Exhibit 4.3
FORM OF WARRANT
FINAL FORM
FORM OF WARRANT
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
XANODYNE PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE WARRANT
No. [____] Dated: As of June __, 2007
Warrant to Purchase [_____]
Shares of Common Stock
XANODYNE PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), for
value received, hereby certifies that [Silver Point Finance, LLC, a Delaware
limited liability company] [INSERT HOLDER ADDRESS] or its registered assigns
(the "Holder"), is entitled to purchase from the Company [________] (the
"Initial Warrant Quantity") duly authorized, validly issued, fully paid and
nonassessable shares of common stock, par value $0.01 per share, of the Company
(the "Common Stock"), at a purchase price of $0.001 per share (the "Warrant"),
at any time or from time to time after the date hereof but prior to the
Expiration Date (as defined below), all subject to the terms, conditions and
adjustments set forth below in this Warrant. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned such terms in the
Financing Agreement, dated as July 25, 2005, as amended by the First Amendment,
Consent and Waiver, dated September 25, 2005, and as further amended by the
Second Amendment thereto, dated as of June [__], 2007 (as further amended,
restated or otherwise modified from time to time, the "Financing Agreement")
among the Company, its subsidiaries, certain lenders named therein, including
the Holder and Silver Point Finance, LLC ("Silver Point") as collateral agent
and administrative agent.
1. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated:
"Additional Shares of Common Stock" shall mean all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to Section 3.3 or
3.4, deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than:
(a) (i) shares of Common Stock issued upon the exercise of the
Warrant and (ii) such number of additional shares of Common Stock as may
become
issuable upon the exercise of the Warrant by reason of adjustments required
pursuant to the anti-dilution provisions applicable to the Warrant as in
effect on the date hereof; and
(b) (i) up to 15,191,677 shares of Common Stock or Options issued
to employees or directors of, or consultants or advisors to, the Company
pursuant to a plan, agreement or arrangement approved by a majority vote of
the Board of Directors, and (ii) such additional number of shares of Common
Stock as may become issuable pursuant to the terms of any such plan by
reason of adjustments required pursuant to anti-dilution provisions
applicable to such securities in order to reflect any subdivision or
combination of Common Stock, by reclassification or otherwise.
(c) The warrants initially held by Silicon Valley Bank which may
be exercised for up to 35,437 shares of Series A-l Preferred Stock
("Silicon Warrant Shares") and the Silicon Warrant Shares.
(d) Shares of Common Stock which may be issued in connection with
the conversion of the Series A-l Preferred Stock.
(e) Dividends paid to the holders of Series A-l Preferred Stock,
in accordance with Article Fourth Section C(1) of the Company's Certificate
of Incorporation, that are paid in shares of Common Stock.
(f) Up to 6,600,000 shares of Series A-l Preferred Stock issued
in connection with the acquisition of any product or products, directly or
indirectly, that are complementary to the Juno Product.
(g) Stock dividends and stock splits for which the Warrant
Quantity is adjusted pursuant to Section 3.3 below.
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly through one or more intermediaries, controls, is
controlled by. or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
"Business Day" shall mean any day other than a Saturday or a Sunday or
a day on which commercial banking institutions in the City of New York are
authorized by law to be closed. Any reference to "days" (unless Business Days
are specified) shall mean calendar days.
"Commission" shall mean the Securities and Exchange Commission or any
successor agency having jurisdiction to enforce the Securities Act.
"Common Stock" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current
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dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to a preference as to dividends or
distributions upon liquidation.
"Company" shall have the meaning assigned to it in the introduction to
this Warrant, such term to include any corporation or other entity which shall
succeed to or assume the obligations of the Company hereunder in compliance with
Section 4.
"Convertible Securities" shall mean any evidences of indebtedness,
shares of capital stock (other than Common Stock) or other securities directly
or indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"Current Market Price" shall mean, on any date specified herein, the
average of the daily Market Price during the 20 consecutive trading days
commencing 30 trading days before such date, except that, if on any such date
the shares of Common Stock are not listed or admitted for trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
"Designated Entity" shall mean, individually and collectively, SPCP
Group III LLC, SPF CDO I, LLC, Field Point I, LTD, Broad Point I, LLC, and SPCP
Group, L.L.C.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Expiration Date" shall have the meaning assigned to it in Section 21.
"Fair Value" shall mean, on any date specified herein (i) in the case
of cash, the dollar amount thereof, (ii) in the case of a security, the Current
Market Price, and (iii) in all other cases, the fair value thereof (as of a date
which is within 20 days of the date as of which the determination is to be made)
determined in good faith by the Board of Directors of the Company and set forth
in a certificate of an Authorized Officer of Company.
"Financing Agreement" shall have the meaning assigned to it in the
introduction to this Warrant.
"Holder" shall have the meaning assigned to it in the introduction to
this Warrant.
"Initial Warrant Quantity" shall have the meaning assigned to it in
the introduction to this Warrant.
"Investor Rights Agreement" shall mean that certain Investor Rights
Agreement dated as of July 25, 2005, amended as of the date hereof, among the
Company, the existing stockholders named therein and the lenders party to the
Second Amendment to the Financing Agreement.
"Market Price" shall mean, on any date specified herein, the amount
per share of the Common Stock, equal to (i) the average weighted sale price of
such Common Stock, regular way, on such date or, in case no such sale takes
place on such date, the average of the closing bid and asked prices thereof
regular way on such date, in either case as officially reported on the
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principal national securities exchange on which such Common Stock is then listed
or admitted for trading, (ii) if such Common Stock is not then listed or
admitted for trading on any national securities exchange but is designated as a
national market system security by the NASD, the average weighted trading price
of the Common Stock on such date, (iii) if there shall have been no trading on
such date or if the Common Stock is not so designated, the average of the
closing bid and asked prices of the Common Stock on such date as shown by the
NASD automated quotation system, or (iv) if such Common Stock is not then listed
or admitted for trading on any national exchange or quoted in the
over-the-counter market, the Fair Value (as set forth in subsection (iii) of the
definition of Fair Value).
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Options" shall mean any rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"Other Securities" shall mean any capital stock (other than Common
Stock) and other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
"Person" shall mean any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"Purchase Price" shall mean $0.001 per share.
"Related Fund" means, (a) with respect to any Person, any Affiliate of
such Person or any fund or account managed by such Person or an Affiliate of
such Person or its investment manager, (b) with respect to Silver Point, (i) any
Affiliate of Silver Point or any fund or account managed by Silver Point or any
Affiliate of Silver Point or its investment manager, or (ii) any Designated
Entity, and (c) with respect to any Designated Entity, Silver Point or any other
Designated Entity.
"Restricted Securities" shall mean (i) any Warrants bearing the
applicable legend set forth in Section 10.1, (ii)any shares of Common Stock (or
Other Securities) issued or issuable upon the exercise of Warrants which are
(or, upon issuance, will be) evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section, and (iii) any shares of Common
Stock (or Other Securities) issued subsequent to the exercise of any of the
Warrants as a dividend or other distribution with respect to, or resulting from
a subdivision of the outstanding shares of Common Stock (or other Securities)
into a greater number of shares by reclassification, stock splits or otherwise,
or in exchange for or in replacement of the Common Stock (or Other Securities)
issued upon such exercise, which are evidenced by a certificate or certificates
bearing the applicable legend set forth in such Section.
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"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute.
"Series A-l Preferred Stock" shall mean the Company's Series A-l
Convertible Preferred Stock, $.001 par value per share.
"Stockholders' Agreement" means that certain ▇▇▇▇▇▇▇ and Restated
Stockholder's Agreement dated as of July 25, 2005, as amended as of the date
hereof, by and among the Company and certain of the holders of the Company's
Common Stock and Preferred Stock that are listed on the signature pages thereto.
"Warrant Quantity" shall mean initially the Initial Warrant Quantity
(as defined in the first paragraph of this Warrant), which amount shall be
subject to adjustment and readjustment from time to time as provided in Section
3, and, as so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment is required by Section 3.
"Warrant" shall have the meaning assigned to it in the introduction to
this Warrant.
2. EXERCISE OF WARRANT.
2.1. Manner of Exercise; Payment of the Purchase Price. (a) This
Warrant may be exercised by the Holder hereof, in whole or in part, at any
time or from time to time prior to the Expiration Date, by surrendering to
the Company at its principal office this Warrant, with the form of Election
to Purchase Shares attached hereto as Exhibit A (or a reasonable facsimile
thereof) duly executed by the Holder and accompanied by payment of the
Purchase Price for the number of shares of Common Stock specified in such
form.
(b) Payment of the Purchase Price may be made as follows (or
by any combination of the following): (i) in United States currency by
cash or delivery of a certified check or bank draft payable to the
order of the Company or by wire transfer to the Company, (ii) by
cancellation of such number of the shares of Common Stock otherwise
issuable to the Holder upon such exercise as shall be specified in
such Election to Purchase Shares, such that the excess of the
aggregate Current Market Price of such specified number of shares on
the date of exercise over the portion of the Purchase Price
attributable to such shares shall equal the Purchase Price
attributable to the shares of Common Stock to be issued upon such
exercise, in which case such amount shall be deemed to have been paid
to the Company and the number of shares issuable upon such exercise
shall be reduced by such specified number, or (iii) by surrender to
the Company for cancellation certificates representing shares of
Common Stock of the Company owned by the Holder (properly endorsed for
transfer in blank) having a Current Market Price on the date of
Warrant exercise equal to the Purchase Price.
2.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to, and the
Purchase Price shall have been received by,
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the Company as provided in Section 2.1, and at such time the Person or Persons
in whose name or names any certificate or certificates for shares of Common
Stock (or Other Securities) shall be issuable upon such exercise as provided in
Section 2.3 shall be deemed to have become the holder or holders of record
thereof for all purposes.
2.3. Delivery of Stock Certificates, Etc.; Charges, Taxes and
Expenses (a) As soon as practicable after each exercise of this Warrant, in
whole or in part, and in any event within five Business Days thereafter,
the Company shall cause to be issued in the name of and delivered to the
Holder hereof or as the Holder may direct,
(i) a certificate or certificates for the number of shares
of Common Stock (or Other Securities) to which the Holder shall be
entitled upon such exercise plus, in lieu of issuance of any
fractional share to which the Holder would otherwise be entitled, if
any, a check for the amount of cash equal to the same fraction
multiplied by the Current Market Price per share on the date of
exercise, and
(ii) in case such exercise is for less than all of the
shares of Common Stock purchasable under this Warrant, a new Warrant
or Warrants of like tenor, for the balance of the shares of Common
Stock purchasable hereunder.
(b) Issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the Holder hereof
for any transfer tax or other incidental expense in respect of the issuance
of such certificates, all of which such taxes and expenses shall be paid by
the Company.
(c) In the case of any dispute in respect of the number of shares
of Common Stock to be issued upon exercise of this Warrant, the Company
shall promptly issue to the Holder such number of shares of Common Stock
that is not disputed and shall submit the disputed determinations or
arithmetic calculations to the Holder via facsimile within five (5)
Business Days after each exercise of this Warrant. If the Holder and the
Company are unable to agree as to the determination of the number of shares
of Common Stock to be issued within three (3) Business Days of such
disputed determination or arithmetic calculation being submitted to the
Holder, then the dispute in respect of the number of shares of Common Stock
to be issued upon exercise of this Warrant shall be determined in good
faith by any firm of independent public accountants of national standing,
selected jointly by the Company and the Holder or, if that selection cannot
be made within ten (10) days, by any firm of independent public accountants
of national standing selected by the American Arbitration Association in
accordance with its rules, and provided further, that all of the fees and
expenses of any third parties incurred in connection with resolving such
dispute will be paid by the party that is determined by such accountant to
be least correct and if neither party is more correct than the other, one-
half by the Company and one-half by the Holder. The Company shall then, on
the next Business Day. issue the appropriate
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number of shares of Common Stock upon exercise of the Warrant in accordance
with such accounting firm's determination under this Section 2.3(c).
3. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.
3.1. General; Warrant Quantity. This Warrant evidences the right to
purchase a number of shares of Common Stock equal to the Warrant Quantity,
subject to adjustment and readjustment as provided in this Section 3.
3.2. Adjustment of Warrant Quantity.
3.2.1. Issuance of Additional Shares of Common Stock. In case the
Company at any time or from time to time after the date hereof shall issue or
sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 3.3 or 3.4), without consideration
or for consideration per share less than the Fair Value of the Common Stock in
effect immediately prior to such issue or sale, then, in each such case, subject
to Section 3.8, the Warrant Quantity shall be increased, concurrently with such
issue or sale, to an amount determined by multiplying such Warrant Quantity by a
fraction:
(a) the numerator of which shall be the number of shares of
Common Stock outstanding on a fully diluted basis (including shares of
Common Stock issuable upon exercise of this Warrant, shares of Common Stock
issuable upon conversion of the issued and outstanding Series A-l Preferred
Stock and the conversion of the Silicon Warrant Shares, and the 9,947,191
shares of Common Stock issuable upon the exercise of Options granted as of
the Second Amendment Effective Date) immediately after such issue or sale;
provided, that for the purposes of this Section 3.2.1(a), (i) immediately
after any Additional Shares of Common Stock are deemed to have been issued
pursuant to Section 3.3 or 3.4, such Additional Shares shall be deemed to
be outstanding, and (ii) treasury shares shall not be deemed to be
outstanding; and
(b) the denominator of which shall be the sum of (i) the number
of shares of Common Stock outstanding on a fully diluted basis (including
shares of Common Stock issuable upon exercise of this Warrant, shares of
Common Stock issuable upon conversion of the issued and outstanding Series
A-l Preferred Stock and the conversion of the Silicon Warrant Shares, and
the 9,947,191 shares of Common Stock issuable upon the exercise of Options
granted as of the Second Amendment Effective Date) immediately prior to
such issue or sale; (provided that for purposes of this Section 3.2.1(b)
treasury shares shall not be deemed outstanding) and (ii) the number of
shares of Common Stock which the aggregate consideration received by the
Company for the total number of such Additional Shares of Common Stock so
issued or sold would purchase at an amount equal to Fair Value.
3.2.2. Treatment of Options and Convertible Securities. Except as
set forth herein, in case the Company at any time or from time to time after the
date hereof shall issue., sell, grant or assume, or shall fix a record date for
the determination of holders of any
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class of securities of the Company entitled to receive, any Options or
Convertible Securities (whether or not the rights thereunder are immediately
excrcisable), then, and in each such case, the maximum number of Additional
Shares of Common Stock (as set forth in the instrument relating thereto, without
regard to any provisions contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue, sale, grant or assumption or, in case such
a record date shall have been fixed, as of the close of business on such record
date; provided, that such Additional Shares of Common Stock shall not be deemed
to have been issued unless the consideration per share (determined pursuant to
Section 3.5) of such shares would be less than the Fair Value in effect on the
date of and immediately prior to such issue, sale, grant or assumption or
immediately prior to the close of business on such record date, as the case may
be; and provided, further, that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(a) whether or not the Additional Shares of Common Stock
underlying such Options or Convertible Securities are deemed to be issued,
no further adjustment of the Warrant Quantity shall be made upon the
subsequent issue or sale of Convertible Securities or shares of Common
Stock upon the exercise of such Options or the conversion or exchange of
such Convertible Securities, except in the case of any such Options or
Convertible Securities which contain provisions requiring an adjustment,
subsequent to the date of the issue or sale thereof, of the number of
Additional Shares of Common Stock issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities by
reason of (i) a Change of Control (as defined in the Financing Agreement)
of the Company, (ii) the acquisition by any Person or group of Persons of
any specified number or percentage of the voting securities of the Company
or (iii) any other event or occurrence, such as a reset of pricing with
respect to the conversion of convertible Securities, each such case to be
deemed hereunder to involve a separate issuance of Additional Shares of
Common Stock. Options or Convertible Securities, as the case may be;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise, conversion
or exchange thereof (by change of rate or otherwise), the Warrant Quantity
computed upon the original issue, sale, grant or assumption thereof (or
upon the occurrence of the record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or
decrease insofar as it affects such Options, or the rights of conversion or
exchange under such Convertible Securities, which are outstanding at such
time;
(c) no readjustment pursuant to subdivision (b) above shall have
the effect of decreasing the Warrant Quantity by an amount in excess of the
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amount of the adjustment thereof originally made in respect of the issue,
sale, grant or assumption of such Options or Convertible Securities.
3.3. Treatment of Stock Dividends, Stock Splits, etc. Except to the
extent paid to the holders of Series A-l Preferred Stock in satisfaction of the
Company's dividend obligation set forth in Article Fourth Section C(l) of the
Company's Certificate of Incorporation, in case the Company at any time or from
time to time after the date hereof shall declare or pay any dividend on the
Common Stock payable in Common Stock, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock), then, and in each such case, if the Company declares or pays a dividend
on its Common Stock, payable in Common Stock, or other securities, subdivides
the outstanding Common Stock into a greater amount of Common Stock, then upon
exercise or conversion of this Warrant, for each share of Common Stock acquired,
Holder shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the shares
of Common Stock recorded as of the date the dividend or subdivision occurred. If
the outstanding shares of Common Stock are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Purchase
Price shall be proportionately increased.
3.4. Computation of Consideration. For the purposes of this Section 3,
(a) the consideration for the issue or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment of
such consideration,
(i) insofar as it consists of cash, be computed at the net
amount of cash received by the Company, without deducting any expenses
paid or incurred by the Company or any commissions or compensations
paid or concessions or discounts allowed to underwriters, dealers or
others performing similar services in connection with such issue or
sale,
(ii) insofar as it consists of property (including
securities) or services other than cash, be computed at the Fair Value
thereof at the time of such issue or sale, and
(iii) in case Additional Shares of Common Stock are issued
or sold together with other stock or securities or other assets of the
Company for a consideration which covers both, be the portion of such
consideration so received, computed as provided in clauses (i) and
(ii) above, allocable to such Additional Shares of Common Stock, such
allocation to be determined in the same manner that the Fair Value of
property not consisting of cash or securities is to be determined as
provided in the definition of "Fair Value" herein;
(b) Additional Shares of Common Stock deemed to have been issued
pursuant to Section 3.3, relating to Options and Convertible Securities,
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shall be deemed to have been issued for a consideration per share
determined by dividing:
(i) the total amount, if any, received and receivable by the
Company as consideration for the issue, sale, grant or assumption of
the Options or Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration to
protect against dilution) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such Convertible
Securities or, in the case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities and the conversion
or exchange of such Convertible Securities, in each case computing
such consideration as provided in the foregoing subdivision (a).
by
(ii) the maximum number of Additional Shares of Common Stock
(as set forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of such
number to protect against dilution) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities.
3.5. Adjustments for Combinations, etc. In case the outstanding shares
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Quantity
in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately decreased.
3.6. Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in Section 4) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis consistent with the standards established in the
other provisions of this Section 3, the purchase rights granted by this Warrant,
then, and in each such case, the computations, adjustments and readjustments
provided for in this Section 3 with respect to the Warrant Quantity shall be
made as nearly as possible in the manner so provided and applied to determine
the amount of Other Securities from time to time receivable upon the exercise of
this Warrant, so as to protect the Holder of this Warrant against the effect of
such dilution.
3.7. De Minimis Adjustments. If the amount of any adjustment of the
Warrant Quantity required pursuant to this Section 3 would be less than one
tenth (1/10) of one percent (1%) of the Warrant Quantity in effect at the time
such adjustment is otherwise so required to be made, such amount shall be
carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other
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amount or amounts so carried forward, shall aggregate a change in the Warrant
Quantity of at least one tenth (1/10) of one percent (1%) of such Warrant
Quantity. All calculations under this Warrant shall be made to the nearest
one-tenth of a share.
3.8. Abandoned Dividend or Distribution. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution (which results in an adjustment to the
Warrant Quantity under the terms of this Warrant) and shall, thereafter, and
before such dividend or distribution is paid or delivered to shareholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Warrant Quantity by reason of the
taking of such record shall be reversed, and any subsequent adjustments, based
thereon, shall be recomputed.
4. CONSOLIDATION, MERGER, ETC.
4.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof shall effect a
capital reorganization or reclassification of the Common Stock or Other
Securities (other than a capital reorganization or reclassification resulting in
the issue of Additional Shares of Common Stock for which adjustment in the
Warrant Quantity is provided in Section 3.2.1 or 3.2.2), then, and in the case
of each such transaction, proper provision shall be made so that, upon the basis
and the terms and in the manner provided in this Warrant, the Holder of this
Warrant, upon the exercise hereof at any time after the consummation of such
transaction, shall be entitled to receive (at the aggregate Purchase Price in
effect at the time of such consummation for all Common Stock or Other Securities
issuable upon such exercise immediately prior to such consummation), in lieu of
the Common Stock or Other Securities issuable upon such exercise prior to such
consummation, the highest amount of securities, cash or other property to which
such Holder would actually have been entitled as a shareholder upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in Sections 3 through 5.
4.2. Assumption of Obligations. Notwithstanding anything contained in
the Warrants or in the Financing Agreement to the contrary, the Company shall
not effect any of the transactions described in Section 4.1 unless, prior to the
consummation thereof, each Person (other than the Company) which may be required
to deliver any stock, securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the Holder of this Warrant, (a) the obligations of
the Company under this Warrant (and if the Company shall survive the
consummation of such transaction, such assumption shall be in addition to, and
shall not release the Company from, any continuing obligations of the Company
under this Warrant), (b) the obligations of the Company under the Investor
Rights Agreement and (c) the obligation to deliver to the Holder such shares of
stock, securities, cash or property as, in accordance with the foregoing
provisions of this Section 4. the Holder may be entitled to receive. Nothing in
this Section 4 shall be deemed to authorize the Company to enter into any
transaction not otherwise permitted by the Financing Agreement.
5. OTHER DILUTIVE EVENTS. In case any event shall occur as to which,
in the good faith opinion of both the Board of Directors of the Company and the
Holder, the
11
provisions of Section 3 or Section 4 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles of such Sections,
then, in each such case, the Board of Directors of Company shall make an
adjustment, which adjustment, if any, will be final, in the application of such
provisions, in accordance with the essential intent and principles, as
determined jointly and in good faith by the Board of Directors and the Holder,
so as to preserve, without dilution, the purchase rights represented by this
Warrant.
6. NO IMPAIRMENT. The Company shall not, by amendment of its
certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, 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, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder of
this Warrant against impairment. Without limiting the generality of the
foregoing, the Company (a) shall not permit the par value of any shares of stock
receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) shall take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of stock, free from all taxes, liens, security
interests, encumbrances, preemptive rights and charges on the exercise of the
Warrants from time to time outstanding, and (c) shall not take any action which
results in any adjustment of the Warrant Quantity if the total number of shares
of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise.
7. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable upon
the exercise of this Warrant, the Company at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms of this Warrant and
prepare a certificate signed by the Chief Financial Officer or Treasurer of the
Company setting forth such adjustment or readjustment and showing in reasonable
detail the method of calculation thereof and the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or to be received by the Company for any Additional
Shares of Common Stock issued or sold or deemed to have been issued, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c)the Warrant Quantity in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by Section 3) on account thereof. The
Company shall forthwith mail a copy of each such certificate to each holder of a
Warrant and shall, upon the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate. The Company shall also keep
copies of all such certificate at its principal office and shall cause the same
to be available for inspection at such office during normal business hours by
any holder of a Warrant or any prospective purchaser of a Warrant designated by
the holder thereof.
12
8. NOTICES OF CORPORATE ACTION.. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a regularly scheduled cash
dividend payable out of consolidated earnings or earned surplus, determined
in accordance with generally accepted accounting principles, in an amount
not exceeding the amount in excess of 110% of the immediately preceding
cash dividend for such period) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company,
any consolidation or merger involving the Company and any other Person, any
transaction or series of transactions in which more than 50% of the voting
securities of the Company are transferred to another Person, or any
transfer, sale or other disposition of all or substantially all the assets
of the Company to any other Person,
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any other transaction of the Company that would result in any
adjustment to the Common Stock as provided in this Section 8,
the Company shall mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, sale, disposition, dissolution, liquidation or winding-up is to take
place and the time, if any such time is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least 20 days prior to the date
therein specified. Notwithstanding the foregoing, the Company will be deemed to
provide notice of any corporate action if the Company provides notice to the
Administrative Agent under the Financing Agreement.
9. REGISTRATION OF COMMON STOCK. If any shares of Common Stock
required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act) before such shares may be issued upon
exercise, the Company shall, at its expense and as expeditiously as possible,
use commercially reasonable best efforts to cause such shares to be duly
registered or approved, as the case may be. At any such time as Common Stock is
listed on any national securities exchange, the Company shall, at its expense,
obtain promptly and
13
maintain the approval for listing on each such exchange, upon official notice of
issuance, the shares of Common Stock issuable upon exercise of the then
outstanding Warrants and maintain the listing of such shares after their
issuance; and the Company shall also list on such national securities exchange,
shall register under the Exchange Act and shall maintain such listing of, any
Other Securities that at any time are issuable upon exercise of the Warrants, if
and at the time that any securities of the same class shall be listed on such
national securities exchange by the Company.
10. RESTRICTIONS ON TRANSFER.
10.1. Restrictive Legends. Except as otherwise permitted by this
Section 10, each Warrant (including each Warrant issued upon the transfer of any
Warrant) shall be stamped or otherwise imprinted with a legend in substantially
the following form and as otherwise required by the Stockholders Agreement:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS."
Except as otherwise permitted by this Section 10, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and each
certificate issued upon the transfer of any such Common Stock (or Other
Securities), shall be stamped or otherwise imprinted with a legend in
substantially the following form and as otherwise required by the Stockholders
Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS."
10.2. Transfer to Comply With the Securities Act. Restricted
Securities may not be sold, assigned, pledged, hypothecated, encumbered or in
any manner transferred or disposed
14
of, in whole or in part, except in compliance with the provisions of the
Securities Act and state securities or Blue Sky laws and the terms and
conditions hereof.
10.3. Termination of Restrictions. Subject to the Stockholders
Agreement,, the restrictions imposed by this Section 10 on the transferability
of Restricted Securities shall cease and terminate as to any particular
Restricted Securities (a) when a registration statement with respect to the sale
of such securities shall have been declared effective under the Securities Act
and such securities shall have been disposed of in accordance with such
registration statement, (b) when such securities are sold pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, or (c) when,
in the opinion of both counsel for the Holder and counsel for the Company, such
restrictions are no longer required or necessary in order to protect the Company
against a violation of the Securities Act upon any sale or other disposition of
such securities without registration thereunder; provided no such opinion shall
be required for any disposition by the Holder to an Affiliate or Related Fund.
Whenever such restrictions shall cease and terminate as to any Restricted
Securities, the Holder shall be entitled to receive from the Company, without
expense, new securities of like tenor not bearing the applicable legends
required by Section 10.1.
11. RESERVATION OF STOCK, ETC. The Company shall at all times reserve
and keep available, solely for issuance and delivery upon exercise of the
Warrants, the number of shares of Common Stock (or Other Securities) from time
to time issuable upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof, and, in the case of all
securities, shall be free from all taxes, liens, security interests,
encumbrances, preemptive rights and charges. The transfer agent for the Common
Stock, which may be the Company ("Transfer Agent"), and every subsequent
Transfer Agent for any shares of the Company's capital stock issuable upon the
exercise of any of the purchase rights represented by this Warrant, are hereby
irrevocably authorized and directed at all times until the Expiration Date to
reserve such number of authorized and unissued shares as shall be requisite for
such purpose. The Company shall keep copies of this Warrant on file with the
Transfer Agent for the Common Stock and with every subsequent Transfer Agent for
any shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by this Warrant. The Company shall supply such
Transfer Agent with duly executed stock certificates for such purpose. All
Warrant Certificates surrendered upon the exercise of the rights thereby
evidenced shall be canceled, and such canceled Warrants shall constitute
sufficient evidence of the number of shares of stock which have been issued upon
the exercise of such Warrants. Subsequent to the Expiration Date, no shares of
stock need be reserved in respect of any unexercised Warrant.
12. REGISTRATION AND TRANSFER OF WARRANTS. ETC.
12.1. Warrant Register; Ownership of Warrants. Each Warrant issued by
the Company shall be numbered and shall be registered in a warrant register (the
"Warrant Register") as it is issued and transferred, which Warrant Register
shall be maintained by the Company at its principal office or, at the Company's
election and expense, by a Warrant Agent or the Company's transfer agent. The
Company shall be entitled to treat the registered Holder of
15
any Warrant on the Warrant Register as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other Person, and shall not be
affected by any notice to the contrary, except that, if and when any Warrant is
properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer thereof as the owner of such Warrant for all purposes. Subject
to Section 10, a Warrant, if properly assigned, may be exercised by a new holder
without a new Warrant first having been issued.
12.2. Transfer of Warrants. Subject to compliance with Section 10, if
applicable, this Warrant and all rights hereunder are transferable in whole or
in part, without charge to the Holder hereof, upon surrender of this Warrant
with a properly executed Form of Assignment attached hereto as Exhibit B at the
principal office of the Company and Instrument of Accession, as described below,
to the Stockholder's Agreement. Upon any partial transfer, the Company shall at
its expense issue and deliver to the Holder a new Warrant of like tenor, in the
name of the Holder, which shall be exercisable for such number of shares of
Common Stock with respect to which rights under this Warrant were not so
transferred.
12.3. Replacement of Warrants. On 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 any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or. in the case of any such
mutilation, on surrender of such Wan-ant to the Company at its principal office
and cancellation thereof, the Company at the Holder's expense shall execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12.4. Adjustments to Number of Shares. Notwithstanding any adjustment
in the number or kind of shares of Common Stock purchasable upon exercise of
this Warrant, any Warrant theretofore or thereafter issued may continue to
express the same number and kind of shares of Common Stock as are stated in this
Warrant, as initially issued.
12.5. Fractional Shares. Notwithstanding any adjustment pursuant to
Section 3 in the number of shares of Common Stock covered by this Warrant or any
other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company
shall make payment to the Holder, at the time of exercise of this Warrant as
herein provided, in an amount in cash equal to such fraction multiplied by the
Current Market Price of a share of Common Stock on the date of Warrant exercise.
13. INTENTIONALLY OMITTED.
14. NO RIGHTS OR LIABILITIES AS SHAREHOLDER. Except as provided in
Section 21, nothing contained in this Warrant shall be construed as conferring
upon the Holder hereof any rights as a shareholder of the Company or as imposing
any obligation on the Holder to purchase any securities or as imposing any
liabilities on the Holder as a shareholder of the Company, whether such
obligation or liabilities are asserted by the Company or by creditors of the
Company.
16
15. NOTICES. All notices and other communications (and deliveries)
provided for or permitted hereunder shall be made in writing by hand delivery,
telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of [_____] at its principal
office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address
as may hereafter be designated in writing by the Company to the Holder in
accordance with the provisions of this Section, or (b) if to the Holder, at its
address as it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
when receipt is acknowledged, if telecopied; on the next Business Day, if timely
delivered to a courier guaranteeing overnight delivery; and five days after
being deposited in the mail, if sent first class or certified mail, return
receipt requested, postage prepaid; provided, that the exercise of any Warrant
shall be effective in the manner provided in Section 2.
16. AMENDMENTS. This Warrant and any term hereof may not be amended,
modified, supplemented or terminated, and waivers or consents to departures from
the provisions hereof may not be established, without the written consent of the
Company and the individual holder of this Warrant. All Warrants may be amended
by the written consent of the Company and the holders of Warrants representing
at least a majority of the shares of Common Stock issuable upon exercise of all
of the Warrants then outstanding; provided however, that with respect to any
amendment, modification, supplement, termination or waiver of any provisions of
this Warrant that would adversely affect the rights of any individual holder, as
compared to the rights of any other holders, the Company shall seek from each
holder adversely affected, a consent in writing to such amendment, modification,
supplement, termination or waiver of such provisions of this Warrant, which
consent may be withheld by the individual holder in its sole discretion. If the
Company is unable to obtain a consent from each holder whose rights would be
adversely affected by the proposed amendment, modification, supplement,
termination or waiver of provisions of this Warrant, then such amendment,
modification, supplement, termination or waiver of provisions of this Warrant
shall not be adopted by the Company.
17. DESCRIPTIVE HEADINGS, ETC. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Warrant otherwise
requires: (a) words of any gender shall be deemed to include each other gender;
(b) words using the singular or plural number shall also include the plural or
singular number, respectively; (c) the words "hereof, "herein" and "hereunder"
and words of similar import when used in this Warrant shall refer to this
Warrant as a whole and not to any particular provision of this Warrant, and
Section and paragraph references are to the Sections and paragraphs of this
Warrant unless otherwise specified; (d) the word "including" and words of
similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (e) "or" is not exclusive; and (f)
provisions apply to successive events and transactions.
18. GOVERNING LAW. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to the
conflict of laws principles thereof).
17
19. JUDICIAL PROCEEDINGS. Any legal action, suit or proceeding brought
with respect to this Warrant may be brought in any federal court of the Southern
District of New York or any state court located in New York County, State of New
York, and by execution and delivery of this Warrant, the Company and each Holder
hereby irrevocably and unconditionally waives any claim (by way of motion, as a
defense or otherwise) of improper venue, that it is not subject personally to
the jurisdiction of such court, that such courts are an inconvenient forum or
that this Warrant or the subject matter may not be enforced in or by such court.
The Company and the Holder hereby irrevocably and unconditionally consents to
the service of process of any of the aforementioned courts in any such action,
suit or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, at its address set forth or provided for in Section 15,
such service to become effective 10 days after such mailing. Nothing herein
contained shall be deemed to affect the right of any party to serve process in
any manner permitted by law or commence legal proceedings or otherwise proceed
against any other party in any other jurisdiction to enforce judgments obtained
in any action, suit or proceeding brought pursuant to this Section.
20. INVESTOR RIGHTS AGREEMENT. The Company agrees to cause the other
parties thereto to amend the Investor Rights Agreement so that the shares of
Common Stock (and Other Securities) issuable upon exercise of this Warrant (or
upon conversion of any shares of Common Stock issued upon such exercise) shall
constitute Registrablc Shares (as such term is defined in the Investor Rights
Agreement). Each holder of this Warrant shall be entitled to all of the benefits
afforded to a holder of any such Registrable Shares under the Investor Rights
Agreement and such holder, by its acceptance of this Warrant, agrees to be bound
by and to comply with the terms and conditions of the Investor Rights Agreement
applicable to such holder as a holder of such Registrable Shares.
21. EXPIRATION; CALL RIGHT.
21.1. The right to exercise this Warrant shall expire at 5:00
p.m., New York City time, on the earlier of (a) June ____, 2012, (b) the
date that a Qualified Public Offering (as such term is defined in the
Company's Certificate of Incorporation as amended from time to time)
covering shares of Common Stock underlying this Warrant is consummated,
subject to Section 21.2 below or (c) the sale of substantially all of the
assets of the Company or the consolidation or merger of the Company with or
into another Person (regardless of whether or not the Company is the
surviving entity) (the "Expiration Date").
21.2. Upon the consummation of a Qualified Public Offering, (the
"Call Event"), each of The Holders will have been deemed to have provided a
Form of Election to Purchase Share; pursuant to Section 2.1 and will be
required to pay the Company the aggregate Purchase Price and the Company
will be required to deliver the shares of Common Stock underlying this
Warrant, all in accordance with the terms of Section 2.1 and the other
terms of this Warrant.
21.3. Other than as described in Section 21.2 above, the exercise
of this Warrant shall be subject to and governed by all the provisions
relating to such exercise contained herein.
18
22. STOCKHOLDERS' AGREEMENT. The Company acknowledges and agrees that,
upon issuance of this Warrant, the Holder shall be required to execute an
Instrument of Accession (as such term is defined in the Stockholders Agreement)
to the Stockholders' Agreement and that Holder shall be entitled to all the
benefits of, and bear all the obligations of, a Common Stockholder (as such term
is defined in the Stockholders' Agreement) thereunder. The Company agrees to
cause the other parties thereto to amend the Stockholders' Agreement to enable
the Holder to participate on a pro rata basis with the Preferred Stockholders of
the Company in the Right of Co-Sale provided by Section 5.1 of the Stockholders'
Agreement.
23. REPRESENTATIONS. Holder by accepting this Warrant shall be deemed
to have made the representations and warranties to the Company contained on
Exhibit C hereto.
[Signature Page Follows]
19
IN WITNESS WHEREOF, the Company has executed and delivered this Warrant as
of the date first above written.
XANODYNE PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
20
(WARRANT SIGNATURE PAGE)
21
EXHIBIT A to
Common Stock Purchase Warrant
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase _____ shares of Common Stock, par value $0.01 per share ("Common
Stock"), of XANODYNE PHARMACEUTICALS, INC. and hereby [makes payment of
$________ therefor] [or] [makes payment therefor by reduction pursuant to
Section 2.1(b)(ii) of the Warrant of the number of shares of Common Stock
otherwise issuable to the Holder upon Warrant exercise by _______ shares] [or]
[makes payment therefor by delivery of the following Common Stock Certificates
of the Company (properly endorsed for transfer in blank) for cancellation by the
Company pursuant to Section 2.1(b)(iii) of the Warrant, certificates of which
are attached hereto for cancellation _______________________ [list certificates
by number and amount]]. The undersigned hereby requests that certificates for
such shares be issued and delivered as follows:
ISSUE TO: ______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: ____________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased (and/or reduced) hereby
is less than the number of shares of Common Stock covered by the Warrant, the
undersigned requests that a new Warrant representing the number of shares of
Common Stock not so purchased (or reduced) be issued and delivered as follows:
ISSUE TO: ______________________________________________________________________
(NAME OF ▇▇▇▇▇▇)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO: ____________________________________________________________________
(NAME OF ▇▇▇▇▇▇)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Dated: ____________, 200_ [NAME OF ▇▇▇▇▇▇]
By
-------------------------------------
Name:
Title:
22
EXHIBIT B to
Common Stock Purchase Warrant
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto the Assignee named below all of the rights of the undersigned to purchase
Common Stock, par value $__________ per share ("Common Stock") of XANODYNE
PHARMACEUTICALS, INC. represented by the Warrant, with respect to the number of
shares of Common Stock set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ___________ Attorney to make
such transfer on the books of XANODYNE PHARMACEUTICALS, INC. maintained for that
purpose, with full power of substitution in the premises.
Dated: _____________, 200_ [NAME OF ▇▇▇▇▇▇]
By:
------------------------------------
Name:
Title:
23
EXHIBIT C to
Common Stock Purchase Warrant
1. Representations of the Holder. The Holder represents and warrants to the
Company as follows:
1.1 Investment. Holder is acquiring this Warrant and shares of Common Stock
issuable upon exercise of this Warrant for ▇▇▇▇▇▇'s own account for investment
and not with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the same.
Holder has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the disposition thereof.
1.2 Restricted Securities. Holder acknowledges that this Warrant and shares of
Common Stock issuable upon exercise of this Warrant consist of restricted
securities that are unregistered; that neither this Warrant nor such shares may
be sold, transferred, or otherwise disposed of without registration under the
Securities Act unless an exemption from such registration is available; that in
the absence of an effective registration statement covering this Warrant and
such shares or an available exemption from registration under the Securities
Act, the Warrants and Warrant Shares must be held indefinitely. In particular,
▇▇▇▇▇▇ is aware that this Warrant and such shares may not be sold pursuant to
Rule 144 promulgated under the Securities Act unless all of the conditions of
that Rule are met and that among the conditions for use of Rule 144 may be the
availability of current information to the public about the Company, information
that is not now made available. Holder understands that this Warrant and such
shares will be subject to the restrictions on exercise, conversion and transfer
as set forth in the instruments governing such shares and in the Stockholders'
Agreement, and to the extent applicable, each certificate, instrument or other
document evidencing such shares shall be endorsed with the legends set forth in
the Stockholders' Agreement.
1.3 Economic Risk; Sophistication. ▇▇▇▇▇▇ is able to bear the economic risk of
an investment in this Warrant and shares of Common Stock issuable upon exercise
of this Warrant acquired by him or it pursuant to this Warrant and has
sufficient knowledge and experience in financial and business matters that he or
it is capable of evaluating the merits and risks of the proposed investment in
the Company and Holder is able financially to bear the risks thereof.
1.4 Accredited Investor. ▇▇▇▇▇▇ meets the criteria of an "accredited investor"
as defined in Rule 501(a) of Regulation D adopted under the Securities Act.
1.5 Investigation. ▇▇▇▇▇▇ has been furnished with, and has had an opportunity to
read, the Second Amendment, this Warrant and Loan Documents to which he or it is
a party and all materials relating to the business, finances, operations, and
prospects of the Company that have been reasonably requested by ▇▇▇▇▇▇. Holder
understands that this Warrant and shares of Common Stock issuable upon exercise
of this Warrant are being or will be issued without any particular offering or
disclosure document, but acknowledges that Holder has been given ample
opportunity to ask questions and request information of. and receive answers
from, Company officials concerning the business, finances and operations of the
Company.
24
1.6 Blue Sky Approvals. The address set forth in the first paragraph of this
Warrant is true, complete and correct, and is the principal address of Holder.
▇▇▇▇▇▇ agrees that the Company can rely on such address for purposes of
compliance with state and federal securities laws.
1.7 Organization and Standing. Holder is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
its respective state or country of organization.
1.8 Authority. The execution, delivery and performance by Holder of this
Warrant, Stockholders Agreement and Investor Rights Agreement and the
consummation by Holder of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action. This Warrant, the
Stockholders Agreement and Investor Rights Agreement has been duly executed and
delivered by the Holder and constitute valid and binding obligations of the
Holder enforceable in accordance with their respective terms, except, (i) as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally and (ii) as may be limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies."
25
WARRANTHOLDER # OF SHARES
------------- -----------
SPCP Group III LLC 490,680
Silver Point Capital Offshore Fund, Ltd. 677,966
Silver Point Capital Fund, LP 794,073
Blue Ridge Investments, LLC 1,090,400
26