Document:

Exhibit 10.7

 

TUBEMOGUL, INC.

February 27, 2014

 

Mr. Paul Joachim

81 Eldridge Avenue

Mill Valley, CA 94941

 

Dear Paul:

TubeMogul, Inc. (the “Company”) is pleased to confirm the terms of your continuing employment with the Company described herein. This letter supersedes and restates your previous offer letter with the Company.

1.  Position.  Your title will be Chief Financial Officer, and you will report to the Company’s Chief Executive Officer.  This is a full-time position.  While you render services to the Company, you will not engage in any other employment, consulting or other business activity (whether full-time or part-time) that would create a conflict of interest with the Company.  By signing this letter agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company.

2.  Salary.  The Company will pay you a salary at the rate of $275,000 per year payable in accordance with the Company’s standard payroll schedule.  This salary will be subject to adjustment pursuant to the Company’s employee compensation policies in effect from time to time.

3.  Cash Incentive Compensation.  Additionally you shall be eligible for $75,000 in additional cash compensation based upon the Company’s achievement of yearly objectives, to be determined by the Chief Executive Officer. The cash incentive shall be 75% based upon achieving financial objectives and 25% based upon achieving non-financial objectives.  

4.  Business Expenses.  The Company will reimburse you for your necessary and reasonable business expenses incurred in connection with your duties hereunder upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies.

5.  Employee Benefits.  As a regular employee of the Company, you will be eligible to participate in a number of Company-sponsored benefits in accordance with the Company policy and applicable plan documents.  In addition, you will be entitled to paid vacation in accordance with the Company’s vacation policy, as in effect from time to time.

 

6.  Change of Control.

You will vest in all of your unvested stock options, restricted stock units and other equity awards granted to you by the Company if both of the following occur: (a) the Company is subject to a Change of Control (b) you are subject to an Involuntary Termination that occurs (i) within 90 days prior to that Change of Control, or (ii) within 12 months after that Change of Control; and (c) you execute (and do not revoke, if applicable) a full and complete general release of all claims, such release language to be in substantially the form attached as Attachment A hereto, which may be updated by the Company to conform to changes in applicable law or regulations without your approval (the “Release”).  

7.  Severance Benefits.

(a)General.  If you are subject to an Involuntary Termination, then you will be entitled to the benefits described in this Section 7(b) and (c) in addition to any benefits described in Section 6, if applicable.  However, this Section 7 will not apply unless and until you (i) have returned all Company property in your possession, (ii) have resigned as a member of the Boards of Directors of the Company and all of its subsidiaries, to the extent applicable, and (iii) have executed (and not revoked, if applicable) the Release.  

(b)Salary Continuation.  Subject to your satisfying the conditions in Section 7(a), if you are subject to an Involuntary Termination, then the Company will continue to pay your base salary for a period of 3 months after your Separation.  Your base salary will be paid based on the annual salary rate in effect at the time of your Separation and in accordance with the Company’s standard payroll procedures.  The salary continuation payments will commence within 60 days after your Separation and, the first payment will include any unpaid amounts accrued from the date of your Separation.  However, if the 60-day period described in the preceding sentence spans two calendar years, then the payments will in any event begin in the second calendar year.

(c)Lump-Sum Payment in Lieu of Health Benefit.  Subject to your satisfying the conditions in Section 7(a), if you are subject to an Involuntary Termination, the Company will pay you a lump-sum amount, net of applicable withholding taxes, equal to the product of (A) six and (B) the monthly amount the Company was paying on behalf of you and your eligible dependents, if any, with respect to the Company’s health insurance plans in which you and your eligible dependents, if any, were participants as of the day of your Separation.  Such payment will be made within 60 days after your Separation; however, if such 60-day period spans two calendar years, then the payment will be made in the second calendar year.

 

 

8.  Employment Relationship.  Employment with the Company is for no specific period of time.  Your employment with the Company will be “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause.  Any contrary representations that may have been made to you are superseded by this letter agreement.  This is the full and complete agreement between you and the Company on this term.  Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and a duly authorized officer of the Company (other than you).  

9.  Tax Matters.

(a)Withholding.  All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law.

(b)Section 409A.  For purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), each salary continuation payment under Section 7(b) is hereby designated as a separate payment.  If the Company determines that you are a “specified employee” under Section 409A(a)(2)(B)(i) of the Code at the time of your Separation, then (i) the salary continuation payments under Section 7(b), to the extent that they are subject to Section 409A of the Code, will commence on the first business day following (A) expiration of the six-month period measured from your Separation or (B) the date of your death and (ii) the installments that otherwise would have been paid prior to such date will be paid in a lump sum when the salary continuation payments commence.

(c)Tax Advice.  You are encouraged to obtain your own tax advice regarding your compensation from the Company.  You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or its Board of Directors related to tax liabilities arising from your compensation.  

10.  Interpretation, Amendment and Enforcement.  This letter agreement supersedes and replaces any prior agreements, representations or understandings (whether written, oral, implied or otherwise) between you and the Company and constitutes the complete agreement between you and the Company regarding the subject matter set forth herein.  This letter agreement may not be amended or modified, except by an express written agreement signed by both you and a duly authorized officer of the Company.  The terms of this letter agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this letter agreement or arising out of, related to, or in any way connected with, this letter agreement, your employment with the Company or any other relationship between you and the Company (the “Disputes”) will be governed by California law, excluding laws relating to conflicts or choice of law.  You and the Company submit to the exclusive personal jurisdiction of the federal and state courts located in San Francisco County in connection with any Dispute or any claim related to any Dispute.

 

 

11.  Definitions.  The following terms have the meaning set forth below wherever they are used in this letter agreement:

“Cause” means (i) your willful refusal to implement or follow a lawful policy or directive of the Board, or your failure to otherwise perform the duties of your position in a reasonably satisfactory manner, which breach, if curable, is not cured within thirty (30) days after written notice to you from the Company; (ii) your commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to the Company; (iii) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; or (iv) your material breach of this Agreement or any other written agreement with the Company (provided that should the Company contend that you have materially breached this Agreement or such other agreement it will first provide you written notice and a thirty (30) day period to cure the alleged breach).

“Change of Control” means 

(i)a sale, transfer or disposition of all or substantially all of the Company’s assets other than to (A) a corporation or other entity of which at least a majority of its combined voting power is owned directly or indirectly by the Company, (B) a corporation or other entity owned directly or indirectly by the holders of capital stock of the Company in substantially the same proportions as their ownership of Common Stock, or (C) an Excluded Entity (as defined in subsection (ii) below); or

(ii)any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction with or into another corporation, entity or person in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding in the continuing entity or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction (such corporation, entity or person, an “Excluded Entity”).

Notwithstanding anything stated herein, a transaction shall not constitute a “Change of Control” if its sole purpose is to change the state of the Company’s incorporation, or to create a holding company that will be owned in substantially the same proportions by the persons who hold the Company’s securities immediately before such transaction.  For clarity, the term “Change of Control” as defined herein shall not include stock sale transactions whether by the Company or by the holders of capital stock.

“Disability” means “disability” within the meaning of Section 22(e)(3) of the Code.

“Involuntary Termination” means either (a) your Termination Without Cause or (b) your Resignation for Good Reason.

 

 

“Resignation for Good Reason” means a Separation from the Company as a result of your resignation within 60 days after one of the following conditions has come into existence without your consent:

(i)A reduction in your base salary by more than 20% (other than as part of an across-the-board, proportional compensation reduction applicable to all executive officers);

(ii)A material diminution of your authority, title, duties or responsibilities, provided that a mere change in title alone in connection with a Change of Control shall not constitute a material diminution of your authority, duties or responsibilities; or

(iii)A relocation of your principal workplace by more than 50 miles, where such relocation increases your one-way commute.

A Resignation for Good Reason will not be deemed to have occurred unless you give the Company written notice of the condition or event within 60 days after the condition or event comes into existence or occurs, the Company fails to remedy the condition or event within 30 days after receiving your written notice, and you resign within 180 days after the initial occurrence of such condition or event.

“Separation” means a “separation from service,” as defined in the regulations under Section 409A of the Code.

“Termination Without Cause” means a Separation from the Company as a result of a termination of your employment by the Company without Cause other than for death or Disability, provided you are willing and able to continue performing services within the meaning of Treasury Regulation 1.409A-1(n)(1).

You may indicate your agreement with these terms by signing and dating this letter agreement in the space provided below.

 

		
	
Very truly yours,

	
 

	
TubeMogul, Inc.

	
 

	
/s/ Brett Wilson

	
By:
	
Brett Wilson

	
 
	
 

	
Title:  
	
CEO

 

I have read and accept this employment offer:

 

		
	
/s/ Paul Joachim

	
Signature of Paul Joachim

	
 

	
Dated:  
	
2/28/2014

 

 

 

 

ATTACHMENT A

RELEASE OF CLAIMS

You agree that your employment from TubeMogul, Inc. (the “Company”) will be terminated on [DATE].  If you comply with the conditions for eligibility described in Section 7 of the offer letter by and between you and the Company, dated [DATE] (the “Offer Letter”), including that you (i) return all Company property in your possession, (ii) resign as a member of the Boards of Directors of the Company and all of its subsidiaries, to the extent applicable, and (iii) sign and do not revoke this Release of Claims (the “Agreement”), the Company will provide you with the benefits described in [Section 7(b) and (c)] of the Offer Letter (collectively, the “Severance Benefits”).  Such Severance Benefits will be paid to you in accordance with the terms of your Offer Letter, provided that in no event will you be paid any Severance Benefits prior to the Effective Date (defined below).

In consideration for receiving the Severance Benefits , you waive and release any and all claims and causes of action, whether or not now known, against the Company or its predecessors, successors, or past or present subsidiaries, officers, directors, agents, employees and assigns, with respect to any matter arising from the beginning of the world up to the Separation Date, including, without limitation, any matter arising out of or connected with your employment with the Company or the termination of that employment, including without limitation, claims to attorneys’ fees or costs, claims of wrongful discharge, constructive discharge, emotional distress, defamation, invasion of privacy, fraud, breach of contract, breach of the covenant of good faith and fair dealing, any claims of discrimination or harassment based on sex, age, race, national origin, disability or on any other basis, under Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment and Housing Act, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, and all other laws and regulations relating to employment.

You expressly waive and release any and all rights and benefits under Section 1542 of the Civil Code of the State of California (or any analogous law of any other state), which reads as follows:  “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which, if known by him or her, must have materially affected his settlement with the debtor.”

You and the Company do not intend tothat you will release claims that you may not release as a matter of law, including but not limited to claims for indemnity under California Labor Code Section 2802 or other applicable law. This release does not extend to any claim for Severance Benefits or the breach of this Agreement.  Nothing in this release waives your rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the TubeMogul, Inc., state or federal law or policy of insurance.

You acknowledge that you have 21 days to consider this Agreement from (but may sign it at any time beforehand if you so desire), and that you can consult an attorney in doing so.  You also acknowledge that you can revoke this Agreement within 7 days of signing it by sending a certified letter to that effect to [INSERT NAME AND ADDRESS].  You understand and agree that this Agreement shall not become effective or enforceable until the 8th day following the date you sign this Agreement, provided you have not revoked the agreement in accordance with this paragraph (such 8th day, the “Effective Date”) and no payments or benefits will be provided prior to the Effective Date.

To accept this Agreement, please sign below and return this letter to [INSERT NAME AND ADDRESS] on or before [INSERT DATE THAT IS 21 or 45 DAYS AFTER RECEIPT, AS APPLICABLE].

 

UNDERSTOOD AND AGREED:

 

				
	
Dated:
	
 
	
 
	
 

	
 
	
 
	
 
	
[EMPLOYEE NAME]Exhibit 4.4

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES (SUBJECT TO THE PROVISIONS OF ARTICLE 5 BELOW), SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

WARRANT TO PURCHASE STOCK

(Subdivided Warrant:        of       )

 

Company:  Zalicus Inc., a Delaware corporation

Number of Shares:                   , subject to adjustment

Class of Stock:  Common Stock, $0.001 par value per share

Warrant Price:  $       , subject to adjustment

Issue Date:        June 27, 2011

Expiration Date:  December 22, 2017

Credit Facility: This Warrant represents a portion of a certain Warrant originally issued in connection with that certain Loan and Security Agreement dated December 22, 2010 (the “Original Issuance Date”) between Oxford Finance Corporation (n/k/a Oxford Finance LLC), the Company and Zalicus Pharmaceuticals Ltd. (as amended and in effect from time to time, the “Loan Agreement”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, OXFORD FINANCE LLC (as successor-in-interest to Oxford Finance Corporation) (together with any successor or permitted assignee or transferee of this Warrant or of any Shares issued upon exercise or conversion hereof, “Holder”) is entitled to purchase the number of fully paid and non-assessable shares of the above-stated Class of Stock (the “Class”) of the above-named company (the “Company”) as set forth below, at the Warrant Price (as defined below), subject to the provisions and upon the terms and conditions set forth in this Warrant.  This Warrant is issued in partial exchange for and replacement of that certain Warrant to Purchase Stock dated December 22, 2010 issued by the Company to Holder (which Warrant evidenced the right to purchase certain shares of Common Stock of the Company).

 

ARTICLE 1. EXERCISE.

 

1.1                               Method of Exercise.  Holder may exercise this Warrant by delivering the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company.  Unless Holder is exercising the conversion right set forth in Article 1.2, Holder shall also deliver to the Company a check, wire transfer (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

 

1.2                               Conversion Right.  In lieu of exercising this Warrant as specified in Article 1.1, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share.  The fair market value of the Shares shall be determined pursuant to Article 1.3.

 

1.3                               Fair Market Value.  If shares of the Class are then publicly listed or quoted on one or more securities exchanges, inter-dealer quotation systems or over-the-counter markets, the fair market value of a Share shall be the closing price of a share of the Class reported on the principal such exchange, system or market for the business day immediately before Holder delivers this Warrant together with its Notice of Exercise to the Company.  If shares of the Class are not then publicly listed or quoted on one or more securities exchanges, inter-dealer quotation systems or over-the-counter markets, then the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

 

1.4                               Delivery of Certificate and New Warrant.  Promptly after Holder exercises or converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant Price, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new warrant of like tenor representing the Shares not so acquired.

 

1.5                               Replacement of Warrants.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

 

1.6                               Treatment of Warrant Upon Acquisition of Company.

 

1.6.1                     “Acquisition”.  For the purpose of this Warrant, “Acquisition” means any sale or other disposition of all or substantially all of the assets of the Company, or any reorganization, consolidation, merger, or sale of outstanding equity securities of the Company by the holders thereof, where the holders of the Company’s outstanding voting equity securities as of immediately before the transaction beneficially own less than a majority of the outstanding voting equity securities of the surviving or successor entity as of immediately after the transaction.

 

1.6.2                     Treatment of Warrant at Acquisition.

 

A)                                   Holder agrees that, in the event of an Acquisition in which the sole consideration payable to the Company and/or its stockholders consists of cash and/or Marketable Securities, this Warrant shall terminate on and as of the closing of such Acquisition to the extent not previously exercised.  The Company shall provide Holder with written notice of any proposed Acquisition at the same time and in the same manner as the Company notifies the holders of the outstanding shares of the Class thereof.

 

B)                                   Upon the closing of any Acquisition other than as particularly described in subsection (A) above, the surviving or successor entity shall assume this Warrant and

 

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the obligations of the Company hereunder, and this Warrant shall, from and after such closing, be exercisable for the same class, number and kind of securities, cash and other property as would have been paid for or in respect of the Shares issuable (as of immediately prior to such closing) upon exercise in full hereof as if such Shares had been issued and outstanding on and as of such closing, at an aggregate Warrant Price equal to the aggregate Warrant Price in effect as of immediately prior to such closing; and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.

 

C)                                   As used in this Article 1.6, “Marketable Securities” means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise or convert this Warrant on or prior to the closing thereof is then publicly listed or quoted on one or more securities exchanges, inter-dealer quotation systems or over-the-counter markets, and (iii) Holder would not be restricted by contract or by applicable federal and state securities laws from publicly re-selling, within six (6) months and one day following the closing of such Acquisition, all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition.

 

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

 

2.1                               Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend on the outstanding shares of the Class payable in additional shares of the Class or other securities, then upon exercise or conversion of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2                               Reclassification, Exchange, Substitution, Recapitalization or Reorganization.  Upon any reclassification, exchange, substitution, recapitalization or reorganization affecting the outstanding shares of the Class, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised in full immediately before such reclassification, exchange, substitution, recapitalization or reorganization, at an aggregate Warrant Price not exceeding the aggregate Warrant Price in effect as of immediately prior thereto.  The Company or its successor shall promptly issue to Holder a certificate pursuant to Article 2.6 hereof setting forth the number, class and series or other designation of such new securities or other property issuable upon exercise or conversion of this Warrant as a result of such reclassification, exchange, substitution, recapitalization or reorganization.  The

 

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provisions of this Article 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, recapitalizations and reorganizations.

 

2.3                               Adjustment to Warrant Price on Cash Dividend.  In the event that the Company at any time prior or from time to time prior to exercise or conversion in full of this Warrant pays any cash dividend on the outstanding shares of the Class or makes any cash distribution on or in respect of the outstanding shares of the Class, then on and as of the date of such dividend payment or the making of such distribution, the Warrant Price shall be reduced (but not below $0.001) by an amount equal to the amount paid or distributed upon or in respect of each outstanding share of the Class.

 

2.4                               No Impairment.  The Company shall not, by amendment of its Certificate of Incorporation or through a 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 to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Article 2 against impairment.

 

2.5                               Fractional Shares.  No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder the amount computed by multiplying the fractional interest by the fair market value of a full Share.

 

2.6                               Certificate as to Adjustments.  Without duplication of the notice required under paragraph A(3) above, upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company shall promptly notify Holder in writing, and, at the Company’s expense, promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price, Class and number of Shares in effect upon the date thereof and the series of adjustments leading to such Warrant Price, Class and number of Shares.

 

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

3.1                               Representations and Warranties.  The Company represents and warrants to, and agrees with, the Holder as follows:

 

(a)                                 The Company shall at all times during the term of this Warrant keep reserved out of its authorized and unissued capital stock a sufficient number of shares of the Class to permit exercise in full of this Warrant and, if applicable, conversion of the Shares issuable and issued upon any exercise hereof.  All Shares which may be issued upon the exercise or conversion of this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

 

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3.2                               Notice of Certain Events.  If the Company proposes at any time (a) to declare any dividend or distribution upon the outstanding shares of the Class, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock; (c) to effect any reclassification, reorganization or recapitalization of the shares of the Class; or (d) to effect an Acquisition or to liquidate, dissolve or wind up; then in each such event the Company shall provide written notice thereof to Holder thereof at the same time and in the same manner as the Company gives notice thereof to the holders of the outstanding shares of the Class.

 

3.3                                        [Intentionally Omitted].

 

3.4                                        No Shareholder Rights.  Except as provided in this Warrant, Holder will not have any rights as a shareholder of the Company until the exercise of this Warrant.

 

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.  The Holder represents and warrants to the Company as follows:

 

4.1                                        Purchase for Own Account.  This Warrant and the securities to be acquired upon exercise of this Warrant by Holder will be acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution in violation of applicable securities laws.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

 

4.2                                        Disclosure of Information.  Holder has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

4.3                                        Investment Experience.  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4             Accredited Investor Status.  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

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4.5                               The Act.  Holder understands that this Warrant and the Shares issuable upon exercise or conversion hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.

 

ARTICLE 5. MISCELLANEOUS.

 

5.1                               Term:  This Warrant is exercisable in whole or in part at any time and from time to time on or before the Expiration Date.

 

5.2                               Legend.     Each certificate representing Shares issued upon any exercise or conversion hereof shall be imprinted with a legend in substantially the following form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES (SUBJECT TO THE PROVISIONS OF ARTICLE 5 OF THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE COMPANY TO OXFORD FINANCE LLC DATED AS OF JUNE     , 2011), SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION..

 

5.3                               Compliance with Securities Laws on Transfer.  This Warrant and/or the Shares issued upon exercise or conversion of this Warrant may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to any affiliate of Holder, provided that such affiliate is an “accredited investor” as defined in Regulation D promulgated under the Act.

 

5.4                               Transfer Procedure.  Subject to the provisions of Article 5.3 and upon providing the Company with written notice, Holder may transfer all or part of this Warrant to any transferee, provided, however, in connection with any such transfer, Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable).  The foregoing provisions of this Article 5.4 shall not apply to a sale or other

 

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transfer of any Shares issued on exercise or conversion of this Warrant pursuant to the provisions of Rule 144 promulgated under the Act.

 

5.5                               Notices.  All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid (or on the first business day after transmission by facsimile), at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such holder from time to time.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

Oxford Finance LLC

Attn:  Mr. John Henderson

133 North Fairfax Street

Alexandria, VA 22314

Facsimile:  703-519-5225

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

Zalicus Inc.

Attn:  Chief Financial Officer

245 First Street, 3rd Floor

Cambridge, MA 02142

Telephone: 617-301-7000

Facsimile:

 

5.6                               Waiver.  This Warrant and any term hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

5.7                               Attorney’s Fees.  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

5.8                               Counterparts.  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.

 

[Remainder of page left blank intentionally; signature page follows]

 

7

 

5.9                               Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law.

 

	
“COMPANY”
    	
 
    
	
 
    	
 
    
	
ZALICUS   INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
(Print)
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
“HOLDER”
    	
 
    
	
 
    	
 
    
	
OXFORD   FINANCE LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
(Print)
    	
 
    
	
Title:
    	
 
    
				

 

8

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.                                      Holder elects to purchase                        shares of the Common Stock of Zalicus Inc. pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the shares in full.

 

[or]

 

1.                                      Holder elects to convert the attached Warrant into Shares in the manner specified in the Warrant.  This conversion is exercised for                                    of the Shares covered by the Warrant.

 

[Strike paragraph that does not apply.]

 

2.                                      Please issue a certificate or certificates representing the Shares in the name specified below:

 

	
 
    	
 
    	
 
    
	
 
    	
Holders Name
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Address)
    	
 
    

 

3.   By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Article 4 of the Warrant as of the date hereof.

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
(Date):
    	
 
    
					

 

9

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