Exhibit 10.2

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN
EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

SIERRA ONCOLOGY, INC.

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.: 0002

  

Number of Warrants: 725,283

  

Number of Warrant Shares: 725,283

Date of Issuance: January 31, 2020 (“Issuance Date”)

Expiration Date: Five (5) year anniversary of the Exercisability Date
(“Expiration Date”)

Sierra Oncology, Inc., a Delaware corporation (the “Company”), certifies that,
for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, Gilead Sciences, Inc., 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 the
Issuance Date (the “Exercisability Date”), but not after 5:30 p.m., New York
Time, on the Expiration Date, 725,283 fully paid and nonassessable shares of
Common Stock (as defined below), equal to the number of Warrants given above
multiplied by 1.00 (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 the Warrant to Purchase Common Stock issued pursuant
to that certain Security Purchase Agreement, dated as of January 31, 2020, by
and between the Company and the Holder.

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(d)), 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 delivery of a
written notice (which may be by facsimile or email), in the form attached hereto
as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant and 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 (a “Cash Exercise”). The Holder shall not be
required to surrender this Warrant in order to effect an exercise hereunder;
provided, that in the event of an exercise of this Warrant for all Warrant
Shares then issuable hereunder, this Warrant is surrendered to the Company’s
transfer agent through DTC’s Deposit Withdrawal Agent Commission system (“DWAC
System”) by the second (2nd) Trading Day following the date on which the
Company’s transfer agent for the Common Stock and Warrants (“Transfer Agent”)
has received the Exercise Notice. Within one (1) Trading Day following the date
of exercise as aforesaid, the Holder shall deliver the Aggregate Exercise Price
for the shares specified in the applicable Exercise Notice by wire transfer or
cashier’s check drawn on a United States bank unless the cashless exercise
procedure specified in Section 1(c) below is specified in the applicable
Exercise Notice. No ink-original Exercise Notice shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any
Exercise Notice form be required, except as may be required by the Company’s
transfer agent. On or before the first (1st) Trading Day following the date on
which the Company or the Transfer Agent has received the Exercise

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Notice, the Company or the Transfer Agent shall transmit by email or facsimile
an acknowledgment of confirmation of receipt of the Exercise Notice to the
Holder and the Transfer Agent. The Company or the Transfer Agent shall deliver
any objection to the Exercise Notice on or before the first (1st) Trading Day
following the date on which the Company or the Transfer Agent has received the
Exercise Notice. In the event of any discrepancy or dispute, the records of the
Company and the Transfer Agent shall be controlling and determinative in the
absence of manifest error. On or before the earlier of (i) the third (3rd)
Trading Day and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined below) following the date on which the Holder has
delivered to the Company a duly completed and executed Exercise Notice (the
“Share Delivery Date”), and, in the case of a Cash Exercise, the Aggregate
Exercise Price, the Company or its Transfer Agent shall, 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 The Depository Trust Company (“DTC”) through its Deposit
Withdrawal At Custodian system. Upon delivery of the Exercise Notice and the
Aggregate Exercise Price, 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
book-entry accounts evidencing such Warrant Shares, as the case may be. The
Company agrees to maintain a transfer agent that is a participant in the FAST
Program so long as this Warrant remains outstanding and exercisable. As used
herein, “Standard Settlement Period” means the standard settlement period,
expressed in a number of Trading Days, on the Principal Market with respect to
the Common Stock as in effect on the date of delivery of the Exercise Notice.

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 Transfer Agent shall as soon as practicable
and in no event later than ten (10) Trading Days after any exercise and at its
own expense, issue a new Warrant (in accordance with Section 7(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, through the DWAC System. 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 based
on the income of the Holder or in respect of any transfer involved in the
registration of any book-entry accounts 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.

If the Company shall fail for any reason or for no reason to credit the Holder’s
balance account with DTC for such number of shares of Common Stock to which the
Holder is entitled upon the Holder’s exercise of this Warrant, then the Holder
shall be entitled, but not required, to rescind the previously submitted
Exercise Notice and the Company or the Transfer Agent shall return all
consideration paid by Holder for such shares upon such rescission.
Notwithstanding anything herein to the contrary, the Company shall not be
required to make any cash payments to the Holder in lieu of issuance of the
Warrant Shares.

(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $13.20
per share of Common Stock, subject to adjustment as provided herein.

(c) Cashless Exercise. 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 × B) - (A × 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
(the “Fair Market Value”).

 

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C= the Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.

If Warrant Shares are issued in such a cashless exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of the Securities
Act, the Warrant Shares shall take on the registered characteristics of the
Warrants being exercised, and the holding period of the Warrant Shares being
issued may be tacked on to the holding period of this Warrant. The Company
agrees not to take any position contrary to this Section 1(c).

(d) Limitations on Exercises. Subject to the last sentence of this Section 1(d),
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 9.99% (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. 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, Proxy Statement, 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 one (1) Trading Day
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. Upon delivery of a written notice to the Company, the
Holder may from time to time increase or decrease the Maximum Percentage to any
other percentage as specified in such notice; provided that (i) any such
increase in the Maximum Percentage will not be effective until the sixty-first
(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. For purposes of clarity, the shares of Common Stock issuable
pursuant to the terms of this Warrant in excess of the Maximum Percentage shall
not be deemed to be beneficially owned by the Holder for any purpose including
for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior
inability to exercise this Warrant pursuant to this paragraph shall have any
effect on the applicability of the provisions of this paragraph with respect to
any subsequent determination of exercisability. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 1(d) to the extent necessary to
correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in
this Section 1(d) or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations set forth in this
Section 1(d) shall not apply to exercises of this Warrant that occur prior to
and expressly in connection with the Company’s consummation of a Fundamental
Transaction.

(e) 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.

 

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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 Issuance 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 Issuance 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) [Reserved.]

(c) Par Value. 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).

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 all of the record holders of any class
of shares of Common Stock (the “Purchase Rights”), then the 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. The Company shall not enter into or be party to a
Fundamental Transaction unless (i) if the successor entity is a publicly traded
corporation whose common stock is quoted on or listed for trading on an Eligible
Market, the successor entity assumes in writing all of the obligations of the
Company under this Warrant pursuant to written agreements in form and substance
reasonably satisfactory to the Holder, including agreements to deliver to the
Holder in exchange for this Warrant a written instrument issued by the successor
entity substantially similar in form and substance to this Warrant, including,
without limitation, an

 

4

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adjusted Exercise Price equal to the value for the shares of Common Stock
reflected by the terms of such Fundamental Transaction, and exercisable for a
corresponding number of shares of capital stock equivalent to the shares of
Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and reasonably satisfactory to the Holder and (ii) if
the successor entity is not a publicly traded corporation whose common stock is
quoted on or listed for trading on an Eligible Market, the successor entity
assumes in writing all of the obligations of the Company under this Warrant
pursuant to written agreements in form and substance reasonably satisfactory to
the Holder, including agreements to deliver to the Holder in exchange for this
Warrant a written instrument issued by the successor entity substantially
similar in form and substance to this Warrant exercisable for the consideration
that would have been issuable in the Fundamental Transaction in respect of the
Warrant Shares had this Warrant been exercised immediately prior to the
consummation of the Fundamental Transaction. The provisions of this Section 4(b)
shall apply similarly and equally to successive Fundamental Transactions and
shall be applied without regard to any limitations on the exercise of this
Warrant. Notwithstanding the foregoing, in the event of a Fundamental
Transaction other than pursuant to clause (i) above, then, at the request of the
Holder delivered before the 30th day after such Fundamental Transaction, the
Company (or the successor entity) shall purchase this Warrant and by paying to
the Holder, within five (5) 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. For the sake of clarity, such
calculation shall assume full exercisability of this Warrant (e.g. without
regard to any limitations on the exercise of this Warrant, including those set
forth in Sections 1(d) and 5(b)).

5. RESERVATION OF WARRANT SHARES.

(a) The Company covenants that it will at all times after the Exercisability
Date 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 without regard to the provisions of Section 1(d). The Company
covenants that all shares of Common Stock so issuable and deliverable shall be,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, duly authorized, validly issued and fully paid and
nonassessable. The Company will take all such actions as may be reasonably
necessary to ensure 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.

6. WARRANT HOLDER NOT DEEMED A SHAREHOLDER. 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
shareholder 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
shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.

7. REGISTRATION AND REISSUANCE OF WARRANTS.

(a) Registration of Warrant. The Company or its Transfer Agent shall register
this Warrant, upon the records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to
time. The Company and its Transfer Agent 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 and its Transfer Agent shall
also register any transfer, exchange, reissuance or cancellation of any portion
of this Warrant in the Warrant Register.

 

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(b) Restrictions on Transfer of Warrant and Warrant Shares; Compliance with
Securities Laws.

 

  i.

Transfer of Warrant. This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Company, and subject to applicable
securities laws. Subject to applicable securities laws, if this Warrant is to be
transferred, the Holder shall surrender this Warrant to the Company or its
Transfer Agent, as directed by the Company, together with all applicable
transfer taxes, whereupon the Company will, or will cause its Transfer Agent to,
forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 7(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 than the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(e)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred. The acceptance of the new Warrant by
the transferee thereof shall be deemed the acceptance by such transferee of all
of the rights and obligations in respect of the new Warrant that the Holder has
in respect of this Warrant.

 

  ii.

Securities Law Legend. Each certificate, instrument or book entry evidencing
this Warrant or the Warrant Shares shall (unless otherwise permitted by the
provisions of this Warrant) be notated with a legend substantially similar to
the following (in addition to any legend required by state securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN
EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

 

  iii.

Instructions Regarding Transfer Restrictions. The Holder consents to the Company
making a notation on its records and giving instructions to any transfer agent
in order to implement the restrictions on transfer established in this
Section 7(b).

 

  iv.

Removal of Legend. The legend referring to federal and state securities laws set
forth on the first page of this Warrant and the legend identified in
Section 7(b)(ii) notated on any certificate or book entry evidencing the Warrant
Shares and the stock transfer instructions and record notations with respect to
such securities shall be removed, and the Company shall issue a Warrant or
certificate, as applicable, without such legend to the holder of such securities
(to the extent the securities are certificated), if (i) such securities are
registered under the Securities Act, or (ii) such holder provides the Company
with an opinion of counsel reasonably acceptable to the Company to the effect
that such legend may be removed from such securities or a sale or transfer of
such securities may be made without registration, qualification or legend.

(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

 

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or destruction, of any indemnification undertaking by the Holder to the Company
in customary form (which shall not include the posting of any bond) and, in the
case of mutilation, upon surrender and cancellation of this Warrant, the Company
or its Transfer Agent, as directed by the Company, shall execute and deliver to
the Holder a new Warrant (in accordance with Section 7(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 or its
Transfer Agent, as directed by the Company, together with all applicable
transfer taxes, for a new Warrant or Warrants (in accordance with Section 7(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 or its
Transfer Agent, as directed by the Company, shall not be required to issue
Warrants for fractional shares of Common Stock hereunder.

(e) Issuance of New Warrants. Whenever the Company or its Transfer Agent, as
directed by 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 7(b) or Section 7(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.

8. 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 give written
notice to the Holder (i) reasonably promptly following any adjustment of the
Exercise Price, setting forth in reasonable detail the calculation of such
adjustment and (ii) at least ten (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 pro rata to the record holders of
any class 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, the Company will only be required to provide such information
to the Holder if such information shall have been made known to the public prior
to or in conjunction with such notice being provided to the Holder.

9. AMENDMENT AND WAIVER. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

10. LIMITATION OF LIABILITY. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Warrant
Shares or as a shareholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

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 the Holder 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

 

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arithmetic calculations via email or facsimile within five (5) 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 (5) Trading Days of such disputed determination or arithmetic calculation
being submitted to the Holder, then the Company shall, within two (2) Trading
Days thereafter submit via email or 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 twenty (20) Trading Days from the time it receives
the disputed determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error. 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 by more
than 25%, 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, 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 or anything else herein to the contrary, if the
Company is for any reason unable to issue and deliver Warrant Shares upon
exercise of this Warrant as required pursuant to the terms hereof, the Company
shall have no obligation to pay to the Holder any cash or other consideration or
otherwise “net cash settle” 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 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 greater of 80% and the 100-day volatility obtained from the HVT function
on Bloomberg.

(b) “Bloomberg” means Bloomberg Financial Markets.

(c) “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.

(d) “Convertible Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exercisable or exchangeable for
shares of Common Stock.

(e) “Eligible Market” means the NYSE MKT LLC, The New York Stock Exchange, Inc.,
The Nasdaq Stock Market, or the OTC Bulletin Board®.

(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(g) “Fundamental Transaction” means that (A) the Company shall, directly or
indirectly, in one or more related transactions, (i) consolidate or merge with
or into (whether or not the Company is the surviving corporation) another
Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company to another Person,
or (iii) allow another Person to make a purchase, tender or

 

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exchange offer that is accepted by the holders of more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer),
or (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 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) or (B) 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 more than 50% of the
aggregate ordinary voting power represented by issued and outstanding Common
Stock.

(h) “Options” means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.

(i) “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.

(j) “Principal Market” means (i) the Nasdaq Global Market, or (ii) if the Nasdaq
Global Market is not the principal trading market for the Common Stock, then the
principal securities exchange or securities market on which the Common Stock is
then traded.

(k) “Securities Act” means the Securities Act of 1933, as amended.

(l) “Trading Day” means any day on which the Common Stock is traded on the
Principal Market.

(m) “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 OTC Markets Inc. 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 Holder. If the Company and the Holder 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.

 

SIERRA ONCOLOGY, INC. By:  

/s/ Sukhi Jagpal

(Signature) Name:   Sukhi Jagpal Title:   Chief Financial Officer

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EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

SIERRA ONCOLOGY, INC.

The undersigned holder hereby exercises the right to purchase                of
the shares of Common Stock (“Warrant Shares”) of Sierra Oncology, 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 Price. The Holder intends that payment of the Exercise Price shall
be made as (check one):

 

  ☐

Cash Exercise under Section 1(a).

 

  ☐

Cashless Exercise under Section 1(c).

2. Cash Exercise. If the Holder has elected a Cash Exercise, the Holder shall
pay the sum of $        to the Company in accordance with the terms of the
Warrant.

3. Delivery of Warrant Shares. The Company shall deliver to the
holder                Warrant Shares in accordance with the terms of the
Warrant.

4. 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(d) of this Warrant to which this notice relates.

DATED:                     

 

(Signature must conform in all respects to name of the Holder as specified on
the face of the Warrant)

        

Registered Holder Address:

 

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