COMBIMATRIX CORPORATION

 

COMMON STOCK PURCHASE WARRANTS REPURCHASE AGREEMENT

 

THIS COMMON STOCK PURCHASE WARRANTS REPURCHASE AGREEMENT (this “Agreement”) is
made as of July 11, 2016 (the “Effective Date”), by and between CombiMatrix
Corporation, a Delaware corporation (the “Company”), and those certain holders
of Common Stock Purchase Warrants set forth on the signature pages hereto (each,
a “Warrantholder” and collectively, the “Warrantholders”). The Company and the
Warrantholders are referred to, each as a “Party,” and collectively as the
“Parties.” Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in the Warrants (defined below).

 

recitals

 

A. As of the date of this Agreement, the Warrantholders hold (i) Common Stock
Purchase Warrants issued October 1, 2012 exercisable for an aggregate of 11,252
shares of Common Stock of the Company (as amended, the “October 2012 Warrants”);
(ii) Common Stock Purchase Warrants issued March 20, 2013 exercisable for an
aggregate of 18,334 shares of Common Stock of the Company (as amended, the
“March 2013 Warrants”); (iii) Common Stock Purchase Warrants issued May 6, 2013
exercisable for an aggregate of 32,788 shares of Common Stock of the Company (as
amended, the “May 2013 Warrants”); (iv) Common Stock Purchase Warrants issued
June 28, 2013 exercisable for an aggregate of 32,788 shares of Common Stock of
the Company (as amended, the “June 2013 Warrants”); (v) Common Stock Purchase
Warrants issued June 4 and June 13, 2014 exercisable for an aggregate of 1,690
shares of Common Stock of the Company (as amended, the “June 2014 Warrants”);
(vi) Common Stock Purchase Warrants issued February 18, 2015 exercisable for an
aggregate of 46,676 shares of Common Stock of the Company (as amended, the
“February 2015 Warrants”); (vii) Common Stock Purchase Warrants issued April 29,
2015 exercisable for an aggregate of 100,847 shares of Common Stock of the
Company (as amended, the “April 2015 $16.50 Warrants”); and (viii) Common Stock
Purchase Warrants issued April 29, 2015 exercisable for an aggregate of 1,831
shares of Common Stock of the Company (as amended, the “April 2015 $32.51
Warrants”) and, together with the October 2012 Warrants, the March 2013
Warrants, the May 2013 Warrants, the June 2013 Warrants, the June 2014 Warrants,
the February 2015 Warrants and the April 2015 $16.50 Warrants, the “Warrants”).

 

B. The Warrantholders and the Company are parties to those certain Securities
Purchase Agreements dated as of September 28, 2012, March 19, 2013, May 3, 2013
and February 13, 2015, respectively (collectively, the “SPAs”), and those
certain Registration Rights Agreements dated as of September 28, 2012 and May 3,
2013, respectively (collectively, the “RRAs”).

 

C. The Warrantholders now desire and voluntarily agree to (i) sell half of their
Warrants to the Company immediately after the announcement of a Fundamental
Transaction (the “Announcement”), (ii) sell the remainder of their Warrants to
the Company at the closing of such Fundamental Transaction (the “Closing”) and
(iii) terminate the SPAs and RRAs as of immediately prior to the Closing, and
the Company desires to purchase such Warrants from the Warrantholders at the
Announcement and at the Closing and terminate the SPAs and RRAs as of
immediately prior to the Closing.

 

agreement

 

For good and valuable consideration, the receipt and sufficiency of which are
acknowledged by the Parties, the Parties agree as follows:

 

 

 

 

1. Sale and Purchase. The Warrantholders agree to sell, and the Company agrees
to buy, half of the Warrants immediately after the Announcement (to the extent
such Warrants are still outstanding as of such date) and the remainder of the
Warrants at the Closing (to the extent such Warrants are still outstanding as of
such date) at the following prices per Warrant Share underlying the Warrants
(all as shall be adjusted for reverse and forward stock splits and the like
after the date hereof):

 

Warrants  Price Per
Warrant Share October 2012 Warrants   $0.10  March 2013 Warrants   $0.20  May
2013 Warrants   $0.28  June 2013 Warrants   $0.30  June 2014 Warrants   $0.06 
February 2015 Warrants   $2.92  April 2015 $16.50 Warrants   $2.92  April 2015
$32.51 Warrants   $2.48 

 

The sale and purchase of half of the Warrants immediately after the Announcement
shall be apportioned ratably among all outstanding Warrants and Warrantholders.

 

2. Closing Dates. The closing of the sale and purchase of half of the Warrants
under this Agreement shall take place immediately after the Announcement of a
Fundamental Transaction (the date of the Announcement, the “Initial Closing
Date”) and the closing of the sale and purchase of the remainder of the Warrants
under this Agreement shall take place at the Closing of a Fundamental
Transaction (the date of the Closing, the “Final Closing Date” and, together
with the Initial Closing Date, the “Closing Date”). Upon the Announcement of a
Fundamental Transaction, half of the Warrants shall be deemed cancelled and
surrendered and shall represent only the right to receive the aggregate price
per Warrant Share set forth in this Agreement with respect to such portion of
Warrants, and upon the Closing of a Fundamental Transaction, the remaining
Warrants shall be deemed cancelled and surrendered and shall represent only the
right to receive the aggregate price per Warrant Share set forth in this
Agreement with respect to such remaining Warrants.

 

3. Delivery. Within three (3) business days after the applicable Closing Date,
the Company shall pay to the Warrantholders the applicable aggregate price per
Warrant Share set forth in Section 1 hereof, by wire transfer in United States
dollars and immediately available funds (the “Payment”) for the applicable
portion of Warrants being purchased on such Closing Date. Within three (3)
business days after the Final Closing Date, (i) the Warrantholders will deliver
all of the Warrants to the Company and (ii) each Warrantholder shall execute an
Assignment Separate from Certificate, the form of which is attached hereto as
Exhibit A, with respect to the Warrants. Immediately following the Announcement,
half of the Warrants shall be deemed cancelled and surrendered and none of the
Warrantholders will have any rights with respect to such portion of Warrants,
including without limitation, any right to exercise such portion of Warrants or
receive any other consideration in the Fundamental Transaction with respect to
such portion of Warrants, and immediately following the Closing, the remaining
Warrants shall be deemed cancelled and surrendered and none of the
Warrantholders will have any rights with respect to such remaining Warrants,
including without limitation, any right to exercise such remaining Warrants or
receive any other consideration in the Fundamental Transaction with respect to
such remaining Warrants. In the event there is an Announcement, but not a
Closing of a Fundamental Transaction, the Warrantholders shall, promptly after
notice from the Company that the Closing will not occur, deliver all their
Warrants to the Company and the Company shall promptly reissue new Warrants of
like tenor for the remaining Warrant Shares that were not purchased at the
Initial Closing Date.

 

 2 

 

 

4. Warrantholders’ Representations and Warranties. Each of the Warrantholders
represents and warrants to the Company, as of the date hereof and as of each of
the Closing Dates, as follows:

 

(a) Right, Title, and Interest. Such Warrantholder is the lawful owner,
beneficially and of record, of the Warrants held by it, has good and marketable
title to such Warrants, and has all right, title and interest in and to such
Warrants. Such Warrantholder has full right and authority to deliver such
Warrants in connection with this Agreement. Such Warrants are free and clear of
all liens, encumbrances, equities, security interests, and any other claims
whatsoever except for the Company’s repurchase option and securities law
transfer restrictions on certain of such Warrants. Such Warrants are not subject
to any agreement, understandings, trusts, or other collaborative arrangements or
understandings with any other party. No third party has any right to prevent
such Warrantholder from transferring such Warrants as contemplated by this
Agreement, and no third party has any right to receive notice of transfer of
such Warrants as contemplated by this Agreement. Such Warrantholder’s delivery
of such Warrants in accordance with the terms of this Agreement will pass full
and valid title to such Warrants free and clear of any security interests,
claims, liens and any other encumbrance. Such Warrantholder is not aware of any
basis for any disputes or challenges regarding such Warrantholder’s ownership of
such Warrants or regarding such Warrantholder’s sale of such Warrants to the
Company, and no such disputes or challenges are pending or alleged.

 

(b) Authority. Such Warrantholder has sole dispositive and voting authority over
the Warrants held by it, and has all requisite legal authority to execute and
deliver this Agreement, to sell and deliver such Warrants, and to carry out and
perform all of such Warrantholder’s obligations under this Agreement. This
Agreement has been duly executed and delivered by such Warrantholder,
constitutes such Warrantholder’s valid and binding obligation, and is
enforceable in accordance with its terms. Such Warrantholder has the capacity to
act on such Warrantholder’s own behalf and on behalf of all who might claim
through such Warrantholder to bind them to the terms and conditions of this
Agreement. Such Warrantholder has never filed any petition under applicable
bankruptcy laws, no such petition has ever been filed involuntarily against such
Warrantholder, no custodian or receiver has ever been appointed with respect to
such Warrantholder’s assets, and such Warrantholder is not now insolvent (before
giving effect to the sale of such Warrants). The execution, delivery and
performance of this Agreement by such Warrantholder will not result in a
violation of, or constitute a default under, any will, trust, agreement or other
instrument to which such Warrantholder is a party or is bound. There is no
pending or threatened litigation involving such Warrantholder’s Warrants or to
which such Warrants may be subject.

 

(c) Value of Warrants. Such Warrantholder acknowledges that the purchase price
of the Warrants has been established by negotiation between the Company and the
Warrantholders. There is no assurance that the purchase price reflects the
current value of the Warrants. Such Warrantholder acknowledges that the market
value of the Warrants held by it could, in the future and depending on the
success of the Company’s business, become worth substantially more than the
price at which the Company is purchasing such Warrants from such Warrantholder.
The Company has not made any representation to such Warrantholder about the
advisability of this decision or the potential future value of the Warrants.
Such Warrantholder acknowledges that, by selling such Warrants to the Company
pursuant to this Agreement, such Warrantholder will not benefit from any future
appreciation in the market value of such Warrants.

 

 3 

 

 

(d) Adequacy of Payment. Such Warrantholder is an “Accredited Investor” as such
term is defined under Regulation D of the Securities Act of 1933, and has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of selling such Warrants to the Company at the
price and on the terms set forth in Section 1 hereof, and that the Company has
made no representation or warranty to such Warrantholder with respect to the
fair market value of such Warrants. Such Warrantholder agrees that the amount of
the Payment is fair and equitable to such Warrantholder. Such Warrantholder
acknowledges that arm’s-length negotiations between the Company and the
Warrantholders resulted in such Warrantholder agreeing to the sufficiency of the
Payment in exchange for the Company’s purchase of such Warrants.

 

(e) No Legal, Tax, or Investment Advice. Such Warrantholder has had an
opportunity to review the federal, state, local, and foreign tax consequences of
such Warrantholder’s sale of the Warrants held by it to the Company. Such
Warrantholder understands that nothing in this Agreement or in any other
materials presented to such Warrantholder in connection with the Company’s
purchase of such Warrants or such Warrantholder’s other agreements under this
Agreement constitutes legal, tax, or investment advice. Such Warrantholder has
consulted such legal, tax, and investment advisors as such Warrantholder, in
such Warrantholder’s sole discretion, has deemed necessary or appropriate in
connection with the sale of such Warrants under this Agreement. Such
Warrantholder acknowledges that such Warrantholder will be responsible for such
Warrantholder’s own tax liability that may arise as a result of such
Warrantholder’s sale of such Warrants to the Company and the other transactions
contemplated by this Agreement.

 

(f) Information. Such Warrantholder has been given full and adequate access to
information relating to the Company, including its business, finances and
operations as such Warrantholder has deemed necessary or advisable in connection
with such Warrantholder’s evaluation of the sale of the Warrants held by it to
the Company. Such Warrantholder has not relied upon any representations or
statements made by either the Company or its agents, officers, directors,
employees or stockholders in regard to this Agreement or the basis thereof.

 

5. Company’s Representations and Warranties. The Company hereby represents and
warrants to the Warrantholders, as of the date hereof and as of each of the
Closing Dates, as follows:

 

(a) Power and Authority. The Company has the requisite corporate power and
authority to enter into and perform this Agreement and the transactions
contemplated herein in accordance with the terms hereof and the execution,
delivery and performance of this Agreement by it and the consummation by it of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action and no further consent or authorization of it,
its board of directors or stockholders is required.

 

(b) Valid and Binding Obligation. The Agreement constitutes the Company’s valid
and legally binding obligation, enforceable in accordance with its terms except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights
generally and (b) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

 

 4 

 

 

(c) Power and Authority/Good Standing. The Company is a company incorporated,
validly existing and in good standing under the laws of the State of Delaware
with full power and authority to enter into and perform all of its obligations
under this Agreement.

 

(d) No Violation. The execution, delivery and performance of the Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby do not and will not violate or conflict with any provision of the
Company’s certificate of incorporation or bylaws, each as amended to date.

 

(e) Actions Pending. There is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
which questions the validity of this Agreement or any of the transactions
contemplated hereby. There are no outstanding orders, judgments, injunctions,
awards or decrees of any court, arbitrator or governmental or regulatory body
against the Company which, individually or in the aggregate, could reasonably be
expected to question the validity of this Agreement or any of the transactions
contemplated hereby.

 

6. Termination of SPAs and RRAs; Consent and Waivers.

 

(a) As of immediately prior to the Closing, the SPAs and RRAs, including all
rights and obligations of the parties thereunder, shall be terminated and shall
be of no further force and effect; provided that the Closing occurs. Capitalized
terms used in this Section 6 and not otherwise defined in this Agreement shall
have the meanings assigned to them in the SPAs, RRAs and Warrants.

 

(b) The Warrantholders hereby (i) agree to consent to and approve any
Fundamental Transaction, agree that any such Fundamental Transaction does not
constitute a breach or default under the SPAs, RRAs or Warrants, waive any
prohibitions in the SPAs, RRAs and Warrants against a Fundamental Transaction,
and waive any rights to adjustment with respect to the Warrants as a result of a
Fundamental Transaction; (ii) agree that this Agreement and the transactions
contemplated by this Agreement do not constitute a breach or default under the
SPAs, RRAs, Warrants and, to the extent applicable, that certain Certificate of
Designation of Preferences, Rights and Limitations of Series F Convertible
Preferred Stock (the “Certificate of Designation”); (iii) waive any restrictions
set forth in Section 4.13 of the SPAs with respect to this Agreement, the
transactions contemplated by this Agreement, or any Fundamental Transaction;
(iv) waive any “most favored nation” rights (including any right to notice) set
forth in Section 4.18 of the SPAs with respect to this Agreement, the
transactions contemplated by this Agreement, or any Fundamental Transaction; (v)
to the extent applicable, waive any antidilution rights or rights to price
adjustments or share adjustments set forth in the Certificate of Designation,
solely in connection with this Agreement and the transactions contemplated by
this Agreement; and (vi) waive any other prohibitions in the SPAs, RRAs,
Warrants and Certificate of Designation against this Agreement, the transactions
contemplated by this Agreement, or any Fundamental Transaction.

 

(c) The Warrantholders hereby agree that after the Initial Closing Date, none of
them shall object, challenge or otherwise withhold their consent or waiver to
any Fundamental Transaction (whether by virtue of being a Warrantholder or
through ownership of any other securities of the Company).

 

7. Disclosure. The Company shall file a current report on Form 8-K on or before
4:30 p.m., New York City time, on the fourth Business Day after the date hereof,
in the form required by the Securities Exchange Act of 1934, relating to the
transactions contemplated by this Agreement.

 

 5 

 

 

8. No Representations. None of the Parties has relied upon any representations
or statements made by the other Parties that are not specifically set forth in
this Agreement.

 

9. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the SPA dated February 13, 2015.

 

10. Entire Agreement. This Agreement constitutes the full and entire
understanding among the Parties with regard to the Warrants. With respect to the
Warrants, none of the Parties will be liable or bound to the other Parties in
any manner by any representations, warranties, or covenants except as
specifically set forth in this Agreement.

 

11. Counterparts. This Agreement may be executed in counterparts, each of which
will be enforceable against the Parties actually executing such counterparts and
all of which together will constitute one instrument. A signed copy of this
Agreement delivered by facsimile, e-mail or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an
original signed copy of this Agreement.

 

12. Section Headings. The section headings, titles, and subtitles contained in
this Agreement are for convenience only and are not to be relied upon in
construing the terms of this Agreement.

 

13. Severability. If any provision of this Agreement, or the application of any
such provision, becomes or is declared by a court of competent jurisdiction to
be illegal, void, or unenforceable, then the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the Parties as expressed in this Agreement. The Parties further agree
to replace any such illegal, void, or unenforceable provision with a legal,
valid, and enforceable substitute provision that will achieve, to the greatest
extent possible, the economic, business, and other purposes of the illegal,
void, or unenforceable provision.

 

14. Successors and Assigns. This Agreement and the Company’s rights, duties,
benefits, and obligations under this Agreement will inure to the benefit of, and
be enforceable by, the Company’s successors and assigns. This Agreement and the
Warrantholders’ rights, duties, benefits, and obligations under this Agreement
will inure to the benefit of, and be enforceable by, the Warrantholders’
successors and assigns.

 

15. Voluntary Execution of Agreement. This Agreement is executed voluntarily,
without any duress or undue influence on the part of any Party or on behalf of
any Party. Each Party acknowledges that it (i) has read this Agreement, (ii) has
been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of its own choice or that it has voluntarily declined
to seek such counsel, (iii) understands the terms and consequences of this
Agreement; and (iv) is fully aware of the legal and binding effect of this
Agreement.

 

16. Independent Nature of Warrantholder’s Obligations and Rights. The
obligations of the Warrantholder under this Agreement are several and not joint
with the obligations of any other Warrantholder, and the Warrantholder shall not
be responsible in any way for the performance of the obligations of any other
Warrantholders under this Agreement. Nothing contained herein, and no action
taken by the Warrantholder pursuant hereto, shall be deemed to constitute the
Warrantholders as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Warrantholders are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement and the Company acknowledges that,
to the best of its knowledge, the Warrantholders are not acting in concert or as
a group with respect to such obligations or the transactions contemplated by
this Agreement. The Company and each Warrantholder confirms that such
Warrantholder has independently participated in the negotiation of the
transactions contemplated hereby with the advice of its own counsel and
advisors. Each Warrantholder shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement, and it shall not be necessary for any other Warrantholder to be
joined as an additional party in any proceeding for such purpose.

 

(Signature pages follow)

 

 6 

 

 

IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase
Warrants Repurchase Agreement as of the date first set forth above.

 

  COMPANY         COMBIMATRIX CORPORATION         By:       Mark McDonough    
President and Chief Executive Officer

 

WARRANTHOLDERS       By:               Name:     Title:    

 

 

 

 

exhibit a

 

assignment separate from certificate

 

for value received, the undersigned hereby sells, assigns, contributes, and
transfers unto CombiMatrix Corporation (the “Company”) Warrants to purchase a
total of _________ shares of the Company’s Common Stock, standing in the
undersigned’s name on the books of said Company, represented by Warrant No.
______ and does hereby irrevocably constitute and appoint the Company’s
Secretary to transfer the said securities on the books of the Company with full
power of substitution in the premises.

 

Dated:________________, 2016