Document:

Exhibit 4.1

 

PURSUANT
TO THE TERMS OF SECTION 1 AND SECTION 15 OF THIS WARRANT, ALL OR A PORTION OF THIS WARRANT MAY HAVE BEEN EXERCISED OR CANCELED,
AND THEREFORE THE ACTUAL NUMBER OF WARRANT SHARES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE
HEREOF. ANY TRANSFEREE OF THIS WARRANT SHOULD CONTACT THRESHOLD PHARMACEUTICALS, INC. IN ADVANCE OF ACQUIRING THIS WARRANT TO BE
APPRISED OF THE ACTUAL NUMBER OF SHARES THAT MAY BE ACQUIRED PURSUANT TO THE EXERCISE OF THIS WARRANT.

 

 

THRESHOLD
PHARMACEUTICALS, Inc.

 

FORM
OF

 

Warrant
To Purchase Common Stock

 

Warrant No.:      

Number of Shares of Common Stock:_____________

Date of Issuance: February [__], 2015 (“Issuance
Date”)

 

Threshold Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [____________________________], the registered holder hereof or its
permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, upon exercise 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 date that is six-months following the
Issuance Date (the “Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration
Date (as defined below), ______________ (_____________)1
fully paid nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 16.

 

This Warrant is one of
a series of warrants to purchase Common Stock issued pursuant to that certain underwriting agreement, dated as of February 11,
2015 (the “Agreement”), by and between the Company and Jefferies LLC, as representative of the several
underwriters listed on Schedule A thereto (all such warrants, excluding this Warrant, collectively, the “Other Warrants”),
pursuant to the Company’s Registration Statement on Form S-3 (File number 333-195084) (the “Registration Statement”).

 

 

 

 

1     Insert
a number of shares equal to 100% of the number of shares of Common Stock issued to the Holder.

 

    	 

    	 

    

 

1.     EXERCISE OF WARRANT.

 

(a)     Mechanics
of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after
the Exercisability Date, in whole or in part, by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder's election to exercise this Warrant. Within one (1) day following the Exercise Notice (the “Payment
Deadline”) (if a registration statement registering the issuance of the Warrant Shares under the Securities Act of 1933,
as amended (the “Securities Act”), is effective and available for the issuance
of the Warrant Shares), the Holder shall make 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 by wire transfer of immediately available funds, or provided the conditions for cashless exercise set forth in Section
1(d) are satisfied, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined
in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder; provided,
however, that in the event that this Warrant is exercised in full or for the remaining unexercised portion hereof, the Holder
shall deliver this Warrant to the Company for cancellation within a reasonable time after such exercise. Execution and delivery
of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares; provided that Holder
shall have complied with its obligation to deliver the Aggregate Exercise Price no later than the Payment Deadline. On or before
the first (1st) Business Day following the date on which the Company has received the Exercise Notice, the Company
shall transmit by facsimile or e-mail transmission an acknowledgment of confirmation of receipt of the Exercise Notice to the
Holder and the Company's transfer agent for the Common Stock (the “Transfer Agent”).
Provided that Holder shall have complied with its obligation to deliver the Aggregate Exercise Price no later than the Payment
Deadline, on or before the third (3rd) Trading Day following the date on which the Company has received the Exercise
Notice (the “Share Delivery Date”), the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of Warrant Shares to
which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its
Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered
in the Company's share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice and provided that Holder shall have complied
with its obligation to deliver the Aggregate Exercise Price no later than the Payment Deadline, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates
evidencing such Warrant Shares, as the case may be. If this Warrant is submitted in connection with any exercise pursuant to this
Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three
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. No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest
whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant; provided, however that the Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrant(s) 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.

 

    	2

    	 

    

 

(b)      Exercise
Price. For purposes of this Warrant, “Exercise Price” initially means $10.86, subject to adjustment as provided
herein. On the thirtieth (30th) Trading Day following the Data Release Date (the “Adjustment Date”),
the Exercise Price shall be changed to equal the Market Price on the Adjustment Date; provided, however, that in
no event shall the Exercise Price, including for purposes of this Section 1(b) and for all other purposes of this Warrant, exceed
$10.86 (the “Ceiling Price”) or be less than $3.62 (the “Floor Price”), in each case subject
to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect
to the Common Stock occurring after the Issuance Date.

 

(c)     Company's
Failure to Timely Deliver Securities. If the Company shall fail for any reason or for no reason to issue to the Holder within
three (3) Business Days of receipt of the Exercise Notice in compliance with the terms of this Section 1, a certificate for the
number of Warrant Shares to which the Holder is entitled and register such shares of Common Stock on the Company's share register
or to credit the Holder's balance account with DTC for such number of Warrant Shares of Common Stock to which the Holder is entitled
upon the Holder's exercise of this Warrant, and if on or after such Trading Day the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon
such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
three (3) Business Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount
equal to the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which point the Company's obligation to deliver such certificate (and to issue such
Warrant Shares or credit such Holder’s balance
account with DTC) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Warrant Shares or credit such
Holder’s balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the date of exercise.

 

(d)     Cashless
Exercise.  Notwithstanding anything contained herein to the contrary, if a registration statement registering the issuance
of the Warrant Shares under the Securities Act is not effective or available for the issuance of the Warrant Shares, then the Holder
may only exercise this Warrant, whether 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, by receiving upon such exercise the “Net Number”
of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

    	3

    	 

    

 

Net Number
= (A x B) - (A x C)

                      B

For purposes
of the foregoing formula:

 

A=
the total number of shares with respect to which this Warrant is then being exercised.

 

B=
the arithmetic average of Closing Sale Prices of the shares of Common Stock for the five (5) consecutive Trading Days ending on
the date immediately preceding the date of the Exercise Notice.

 

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

 

(e)      Rule 144.
For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, it is intended that the Warrant
Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant
Shares shall be deemed to have commenced, on the date this Warrant was originally issued.

 

(f)     Disputes.
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 promptly issue to the Holder the number of Warrant Shares that are not disputed.

 

    	4

    	 

    

 

(g)      Beneficial
Ownership Limitation. 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 whose beneficial ownership of shares of Common Stock would be aggregated with the Holder’s
for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”))
would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding
immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by such Holder, its affiliates and any other Persons whose beneficial ownership of shares of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act 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 Holder and its affiliates and any other Persons whose beneficial ownership of shares
of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such Holder
and its affiliates and any other Persons whose beneficial ownership of shares of Common Stock would be aggregated with the Holder’s
for purposes of Section 13(d) of the 1934 Act (including, without limitation, any convertible notes or convertible preferred
stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set
forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d)
of the 1934 Act. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K,
Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case
may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of
the Holder, the Company shall within one (1) Business 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. By written notice to the Company, the Holder may from
time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% or less than 4.99% specified
in such notice; provided that (i) any such increase 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 the Warrants. For the avoidance of doubt, to the extent the limitation set forth in this Section 1(g) applies, the determination
(i) of whether the exercise of this Warrant may be effected (vis-a-vis other Options or Convertible Securities owned by the Holder
or any of its affiliates and any other Persons whose beneficial ownership of shares of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) of the 1934 Act) and (ii) of which such Options or Convertible Securities
shall be convertible, exercisable or exchangeable (as the case may be, as among all such securities owned by the Holder) shall,
subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion,
exercise or exchange (as the case may be). The provisions of this paragraph shall be construed and implemented in a manner other
than in strict conformity with the terms of this Section 1(g) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation.

 

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)     Stock Dividends
and Splits. Without limiting any provision of Section 2(b) or Section 4, if the Company, at any time on or after the Issuance
Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date
of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that the
Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.

 

    	5

    	 

    

 

(b)      Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the Issuance Date, the Company issues or sells, or in
accordance with this Section 2(b) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale
of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities issued or sold
or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”) less than a
price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Exercise Price
then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New
Issuance Price. For purposes of determining the adjusted Exercise Price under this Section 2(b), the following shall be applicable:

 

(i)     Issuance of
Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For
purposes of this Section 2(b)(i), the “lowest price per share for which one share of Common Stock is issuable upon the exercise
of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option and (y) the lowest exercise price set forth
in such Option for which one share of Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise
or exchange of any Convertible Securities issuable upon exercise of any such Option minus (2) the sum of all amounts paid or payable
to the holder of such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon
conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any other
consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of
such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities.

 

    	6

    	 

    

 

(ii)     Issuance of
Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share
for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii), the “lowest
price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof” shall
be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made
pursuant to other provisions of this Section 2(b), except as contemplated below, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.

 

(iii)     Change in
Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance
of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(b) shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.

 

(iv)     Calculation
of Consideration Received. If any Option or Convertible Security or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company, together comprising one integrated transaction, (x)
such Option or Convertible Security (as applicable) or Adjustment Right (as applicable) will be deemed to have been issued for
consideration equal to the Option Value thereof and (y) the other securities issued or sold or deemed to have been issued or sold
in such integrated transaction shall be deemed to have been issued for consideration equal to the difference of (I) the aggregate
consideration received or receivable by the Company minus (II) the Option Value of each such Option or Convertible Security (as
applicable) or Adjustment Right (as applicable). If any shares of Common Stock, Options or Convertible Securities are issued or
sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of
consideration received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or
sold for a consideration other than cash, for purposes of calculating the consideration paid for the Options or Convertible Securities
(but not the Option Value thereof), the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the
Company for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days
immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners
of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable
to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other
than cash or publicly traded securities (but not the Option Value thereof) will be determined jointly by the Company and the Holder.
If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th)
day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company.

 

    	7

    	 

    

 

(v)     Record Date.
If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe
for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

 

(c)     Number of
Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after
such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).

 

(d)     Other Events.
If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features),
then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise
Price and/or the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such
adjustment pursuant to this Section 2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately
protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree,
in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose
determination shall be final and binding and whose fees and expenses shall be borne by the Company.

 

    	8

    	 

    

 

(e)     Floor Exercise
Price. Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced below the
Floor Price (subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar
transaction after the Issuance Date).

 

(f)     Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share,
as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company.

 

3.     RIGHTS UPON DISTRIBUTION
OF ASSETS. In addition to any adjustments pursuant to Section 2 above, 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, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein 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 exercise hereof, including without limitation,
the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, 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 participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distributions would result in the Holder
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or
the beneficial ownership of any such shares of Common Stock as a result of such Distribution to such extent) and such Distribution
to such extent shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Maximum Percentage).

 

4.     PURCHASE RIGHTS;
FUNDAMENTAL TRANSACTIONS.

 

(a)     Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of shares of Common Stock (the “Purchase Rights”), then the 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 exercise hereof, including without limitation, the Maximum Percentage) 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 (provided, however, to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership
of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the
Maximum Percentage).

 

    	9

    	 

    

 

(b)     Fundamental Transactions.
The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including agreements
to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, which is 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 with an exercise price which
applies the Exercise Price hereunder to such shares of capital stock (but taking into account the relative value of the shares
of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of any Fundamental Transaction, the
Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction,
the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect
as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the
consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(b) above, which shall continue to be receivable thereafter))
issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of stock (or its equivalent)
of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of
the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant,
including without limitation, the Maximum Percentage), as adjusted in accordance with the provisions of this Warrant.
Notwithstanding the foregoing, and without limiting Section 1(g) hereof, the Holder may elect, at its sole option, by delivery
of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this
Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that
the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the
applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property (except such items still issuable under Sections 3 and 4(b) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities,
cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would
have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately
prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant, including
without limitation, the Maximum Percentage). Provision made pursuant to the preceding sentence shall be in a form and
substance reasonably satisfactory to the Holder. Notwithstanding the foregoing, in the event of a Change of Control, at the request
of the Holder delivered before the 90th day after such Change of Control, the Company (or the Successor Entity) shall purchase
this Warrant from the Holder by paying to the Holder, within five Business Days after such request (or, if later, on the effective
date of the Change of Control), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this
Warrant on the date of such Change of Control.

 

    	10

    	 

    

 

(c)     Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage,
applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of
this Warrant (or any such other warrant)).

 

5.     NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights
of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all
such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as this Warrant is outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting
the exercise of this Warrant, 100% of the number of shares of Common Stock issuable upon exercise of this Warrant then outstanding
(without regard to any limitations on exercise).

 

6.     WARRANT HOLDER
NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder
of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for
any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.

 

    	11

    	 

    

 

7.     REISSUANCE OF WARRANTS.

 

(a)     Registration
of Warrant. The Company shall register this Warrant, upon the records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary. The Company shall also register any transfer,
exchange, reissuance or cancellation of any portion of this Warrant in the Warrant Register.

 

(b)     Transfer
of Warrant. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except
as may otherwise be required by applicable securities laws. Subject to applicable securities laws, if this Warrant is to be transferred,
the Holder shall surrender this Warrant to the Company, together with all applicable transfer taxes, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 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.

 

(c)      Lost, Stolen
or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant (in accordance with Section 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, 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 no warrants for fractional
shares of Common Stock shall be given.

 

    	12

    	 

    

 

(e)      Issuance
of New Warrant. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall 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 Warrant(s) issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying
this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance
Date, and (iv) shall have the same rights and conditions as this Warrant.

 

8.     NOTICES. (a) Any
and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via
email at the email address set forth on the signature pages attached hereto (or otherwise provided below) or facsimile at the
facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or communication is delivered via email at the email address
set forth on the signature pages attached hereto (or otherwise provided below) orfacsimile at the facsimile number set forth on
the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications
shall be:

 

if to the Company:

 

Threshold
Pharmaceuticals, Inc.

170 Harbor Way, Suite 300

South San Francisco, CA 94080

Fax: (650) 474-XXXX

Attention: Chief Executive Officer

email: BSelick@thresholdpharm.com

 

With
copy to:

 

Cooley
LLP

101 California Street, 5th Floor

San Francisco, CA 94111

Fax: (415) 693-2222

Attention: Chadwick L. Mills, Esq.

email: cmills@cooley.com

 

    	13

    	 

    

 

If to the Holder:

 

To the address,
email address or facsimile number set forth in
the Warrant Register, or as otherwise provided by the
Holder to the Company in accordance with this Section 8.

 

(b)     The Company
shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail
a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written
notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth
in reasonable detail, and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) 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 in each case that such information shall
be made known to the public prior to or in conjunction with such notice being provided to the Holder.

 

9.     AMENDMENT AND WAIVER.
Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.

 

10.     SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

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 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. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	14

    	 

    

 

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, the Closing Sale Price, the Closing Bid Price or fair market
value or the arithmetic calculation of the Warrant Shares (as the case may be), the Company or the Holder (as the case may be)
shall submit the disputed determinations or arithmetic calculations (as the case may be) via email or facsimile (i) within two
(2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder (as the case
may be) or (ii) if no notice gave rise to such dispute, at any time after the Company or the Holder (as the case may be) learned
of the circumstances giving rise to such dispute (including, without limitation, as to whether any issuance or sale or deemed issuance
or sale was an issuance or sale or deemed issuance or sale of Excluded Securities). If the Holder and the Company are unable to
agree upon such determination or calculation (as the case may be) of the Exercise Price, the Closing Sale Price, the Closing Bid
Price or fair market value or the number of Warrant Shares (as the case may be) within five (5) Business Days of such disputed
determination or arithmetic calculation being submitted to the Company or the Holder (as the case may be), then the Company shall,
within two (2) Business Days submit via email or facsimile (a) the disputed determination of the Exercise Price, the Closing Sale
Price, the Closing Bid Price or fair market value (as the case may be) to an independent, reputable investment bank selected 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
(as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it
receives such disputed determinations or calculations (as the case may be). 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 accounting will be borne by the Company unless the investment bank or accountant determines
that the determination of the Exercise Price, the Closing Sale Price, the Closing Bid Price or fair market value or the number
of Warrant Shares (as the case may be) by the Holder was incorrect, in which case the expense of the investment bank and accountant
will be borne by the Holder.

 

    	15

    	 

    

 

14.     REMEDIES, CHARACTERIZATION,
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 to seek, in addition to all other available
remedies, an injunction restraining any breach without any bond or other security being required. The Company shall provide all
information and documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company’s
compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2hereof). Notwithstanding
the foregoing or anything else herein to the contrary, other than as expressly provided in Section 1(c) or 1(d) hereof, 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.     FORCED EXERCISE.
If at any time from and after ninety (90) days following the Adjustment Date (the “Forced Exercise Eligibility Date”),
(i) the arithmetic average of the VWAP of the Common Stock for any twenty (20) consecutive Trading Days that commences on or after
the Forced Exercise Eligibility Date (the “Forced Exercise Measuring Period”) equals or exceeds $18.00 (subject
to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction after
the Issuance Date) and (ii) there is not then an Equity Conditions Failure, the Company shall have the right to require the Holder
to exercise all or any portion of the unexercised portion of this Warrant (without regard to any limitations on exercise hereof,
including without limitation, the Maximum Percentage), in each case as designated in the Forced Exercise Notice (as defined
below) into fully paid, validly issued and nonassessable shares of Common Stock in accordance with Section 1(a) hereof (or,
solely if a registration statement registering the issuance of the Warrant Shares under the Securities Act is not then effective
or available for the issuance of the Warrant Shares, in accordance with Section 1(a) and 1(d) hereof) at the Exercise Price as
of the Forced Exercise Date (as defined below) (a “Forced Exercise”). The Company may exercise its right to
require Forced Exercise under this Section 15 by delivering, within not more than two (2) Trading Days following the end of such
Forced Exercise Measuring Period, a written notice thereof by facsimile and overnight courier to all of, but not less than all,
of the Holder and the holders of the Other Warrants and the Transfer Agent (the “Forced Exercise Notice” and
the date all of the holders of the Warrants received such notice by facsimile is referred to as the “Forced Exercise Notice
Date”). The Forced Exercise Notice shall be irrevocable. The Forced Exercise Notice shall (x) state (A) the Trading Day
selected for the Forced Exercise, which Trading Day shall be no sooner than five (5) Trading Days nor later than ten (10) Trading
Days following the Forced Exercise Notice Date (the “Forced Exercise Date”), and (B) the aggregate number of
Warrant Shares subject to Forced Exercise from the Holder (the “Forced Exercise Share Number”) and all of the
holders of the Other Warrants pursuant to this Section 15 (the “Holders’ Aggregate Forced Exercise Share Number”)
(and analogous provisions under the Other Warrants); and (y) certify that there has been no Equity Conditions Failure. If
the Equity Conditions were satisfied as of the Forced Exercise Notice Date, but the Equity Conditions are no longer satisfied at
any time prior to the Forced Exercise Date, the Company shall provide the Holder a subsequent notice to that effect indicating
that unless the Holder waives the Equity Conditions, the Forced Exercise Notice shall be void ab initio and of no further
force or effect. The Company shall deliver to the Holder a notice no later than 10:00 a.m., New York time, on the Forced Exercise
Date which notice shall certify whether or not the Equity Conditions have been satisfied. Notwithstanding the foregoing, nothing
in this subsection shall prevent the Holder from exercising this Warrant, in whole or part, on or prior to the Forced Exercise
Date. The Company covenants and agrees that it will honor all Exercise Notices tendered from the time of delivery of the Forced
Exercise Notice through the Forced Exercise Date. Upon an Equity Conditions Failure, the Holder may revoke any Exercise Notice
delivered after the Forced Exercise Notice is received by the Holder and the Company, within one (1) Business Day of such revocation,
shall return the Aggregate Exercise Price applicable to any such Exercise Notice(s) to the Holder by wire transfer of immediately
available funds and any Warrants so exercised shall be deemed reinstated and returned to the Holders, if applicable.

 

    	16

    	 

    

 

16.     CERTAIN DEFINITIONS.
For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)     “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than rights of the type described
in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with,
or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar
rights).

 

(b)     “Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s
request, which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on
Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common
Stock during the period beginning on the Trading Day immediately preceding the public disclosure of the applicable Change of Control
and ending on the Trading Day immediately preceding the consummation of the applicable Change of Control and (2) the sum of the
price per share being offered in cash in the applicable Change of Control (if any) plus the value of the non-cash consideration
being offered in the applicable Fundamental Transaction (if any), (ii) a strike price equal to the Exercise Price in effect on
the of date of the Holder’s request, (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request and (2) the remaining
term of this Warrant as of the date of consummation of the applicable Change of Control or as of the date of the Holder’s
request pursuant to Section 4(b) if such request is prior to the date of the consummation of the applicable Change of Control and
(iv) an expected volatility equal to the lesser of 65% and the 30 day volatility obtained from the HVT function on Bloomberg (determined
utilizing a 365 day annualization factor) as of and including the Trading Day immediately following the earlier to occur of the
public disclosure or consummation of the applicable Change of Control.

 

(c)     “Bloomberg”
means Bloomberg, L.P.

 

(d)     “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

    	17

    	 

    

 

(e)     “Change
of Control” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification
of the Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities
and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members
of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (ii) pursuant to
a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.

 

(f)     “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or
the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation period.

 

(g)      “Common
Stock” means (i) the Company’s shares of common stock, and (ii) any capital stock into which such common stock
shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(h)     “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

 

(i)     “Data
Release Date” means the first to occur of (i) the last to occur of (x) the date on which top-line efficacy data from
the Company’s TH-CR 406 trial, a Phase 3 clinical trial of TH-302 plus doxorubicin versus doxorubicin alone in patients with
locally advanced unresectable or metastatic soft tissue sarcoma is first publicly announced in a press release issued by the Company
and (y) the date on which top-line efficacy data from the MAESTRO study, a Phase 3 clinical trial of TH-302 in combination with
gemcitabine in patients with previously untreated, locally advanced unresectable or metastatic pancreatic adenocarcinoma is first
publicly announced in a press release issued by the Company and (ii) the second anniversary of the Issuance Date of this Warrant.

 

    	18

    	 

    

 

(j)     “Eligible
Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market or
the Principal Market.

 

(k)     “Equity
Conditions” means: (i) on each day during the period beginning thirty (30) Trading Days prior to the applicable date
of determination and ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”),
all shares of Common Stock issued and issuable upon exercise of the Warrants shall be eligible for sale without restriction or
limitation and without the need for registration under any applicable federal or state securities laws, unless in each such case
such Warrant Shares are held by or issuable to an affiliate of the Company within the meaning of Rule 144 promulgated under the
Securities Act; (ii) on each day during the Equity Conditions Measuring Period, the Common Stock is listed or designated for quotation
on the Principal Market or an Eligible Market and shall not have been suspended from trading from the Principal Market or Eligible
Market on which the Common Stock is primarily listed on and quoted for trading (the “Primary Market”) any applicable
exchanges or markets (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination
due to business announcements by the Company) nor shall proceedings for such delisting or suspension from the Principal Market
have been commenced, threatened or pending either (1) in writing by the Principal Market or (2) by falling below the minimum listing
maintenance requirements of all relevant exchanges and markets unless, in the case of clause (1) or (2) above, (x) the Company
shall meet all minimum initial listing conditions of one or more other Eligible Markets or (y) the commenced, threatened or pending
delisting or suspension is due to the applicable price of the Common Stock falling below a listing standard provided the Company
is actively taking the necessary steps to effect a reverse stock split to meet the requirements of such Eligible Market or the
price of the Common Stock has risen such that the commenced, threatened or pending delisting or suspension is no longer applicable;
and (iii) on each day during the Equity Conditions Measuring Period, the Company shall have delivered Common Stock upon exercise
of this Warrant to the Holder on a timely basis as set forth in Section 1(a) hereof or shall have otherwise timely satisfied its
obligations under Section 1(c) hereof, unless in each such case the Company’s failure to timely deliver or otherwise satisfy
such obligations is due solely to any action or inaction by the Holder; (iv) on each day during the Equity Conditions Measuring
Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been
abandoned, terminated or consummated; (v) the Holder shall not be in possession of any material, non-public information provided
to the Holder by the Company, any of its affiliates or any of their respective officers, employees, directors, representatives,
or agents; and (vi) on each day during the Equity Conditions Measuring Period, the Company shall not be in breach of any material
term or condition of this Warrant.

 

    	19

    	 

    

 

(l)     “Equity
Conditions Failure” means that during the period beginning with the first Trading Day of the Forced Exercise Measuring
Period through the applicable Forced Exercise Notice Date or Forced Exercise Date, as the case may be, the Equity Conditions have
not been satisfied (or waived in writing by the Holder).

 

(m)     “Excluded
Securities” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
in their capacity as such pursuant to any stock or option plan or employment agreement duly adopted for such purpose, by a majority
of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established
for such purpose, (b) securities upon the exercise or exchange of or conversion of the securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities, and (c) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided
that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

(n)      “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date, if such date falls on a day
other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the
next date that is not a Holiday.

 

(o)     “Fundamental
Transaction” means that (i) the Company or any of its direct or indirect wholly-owned subsidiaries shall, directly or
indirectly, in one or more related transactions, (A) consolidate or merge with or into (whether or not the Company or any of its
subsidiaries is the surviving corporation) any other Person, or (B) sell, lease, license, assign, transfer, convey or otherwise
dispose of all or substantially all of its respective properties or assets to any other Person, or (C) allow any other Person to
make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting
Stock of the Company (not including any shares of Voting Stock of the Company 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 (D) consummate a
stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with any other Person whereby such other Person acquires more than 50% of the outstanding shares
of Voting Stock of the Company (not including any shares of Voting Stock of the Company 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 or share purchase agreement
or other business combination), or (E) reorganize, recapitalize or reclassify the Common Stock, or (ii) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations
promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

 

    	20

    	 

    

 

(p)     “Market
Price” means the arithmetic average of the VWAP for the Common Stock on each of the twenty (20) Trading Days immediately
preceding the applicable date.

 

(q)     “Option
Value” means the value of the applicable Option or Convertible Security (as the case may be) as of the date of issuance
thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing
(i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day immediately preceding
the public announcement of the execution of definitive documents with respect to the issuance of such Option or Convertible Security
(as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of such Option or Convertible Security (as the case may be) as of the date of issuance of such Option or Convertible Security
(as the case may be) and (iii) an expected volatility equal to the lesser of 65% and the 30 day volatility obtained from the HVT
function on Bloomberg (determined utilizing a 365 day annualization factor) as of and including the Trading Day immediately following
the date of issuance of such Option or Convertible Security (as the case may be)

 

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

 

(s)     “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(t)     “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

 

(u)     “Principal
Market” means the Nasdaq Capital Market.

 

(v)     “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

 

(w)     “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

 

    	21

    	 

    

 

(x)     “Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).

 

(y)     “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York 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 time, and ending at 4:00:00 p.m., New York 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 OTC Markets Group Inc. (formerly Pink Sheets LLC). If VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP 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 in accordance with the procedures in Section 13. All such determinations shall be appropriately
adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such
period.

 

(z)     “Warrants”
means, collectively, this Warrant and the Other Warrants.

 

 

 

 

 

[signature page follows]

 

    	22

    	 

    

 

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.

 

 

	 	THRESHOLD PHARMACEUTICALS, INC.
	 	 
	 	 
	 	By:	                  	 
	 	Name:
	 	Title:

 

 

 

 

 

 

 

    	 

    	 

    

 

EXHIBIT A

 

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

THRESHOLD
PHARMACEUTICALS, INC.

The
undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”)
of THRESHOLD PHARMACEUTICALS, INC,
a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1. Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:

 

		____________	a “Cash Exercise” with respect to _________________ Warrant Shares; and/or

 

		____________	a “Cashless Exercise” with respect to _______________ Warrant Shares (eligible for
use only in accordance with Section 1(d) of the Warrant).

 

2. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in 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. If
the shares are to be delivered electronically, please complete the DTC DWAC information below.

 

3.
Representation 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(f) of the Warrant to which this notice relates.

 

 

Date: _______________ __, ______

 

 

 

Name of Registered Holder

 

 

	By:	  
	 	Name:
	 	Title:

 

    	 

    	 

    

 

ACKNOWLEDGMENT

 

 

The Company hereby
acknowledges this Exercise Notice and hereby directs [INSERT NAME OF TRANSFER AGENT] to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated ________, 201_ from the Company and acknowledged and agreed
to by [INSERT NAME OF TRANSFER AGENT].

 

	 	THRESHOLD PHARMACEUTICALS, INC
	 	 	 
	 	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:exhibit_4-1.htm

Exhibit 4.1

 

FORM OF SHARE CERTIFICATE

 

 

Check-Cap Ltd.

 

	  	  
	
Number

	
  

Shares

	  	
  

	  
	
CHEK

	
  

CUSIP: M2361E 112

	  	
  

	  
	  	
See Reverse for

Certain Definitions

 

CHECK-CAP LTD.

INCORPORATED UNDER THE LAWS OF THE STATE OF ISRAEL

 

THIS CERTIFIES that

 

is the Registered Holder of

 

FULLY PAID AND NON-ASSESSABLE ORDINARY SHARES OF NIS 0.20 PAR VALUE EACH

 

of Check-Cap Ltd. transferable on the books of the Company by the holder hereof in person or by duly authorized attorney only upon surrender of this Certificate properly endorsed or with an appropriate instrument of transfer. This Certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Articles of Association of the Company and amendments thereto, to all of which the holder by the acceptance hereof assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.

 

IN WITNESS WHEREOF, the Company has caused this Certificate to be issued under the facsimile seal of the Company.

 

	
Dated: ______________________________

 

	
Check-Cap Ltd.

	  	  	  	  	  
	
Corporate Seal

	
ISRAEL

	  	  	  	  

 

	 	
/s/ Guy Neev

	 
	 	
Chief Executive Officer and Director

	 

  

  

  

 

The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
TEN COM  - as tenants in common

	
  

	  	
  

	
UNIF GIFT MIN ACT  ________________________

	  	  	
Custodian _____________

	
              

	
TEN ENT   - as tenants by the entireties

	
  

	  	
  

	  	
  

	  	
  

	
                (Cust)

	  	  	
                  (Minor)

	
  

	
JT TEN      -  as joint tenants with right of survivorship 

               and not as tenants in common

	
  

	
                under Uniform Gifts to Minors        

	
  

	  	
  

	  	
  

	  	
  

	  	
  

	
Act

	
  

	 	  
	  	
  

	  	
  

	  	
  

	  	
  

	  	
  

	
                (State)

	
 

 

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED,                              HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO ______________________________________________

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

                              SHARES REPRESENTED BY THE WITHIN CERTIFICATE, AND SO HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS _______________________________

 

ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN-NAMED COMPANY AND FULL POWER OF SUBSTITUTION IN THE PREMISES.

 

	
DATED

	  	  	
  

	  	
  

	  
	  	  	  	  
	  	  	  	
  

	  	
  

	  
	  	  	  	
  

	  	
  

	
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE, WHATSOEVER.

	
Signature(s) Guaranteed:

	
  

	  	
  

	  
	  	  	  
	 	 	 	 	 
	
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17 Ad-15.

	
  

	  	
  

	  

 

[To be added to Share Certificates issued to former holders of Preferred Shares and the lenders under the certain Credit Line Agreement dated August 20, 2014, as amended:]

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT DATED AS OF OCTOBER 14, 2014, AS AMENDED (THE “SHAREHOLDERS’ AGREEMENT”) BY AND AMONG CHECK-CAP LTD. (THE “COMPANY”), CERTAIN OF THE COMPANY’S SHAREHOLDERS AND THE LENDERS UNDER THE CERTAIN CREDIT LINE AGREEMENT DATED AUGUST 20, 2014, AS AMENDED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE THEREFORE ENTITLE THE HOLDER OF THIS CERTIFICATE TO CERTAIN REGISTRATION RIGHTS SUCH HOLDER IS ENTITLED TO UNDER AND ACCORDING TO THE SHAREHOLDERS AGREEMENT ON ACCOUNT THEREOF.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00240-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00240-of-00352.parquet"}]]