Document:

evc-ex101_16.htm

Exhibit 10.1

FOURTH AMENDMENT TO LEASE

THIS Fourth Amendment to Lease (this “Amendment”) is made and entered into as of January 14, 2021, by and between WATER GARDEN COMPANY L.L.C., a Delaware limited liability company (“Landlord”) and ENTRAVISION COMMUNICATIONS CORPORATION, a Delaware corporation (“Tenant”).

1.Recitals.

1.1Lease.  Landlord and Tenant are parties to that certain Office Lease dated as of  August 19, 1999 (“Original Lease”), as amended by that certain First Amendment to Lease and Agreement Re: Sixth Floor Additional Space dated as of March 15, 2001 (the “First Amendment”), that certain Second Amendment to Lease dated as of October 5, 2005 (the “Second Amendment”) and that certain Third Amendment to Lease (the “Third Amendment”) dated as of January 31, 2011 (collectively, the “Lease”), pursuant to which Tenant currently leases 16,023 rentable square feet, commonly known as Suite 6000W (referred to herein as the “Existing Premises”), located on the sixth (6th) floor of the West tower of the Building located at 2425 Olympic Boulevard in Santa Monica, California, all as more particularly described therein.  All terms defined in the Lease shall have the same meanings when used in this Amendment, unless a different meaning is clearly expressed herein.

1.2Amendment.  The Lease Term is currently scheduled to expire on January 31, 2021.  Landlord and Tenant have agreed that Tenant will relocate from the Existing Premises to other space in the Building, and the parties desire to amend the Lease to memorialize their agreement regarding such relocation, the extension of the Lease Term in connection therewith, and otherwise amend the Lease, upon the terms and conditions set forth herein.  

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

2.Substitution of Premises

.

Effective on the New Premises Commencement Date (as defined in Section 3.1(a) below), the term “Premises” as used in the Lease shall mean the 8,670 rentable square feet currently known as Suite 650E (the “New Premises”), located on the sixth (6th) floor of the East tower of the Building.  The outline of the New Premises is set forth in Exhibit “A” attached hereto.  Such Exhibit “A” (i) is intended only to show the general layout of the New Premises as of the date of this Amendment, (ii) does not constitute an agreement, representation or warranty as to the construction of the New Premises, the precise area thereof or the specific location of the Common Areas, (iii) does not supersede any of Landlord’s rights with respect to arrangements and/or locations of public parts of the Project and changes in such arrangements and/or locations, and (iv) is not to be scaled; any measurements or distances shown should be taken as approximate.   

 

 

3.Term and Delivery of New Premises.

3.1New Premises Term

.  

(a)Upon the terms and conditions of the Lease as amended by this Amendment, Landlord hereby leases the New Premises to Tenant, and Tenant hereby leases the New Premises from Landlord.  The term of the Lease with respect to the New Premises (the “New Premises Term”) shall commence on the date (the “New Premises Commencement Date”) that is the earlier to occur of (i) the date Tenant first commences to conduct business in any portion of the New Premises, and (ii) seven (7) days following the date of “Substantial Completion of the Tenant Improvements”, as such term is defined in Section 5.1 of Exhibit “B” attached hereto.  The determination of the New Premises Commencement Date is subject to Section 5.2 of Exhibit “B” attached hereto.  Unless sooner terminated pursuant to the Lease (as hereby amended), the New Premises Term shall expire on the date (the “New Premises Expiration Date”) immediately preceding the 60-month anniversary of the New Premises Commencement Date; provided that if the New Premises Commencement Date is not the first day of the month, then the New Premises Expiration Date shall be the last day of the month in which the 60-month anniversary of the New Premises Commencement Date occurs.  Except as expressly set forth in this Amendment, all of the terms and conditions of the Lease shall apply to the New Premises during the New Premises Term, and the “Lease Term” as defined in the Lease shall include the New Premises Term.  During the 7-day period referenced in clause (ii) above (if applicable), all of the provisions of the Lease as amended by this Amendment shall apply with respect to the New Premises, but Tenant shall not be obligated to pay Base Rent or Additional Rent for Project Expenses with respect to the New Premises until the New Premises Commencement Date.  

(b)At any time following the New Premises Commencement Date, Landlord may deliver to Tenant a Notice of Lease Term Dates with respect to the New Premises in the form attached hereto as Exhibit “C”, which notice Tenant shall execute and return within ten (10) days after its receipt thereof, and the dates set forth therein shall thereafter be conclusive and binding on Landlord and Tenant.

3.2Acceptance of New Premises

.  

Except as set forth in Exhibit “B” attached hereto and incorporated herein,  Landlord shall have no obligation to provide or pay for any improvement work or services related to the improvement of the New Premises, and Tenant shall accept the New Premises in its AS-IS condition.  Tenant acknowledges and agrees that except as otherwise expressly provided in the Lease as amended hereby, neither Landlord, nor any employee, agent, or representative of Landlord has made or herein makes any representation or warranty concerning the New Premises or the Building or Project, or the suitability of the New Premises or the Building for the conduct of Tenant’s business.  Tenant’s occupancy of the New Premises shall be deemed conclusive evidence of Tenant’s acceptance of the New Premises in accordance herewith, subject to the provisions of Exhibit “B”.

 

3.3Surrender of the Existing Premises.

 

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(a)The Lease Term with respect to the Existing Premises is hereby extended to expire on the day immediately prior to the New Premises Commencement Date (the “Existing Premises Termination Date”).  During such extension, all of the terms and conditions of the Lease shall continue to apply with respect to the Existing Premises, including Tenant’s obligation to pay Additional Rent and Tenant’s right to occupy the entirety of the Existing Premises, provided that Tenant shall pay Base Rent for the Existing Premises in the amount of $52,431.95 per month. 

(b)No later than the date (the “Existing Premises Final Surrender Date”) that is seven (7) days after the Existing Premises Termination Date, Tenant shall vacate and surrender the Existing Premises to Landlord in accordance with the requirements of the Lease including, without limitation, Section 15.2 of the Original Lease, but Tenant shall not be required to remove communications and computer wires and cables located in or serving the Existing Premises, but if any such removal is undertaken, Tenant shall repair any damage in connection with such removal.  Tenant shall be solely responsible for moving Tenant’s furniture, fixtures, equipment and other personal property to the New Premises and for all costs and expenses associated therewith, and Landlord shall not be responsible for any costs whatsoever associated with Tenant’s relocation. Following the Existing Premises Final Surrender Date, Landlord shall be entitled to lease and/or use the Existing Premises in its discretion, and all of the rights and obligations of Landlord and Tenant under the Lease with respect to the Existing Premises (except for accrued and unpaid or unperformed obligations, including but not limited to Tenant’s surrender obligations) shall expire, subject only to the terms hereof.  If Tenant fails to vacate and surrender the entirety of the Existing Premises as required hereunder by the Existing Premises Final Surrender Date, Article 16 of the Original Lease shall apply with respect to such holdover. The Rent payable for the Existing Premises during such holdover shall be in addition to the Rent payable for the New Premises hereunder.  Notwithstanding Article 2 above, during any holdover of the Existing Premises, the term “Premises” as used in the Lease shall include the Existing Premises and the New Premises.  

(c)Nothing in this Section 3.3 shall be construed as a consent by Landlord to any holding over by Tenant in the Existing Premises after the Existing Premises Termination Date, except as expressly set forth in clause (b) above.  During the period prior to the Existing Premises Final Surrender Date, all of the provisions of the Lease shall remain in full force and effect with respect to the Existing Premises, but Tenant shall have no obligation to pay Base Rent or Tenant’s Share of Project Expenses with respect to the Existing Premises after the Existing Premises Termination Date, unless Tenant holds over in the Existing Premises after the Existing Premises Final Surrender Date.

4.Rent for New Premises.

4.1Base Rent

.  Subject to Section 4.3 below, beginning on the New Premises Commencement Date and continuing throughout the New Premises Term, Tenant shall pay monthly Base Rent for the New Premises in the amounts set forth in the table below, in the manner set forth in Article 3 of the Original Lease.  Without limiting the foregoing, if the New Premises Commencement Date falls on a day of the month other than the first day of such month, the Base Rent for such partial month shall be prorated in the manner set forth in Article 3 of the Original Lease.

			
	
 

 

Period Following 

New Premises Commencement Date
	
 

 

Monthly Installment

of Base Rent*
	
 

Monthly Rental Rate per Rentable Square Foot (rounded)

	
Months 1 – 12
	
$55,054.50
	
$6.350

	
Months 13 – 24
	
$56,979.24
	
$6.572

	
Months 25 – 36
	
$58,973.34
	
$6.802

	
Months 37 – 48
	
$61,036.80
	
$7.040

	
Month 49 – New Premises Expiration Date
	
$63,169.62
	
$7.286

*Notwithstanding the foregoing, for each calendar month of the New Premises Term, Tenant shall not be obligated to pay 50% of the Base Rent with respect to 826 rentable square feet of the New Premises attributable to the balcony area, resulting in the following deductions from the monthly Base Rent set forth above:  Months 1 – 12 $2,622.55 per month; Months 13 – 24 $2,714.24 per month; Months 25 – 36 $2,809.23 per month; Months 37 – 48 $2,907.52 per month; and Month 49 – New Premises Expiration Date $3,009.12 per month.  By way of example, the Base Rent for months 1 – 12 after the foregoing deduction shall equal $52,431.95 per month.  With respect to any partial month occurring during the New Premises Term, the deduction amount shall be prorated as provided in Article 3 of the Original Lease.

 

4.2 Additional Rent

.  During the New Premises Term, Tenant shall pay Additional Rent for the New Premises pursuant to the Lease, including without limitation, Tenant’s Share of Project Expenses in accordance with Article 4 of the Original Lease; provided, however, that the Base Year with respect to the New Premises shall be calendar year 2021, and Tenant’s Share with respect to the New Premises shall be 2.360%.

4.3Base Rent Abatement

.  Provided Tenant is not in default under the Lease as amended hereby (beyond any applicable notice and cure periods), Tenant shall not be obligated to pay Base Rent for the New Premises for months two (2) through five (5) of the New Premises Term (i.e., total abatement of $209,727.80).  During all of the months for which Base Rent is abated hereunder, Tenant shall be and remain obligated to pay all Additional Rent otherwise due under the Lease as amended hereby.

5.Security Deposit.    Landlord and Tenant acknowledge that Landlord currently holds the Security Deposit in the amount of Seventy-Eight Thousand Four Hundred and 54/100 Dollars ($78,400.54).  Landlord shall continue to hold the foregoing Security Deposit throughout the New Premises Term, in accordance with the terms of Article 7 of the Second Amendment.  Article 7 of the Second Amendment is hereby modified so that all references therein to the “Extension Term” shall mean the New Premises Term.

6.Broker.   Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Amendment, excepting only CBRE, Inc. and Jones Lang LaSalle Brokerage, Inc. (collectively, “Broker”), whose commission shall be the responsibility of Landlord pursuant to a separate written agreement, and that they know of no other real estate broker or agent who is entitled to a 

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commission in connection with this Amendment.  Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than Broker, occurring by, through, or under the indemnifying party.  

7.New Premises Term Parking.   

7.1During the New Premises Term, Tenant shall have the right, but not the obligation, to rent up to twenty-six (26) parking passes (equivalent to 3 parking passes per 1,000 rentable square feet of the New Premises) (referred to herein as the “New Premises Parking Passes”), upon the terms and conditions of this Article 7.  The New Premises Parking Passes shall pertain to unreserved parking in the Project parking facility on a first-come, first-served basis; provided that Tenant shall have the right to convert up to seven (7) of the New Premises Parking Passes to pertain to passes for reserved parking spaces in the Project parking facility, three (3) of which shall be on the “P-1” level (in a location reasonably proximate to the elevators closest to the Premises, if and to the extent such reasonably proximate location is available), and the other four (4) of which shall be on the “P-2” level (in a location reasonably proximate to the elevators closest to the Premises, if and to the extent such reasonably proximate location is available) (the “Reserved Parking Spaces”).  Tenant hereby elects to rent the seven (7) New Premises Parking Passes pertaining to the Reserved Parking Spaces, effective as of the New Premises Commencement Date. At least thirty (30) days prior to the New Premises Commencement Date, Tenant shall notify Landlord of how many of the remaining nineteen (19) New Premises Parking Passes Tenant elects to rent as of the New Premises Commencement Date; Tenant’s failure to do so shall be deemed to be Tenant’s election to rent all nineteen (19) of such New Premises Parking Passes (all of which shall pertain to unreserved parking), plus the seven (7) passes for the Reserved Parking Spaces, as of the New Premises Commencement Date.  Thereafter, from time to time during the New Premises Term upon at least thirty (30) days prior written notice to Landlord, Tenant shall have the right to increase or decrease the amount of the New Premises Parking Passes, unreserved and reserved, rented by Tenant (not to exceed a total of 26, with not more than 7 being for reserved spaces); provided that in the event Tenant reduces the number of Reserved Parking Spaces rented by Tenant during the New Premises Term to less than seven (7), the number of Reserved Parking Spaces to which Tenant has the right under the second sentence of this Section 7.1 will be permanently reduced to the number of Reserved Parking Spaces then rented by Tenant.   

7.2Tenant shall pay Landlord on a monthly basis the prevailing rates charged (as such rates may be adjusted from time to time) for parking passes in the Project, plus City of Santa Monica parking taxes, for all parking passes rented by Tenant hereunder.  At any time during the New Premises Term, Landlord shall have the right to convert up to 50% of the parking passes rented by Tenant to passes to be used in tandem parking spaces.  Landlord shall have the right at any time and from time to time during the New Premises Term to use valet assisted parking in all or part of the parking areas.  Tenant’s continued right to use the parking passes is conditioned upon Tenant abiding by all rules and regulations which are prescribed from time to time for the orderly operation and use of the Project parking facility and upon Tenant’s cooperation in seeing that Tenant’s employees and visitors also comply with such rules and regulations.  Landlord specifically reserves the right to change the size, configuration, design, layout and all other aspects 

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of the Project parking facility at any time and Tenant acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent under the Lease (as hereby amended), from time to time, close-off or restrict access to the Project parking facility for purposes of permitting or facilitating any such construction, alteration or improvements.  Landlord may delegate its responsibilities hereunder to a parking operator in which case such parking operator shall have all the rights of control attributed hereby to the Landlord.  

7.3The parking passes rented by Tenant pursuant to this Article 7 are provided to Tenant solely for use by Tenant’s own personnel and such passes may not be transferred, assigned, subleased or otherwise alienated by Tenant without Landlord’s prior approval.  Subject to reasonable rules and regulations for the Building parking facility, including, without limitation, temporary rules and regulations for the purpose of increased security, implemented by Landlord or Landlord’s parking operator, Tenant’s clients and visitors may park in the subterranean Building parking facility at any time, twenty-four hours per day.  From time to time hereafter, Tenant may purchase parking validation booklets at Landlord’s prevailing Building rate for validation booklets.  Tenant shall surrender any unused validation booklets (or portions thereof) upon Lease termination.  Effective as of the New Premises Commencement Date, Article 28 of the Original Lease, Article 8 of the First Amendment, Article 6 of the Second Amendment and Article 6 of the Third Amendment shall be deleted in their entirety, it being the intent of Landlord and Tenant that all terms pertaining to parking following the New Premises Commencement Date shall be as set forth in this Article 7.

8.Option to Extend.

(a)Provided Tenant is not in default under the Lease as amended hereby (after any applicable notice and lapse of applicable cure periods) as of the date of exercise or the end of the New Premises Term, Tenant shall have one (1) option to renew the Lease as amended hereby (“Renewal Option”) for the entire Premises then leased by Tenant for one (1) period of three (3) years (“Renewal Term”), exercisable by giving written notice thereof (“Renewal Notice”) to Landlord of its exercise of the Renewal Option no later than twelve (12) months prior to the expiration of the New Premises Term. 

(b)The Base Rent payable for the Premises during the Renewal Term shall be adjusted to the Fair Market Rental Rate (as defined in Section 8(f) below) as of the commencement of the Renewal Term (“Renewal Term Commencement Date”).  Landlord shall give Tenant written notice of Landlord’s determination of the Fair Market Rental Rate for the Renewal Term (“Landlord’s Statement”) within thirty (30) days after Landlord’s receipt of the Renewal Notice (but Landlord shall not be obligated to do so earlier than twelve (12) months prior to expiration of the New Premises Term).  Within fifteen (15) days after Tenant’s receipt of Landlord’s Statement (“Tenant’s Review Period”), Tenant shall give Landlord written notice of its election to either (a) accept the Fair Market Rental Rate set forth in Landlord’s Statement or (b) reject Landlord’s Statement and request that the Fair Market Rental Rate be determined by arbitration pursuant to Section 8(c); provided, however, that prior to submitting the matter to arbitration as herein provided, the parties shall first attempt in good faith to resolve their differences in the determination of the Fair Market Rental Rate for a period of thirty (30) days following Landlord’s receipt of Tenant’s notice of its rejection of Landlord’s statement.  If Tenant fails to give Landlord notice of its acceptance or rejection of Landlord’s Statement by the expiration of Tenant’s Review 

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Period, then such failure shall be deemed to be Tenant’s acceptance of the Fair Market Rental Rate set forth in Landlord’s Statement.

(c)If Tenant gives Landlord notice that it elects arbitration pursuant to Section 8(b), and the parties have failed to resolve their differences within the required thirty (30) days thereafter, then, in order to determine the Fair Market Rental Rate, on the day that is the thirty-fifth (35th) day after Landlord’s receipt of Tenant’s written notice of election to arbitrate, Landlord and Tenant shall each simultaneously submit to the other in writing its good faith estimate of the Fair Market Rental Rate (“Good Faith Estimates”).  If the higher of the Good Faith Estimates is not more than one hundred and five percent (105%) of the lower of the Good Faith Estimates, the Fair Market Rental Rate in question shall be deemed to be the average of the submitted rates.  If otherwise, then the rate shall be set by arbitration to be held in Santa Monica, California in accordance with the Real Estate Valuation Arbitration Rules of the American Arbitration Association, except that the arbitration shall be conducted by a single arbitrator selected as follows.  Within five (5) business days after the simultaneous submittal by Landlord and Tenant of their respective Good Faith Estimates, each shall designate a recognized and independent real estate broker who shall have at least ten (10) years’ experience in the leasing of properties similar to and in the vicinity of the Project.  The two individuals so designated shall, within ten (10) business days after the last of them is designated, appoint a third independent broker possessing the aforesaid qualifications to be the single arbitrator, and if they are unable to do so, then the selection shall be made by an arbitrator selected at random by the American Arbitration Association under the Commercial Rules of Arbitration (which arbitrator shall be a real estate lawyer practicing in the greater Los Angeles area with at least ten (10) years of experience in the field of leasing).  The third arbitrator so selected shall, alone, pick one of the two Good Faith Estimates, being the Good Faith Estimate that is closer to the Fair Market Rental Rate as determined by the arbitrator using the definition set forth in Section 8(f).  The parties agree to be bound by the decision of the arbitrator, which shall be final and non-appealable, and shall share equally the costs of arbitration, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  

(d)During the Renewal Term, Tenant shall continue to pay Additional Rent in accordance with the provisions of the Lease, as amended hereby. 

(e)The Renewal Option set forth in this Article 8 is personal to Entravision Communications Corporation (“Original Tenant”), and may not be assigned, transferred or conveyed to any party, except in connection with an assignment of the Lease in its entirety to an Affiliate pursuant to Section 14.7 of the Original Lease, and may be exercised only if Original Tenant or its Affiliate occupies the entire Premises, without sublease or assignment to any other party.   

(f)As used herein, the phrase “Fair Market Rental Rate” shall mean the fair market value rental rate that a comparable tenant would pay and a comparable landlord would accept in an arm’s length transaction, for delivery on or about the applicable delivery or effective date, for non-renewal, non-expansion space in the Project and in Comparable Buildings (as defined in Section 1.1.3 of the Original Lease) (“Comparable Transactions”), provided that any Comparable Transactions in the Project or in Phase II during the preceding 12 month period will be given the most weight in determining the Fair Market Rental Rate when comparing the rental 

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rates accepted by owners of the Comparable Buildings.  In any determination of Comparable Transactions, appropriate consideration shall be given to (i)  rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, (ii) the type of escalation clauses (including without limitation, operating costs, real estate tax allowances or base year and rental adjustments), (iii) rental abatement or free rent concessions, if any, (iv) brokerage commissions, (v) the length of the term, (vi) the size and location of the premises being leased, (vii) building standard work letters and/or tenant improvement allowances, if any, (viii) the date as of which the Fair Market Rental Rate is to become effective, and (ix) other generally applicable terms and conditions of tenancy for such Comparable Transactions.  The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions.

(g)Section 2.2 of the Original Lease (as amended) is hereby deleted in its entirety, and Tenant’s sole option to renew or extend the Lease shall be as set forth in this Article 8.

9.Civil Code Section 1938.  For purposes of Section 1938 of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that the Project, the Building, the Existing Premises and the New Premises have not undergone inspection by a Certified Access Specialist (CASp).  As required by Section 1938(e) of the California Civil Code, Landlord hereby states as follows:  “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law.  Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant.  The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”  In furtherance of the foregoing, Landlord and Tenant hereby agree as follows: (i) any CASp inspection requested by Tenant prior to the New Premises Commencement Date shall pertain to the Existing Premises only; (ii) any CASp inspection requested by Tenant on or after the New Premises Commencement Date shall pertain to the New Premises only; (iii) any CASp inspection requested by Tenant shall be conducted, at Tenant's sole cost and expense, by a CASp approved in advance by Landlord; and (iv) Tenant, at its cost, is responsible for making any repairs within the Premises to correct violations of construction-related accessibility standards disclosed by such CASp inspection, in accordance with the terms of Article 8 of the Original Lease.  If any such CASp inspection indicates that repairs or modifications are required to cause the areas of the Building outside the Premises to comply with applicable construction-related accessibility standards, and are related to Tenant’s use of the Premises for normal, general office use, with normal occupancy densities (as reasonably determined by Landlord), and Landlord’s failure to make such repairs or modifications would affect Tenant’s use of or occupancy of the Premises, then Landlord (or Tenant, if so elected by Landlord) shall make such repairs or modifications to the Building at Landlord’s sole cost. If any such repairs or modifications to the Building are required as a result of Tenant’s use of the Premises for other than normal, general office use, or by 

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Tenant’s higher than normal occupancy density, or if the failure to make such repairs or modifications would not affect Tenant’s use or occupancy of the Premises, then either (A) Tenant shall, at Landlord's option, either perform such repairs at Tenant's sole cost and expense or reimburse Landlord upon demand, as Additional Rent, for the cost to Landlord of performing such repairs, or (B) Landlord may elect not to make such repairs or modifications, and Tenant shall be required to modify its use and occupancy density of the Premises so as to comply with applicable construction-related accessibility standards without such repairs or modifications being made to the Building. Prior to the New Premises Commencement Date, all references in this Article 9 to the “Premises” shall be deemed to mean solely the Existing Premises.  Following the New Premises Commencement Date, all references in this Article 9 to the “Premises” shall be deemed to mean solely the New Premises.   

10.Statement of Intent.

(a)Rent From Real Property.

  Landlord has advised Tenant that all rental payable by Tenant to Landlord, which includes all sums, charges, or amounts of whatever nature to be paid by Tenant to Landlord in accordance with the provisions of the Lease as amended by this Amendment, shall qualify as “rents from real property” within the meaning of both Sections 512(b)(3) and 856(d) of the Internal Revenue Code of 1986, as amended (the “Revenue Code”) and the U.S. Department of Treasury Regulations promulgated thereunder (the “Regulations”).  In the event that Landlord, in its sole discretion, determines that there is any risk that all or part of any rental shall not qualify as “rents from real property” for the purposes of Sections 512(b)(3) or 856(d) of the Revenue Code and the Regulations promulgated thereunder, Tenant agrees (i) to cooperate with Landlord by entering into such amendment or amendments as Landlord deems reasonably necessary solely to qualify all rental as “rents from real property,” and (ii) to permit an assignment of the Lease; provided, however, that (I) any adjustments required pursuant to this paragraph shall be made so as to produce the equivalent rental (in economic terms) payable prior to such adjustment; (II) no such amendment shall result in Tenant having to pay in the aggregate more money on account of its occupancy of the Premises under the terms of the Lease, as so amended, and (III) no such amendment shall result in Tenant having greater obligations or liabilities, or receiving less services than previously obligated for or entitled to receive under the Lease, or services of a lesser quality.

(b)Unrelated Business Transaction Income.

  Landlord shall have the right at any time and from time to time to unilaterally amend the provisions of the Lease as hereby amended, if Landlord is advised by its counsel that all or any portion of the monies paid by Tenant to Landlord thereunder are, or may be deemed to be, unrelated business income within the meaning of the Revenue Code or Regulations, and Tenant agrees that it will, at Landlord’s sole cost and expense, execute all reasonable documents or instruments reasonably necessary to effect such amendment or amendments, provided that no such amendment shall result in Tenant having to pay in the aggregate more money on account of its occupancy of the Premises under the terms of the Lease, as so amended, and provided further that no such amendment shall result in Tenant having greater obligations or liabilities, or receiving less services than previously obligated for or entitled to receive under the Lease, or services of a lesser quality.

(c)Services.

  Any services which Landlord is required to furnish pursuant to the Lease may, at Landlord’s option, be furnished from time to time, in whole or in part, by 

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employees of Landlord or Landlord’s managing agent (“Managing Agent”) or its employees or by one or more third persons hired by Landlord or Managing Agent, provided, however, in no event shall Landlord be released from the obligation to provide any services that Landlord is expressly required to provide under the Lease.  

11.Balcony.  The balcony which constitutes part of the New Premises (such area is labeled as the “patio” on Exhibit “A” attached hereto and referred to herein as the “Balcony”) shall be used by Tenant in a manner consistent with a first-class office complex containing balconies, on the terms and conditions set forth herein and subject to all limitations and restrictions on use of the Premises in the Lease as amended hereby.  Tenant shall not make any improvements to the Balcony.  Tenant shall seek Landlord’s advance written consent to all proposed furniture, fixtures, plants or other items of any kind whatsoever which Tenant desires to affix or to place on the Balcony which are not consistent with customary personal property items located on a balcony of a first-class office complex containing balconies, the parties hereby agreeing that personal property items consistent with customary personal property items located on a balcony of a first-class office complex containing balconies are hereby pre-approved by Landlord, and personal property items substantially similar to those currently located on the balconies of the Existing Premises are hereby pre-approved by Landlord.  In the event of Tenant’s placement of furniture or other items on the Balcony, Tenant does so at its sole risk, and Tenant shall be responsible for maintaining such furniture and other items. Tenant shall not be permitted to display any graphics, signs or insignias or the like on the Balcony.  Tenant shall permit Landlord and its agents access to the Balcony at reasonable times for cleaning, general maintenance and, if applicable, plant maintenance.    

12.Notice Addresses.  From and after the New Premises Commencement Date, Tenant’s address for Notices shall be modified to be the address of the New Premises, Attn:  CEO and with a copy to the address of the New Premises, Attn:  General Counsel, unless and until modified pursuant to Section 29.13 of the Original Lease.  From and after the date of this Amendment, Landlord’s address for Notices shall be as follows, unless and until modified pursuant to Section 29.13 of the Original Lease:

J.P. Morgan Asset Management
2029 Century Park East, Suite 4150

Los Angeles, California 90067

Attention:  Lauren B. Graham

 

and

 

CBRE, Inc.
1620 26th Street, Suite 1015 
Santa Monica, California  90404
Attention:  Property Manager

With a copy to:

Cozen O'Connor
1299 Ocean Avenue, Suite 900
Santa Monica, California 90401
Attention:  Diane Hvolka

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13.Miscellaneous.

13.1Deletion.  Article 22 of the Original Lease (Substitution of Other Premises) is hereby deleted in its entirety.  

13.2Section 19.2.1.  In the event of termination of the Lease under Section 19.2.1 of the Original Lease prior to the occurrence of the New Premises Commencement Date, the damages thereunder shall be calculated in the same manner as they would have been calculated if this Amendment documented a typical lease renewal/extension for a 60 month renewal term, except the rent used for purposes of such calculation shall be the rent as set forth in this Amendment for the New Premises, and the extension of the current Lease Term during the period prior to the New Premises Commencement Date as set forth in Section 3.3(a) above shall also be taken into account. In furtherance of the foregoing, such damages under Section 19.2.1 shall be calculated using Landlord’s best, good faith estimate as to when the New Premises Commencement Date would have occurred without regard to Tenant’s default. 

13.3New Premises Signage.  Landlord will install, at Tenant’s expense, building standard, multi-tenant signage at the entrance to the New Premises.  Tenant shall have the right to place its name, the names of employees or subtenants on the electronic Building directory board and on any other multi-tenant directory which may become available to serve the tenants of the Building.

13.4Energy Disclosure Requirements.  Tenant acknowledges that from time to time Landlord may be required by law (“Energy Disclosure Requirements”) to disclose information concerning Tenant’s energy usage to certain third parties, including, without limitation, prospective purchasers, lenders and tenants of the Project (“Tenant Energy Use Disclosure”).  To the extent required for Landlord’s compliance with applicable Laws, Tenant shall, at no cost to Tenant, reasonably cooperate with Landlord with respect to any Tenant Energy Use Disclosure.  Without limiting the generality of the foregoing, Tenant shall, within fifteen (15) business days following written request from Landlord, disclose to Landlord all information available to Tenant that is required for Landlord to so comply with applicable laws.  Tenant acknowledges that this information shall be provided on a non-confidential basis and may be provided by Landlord to the applicable utility providers, the California Energy Commission (and other governmental entities having jurisdiction with respect to the Energy Disclosure Requirements), and any third parties to whom Landlord is required by applicable laws to make any Tenant Energy Use Disclosure.

13.5Communications and Computer Lines.  This Section 13.5 shall apply with respect to the New Premises.  Tenant may install, maintain, replace, remove or use any communications or computer wires and cables serving the New Premises (collectively, the “Lines”), provided that (i) Tenant shall obtain Landlord's prior written consent, use an experienced and qualified contractor approved in writing by Landlord, and comply with all of the other provisions of Articles 7 and 8 of the Original Lease, (ii) an acceptable number of spare Lines and space for additional Lines shall be maintained for existing and future occupants of the Project, as determined in Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables) shall 

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LEGAL\45488233\8

be appropriately insulated to prevent excessive electromagnetic fields or radiation, shall be surrounded by a protective conduit reasonably acceptable to Landlord, and shall be identified in accordance with the "Identification Requirements," as that term is set forth hereinbelow, (iv) any new or existing Lines servicing the New Premises shall comply with all applicable governmental laws and regulations, (v)  if required by Landlord, Tenant shall remove all Lines installed by or on behalf of Tenant, and repair any damage in connection with such removal, upon the expiration or earlier termination of the Lease as amended hereby (and if Tenant fails to complete such removal and/or to repair any damage caused by the removal of Lines, Landlord may do so and Tenant shall reimburse Landlord for the cost thereof, as an obligation which shall expressly survive termination of the Lease as amended hereby), and (vi) Tenant shall pay all costs in connection therewith.  All Lines shall be clearly marked with adhesive plastic labels (or plastic tags attached to such Lines with wire) to show Tenant's name, suite number, telephone number and the name of the person to contact in the case of an emergency (A) every four (4) feet outside the New Premises (specifically including, but not limited to, the electrical room risers and other Common Areas), and (B) at the Lines' termination point(s) (collectively, the “Identification Requirements”).  Landlord reserves the right to require that Tenant remove any Lines located in or serving the New Premises which are installed in violation of these provisions, or which are at any time in violation of any laws or represent a dangerous or potentially dangerous condition.

13.6Lease Ratified.  Except as specifically amended or modified herein, each and every term, covenant, and condition of the Lease as amended is hereby ratified and shall remain in full force and effect.  References in the Lease to “this Lease” shall hereinafter be deemed to refer to the Lease as amended by this Amendment, unless the context clearly requires otherwise; provided that in the event of a conflict between the terms and conditions of the Lease and the terms and conditions of this Amendment, the terms and conditions of this Amendment shall govern.  To Tenant’s current, actual knowledge, Landlord is not in default under the Lease and has not committed any violation of the Lease which with the passage of time or giving of notice would constitute a default under the Lease.  To Landlord’s current, actual knowledge, Tenant is not in default under the Lease and has not committed any violation of the Lease which with the passage of time or giving of notice would constitute a default under the Lease.

13.7Binding Agreement.  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their legal representatives, successors and permitted assigns.

13.8Counterparts.  This Amendment may be executed electronically, in any number of counterparts, all of which together shall constitute one and the same instrument.

13.9Governing Law.  This Amendment shall be interpreted and construed in accordance with the laws of the State of California.

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LEGAL\45488233\8

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

LANDLORD:

 

WATER GARDEN COMPANY L.L.C.,
a Delaware limited liability company

By: /s/ Lauren B. Graham
Lauren B. Graham
Executive Director, Real Estate 

Date Signed:  January 25, 2021___________

 

TENANT:

 

ENTRAVISION COMMUNICATIONS CORPORATION,

a Delaware corporation

 

By: /s/ Walter Ulloa____________________

         Walter Ulloa

          Chairman and Chief Executive Officer

Date Signed: January 19, 2021____________

 

 

By: /s/ Christopher Young_______________

        Christopher Young

        Chief Financial Officer

Date Signed: January 22, 2021

 

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LEGAL\45488233\8ex_222593.htm

Exhibit 4.1

 

 

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.   

                                               

 

SERIES C COMMON STOCK PURCHASE WARRANT

 

 kempharm, inc.

 

 

	Warrant Shares: _______	Initial Exercise Date: January 26, 2021

 

THIS SERIES A COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 26, 2026 (the “Termination Date”) but not thereafter, to subscribe for and purchase from KemPharm, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.     Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company and reasonably acceptable to the Required Holders, the fees and expenses of which shall be paid by the Company.

 

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“Board of Directors” means the board of directors of the Company.

 

“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; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”  or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or any Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

 

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“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).

 

“Transfer Agent” means Computershare Trust Company, N.A., the current transfer agent of the Company, with a mailing address of 144 Fernwood Avenue, Edison, NJ 08837 and a phone number of 732-417-2700, and any successor transfer agent of the Company.

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company and reasonably acceptable to the Holder, the fees and expenses of which shall be paid by the Company.

 

Section 2.     Exercise.

 

a)     Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee of the Holder, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

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b)     Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $6.36, subject to adjustment hereunder (the “Exercise Price”).

 

c)     Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

(B) = the Exercise Price, as adjusted hereunder; and

 

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).

 

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d)     Mechanics of Exercise

 

i.     Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the applicable Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of such Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of such Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of a Notice of Exercise, 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 of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or the Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the DTC Fast Automated Securities Transfer Program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the applicable Notice of Exercise.

 

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ii.     Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.     Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.     Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

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v.     No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

vi.     Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vii.     Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

e)     Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. 

 

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Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written request of a Holder, the Company shall within two (2) Trading Days confirm 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 this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) 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. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

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Section 3.     Certain Adjustments.

 

a)     Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)     Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents 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 Beneficial Ownership Limitation) 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, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, 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 Beneficial Ownership Limitation).

 

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c)     Pro Rata Distributions. During such time as this Warrant is outstanding, 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 Beneficial Ownership Limitation) immediately before the date of 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, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution 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 Beneficial Ownership Limitation).

 

d)     Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction, subject to any restrictions under applicable law. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company's control, including not approved by the Company's Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction.

 

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“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(d) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, 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 which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) 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 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), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

 

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e)     Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)     Notice to Holder.

 

i.     Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

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ii.     Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that, notwithstanding the foregoing, any notice delivery requirement hereunder shall also be deemed satisfied by filing or furnishing such communication with the Commission via the EDGAR system; and provided, further that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein or as restricted by applicable law. To the extent that any notice provided in this Warrant constitutes, or contains, material nonpublic information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on From 8-K.

 

g)     Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors.

 

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Section 4.     Transfer of Warrant.

 

a)     Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)     New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)     Warrant Register. The Company shall register this Warrant, upon 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.

 

d)     Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

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Section 5.     Miscellaneous.

 

a)     No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

 

b)     Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)     Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.

 

d)     Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to in accordance with the terms of this Warrant, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith carry out the provisions of this Warrant and take any action as reasonably required to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

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Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof to effect such action.

 

e)     Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party 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 improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

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f)     Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)     Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable and documented costs and expenses incurred including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by such party in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h)     Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 1180 Celebration Blvd. Suite 103, Celebration, FL 34747, Attention: R. LaDuane Clifton, Chief Financial Officer, facsimile number: 321-250-3698, email address: lclifton@kempharm.com, or such other facsimile number, email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company; provided, that, notwithstanding the foregoing, any notice delivery requirement hereunder shall also be deemed satisfied by filing or furnishing such communication with the Commission via the EDGAR system; and provided, further that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

i)     Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company to the extent permitted under applicable law.

 

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j)     Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)     Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)     Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder, on the other hand.

 

m)     Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)     Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

 

********************

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	 	
			kempharm, inc.

			 

			
	 	
			By:__________________________________________

			     Name:

			     Title:

			

 

19

 

 

NOTICE OF EXERCISE

 

To:     kempharm, inc.

 

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

 

[ ] in lawful money of the United States; or

 

[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

_______________________________

_______________________________

_______________________________

 

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
			Name:

				 
	 	
			(Please Print)

			
	 	 
	
			Address:

				 
	
			 

			Phone Number:

			Email Address:

				
			(Please Print)

			______________________________________

			______________________________________

			
	
			Dated: _______________ __, ______

				 
	
			Holder’s Signature: ________________

				 
	
			Holder’s Address: _________________

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