
Act, provided, however, that the Warrants to be transferred to ______
contain a legend restricting its transferability pursuant to the Securities Act and that
transfer of the Warrants is subject to a stop order.
The
foregoing opinion is furnished only to ______ and may not be used, circulated,
quoted or otherwise referred to or relied upon by you for any purposes other than the
purpose for which furnished or by any other person for any purpose, without our prior
written consent.
Very truly yours,
[FORM OF INVESTOR REPRESENTATION LETTER]
_____, 20__
[_________________]
Gentlemen:
______
(“______”) has agreed to purchase
______ Warrants (the “Warrants”) of Third Wave
Technologies, Inc. (the “Company”) from [______] (“[______]”). We understand that the
Warrants are “restricted securities.” We represent and
warrant that ______ is a sophisticated
institutional investor that would qualify as an “Accredited Investor” as defined in Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).
______
represents and warrants as of the date hereof as follows:
| 1. That it is acquiring the Warrants and the shares of common stock, $0.001 par value per share underlying such Warrants (the “Exercise Shares”) solely for its account for investment and not with a view to or for sale or distribution of said Warrants or Exercise Shares or any part thereof. ______ also represents that the entire legal and beneficial interests of the Warrants and Exercise Shares ______ is acquiring is being acquired for, and will be held for, its account only; | ||
| 2. That the Warrants and the Exercise Shares have not been registered under the Securities Act on the basis that no distribution or public offering of the stock of the Company is to be effected. ______ realizes that the basis for the exemption may not be present if, notwithstanding its representations, ______ has a present intention of acquiring the securities for a fixed or determinable period in the future, selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the securities. ______ has no such present intention; | ||
| 3. That the Warrants and the Exercise Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. ______ recognizes that the Company has no obligation to register the Warrants, or to comply with any exemption from such registration; | ||
| 4. That neither the Warrants nor the Exercise Shares may be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met, including, among other things, the existence of a public market for the shares, the availability of certain current public information about Company, the resale following the required holding period under Rule 144 and the number of shares being sold during any three month period not exceeding specified limitations; | ||
| 5. That it will not make any disposition of all or any part of the Warrants or Exercise Shares in any event unless and until: |
| (i) | The Company shall have received a letter secured by ______ from the Securities and Exchange Commission stating that no action will be recommended to the Securities and Exchange Commission with respect to the proposed disposition; |
| (ii) | There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or |
| (iii) | ______ shall have notified the Company of the proposed disposition and, in the case of a sale or transfer in a so called “4(1) and a half” transaction, shall have furnished counsel to the Company with an opinion of counsel, reasonably satisfactory to counsel to the Company. |
We acknowledge that the Company will place stop orders with respect to the Warrants and the
Warrants, and if a registration statement is not effective, the Exercise Shares shall bear the
following restrictive legend:
| “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING, WITHOUT LIMITATION, PURSUANT TO RULES 144 OR |
| 144A UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED “4(1) AND A HALF” SALE.” | ||
| “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 DECEMBER ___, 2007, 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.” |
At any
time and from time to time after the date hereof, ______ shall, without further
consideration, execute and deliver to [______] or the Company such other instruments or documents
and shall take such other actions as they may reasonably request to carry out the transactions
contemplated hereby.
Very truly yours,
Schedule 1
Calculation of Intrinsic Value and Black-Scholes Value
| Calculation of Intrinsic Value | Calculation of Black-Scholes | |||||
| Under Section 5(c)(iii) | Under Section 10(b) or 11(b) | |||||
Intrinsic Value
|
The excess of the Stock Price minus the then Exercise Price at the time of calculation. For avoidance of doubt, the Intrinsic Value shall never be less than zero. | Remaining Term | Number of calendar days from date of the Event of Failure until the last date on which the Warrant may be exercised. | |||
Stock Price
|
The greater of (1) the closing price of the Common Stock on NASDAQ, or, if that is not the principal trading market for the Common Stock, such principal market on which the Common Stock is traded or listed (the “Closing Market Price”) on the trading day immediately preceding the date on which a Major Transaction is consummated, (2) the first Closing Market Price following the first public announcement of a Major Transaction, (3) the Volume Weighted Average Price as of the date immediately preceding the first public announcement of the Major Transaction or (4) the per share value of the consideration to be received by the Company and/or stockholders in a Major Transaction. | Interest Rate Volatility Stock Price Dividends |
A risk-free interest rate
corresponding to the US$
LIBOR/Swap rate for a
period equal to the
Remaining Term. 42% The volume Weighted Average Price on the date of such calculation. Zero. |