ANADYS PHARMACEUTICALS, INC. Warrant To Purchase Common Stock
Exhibit 4.1
ANADYS PHARMACEUTICALS, INC.
Warrant No.: 2009-________
Number of Shares of Common Stock:
Date of Issuance: _________ _____, 200___ (“Issuance Date”)
Number of Shares of Common Stock:
Date of Issuance: _________ _____, 200___ (“Issuance Date”)
Anadys Pharmaceuticals, Inc., a Delaware corporation (the “Company”), certifies that, for good and
valuable consideration, the receipt and sufficiency of which are acknowledged, ,
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then
in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any
time or times on or after 180 days from the date hereof (the “Exercisability Date”), but not after
5:30 p.m., New York Time, on the Expiration Date (as defined below), ( ) fully
paid and nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 15. This Warrant is one of a series of warrants to purchase shares of Common Stock
(collectively, the “Warrants”) issued pursuant to those certain Subscription Agreements, dated as
of June 3, 2009 (the “Subscription Date”), by and among the Company and the investors (the
“Investors”) referred to therein (the “Subscription Agreements”) pursuant to the Company’s
Registration Statement on Form S-3 (No. 333-158342) (the “Registration Statement”).
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions hereof (including,
without limitation, the limitations set forth in Section 1(e)), this Warrant may be exercised by
the Holder on any day on or after the Exercisability Date, in whole or in part (but not as to
fractional shares), by (i) delivery of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant and (ii) payment
to the Company of an amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash
or wire transfer of immediately available funds. The Holder shall not be required to surrender
this Warrant in order to effect an exercise hereunder, provided that this Warrant is
surrendered to the Company by the second Trading Day following the date on which the Company has
received each of the Exercise Notice and the Aggregate Exercise Price (the “Exercise Delivery
Documents”). On or before the first Trading Day following the date on which the Company has
received the Exercise Delivery Documents, the Company shall transmit by facsimile an acknowledgment
of confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company’s
transfer agent for the Common Stock (the “Transfer Agent”). The Company shall deliver any
objection to the Exercise Delivery Documents on or before the second Trading Day following the date
on which the Company has received all of the Exercise Delivery Documents. In the event of any
discrepancy or dispute, the records of the Company shall be controlling and determinative in
the absence of manifest error. On or before the third Trading Day following the date on which
the Company has received all of the Exercise Delivery Documents and after the Company shall have
received this Warrant (the “Share Delivery Date”), the Company shall, (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program (the “FAST Program”) and so long as the certificates therefor are not required to
bear a legend regarding restriction on transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal
Agent Commission system, or (Y), if the Transfer Agent is not participating in the FAST Program or
if the certificates are required to bear a legend regarding restriction on transferability, issue
and dispatch by overnight courier to the address as specified in the Exercise Notice, a
certificate, registered in the Company’s share register in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
Upon delivery of the Exercise Delivery Documents and surrender of this Warrant, 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. If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant
submitted for exercise is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no event later than five Trading
Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section
8(e)) representing the right to purchase the number of Warrant Shares purchasable immediately prior
to such exercise under this Warrant, less the number of Warrant Shares with respect to which this
Warrant is exercised. The Company shall pay any and all taxes that may be payable with respect to
the issuance and delivery of Warrant Shares upon exercise of this Warrant; provided,
however, that the Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a
name other than that of the Holder or an affiliate thereof. The Holder shall be responsible for
all other tax liability that may arise as a result of holding or transferring this Warrant or
receiving Warrant Shares upon exercise hereof.
(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $2.75 per
share of Common Stock, subject to adjustment as provided herein.
(c) Failure to Timely Deliver Shares. In addition to any other rights available to a
Holder, if the Company fails to deliver to the Holder a certificate representing Warrant Shares by
the third Trading Day after the date on which delivery of such certificate is required by this
Warrant, and if after such third Trading Day the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall,
within three Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased less the Exercise Price (the
“Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue
such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such Common Stock and
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pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Closing Price on the date of
the event giving rise to the Company’s obligation to deliver such certificate.
(d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, if
neither a registration statement covering the Warrant Shares nor an exemption from registration
under the Securities Act of 1933, as amended, is available either for registration of the Warrant
Shares or for the resale of the Warrant Shares, the Holder may, in its sole discretion, exercise
this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to
be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of shares of Common Stock determined according to
the following formula (a “Cashless Exercise”):
| Net Number = | (A x B) — (A x C) | |||||
| B |
For purposes of the foregoing formula:
| A= | the total number of shares with respect to which this Warrant is then being exercised. | ||
| B= | the Weighted Average Price of the shares of Common Stock (as reported by Bloomberg) on the date immediately preceding the date of the Exercise Notice. | ||
| C= | the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise. |
(e) Limitations on Exercises. (1) The Company shall not effect the exercise of this
Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after
giving effect to such exercise, such Holder (together with such Holder’s affiliates and any other
Persons acting as a group together) would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such
exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock
beneficially owned by such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i)
exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person
and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or warrants) subject to a
limitation on conversion or exercise analogous to the limitation contained herein. Except as set
forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), it being acknowledged that the Company is not representing to the Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act, and the Holder is solely
responsible for any schedules required to be
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filed in accordance therewith.. For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on
Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be,
(2) a more recent public announcement by the Company or (3) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at
any time, upon the written or oral request of the Holder, where such request indicates that it is
being made pursuant to this Warrant, the Company shall within two Trading Days confirm orally and
in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including the Warrants, by the Holder and its
affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may increase or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% specified in such notice;
provided, that (i) any such increase will not be effective until the 61st day
after such notice is delivered to the Company and (ii) any such increase or decrease will apply
only to the Holder and not to any other holder of Warrants.
(f) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share
that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and
the number of Warrant Shares shall be adjusted from time to time as follows:
(a) Adjustment upon Subdivision or Combination of Shares of Common Stock. If the
Company at any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common
Stock into a greater number of shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of Warrant Shares will be
proportionately increased. If the Company at any time on or after the Subscription Date combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to
such combination will be proportionately increased and the number of Warrant Shares will be
proportionately decreased. Any adjustment under this Section 2(a) shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(b) Other Events. If any event occurs of the type contemplated by the provisions of
Section 2(a) but not expressly provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights with equity features to
the holders of the Company’s equity securities), then the Company’s Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of Warrant Shares so as to protect the
rights of the Holder; provided, that no such adjustment pursuant to this Section 2(b)
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will increase the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2.
(c) Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise
Price be reduced below the par value of the Company’s Common Stock
3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:
(a) any Exercise Price in effect immediately prior to the close of business on the record date
fixed for the determination of holders of shares of Common Stock entitled to receive the
Distribution shall be reduced, effective as of the close of business on such record date, to a
price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall
be the Weighted Average Price of the shares of Common Stock on the Trading Day immediately
preceding such record date minus the value of the Distribution (as determined in good faith by the
Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator
shall be the Weighted Average Price of the shares of Common Stock on the Trading Day immediately
preceding such record date; and
(b) the number of Warrant Shares shall be increased to a number of shares equal to the number
of shares of Common Stock obtainable immediately prior to the close of business on the record date
fixed for the determination of holders of shares of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding
paragraph (a); provided, that in the event that the Distribution is of shares of Common
Stock or common stock of a company whose common shares are traded on a national securities exchange
or a national automated quotation system (“Other Shares of Common Stock”), then the Holder may
elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except
that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock
that would have been payable to the Holder pursuant to the Distribution had the Holder exercised
this Warrant immediately prior to such record date and with an aggregate exercise price equal to
the product of the amount by which the exercise price of this Warrant was decreased with respect to
the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the number of
Warrant Shares calculated in accordance with the first part of this paragraph (b).
4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if
at any time prior to the Expiration Date the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the
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Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined for the grant, issue
or sale of such Purchase Rights.
(b) Fundamental Transactions. Upon the occurrence of any Fundamental Transaction, the
Successor Entity shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant with the same effect as if such
Successor Entity had been named as the Company herein. Upon consummation of the Fundamental
Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon exercise of this Warrant at any time after the consummation of the Fundamental
Transaction, in lieu of the shares of the Common Stock (or other securities, cash, assets or other
property purchasable upon the exercise of the Warrant prior to such Fundamental Transaction), such
shares of stock, securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights), if any, that the Holder would have been entitled to receive
upon the happening of such Fundamental Transaction had this Warrant been exercised immediately
prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this
Warrant. In addition to and not in substitution for any other rights hereunder, prior to the
consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are
entitled to receive securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder
will thereafter have the right to receive upon an exercise of this Warrant within 90 days after the
consummation of the Fundamental Transaction but, in any event, prior to the Expiration Date, in
lieu of the shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of
stock, securities, cash, assets or any other property whatsoever (including warrants or other
purchase or subscription rights) which the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction had the Warrant been exercised immediately prior to such
Fundamental Transaction. Provision made pursuant to the preceding sentence shall be in a form and
substance reasonably satisfactory to the Required Holders. The provisions of this Section shall
apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall
be applied without regard to any limitations on the exercise of this Warrant. Without limiting the
foregoing, in connection with a Fundamental Transaction that constitutes a Change of Control, at
the request of the Holder delivered before the 90th day after such Fundamental Transaction, the
Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the
Holder, within five Business Days after such request (or, if later, on the effective date of the
Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining
unexercised portion of this Warrant on the date of such Fundamental Transaction.
5. NONCIRCUMVENTION. The Company covenants and agrees that the Company will not, by
amendment of its Certificate of Incorporation, Bylaws or through any
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reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, and will at all times in good faith carry out all
the provisions of this Warrant and take all action as may be required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the
par value of any shares of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants,
the number of shares of Common Stock as shall from time to time be necessary to effect the exercise
of the Warrants then outstanding (without regard to any limitations on exercise).
6. RESERVATION OF WARRANT SHARES. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of shares of Common Stock which are then
issuable and deliverable upon the exercise of this entire Warrant, free from preemptive or any
other contingent purchase rights of Persons other than the Holder (taking into account the
adjustments and restrictions in Section 2). Such reservation shall comply with the provisions of
Section 1. The Company covenants that all shares of Common Stock so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will
take all such actions as may be necessary to assure that such shares of Common Stock may be issued
as provided herein without violation of any applicable law or regulation, or of any requirements of
any securities exchange or automated quotation system upon which the Common Stock may be listed.
7. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided
herein, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be
entitled to vote or receive dividends or be deemed the holder of share capital of the Company for
any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder
of the Company or any right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to
receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant
shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company.
8. REGISTRATION AND REISSUANCE OF WARRANTS.
(a) Registration of Warrant. The Company shall register this Warrant, upon the
records to be maintained by the Company for that purpose (the “Warrant Register”), in the
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name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the
contrary. The Company shall also register any transfer, exchange, reissuance or cancellation of
any portion of this Warrant in the Warrant Register.
(b) Transfer of Warrant. This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Company, except as may otherwise be required by applicable
securities laws. Subject to applicable securities laws, if this Warrant is to be transferred, the
Holder shall surrender this Warrant to the Company together with all applicable transfer taxes ,
whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant
(in accordance with Section 8(e)), registered as the Holder may request, representing the right to
purchase the number of Warrant Shares being transferred by the Holder and, if less then the total
number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in
accordance with Section 8(e)) to the Holder representing the right to purchase the number of
Warrant Shares not being transferred.
(c) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this
Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form or the provision of reasonable security by the Holder to
the Company and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(e))
representing the right to purchase the Warrant Shares then underlying this Warrant.
(d) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company together with all applicable
transfer taxes, for a new Warrant or Warrants (in accordance with Section 8(e)) representing in the
aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each
such new Warrant will represent the right to purchase such portion of such Warrant Shares as is
designated by the Holder at the time of such surrender; provided, however, that the
Company shall not be required to issue Warrants for fractional shares of Common Stock hereunder.
(e) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant
pursuant to the terms of this Warrant, such new Warrant shall (i) be of like tenor with this
Warrant, (ii) represent, as indicated on the face of such new Warrant, the right to purchase the
Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant
to Section 8(b) or Section 8(c), the Warrant Shares designated by the Holder which, when added to
the number of shares of Common Stock underlying the other new Warrants issued in connection with
such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii)
have an issuance date, as indicated on the face of such new Warrant which is the same as the
Issuance Date and (iv) have the same rights and conditions as this Warrant.
9. NOTICES. Whenever notice is required to be given under this Warrant, unless
otherwise provided herein, such notice shall be given in accordance with the information set forth
in the Warrant Register. The Company shall provide the Holder with prompt written notice
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of all actions taken pursuant to this Warrant, including, in reasonable detail, a description
of such action and the reason or reasons therefore. Without limiting the generality of the
foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment
of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such
adjustment and (ii) at least 10 days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock,
(B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property to holders of shares of Common Stock or
(C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or
liquidation; provided, that in each case, such information shall be made known to the
public prior to or in conjunction with such notice being provided to the Holder.
10. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this
Warrant may be amended and the Company may take any action herein prohibited, or omit to perform
any act herein required to be performed by it, only if the Company has obtained the written consent
of the Required Holders; provided, that no such action may increase the exercise price of
any Warrant or decrease the number of shares or class of stock obtainable upon exercise of any
Warrant without the written consent of the Holder. No such amendment shall be effective to the
extent that it applies to less than all of the holders of the Warrants then outstanding.
11. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in
accordance with, and all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.
12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the
Company and all the Investors and shall not be construed against any person as the drafter hereof.
The headings of this Warrant are for convenience of reference and shall not form part of, or affect
the interpretation of, this Warrant.
13. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two Trading Days of receipt
of the Exercise Notice 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 of the Exercise
Price or the Warrant Shares within five Trading Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two Trading Days submit
via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable
investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company
shall 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
10 Trading Days from the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or
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calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
The expenses of the investment bank and accountant will be borne by the Company unless the
investment bank or accountant determines that the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares by the Holder was incorrect, in which case the
expenses of the investment bank and accountant will be borne by the Holder.
14. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Warrant shall be cumulative and in addition to all other remedies available under
this Warrant and the Subscription Agreements, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder
to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.
The Company acknowledges that a breach by it of its obligations hereunder may cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach, the holder of this
Warrant shall be entitled, in addition to all other available remedies, to seek an injunction
restraining any breach. Notwithstanding the foregoing, the absence of an effective registration
statement relating to the issuance of Warrant Shares upon exercise of the Warrant shall not provide
the Holder with the right to net-settle this Warrant in cash. Furthermore, the absence of an
effective registration statement or applicable exemption from registration does not alleviate the
Company’s obligation to deliver the Warrant Shares upon exercise of this Warrant.
15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have
the following meanings:
(a) “Black Scholes Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the end of day
immediately following the public announcement of the applicable Fundamental Transaction and
reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal
to the remaining term of this Warrant as of such date of request and (ii) an expected volatility
equal to the 30 day volatility of the Common Stock obtained from the HVT function on Bloomberg for
the period ending as of the end of the day immediately preceding the public announcement of the
applicable Fundamental Transaction.
(b) “Bloomberg” means Bloomberg Financial Markets.
(c) “Change of Control” means any Fundamental Transaction following which the holders of the
Company’s voting power immediately prior to such Fundamental Transaction do not, immediately
thereafter, hold, directly or indirectly, voting power of the surviving or successor entity or
entities sufficient to elect a majority of the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities.
(d) “Common Stock” means (i) the Company’s shares of Common Stock, $0.001 par value per share,
and (ii) any share capital into which such Common Stock shall have been changed or any share
capital resulting from a reclassification of such Common Stock.
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(e) “Convertible Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Common Stock.
(f) “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., the NYSE
Amex LLC, The Nasdaq Stock Market, or the OTC Bulletin Board®.
(g) “Expiration Date” means the fifth anniversary of the Issuance Date or, if such date falls
on a day other than a Trading Day or on which trading does not take place on the Principal Market
(a “Holiday”), the next date that is not a Holiday.
(h) “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or
more related transactions, (i) consolidate or merge with or into another Person, (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company to another Person, (iii) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than the 50% of either the outstanding shares of
Common Stock (not including any shares of Common Stock held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such purchase, tender or
exchange offer), (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock purchase agreement or other business combination), (v) reorganize,
recapitalize or reclassify its Common Stock or (vi) any “person” or “group” (as these terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.
(i) “Options” means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.
(j) “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 the
Fundamental Transaction.
(k) “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.
(l) “Principal Market” means the Nasdaq Global Market.
(m) “Required Holders” means the holders of the Warrants representing at least a majority of
shares of Common Stock underlying the Warrants then outstanding.
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(n) “Successor Entity” means the Person (or, if so elected by the Required Holders, the Parent
Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so
elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction shall
have been entered into.
(o) “Trading Day” means any day on which the Common Stock is traded on the Principal Market,
or, if the Principal Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is then traded;
provided that “Trading Day” shall not include any day on which the Common Stock is
scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such exchange or market (or if
such exchange or market does not designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00:00 p.m., New York Time).
(p) “Weighted Average Price” means, for any security as of any date, the dollar
volume-weighted average price for such security on the Principal Market during the period beginning
at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by
Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time,
and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the Weighted
Average Price cannot be calculated for such security on such date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Required Holders. If the Company and the Required Holders are
unable to agree upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 13 with the term “Weighted Average Price” being substituted for the term
“Exercise Price.” All such determinations shall be appropriately adjusted for any share dividend,
share split or other similar transaction during such period.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.
| ANADYS PHARMACEUTICALS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
WARRANT TO PURCHASE COMMON STOCK
ANADYS PHARMACEUTICALS, INC.
The undersigned holder hereby exercises the right to purchase
of the shares of
Common Stock (“Warrant Shares”) of Anadys Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.
1. Exercise. The Holder intends to pay the sum of $
to the
Company in accordance with the terms of the Warrant in connection with the exercise of the Warrant
for _______Warrant Shares.
2. Delivery of Warrant Shares. The Company shall deliver to the holder
Warrant Shares in accordance with the terms of the Warrant.
3. Representations and Warranties. By its delivery of this Exercise Notice, the
undersigned represents and warrants to the Company that in giving effect to the exercise evidenced
hereby the Holder will not beneficially own in excess of the number of shares of Common Stock
(determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended)
permitted to be owned under Section 1(e) of this Warrant to which this notice relates.
Date: ____, _________
| By: | ||||
| Name: | ||||
| Title: | ||||
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice.
| ANADYS PHARMACEUTICALS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
