Document:

Exhibit 10.62

 

FIFTH
AMENDMENT TO AMENDED

 

AND
RESTATED CREDIT AGREEMENT

 

This Fifth Amendment is made as of April 25,
2008, (the “Amendment”), by and between ML Macadamia Orchards, L.P., a Delaware
limited partnership, and ML Resources, Inc., a Hawaii corporation
(collectively the “Borrower”) and American AgCredit, PCA (the “Lender”).

 

RECITALS

 

A.  Borrower and
Lender entered into an Amended and Restated Credit Agreement dated as of May 1,
2004, as amended by that certain Amendment to Amended and Restated Credit
Agreement dated as of August 17, 2004, that certain Waiver and Amendment
dated as of March 15, 2005, that certain Second Amendment to Amended and
Restated Credit Agreement dated as of December 27, 2005, that certain
Waiver dated as of March 29, 2007, that certain Third Amendment to Amended
and Restated Credit Agreement dated as of July 5, 2007, and that certain
Fourth Amendment to Amended and Restated Credit Agreement dated as of March 14,
2008 (as amended, the “Agreement”). The Agreement governs the payment of a Term
Loan Promissory Note dated May 1, 2000 in the sum of $4,000,000.00 and a
Revolving Loan Promissory Note dated May 1, 2004 in the sum of
$5,000,000.00 (the “Notes”) and a Supplemental Security Agreement dated May 1,
2004.

 

B.  The principal
amount outstanding on the Notes as of the date of this Amendment is
$5,000,000.00.  There remains available a
commitment to fund $700,000.00 on the May 1, 2004 Revolving Loan
Promissory Note.

 

C.  Borrower has
requested that Lender extend the Revolving Loan Maturity Date from May 1,
2008 to July 1, 2008, and extend the date that Borrower is required to
provide additional security for the Loans from May 1, 2008 to July 1,
2008.

 

D.  Lender has
agreed to the waiver and amendment requested.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants hereinafter contained,
the parties hereto agree as follows:

 

1.           All capitalized terms not defined herein shall have the
meanings assigned in the Agreement.

 

2.           The definition of “Revolving Loan Maturity Date” contained
in the Agreement is hereby amended to read as follows”

 

 

“Revolving Loan Maturity
Date” shall mean July 1, 2008; provided, that if the Obligations shall
become due and payable in accordance with Section 10.2 or any other
provision of this Agreement, then the Revolving Loan Maturity Date shall be the
date on which the Obligations become due and payable.”

 

3.           Additional
Security Requirement Date.  The date
in which Borrower is required to execute and deliver to Lender, as additional security
for the Loans, a mortgage or deed of trust on certain real property as
described in Section 11 of the Fourth Amendment to Amended and Restated
Credit Agreement dated as of March 14, 2008 between Borrower and Lender is
hereby extended from May 1, 2008 to July 1, 2008.

 

4.           Borrower represents and warrants that, except as disclosed
herein, it is in compliance with all of the terms and conditions contained in
the Agreement as previously modified and that it is not aware of any event that
is or would become and Event of Default as that term is defined in the
Agreement.

 

5.           Borrower further represents and warrants that each of the
signatories hereto has taken all necessary action to authorize the execution,
delivery and performance of this Amendment.

 

6.           Continuing Validity. Except as expressly modified or
changed by this Amendment, the terms of the original Agreement and all other
related loan documents remain unchanged and in full force and effect.  Consent by the Lender to the changes
described herein does not waive Lender’s right to strict performance of the
terms and conditions contained in the Agreement as amended, nor obligate the
Lender to make future changes in terms. 
Nothing in this Amendment will constitute a satisfaction of the
Indebtedness.  It is the Lender’s
intention to retain as liable parties all makers, guarantors, endorsers of the
original Indebtedness, unless Lender expressly releases such party in writing.

 

7.           This Amendment may be executed in any number of separate
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, this
Amendment has been duly executed as of the date first written above.

 

 

	
   

  	
  ML MACADAMIA ORCHARDS,
  L.P.,

  
	
   

  	
   

  
	
   

  	
  a Delaware limited
  partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ML RESOURCES, INC., a
  Hawaii

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  corporation, its managing
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Dennis J. Simonis

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
     Dennis J. Simonis

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
       President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signatures continued on
  next page)

  
								

 

 

	
   

  	
  ML RESOURCES, INC., a
  Hawaii corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Dennis J. Simonis

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
     Dennis J. Simonis

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
       President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN AGCREDIT, PCA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vern Zander

  
	
   

  	
   

  	
     Name:
  Vern Zander

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
     Title:    Vice
  PresidentEXHIBIT 4.1

 

THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OR REDEMPTION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (I) A
REGISTRATION STATEMENT REGISTERING SUCH SECURITIES UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE, OR (II) THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR (III) SUCH
SECURITIES ARE SOLD PURSUANT TO RULE 144 OR RULE 144A.

 

AN
INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST
RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS
INVOLVED.

 

	
  Warrant to Purchase

  	
   

  	
   

  
	
    shares

  	
   

  	
  Warrant Number

  

 

Warrant to
Purchase Common Stock

of

ARRAY
BIOPHARMA INC.

 

THIS
CERTIFIES that
[                          ]
or any subsequent holder hereof (“Holder”) has the right to purchase
from ARRAY BIOPHARMA INC., a Delaware corporation, (the “Company”),
[                                                                                  ]
([                  ])
fully paid and nonassessable shares, of the Company’s common stock, $0.001 par
value per share (“Common Stock”), subject to adjustment as provided
herein, at a price equal to the Exercise Price (as defined in Section 3
below), at any time during the Term (as defined below).

 

Holder
agrees with the Company that this Warrant to Purchase Common Stock of the
Company (this “Warrant” or this “Agreement”) is issued and all
rights hereunder shall be held subject to all of the conditions, limitations
and provisions set forth herein.

 

1.
Date of Issuance and Term.

 

This
Warrant shall be deemed to be issued on April 29, 2008 (“Date of
Issuance”). The term of this Warrant begins on the Date of Issuance and
ends at 5:00 p.m., New York City time, on the date that is six (6) years
after the Date of Issuance (the “Term”). This Warrant was issued in
conjunction with that certain Facility Agreement (the “Facility Agreement”)
by and between the Company and Deerfield Private Design Fund, L.P., a Delaware
limited partnership, and Deerfield Private Design International, L.P., a
limited partnership organized under the laws of the British Virgin Islands
(individually, a “Lender” and together, the “Lenders”), that
certain Registration Rights Agreement (“Registration Rights Agreement”)
by and between the Company and the Lenders, each dated April 29, 2008,
entered into in conjunction herewith.

 

Notwithstanding
anything herein to the contrary, the Company shall not issue to the Holder, and
the Holder may not acquire, a number of shares of Common Stock upon exercise of
this Warrant to the extent

 

[***]
Confidential Treatment of 

Redacted
Portions Has Been Requested

 

 

that,
upon such exercise, the number of shares of Common Stock then beneficially
owned by the Holder and its Affiliates and any other persons or entities whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Securities Exchange Act of 1934 (the
“Exchange Act”) (including shares held by any “group” of which the
Holder is a member, but excluding shares beneficially owned by virtue of the
ownership of securities or rights to acquire securities that have limitations
on the right to convert, exercise or purchase similar to the limitation set
forth herein) would exceed 9.98% of the total number of shares of Common Stock
then issued and outstanding. For purposes hereof, “group” has the meaning set
forth in Section 13(d) of the Exchange Act and applicable regulations
of the Securities and Exchange Commission (the “SEC”), and the percentage held
by the Holder shall be determined in a manner consistent with the provisions of
Section 13(d) of the Exchange Act. Upon the written request of the
Holder, the Company shall, within two (2) Trading Days confirm orally and
in writing to the Holder the number of shares of Common Stock then outstanding.

 

“Affiliate”
means any person or entity that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
person or entity, as such terms are used in and construed under Rule 144
under the Securities Act of 1933, as amended (the “Securities Act”).
With respect to a Holder of Warrants, any investment fund or managed account
that is managed on a discretionary basis by the same investment manager as such
Holder will be deemed to be an Affiliate of such Holder.

 

“Business
Day” means  a day on which banks are
open for business in The City of New York.

 

“Holder”
means Deerfield Private Design Fund, L.P. and any transferee or assignee
pursuant to the terms of this Warrant.

 

“Trading
Day” means any day on which the Common Sock is traded for at least two
hours on NASDAQ, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.

 

2.
Exercise.

 

(a) Manner of Exercise. During the Term, this
Warrant may be Exercised as to all or any lesser number of full shares of
Common Stock covered hereby (the “Warrant Shares” or the “Shares”)
upon surrender of this Warrant, with the Exercise Form attached hereto as Exhibit A
(the “Exercise Form”) duly completed and executed, together with the
full Exercise Price (as defined below, which may be satisfied by a Cash
Exercise or a Cashless Exercise, as each is defined below) for each share of
Common Stock as to which this Warrant is Exercised, at the office of the
Company, Array BioPharma Inc., 3200 Walnut Street, Boulder, CO 80301;
Attention: Chief Financial Officer Phone: (303) 381-6663, Fax: (303) 381-6697,
or at such other office or agency as the Company may designate in writing, by
overnight mail, with an advance copy of the Exercise Form sent to the
Company and its transfer agent (“Transfer Agent”) by facsimile (such
surrender and payment of the Exercise Price hereinafter called the “Exercise”
of this Warrant).

 

(b) Date of Exercise. The “Date of Exercise”
of the Warrant shall be defined as the date that the Exercise Form attached
hereto as Exhibit A, completed and executed, and the original
Warrant are received by the Company and the Exercise Price is satisfied
pursuant to Section 3 below.  Upon
receipt of the properly completed and executed Exercise Form, the original
Warrant and the Exercise Price by the Company, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been Exercised, irrespective of
the date such Warrant Shares are credited to the Holder’s DTC account or the
date of delivery of the certificates evidencing such Warrant Shares as the case
may be.

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

2

 

(c) Delivery of Common Stock Upon Exercise. Within three (3) Business
Days after any Date of Exercise (the “Delivery Period”), the Company
shall issue and deliver (or cause its Transfer Agent so to issue and deliver)
in accordance with the terms hereof to or upon the order of the Holder that
number of shares of Common Stock (“Exercise Shares”) for the portion of
this Warrant converted as shall be determined in accordance herewith. Upon the
Exercise of this Warrant or any part thereof, the Company shall, at its own
cost and expense, take all reasonable steps, including obtaining and delivering
an opinion of counsel, to assure that the Transfer Agent shall issue stock
certificates in the name of Holder (or its nominee) or such other persons as
designated by Holder and in such denominations to be specified at Exercise
representing the number of shares of Common Stock issuable upon such Exercise.
The Company warrants that no instructions contrary to these instructions have
been or will be given to the Transfer Agent and that, unless waived by the
Holder, this Warrant and the Exercise Shares will be free-trading, and freely
transferable, and will not contain a legend restricting the resale or
transferability of the Exercise Shares if the Unrestricted Conditions (as
defined in paragraph 2(e)(ii) below) are met.

 

(d) Delivery Failure. In addition to any other
remedies which may be available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Exercise Shares by the end of
the Delivery Period (a “Delivery Failure”), the Holder will be entitled
to revoke all or part of the relevant Exercise Form by delivery of a
notice to such effect to the Company whereupon the Company and the Holder shall
each be restored to their respective positions immediately prior to the
delivery of such notice, except that the liquidated damages described herein
shall be payable through the date notice of revocation or rescission is given
to the Company.

 

(e) Legends.

 

(i) Restrictive Legend. The Holder understands that until
such time as this Warrant, the Exercise Shares and the Redemption Shares have
been registered under the Securities Act as contemplated by the Registration
Rights Agreement or otherwise may be sold pursuant to Rule 144 under the
Securities Act or an exemption from registration under the Securities Act
without any restriction as to the number of securities as of a particular date
that can then be immediately sold, this Warrant, the Exercise Shares and the
Redemption Shares, as applicable, shall bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates for such securities):

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
OR EXERCISED UNLESS (I) A REGISTRATION STATEMENT REGISTERING SUCH
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL
HAVE BECOME EFFECTIVE, OR (II) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS, OR (III) SUCH SECURITIES ARE SOLD PURSUANT TO RULE 144 OR
RULE 144A.

 

“THE SALE, TRANSFER OR
ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT DATED AS OF
APRIL 29, 2008, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND A HOLDER OF
ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE COMPANY.”

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

3

 

(ii) Removal
of Restrictive Legends. This Warrant, the certificates evidencing the
Exercise Shares and any Redemption Shares, as applicable, shall not contain any
legend restricting the transfer thereof (including the legend set forth above
in subsection 2(e)(i)): (A) while a registration statement (including a
Registration Statement, as defined in the Registration Rights Agreement, or any
Shelf Registration Statement with respect to Redemption Shares, as defined in Section 4(c) below)
covering the resale of such security is effective under the Securities Act, or (B) following
any sale of such Warrant, Exercise Shares and/or Redemption Shares pursuant to Rule 144,
or (C) if such Warrant, Exercise Shares and/or Redemption Shares are
eligible for sale under Rule 144(b)(1)(i), or (D) if such legend is
not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the SEC) and
the Company shall have received an opinion of counsel of Holder to such effect
(collectively, the “Unrestricted Conditions”).  The Company shall cause its counsel to issue
a legal opinion to the Transfer Agent promptly after the Effective Date (as
defined below) if required by the Company’s transfer agent to effect the
issuance of the Exercise Shares or any Redemption Shares without a restrictive
legend or removal of the legend hereunder. If the Unrestricted Conditions are
met at the time of issuance of this Warrant, Exercise Shares and/or Redemption
Shares, then such Warrant, Exercise Shares and/or Redemption Shares shall be
issued free of all legends.  The Company
agrees that following the Effective Date or at such time as the Unrestricted
Conditions are met or such legend is otherwise no longer required under this Section 2(e),
it will, no later than three (3) Trading Days following the delivery (the “Unlegended
Shares Delivery Deadline”) by the Holder to the Company or the Transfer
Agent of this Warrant and a certificate representing Exercise Shares or
Redemption Shares, as applicable, issued with a restrictive legend (such third
Trading Day, the “Legend Removal Date”), deliver or cause to be
delivered to such Holder this Warrant and/or a certificate (or electronic
transfer) representing such shares that is free from all restrictive and other
legends. For purposes hereof, “Effective Date” shall mean the date that
the Registration Statement that the Company is required to file pursuant to the
Registration Rights Agreement or any Shelf Registration Statement pursuant to Section 4(c) below
has been declared effective by the SEC.

 

(iii) Sale
of Unlegended Shares. Holder agrees that the removal of the restrictive
legend from this Warrant and any certificates representing securities as set
forth in this Section 2(e)(ii) above is predicated upon the Company’s
reliance that the Holder will sell this Warrant, Exercise Shares and/or
Redemption Shares pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or
an exemption therefrom, and that if such securities are sold pursuant to a
Registration Statement, they will be sold in compliance with the plan of
distribution set forth therein.

 

(f) Cancellation of Warrant. This Warrant
shall be canceled upon the full Exercise of this Warrant or upon full
redemption of this Warrant. As soon as practical after the Date of Exercise,
Holder shall be entitled to receive Common Stock for the number of shares
purchased upon Exercise of this Warrant, and if this Warrant is not Exercised
in full, Holder shall be entitled to receive a new Warrant (containing terms
identical to this Warrant) representing any unexercised portion of this Warrant
in addition to such Common Stock.

 

(g) Holder of Record. Each person in whose name
any Warrant for shares of Common Stock is issued shall, for all purposes, be
deemed to be the Holder of record of such shares on the Date of Exercise of
this Warrant, irrespective of the date of delivery of the Common Stock
purchased upon the Exercise of this Warrant. Nothing in this Warrant shall be
construed as conferring upon Holder any rights as a stockholder of the Company.

 

(h) Delivery of Electronic Shares. In lieu of delivering
physical certificates representing the Common Stock issuable upon Exercise or
legend removal or representing Redemption Shares, provided the Company’s
Transfer Agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer (“FAST”) program, upon written
request of the Holder, the Company shall use commercially reasonable efforts to
cause its Transfer Agent to electronically transmit the Common Stock 

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

4

 

issuable
to the Holder by crediting the account of the Holder’s prime broker with DTC
through its Deposit Withdrawal Agent Commission (DWAC) system. The time periods
for delivery and penalties described herein shall apply to the electronic
transmittals described herein.  Any
delivery not effected by electronic transmission shall be effected by delivery
of physical certificates.

 

(i) Buy-In. In addition to any other
rights available to the Holder, if the Company fails to cause its Transfer
Agent to transmit to the Holder a certificate or certificates representing the
Exercise Shares pursuant to an Exercise on or before the Delivery Period (other
than a failure caused by any incorrect or incomplete information provided by
Holder to the Company hereunder or the negligence or any act or failure to act
of the Transfer Agent), 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 Exercise Shares which the Holder
anticipated receiving upon such Exercise (a “Buy-In”), then the Company
shall (1) pay in cash to the Holder the amount 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 (A) the number of Exercise Shares that the Company was required
to deliver to the Holder in connection with the Exercise at issue times and (B) the
price at which the sell order giving rise to such purchase obligation was
executed, and (2) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Exercise Shares for which such
Exercise was not honored or deliver to the Holder certificate(s) representing
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 to cover the
sale of Common Stock with an aggregate sale price giving rise to such purchase
obligation of $10,000, under subsection (1) 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, together with applicable confirmations and
other evidence reasonably requested by the Company. 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 certificates representing shares of Common Stock upon Exercise of the
Warrant as required pursuant to the terms hereof.

 

3.
Payment of Warrant Exercise Price.

 

(a) Exercise Price. The Exercise Price (“Exercise
Price”) shall initially equal $7.54 per share subject to adjustment
pursuant to the terms hereof, including but not limited to Section 5
below.

 

Payment
of the Exercise Price may be made by either of the following, or a combination
thereof, at the election of Holder:

 

(i) Cash Exercise: The Holder may exercise this
Warrant in cash, bank or cashier’s check or wire transfer (a “Cash Exercise”);
or

 

(ii) Cashless Exercise:  The
Holder, at its option, may exercise this Warrant in a cashless exercise
transaction. In order to effect a Cashless Exercise, the Holder shall surrender
this Warrant at the principal office of the Company together with notice of
cashless election, in which event the Company shall issue Holder a number of
shares of Common Stock computed using the following formula (a “Cashless
Exercise”):

 

X = Y (A-B)/A

 

where:             X = the number
of shares of Common Stock to be issued to Holder.

 

               Y = the number of shares of
Common Stock for which this Warrant is being Exercised.

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

5

 

               A = the Market
Price of one (1) share of Common Stock (for purposes of this Section 3(ii),
where “Market Price,” as of any date, means the average Volume Weighted
Average Price (as defined below) of the Company’s Common Stock over the five (5) consecutive
Trading Day period immediately preceding the date in question.

 

               B = the Exercise Price.

 

As used herein, the “Volume
Weighted Average Price” for any security as of any date means the volume
weighted average sale price on The NASDAQ Global Market (“NASDAQ”) as
reported by, or based upon data reported by, Bloomberg Financial Markets or an
equivalent, reliable reporting service mutually acceptable to and hereafter
designated by holders of a majority in interest of the Warrants and the Company
(“Bloomberg”) or, if NASDAQ is not the principal trading market for such
security, the volume weighted average sale price of such security on the
principal securities exchange or trading market where such security is listed
or traded as reported by Bloomberg, or, if no volume weighted average sale
price is reported for such security, then the last closing trade price of such
security as reported by Bloomberg, or, if no last closing trade price is
reported for such security by Bloomberg, the average of the bid prices of any
market makers for such security that are listed in the over the counter market
by the National Association of Securities Dealers or in the “pink sheets” by
the National Quotation Bureau, Inc. If the Volume Weighted Average Price
cannot be calculated for such security on such date in the manner provided
above, the volume weighted average price shall be the fair market value as
mutually determined by the Company and the Holders of a majority in interest of
the Warrants being Exercised for which the calculation of the volume weighted
average price is required in order to determine the Exercise Price of such
Warrants.

 

For
purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is
intended, understood and acknowledged that the Common Stock issuable upon
Exercise of this Warrant in a cashless Exercise transaction shall be deemed to
have been acquired at the time this Warrant was issued. Moreover, it is
intended, understood and acknowledged that the holding period for the Common
Stock issuable upon Exercise of this Warrant in a cashless Exercise transaction
shall be deemed to have commenced on the date this Warrant was issued.

 

(b) Dispute Resolution. In the case of
a dispute as to the determination of the closing price or the Volume Weighted
Average Price of the Company’s Common Stock or the arithmetic calculation of
the Exercise Price, Market Price or any Redemption Price, the Company shall
submit the disputed determinations or arithmetic calculations via facsimile
within two (2) Business Days of receipt, or deemed receipt, of the
Exercise Notice or Redemption Notice, or other event giving rise to such
dispute, as the case may be, to the Holder. If the Holder and the Company are
unable to agree upon such determination or calculation within two (2) Business
Days of such disputed determination or arithmetic calculation being submitted
to the Holder, then the Company shall, within two (2) Business Days submit
via facsimile (i) the disputed determination of the closing price or the
Volume Weighted Average Price of the Company’s Common Stock to an independent,
reputable investment bank selected by the Company and approved by the Holder,
which approval shall not be unreasonably withheld or (ii) the disputed
arithmetic calculation of the Exercise Price, Market Price or any Major
Transaction Warrant Redemption Price to the Company’s independent, outside
accountant.  The Company shall use
commercially reasonable efforts to cause the investment bank or the accountant,
as the case may be, to perform the determinations or calculations and notify
the Company and the Holder of the results no later than five (5) Business
Days from the time it receives the disputed determinations or calculations.
Such investment bank’s or accountant’s determination or calculation, as the
case may be, shall be binding upon all parties absent demonstrable error, and
the Company and the Holder shall each pay one-half of the fees and costs of
such investment bank or accountant.

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

6

 

4. Transfer and
Registration.

 

(a) Transfer Rights. Subject to the
provisions of Section 8 of this Warrant, this Warrant may be transferred
on the books of the Company, in whole or in part, in person or by attorney,
upon surrender of this Warrant properly completed and endorsed. This Warrant
shall be canceled upon such surrender and, as soon as practicable thereafter,
the person to whom such transfer is made shall be entitled to receive a new
Warrant or Warrants as to the portion of this Warrant transferred, and Holder
shall be entitled to receive a new Warrant as to the portion hereof retained.

 

(b) Registrable Securities. The Common Stock issuable upon the Exercise of this Warrant has
registration rights pursuant to the Registration Rights Agreement.

 

(c) Registration of Redemption Shares. The Company
agrees to prepare and file with the SEC one or more “shelf” registration
statement(s) on Form S-3 (the “Shelf Registration Statement”)
for an offering to be made on a continuous basis pursuant to Rule 415 of
the Securities Act promptly following issuance of this Warrant, and to use its
commercially reasonable efforts to cause any such Shelf Registration Statement
to become effective as soon as possible after such filing, covering the
issuance of a sufficient number of shares of Common Stock that may be deliverable
by it upon a redemption of this Warrant under Sections 5(c)(iii) or 11 or
in satisfaction of any Failure Payments (as defined in Section 10 below)
under Section 10. For so long as all or any portion of this Warrant is
outstanding, the Company agrees to use its commercially reasonable efforts to
ensure that any Shelf Registration Statement shall continuously be effective
and contain a sufficient number of shares of Common Stock available to be
issued pursuant to any such Shelf Registration Statement to cover shares
estimated by the Company in good faith that may be issuable by it upon a
redemption of this Warrant under Sections 5(c)(iii) or 11 or in
satisfaction of any Failure Payments under Section 10, including by
preparing and filing such amendments (including post-effective amendments) and
supplements to any such Shelf Registration Statement and preparing and filing a
subsequent Shelf Registration Statement if a previously filed and effective
Shelf Registration Statement will no longer deemed current and effective or
such Shelf Registration Statement does not cover a sufficient number of shares
that may be issuable by the Company upon a redemption of this Warrant under
Sections 5(c)(iii) or 11 or in satisfaction of any Failure Payments under Section 10
; provided, however, in no event shall the Shelf Registration Statement(s) be
required to register in the aggregate more than [*****]
shares of Common Stock.  To the extent
the Shelf Registration Statement provided for under this paragraph is effective,
at any time that shares of Common Stock are issuable to the Holder upon a
redemption of the Warrant under Sections 5(c)(iii) or 11 or in
satisfaction of any Failure Payments under Section 10, such shares
delivered to the Holder shall be registered pursuant to such Shelf Registration
Statement. Notwithstanding anything to the contrary herein (i) the Company
may delay or suspend the effectiveness of a Shelf Registration Statement or the
use of any prospectus forming a part of a Shelf Registration Statement due to
the non-disclosure of material, non-public information concerning Company the
disclosure of which at the time is not in its best interest, in the good faith
opinion of the Company; provided that no such periods shall individually exceed
90 days or in the aggregate exceed 90 days during any 12-month period and (ii) a
delay in the effectiveness of a Shelf Registration Statement caused solely by
the filing of a request for confidential treatment shall not be deemed an Event
of Failure or an Event of Default herein.

 

5.  Adjustments Upon Certain Events.

 

(a) Participation. The Holder, as the holder
of this Warrant, shall be entitled to receive such dividends paid and
distributions of any kind made to the holders of Common Stock of the Company to
the same extent as if the Holder had Exercised this Warrant into Common Stock
(without regard to any limitations on exercise herein or elsewhere and without
regard to whether or not a sufficient number of shares are authorized and
reserved to effect any such exercise and issuance) and had held such shares of
Common 

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

7

 

Stock on the record date
for such dividends and distributions. Payments under the preceding sentence
shall be made concurrently with the dividend or distribution to the holders of
Common Stock.

 

(b) Recapitalization or Reclassification. If
the Company shall at any time effect a recapitalization, reclassification or
other similar transaction of such character that the shares of Common Stock
shall be changed into or become exchangeable for a larger or smaller number of
shares, then upon the effective date thereof, the number of shares of Common
Stock which Holder shall be entitled to purchase upon Exercise of this Warrant
shall be increased or decreased, as the case may be, in direct proportion to
the increase or decrease in the number of shares of Common Stock by reason of
such recapitalization, reclassification or similar transaction, and the
Exercise Price shall be, in the case of an increase in the number of shares,
proportionally decreased and, in the case of decrease in the number of shares,
proportionally increased. The Company shall give Holder the same notice it
provides to holders of Common Stock of any transaction described in this Section 5(b).

 

(c) Rights Upon Major Transaction. Certain capitalized terms used in this Section and
not defined elsewhere have the meanings given to them below.

 

(i) Major Transaction.   [*****], the Holder shall have the right to require the
Company to redeem the Holder’s outstanding Warrants (or such applicable portion
in a Mixed Qualified Major Transaction) in accordance with Section 5(c)(iii) below
[*****]. 
Notwithstanding anything herein to the contrary, the Holder may elect to
waive its rights under this Section 5(c)(i) with respect to any Major
Transaction in which event none of the provisions contained in this Section 5(c)(i) shall
apply.

 

[*****]

 

Each of the
following events shall constitute a “Major Transaction”:

 

(A) a
consolidation, merger, exchange of shares, recapitalization, reorganization,
business combination or other similar event, (1) following which the
holders of Common Stock immediately preceding such consolidation, merger, exchange,
recapitalization, reorganization, combination or event either (a) no
longer hold a majority of the shares of Common Stock or (b) no longer have
the ability to elect a majority of the board of directors of the Company or (2) as
a result of which shares of Common Stock shall be changed into (or the shares
of Common Stock become entitled to receive) the same or a different number of
shares of the same or another class or classes of stock or securities of the
Company or another entity (collectively, a “Change of Control Transaction”);

 

(B) the
sale or transfer in one transaction or in a series of related transactions (i) of
all or substantially all of the assets of the Company, (ii) of assets
for a purchase price equal to more than [*****], or (iii) of assets that
represent 50% or more of the assets [*****];

 

(C) a
purchase, tender or exchange offer made to the holders of outstanding shares of
Common Stock, such that following such purchase, tender or exchange offer a
Change of Control Transaction shall have occurred and is consummated;

 

(D) the
liquidation, bankruptcy, insolvency, dissolution or winding-up (or the
occurrence of any analogous proceeding) of the Company; or

 

(E) the
shares of Common Stock cease to be listed, traded or publicly quoted on the NASDAQ
Global Market and are not promptly re-listed or requoted on either the New York
Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or
the NASDAQ Capital Market.

 

For
purposes hereof, the following terms have the definitions set forth below:

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

8

 

A “Cash-Out Major Transaction” means a Major Transaction in
which the consideration payable to holders of Common Stock in connection with
the Major Transaction consists solely of cash.

 

An “Eligible Market” means the over the counter Bulletin Board,
the New York Stock Exchange, Inc., the NYSE Arca, the NASDAQ Capital
Market, the NASDAQ Global Market, the NASDAQ Global Select Market or the
American Stock Exchange.

 

A “Mixed Qualified Major Transaction” means a Qualified Major
Transaction where the consideration payable to shareholders of the Company
consists partially of cash and partially of securities of a Successor Entity.

 

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

 

A “Person” means a limited liability company, a partnership, a
joint venture, a corporation or a trust.

 

A “Private Successor Entity” means an Successor Entity that is
not a Publicly Traded Successor Entity.

 

A “Publicly Traded Successor Entity” means a Successor Entity that is a publicly
traded corporation whose common stock is quoted on or listed for trading on an
Eligible Market (as defined below).

 

[*****]

 

“Redemption Shares” means shares of Common Stock of the Company
that may be issuable from time to time pursuant to Section 5(c)(iii), 10
and/or 11 hereof and that are registered for resale under the Securities Act
pursuant to an effective registration statement filed by the Company as
contemplated by Section 4(c) or, if such a registration statement is
not then effective, shares of Common Stock of the Company that are not so
registered.

 

A “Successor Entity” shall be a Person as defined in Section 5(c)(ii) below.

 

(ii) Assumption.  The Company shall not enter into or be party
to a Major Transaction that is to be treated as an Assumption pursuant to Section 5(c)(i) above
unless any Person purchasing the Company’s assets or Common Stock, or any
successor entity resulting from such Major Transaction, or if the Warrant is to
be exercisable for shares of its Parent Entity (as defined above), its Parent
Entity (in each case, a “Successor Entity”), shall have assumed in
writing all of the obligations of the Company under this Warrant and the
Registration Rights Agreement in accordance with the provisions of this
subsection (ii) pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder prior to such
Major Transaction (not to be unreasonably withheld or delayed), including
agreements to deliver to each holder of Warrants in exchange for such Warrants
a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to the Warrants, including, without
limitation, an instrument representing the appropriate number of shares of the
Successor Entity, having similar exercise rights as the Warrants (including but
not limited to a similar Exercise Price and similar Exercise Price adjustment
provisions based on the price per share or conversion ratio to be received by
the holders of Common Stock in the Major Transaction), and similar registration
rights as provided herein and under the Registration Rights Agreement. Upon the
occurrence of any Major Transaction treated as an Assumption hereunder, any
Successor Entity shall succeed to, and be substituted for (so that from and
after the date of such Major Transaction, the provisions of this 

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

9

 

Warrant and the
Registration Rights Agreement (or substantially similar instruments, if
applicable) referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant with the same effect
as if such Successor Entity had been named as the Company herein. Upon
consummation of the Major Transaction, the Successor Entity shall deliver to
the Holder confirmation that there shall be issued upon exercise or redemption
of this Warrant at any time after the consummation of the Major Transaction, in
lieu of the shares of Common Stock (or other securities, cash, assets or other
property) issuable upon the exercise of the Warrants prior to such Major
Transaction, such shares of common stock (or their equivalent) of the Successor
Entity (or such shares of publicly traded common stock (or their equivalent) if
the Successor Entity is a Publicly Traded Successor Entity), as adjusted in
accordance with the provisions of this Warrant. The provisions of this Section shall
apply similarly and equally to successive Major Transactions and shall be
applied without regard to any limitations on the exercise of this Warrant other
than any applicable beneficial ownership limitations.  Any assumption of Company obligations under
this paragraph shall be referred to herein as an “Assumption”.

 

(iii) Notice; Major
Transaction Redemption Right. At least thirty (30) days prior to the
consummation of any Major Transaction, but, in any event, no later than two (2) Business
Days following the public announcement of such Major Transaction, the Company
shall deliver written notice thereof via facsimile and overnight courier to the
Holder (a “Major Transaction Notice”) [*****].

 

[*****] at any time during the period beginning
after the Holder’s receipt of a Major Transaction Notice and ending five (5) Trading
Days prior to the scheduled consummation of such Major Transaction, the Holder
may require the Company to redeem (a “Redemption Upon Major Transaction”)
all or any portion of this Warrant not to be so assumed pursuant to the
provisions hereof by delivering written notice thereof (“Major Transaction
Redemption Notice”) to the Company, which Major Transaction Redemption
Notice shall indicate the portion of the principal amount (the “Redemption
Principal Amount”) of the Warrant that the Holder is electing to have
redeemed. The outstanding portion of this Warrant to the extent subject to
redemption pursuant to this Section 5(c)(iii) (the “Redeemable
Shares”) shall be redeemed by the Company at a price (the “Major
Transaction Warrant Redemption Price”) payable:

 

(x) in the case of a
Cash-Out Major Transaction, or in the case of a Qualified Major Transaction (or
that portion of a Mixed Qualified Major Transaction) not treated as an
Assumption in accordance with Section 5(c)(i) above, in cash equal to
the “Black Scholes value” of the Redeemable Shares, and

 

(y) in the case of a
Major Transaction not described in the foregoing proviso (x), in a number of
shares of Redemption Shares equal to the “Black Scholes value” of the
Redeemable Shares divided by [*****]% of the closing price of the Common
Stock on the principal securities exchange or other securities market on which
the Common Stock is then being traded on the Trading Day immediately preceding
the date on which the Major Transaction is consummated; provided, however, that
Holder shall only receive up to such amount of shares of Common Stock such that
Holder and its Affiliates and any other persons or entities whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act (including shares held by any “group”
of which the Holder is a member, but excluding shares beneficially owned by
virtue of the ownership of securities or rights to acquire securities that have
limitations on the right to convert, exercise or purchase similar to the
limitation set forth herein) shall not collectively beneficially own greater
than 9.98% of the total number of shares of Common Stock of the Company then
issued and outstanding; and, provided further, that the foregoing proviso shall
not be construed to require any cash payment by the Company of the remaining
amount of the Major Transaction Warrant Redemption Price.

 

The “Black Scholes value”
of the Redeemable Shares shall be determined by use of the Black Scholes Option
Pricing Model using the criteria set forth on Schedule I hereto.

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

10

 

[*****]

 

(iv) Escrow; Payment of Major Transaction Warrant
Redemption Price. Following the receipt of a Major Transaction
Redemption Notice from the Holder, the Company shall not effect a Major
Transaction that is being treated as a redemption in accordance with subsection
(iii) above, unless either it obtains the written agreement of the
Successor Entity that payment of the Major Transaction Warrant Redemption Price
shall be made to the Holder upon consummation of such Major Transaction or it
shall first place into an escrow account with an independent escrow agent, at
least three (3) Business Days prior to the closing date of the Major
Transaction (the “Major Transaction Escrow Deadline”), an amount in cash or
shares of Common Stock, as applicable, equal to the Major Transaction Warrant
Redemption Price. Concurrently upon closing of such Major Transaction, the
Company shall pay or shall instruct the escrow agent to pay the Major
Transaction Warrant Redemption Price to the Holder.  For purposes of determining the amount
required to be placed in escrow pursuant to the provisions of this subsection (iv) and
without affecting the amount of the actual Major Transaction Warrant Redemption
Price, the calculation of the price referred to in clause (1) of the first
column of Schedule 1 hereto with respect to Stock Price shall be determined
based on the Closing Market Price (as defined herein) of the Common Stock on
the Trading Day immediately preceding the date that the funds are deposited
with the escrow agent.

 

(v) Injunction. Following the receipt of a
Major Transaction Redemption Notice from the Holder, in the event that the
Company attempts to consummate a Major Transaction without either placing the
Major Transaction Warrant Redemption Price in escrow in accordance with
subsection (iv) above or obtaining the written agreement of the Successor
Entity that payment of the Major Transaction Warrant Redemption Price will be
made to the Holder upon consummation of such Major Transaction, the Holder
shall have the right to apply for an injunction in any state or federal courts
sitting in the City of New York, borough of Manhattan to prevent the closing of
such Major Transaction until the Major Transaction Warrant Redemption Price is
paid to the Holder, in full.

 

Redemptions required by
this Section 5(c) shall be made in accordance with the provisions of Section 12
and shall have priority to payments to holders of Common Stock in connection
with a Major Transaction. To the extent redemptions required by this Section 5(c)(iii) are
deemed or determined by a court of competent jurisdiction to be prepayments of
the Warrant by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 5,
until the Major Transaction Warrant Redemption Price is paid in full, this
Warrant may be exercised, in whole or in part, by the Holder into shares of
Common Stock, or in the event the Exercise Date is after the consummation of
the Major Transaction, shares of publicly traded common stock (or their
equivalent) of the Successor Entity pursuant to Section 5(c). The parties
hereto agree that in the event of the Company’s redemption of any portion of
the Warrant under this Section 5(c), the Holder’s damages would be
uncertain and difficult to estimate because of the parties’ inability to
predict future interest rates and the uncertainty of the availability of a
suitable substitute investment opportunity for the Holder. Accordingly, any
redemption premium due under this Section 5(c) is intended by the
parties to be, and shall be deemed, a reasonable estimate of the Holder’s
actual loss of its investment opportunity and not as a penalty.

 

(d) Exercise Price Adjusted. As used in this
Warrant, the term “Exercise Price” shall mean the purchase price per
share specified in Section 3 of this Warrant, until the occurrence of an
event stated in this Section 5 or otherwise set forth in this Warrant, and
thereafter shall mean said price as adjusted from time to time in accordance
with the provisions of said subsection. 
No adjustment made pursuant to any provision of this Section 5
shall have the net effect of increasing or decreasing the Exercise Price in
relation to the split adjusted and distribution adjusted price of the Common
Stock.

 

(e) Adjustments: Additional Shares,
Securities or Assets. In the event that at any time, as a result of
an adjustment made pursuant to this Section 5 or otherwise, Holder shall,
upon Exercise of this Warrant, become entitled to receive shares and/or other
securities or assets (other than Common Stock) then, 

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

11

 

wherever
appropriate, all references herein to shares of Common Stock shall be deemed to
refer to and include such shares and/or other securities or assets; and
thereafter the number of such shares and/or other securities or assets shall be
subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.

 

(f) Notice of Adjustments. Whenever the
Exercise Price is adjusted pursuant to the terms of this Warrant, the Company
shall promptly mail to the Holder a notice (an “Exercise Price Adjustment
Notice”) setting forth the Exercise Price after such adjustment and setting
forth a statement of the facts requiring such adjustment. The Company shall,
upon the written request at any time of the Holder, furnish to such Holder a
like Warrant setting forth (i) such adjustment or readjustment, (ii) the
Exercise Price at the time in effect and (iii) the number of shares of
Common Stock and the amount, if any, of other securities or property which at
the time would be received upon Exercise of the Warrant. For purposes of
clarification, whether or not the Company provides an Exercise Price Adjustment
Notice pursuant to this Section 5(f), upon the occurrence of any event
that leads to an adjustment of the Exercise Price, the Holders are entitled to
receive a number of Exercise Shares based upon the new Exercise Price, as
adjusted, for exercises occurring on or after the date of such adjustment,
regardless of whether a Holder accurately refers to the adjusted Exercise Price
in the Exercise Form.

 

6.
Fractional Interests.

 

No
fractional shares or scrip representing fractional shares shall be issuable
upon the Exercise of this Warrant, but on Exercise of this Warrant, Holder may
purchase only a whole number of shares of Common Stock. If, on Exercise of this
Warrant, Holder would be entitled to a fractional share of Common Stock or a right
to acquire a fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares of Common Stock issuable upon Exercise
shall be the next higher number of shares.

 

7. Reservation of Shares.

 

From
and after the date hereof, the Company shall at all times reserve for issuance
such number of authorized and unissued shares of Common Stock (or other
securities substituted therefor as herein above provided) as shall be
sufficient for the Exercise of this Warrant and payment of the Exercise Price.
If at any time the number of shares of Common Stock authorized and reserved for
issuance is below the number of shares sufficient for the Exercise of this
Warrant (a “Share Authorization Failure”) (based on the Exercise Price
in effect from time to time), the Company will promptly take all corporate
action necessary to authorize and reserve a sufficient number of shares,
including, without limitation, calling a special meeting of stockholders to
authorize additional shares to meet the Company’s obligations under this Section 7,
in the case of an insufficient number of authorized shares, and using
commercially reasonable efforts to obtain stockholder approval of an increase
in such authorized number of shares. The Company covenants and agrees that upon
the Exercise of this Warrant, all shares of Common Stock issuable upon such
Exercise shall be duly and validly issued, fully paid and nonassessable and not
subject to preemptive rights, rights of first refusal or similar rights of any
person or entity.

 

8.
Restrictions on Transfer.

 

(a) Registration or Exemption
Required. This Warrant has been issued in a transaction exempt
from the registration requirements of the Securities Act by virtue of
Regulation D and exempt from state registration under applicable state laws.
The Warrant, the Common Stock issuable upon the Exercise of this Warrant and
any Redemption Shares issued pursuant hereto may not be pledged, transferred,
sold or assigned except pursuant to an effective registration statement,
pursuant to Rule 144 or after receipt by the Company of an opinion of
counsel for the Holder that any such pledge, transfer, sale or assignment shall
be exempt from the registration requirements of the Securities Act and
applicable state laws. The 

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

12

 

Holder
agrees to comply with the reporting obligations applicable to it under Section 16
of the Exchange Act with respect to this Warrant, the Warrant Shares, the
Redemption Shares and any other shares of Common Stock beneficially owned by
it, and to furnish the Company with copies of all reports filed by it with the
SEC pursuant to Section 16.

 

(b) Assignment. Subject to
compliance with the second sentence of Section 8(a), the Holder may sell,
transfer, assign, pledge or otherwise dispose of this Warrant, in whole or in
part. Holder shall deliver a written notice to Company, substantially in the
form of the Assignment attached hereto as Exhibit B, indicating the
person or persons to whom the Warrant shall be assigned and the respective
number of warrants to be assigned to each assignee. The Company shall effect
the assignment within three (3) Business Days of its receipt of a properly
completed and executed form of Assignment and, if required by this Warrant,
receipt by the Company of an opinion of counsel (the “Transfer Delivery
Period”), and shall deliver to the assignee(s) designated by Holder a
Warrant or Warrants of like tenor and terms for the appropriate number of
shares.  This Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Holder. The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant, and
shall be enforceable by any such Holder. 
For avoidance of doubt, in the event Holder notifies the Company that
such sale or transfer is a so called “4(1) and half” transaction, the
parties hereto agree that a legal opinion from outside counsel for the Holder
delivered to counsel for the Company substantially in the form attached hereto
as Exhibit C, shall be the only requirement to satisfy an exemption from
registration under the Securities Act to effectuate such “4(1) and half”
transaction.

 

9.
Noncircumvention. The Company hereby covenants and agrees that the
Company will not, by amendment of its certificate of incorporation, bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, and will at all times in good faith carry out all
the provisions of this Warrant and take all action as may be reasonably
required to protect the rights of the Holder. Without limiting the generality
of the foregoing, the Company (i) shall not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect, and (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant.

 

10. Events of Failure; Definition of Black
Scholes Value.

 

(a) Definitions.

 

The
occurrence of each of the following shall be considered to be an “Event of
Failure.”

 

(i) A Delivery Failure occurs, where a “Delivery Failure”
shall be deemed to have occurred if the Company fails to use reasonable best
efforts to deliver Exercise Shares to the Holder within any applicable Delivery
Period (other than due to the limitation contained in the proviso in the second
paragraph of Section 1);

 

(ii) A Legend Removal Failure occurs, where a “Legend Removal
Failure” shall be deemed to have occurred if the Company fails to use
reasonable best efforts to issue this Warrant and/or Exercise Shares without a
restrictive legend, or fails to use reasonable best efforts to remove a
restrictive legend, when and as required under Section 2(e) hereof;

 

(iii) a Transfer Delivery Failure occurs, where a “Transfer
Delivery Failure” shall be deemed to have occurred if the Company fails to
use reasonable best efforts to deliver a Warrant within any applicable Transfer
Delivery Period; and

 

(iv) a Registration Failure (as defined below) (subject to any
Grace Periods).

 

[***] Confidential
Treatment of 

Redacted Portions Has Been Requested

 

13

 

For purpose hereof, “Registration Failure”
means that (A) the Company fails to file with the SEC on or before the
Filing Deadline (as defined in the Registration Rights Agreement) any
Registration Statement required to be filed pursuant to Section 2(a) of
the Registration Rights Agreement, or (B) the Company fails to use
reasonable best efforts to obtain effectiveness with the SEC, prior to the
Registration Deadline (as defined in the Registration Rights Agreement), and if
such Registration Statement is not so filed prior to the Registration Deadline,
as soon as possible thereafter, of any Registration Statement (as defined in
the Registration Rights Agreement) that are required to be filed pursuant to Section 2(a) of
the Registration Rights Agreement, or fails to use reasonable best efforts to
keep such Registration Statement current and effective as required in Section 3
of the Registration Rights Agreement, (C) the Company fails to file any
amendment to the Registration Statement, or any additional Registration
Statement required to be filed pursuant to Section 3(b) of the
Registration Rights Agreement within thirty (30) days of the applicable
Registration Trigger Date (as defined in the Registration Rights Agreement), or
fails to use reasonable best efforts to cause such amendment and/or new
Registration Statement to become effective within sixty (60) days of the
applicable Registration Trigger Date, and, if such effectiveness does not occur
within such period, as soon as possible thereafter, or (iv) any Registration
Statement required to be filed under the Registration Rights Agreement, after
its initial effectiveness and during the Registration Period (as defined in the
Registration Rights Agreement), lapses in effect or sales of all of the
Registrable Securities (as defined in the Registration Rights Agreement) cannot
otherwise be made thereunder (whether by reason of the Company’s failure to
amend or supplement the prospectus included therein in accordance with the
Registration Rights Agreement, the Company’s failure to file and use reasonable
best efforts to obtain effectiveness with the SEC of an additional Registration
Statement or amended Registration Statement required pursuant to Section 3
of the Registration Rights Agreement or otherwise, but subject to Section 3(q) of
the Registration Rights Agreement), (D) the Company fails to provide a
commercially reasonable written response to any comments to any Registration
Statement submitted by the SEC within thirty (30) days of the date that
such SEC comments are received by the Company, in each case other than as a
result of the failure of any Buyer (as defined in the Registration Rights
Agreement) to provide such information or otherwise comply with its obligations
under the Registration Rights Agreement or (E) the Company fails to file
with the SEC the Shelf Registration Statement(s) as required under Section 4(c) hereof
and to use commercially reasonable efforts to cause any such Registration
Statement(s) to become effective as soon as possible after such filing and
to use commercially reasonable efforts to ensure that any such Shelf
Registration Statement shall continuously be effective, in each case, in
accordance with Section 4(c) hereof.

 

(b) Failure Payments;
Black-Scholes Determination. The Company understands that any Event of Failure (as defined above)
could result in economic loss to the Holder. In the event that any Event of
Failure occurs (other than an Event of Failure caused by the submission of any
incomplete or inaccurate information required to be furnished by the Holder or
the negligence or failure to act or action of the Company’s transfer agent), as
compensation to the Holder for such loss, the Company agrees to pay (as
liquidated damages and not as a penalty) to the Holder an amount payable in
Redemption Shares that are valued for these purposes at 95% of the Volume
Weighted Average Price on the date of such calculation (“Failure Payments”)
equal to 18% per annum (or the maximum rate permitted by applicable law,
whichever is less) of the Black-Scholes value (as determined below) of the
remaining unexercised portion of this Warrant on the date of such Event of
Failure (as recalculated on the first Business Day of each month thereafter for
as long as Failure Payments shall continue to accrue), which shall accrue daily
from the date of such Event of Failure until the Event of Failure is cured,
accruing daily and compounded monthly, provided, however, the Holder shall
receive up to such amount of Redemption Shares such that Holder and any other
persons or entities whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act (including shares held by any “group” of which the Holder is a
member, but excluding shares beneficially owned by virtue of the ownership of
securities or rights to acquire securities that have limitations on the right
to convert, exercise or purchase similar to the limitation set forth herein)
shall not collectively beneficially own greater than 

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

14

 

9.98% of the total number of shares of Common Stock
of the Company then issued and outstanding; and, provided further, that the foregoing proviso shall not be
construed to require any cash payment by the Company of the remaining amount of
the Failure Payment.  For purposes of clarification, it is agreed
and understood that Failure Payments shall continue to accrue following any
Event of Default until the applicable Default Amount is paid in full.

 

Notwithstanding the above, in the event that the
Company (i) has, by the Filing Deadline (as defined the Registration
Rights Agreement) filed a Registration Statement (as defined in the
Registration Rights Agreement) covering the number of shares required by the
Registration Rights Agreement, and (ii) has responded in writing to any
comments to the Registration Statement that the Company has received from the
SEC, within seven (7) Business Days of such receipt, and nevertheless the
SEC has not declared effective a Registration Statement covering the full
number of Warrant Shares issuable upon exercise of the Warrants by the
Registration Deadline (as defined in the Registration Rights Agreement) then, the
Failure Payments attributable to such late Registration Effectiveness shall be
reduced from 18% to 15% (calculated as set forth above). The Company shall
satisfy any Failure Payments incurred under this Section pursuant to Section 10(c) below.

 

For purposes hereof, the “Black-Scholes”
value of a Warrant shall be determined by use of the Black Scholes Option
Pricing Model and using the criteria set forth on Schedule 1 hereto.

 

(c) Payment of Accrued
Failure Payments.  The shares representing accrued Failure
Payments for each Event of Failure shall be issued and delivered on or before
the fifth (5th) Trading Day of each month following a month in which Failure
Payments accrued. Nothing herein shall limit the Holder’s right to pursue
actual damages (to the extent in excess of the Failure Payments) for the
Company’s Event of Failure, and the Holder shall have the right to pursue all
remedies available at law or in equity (including a decree of specific
performance and/or injunctive relief). Notwithstanding the above, if a
particular Event of Failure results in an Event of Default pursuant to Section 11
hereof, then the Failure Payment, for that Event of Failure only, shall be
considered to have been satisfied upon payment to the Holder of an amount equal
to the greater of (i) the Failure Payment, or (ii) the Default
Amount, payable in accordance with Section 11.

 

(d) Maximum Interest Rate. Nothing contained herein or in any document
referred to herein or delivered in connection herewith shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest or
dividends required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Holder and thus refunded to the
Company.

 

11. Default and Redemption.

 

(a) Events Of Default. Each of the following events, after expiration of any applicable cure
periods, shall be considered to be an “Event of Default,” unless waived
by the Holder:

 

(i) Failure To
Effect Registration.  With respect to all Registration Failures
other than as provided in clause (E) of the definition of “Registration
Failure,” a Registration Failure occurs and remains uncured for a period of
more than forty-five (45) days (or sixty (60) days in the case where the
Company (i) has, by the Filing Deadline (as defined the Registration
Rights Agreement) filed a Registration Statement (as defined in the
Registration Rights Agreement) covering this Warrant and the number of shares
required by the Registration Rights Agreement, and (ii) has responded in
writing to any comments to the Registration Statement that the Company has received
from the SEC, within seven (7) Business Days of such receipt, and
nevertheless the SEC has not declared effective a Registration Statement
covering the this Warrant and the Shares by the Registration Deadline (as
defined in the Registration Rights Agreement)), and such Registration
Failure relates solely to the Company’s failure to have the 

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

15

 

Registration Statement declared effective by the
Registration Deadline (as defined in the Registration Rights Agreement) and
with respect to the Registration Failure provided in clause (E) of the
definition of “Registration Failure,” such Registration Failure occurs and
remains uncured for a period of more than forty-five (45) days;

 

(ii) Failure To
Deliver Common Stock.
A Delivery Failure (as defined above) occurs and remains uncured for a period
of more than [*****] ([*****]) days;
or at any time, the Company announces or states in writing that it will not
honor its obligations to issue shares of Common Stock to the Holder upon
Exercise by the Holder of the Exercise rights of the Holder in accordance with
the terms of this Warrant.

 

(iii) Legend
Removal Failure.  A Legend
Removal Failure (as defined above) occurs and remains uncured for a period of
thirty (30) days; and

 

(iv) Major
Transaction. The
Company has effected a Major Transaction without paying the Major Transaction
Warrant Redemption Price, if applicable, to the Holder pursuant to Section 5(c)(iii) (other
than due to the limitation contained in the proviso in Section 5(c)(iii)(y))
or, with respect to a Major Transaction that is to be treated as an Assumption
under the terms hereof, the Company has failed to meet the Assumption requirements
of Section 5(c)(iii) prior to effecting the Major Transaction.

 

(b) Mandatory Redemption.

 

(i) Mandatory Redemption Amount. If any Events of Default shall occur then,
unless waived by the Holder, upon the occurrence and during the continuation of
any Event of Default after expiration of any applicable cure periods, at the
option of the Holder, such option exercisable through the delivery of written
notice to the Company by such Holder (the “Default Notice”), the
outstanding amount of this Warrant shall be immediately redeemed by the Company
and the Company shall pay to the Holder (a “Mandatory Redemption”), in
full satisfaction of its obligations hereunder, an amount in Redemption Shares
(the “Mandatory Redemption Amount” or the “Default Amount”) equal
to the greater of (1) the Black-Scholes value (as determined in accordance
with Section 10(b)) of the remaining unexercised portion of this Warrant
on the date of such Default Notice and (2) the Black-Scholes value (also
as determined in accordance with Section 10(b)) of the remaining
unexercised portion of this Warrant on the Trading Day immediately preceding
the date that the Mandatory Redemption Amount is paid to the Holder, provided,
however, Holder shall receive up to such amount of Redemption Shares such that
Holder and its Affiliates and any other persons or entities whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act (including shares held by any “group”
of which the Holder is a member, but excluding shares beneficially owned by
virtue of the ownership of securities or rights to acquire securities that have
limitations on the right to convert, exercise or purchase similar to the
limitation set forth herein) shall not collectively beneficially own greater
than 9.98% of the total number of shares of Common Stock of the Company then
issued and outstanding; and,
provided further, that the foregoing proviso shall not be construed to require
any cash payment by the Company of the remaining amount of the Mandatory
Redemption Amount.

 

The
Mandatory Redemption Amount shall be payable in Redemption Shares that are
valued for these purposes at 95% of the Volume Weighted Average Price for the
five (5) Business Days prior to the Date of the applicable Default Notice.

 

(ii) Liquidated Damages. The parties hereto acknowledge and agree
that the sums payable as Failure Payments or pursuant to a Mandatory Redemption
shall give rise to liquidated damages and not penalties. The parties further
acknowledge that (i) the amount of loss or damages likely to be incurred
by the Holder is incapable or is difficult to precisely estimate, (ii) the
amounts specified bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by the Holder, and (iii) the
parties are sophisticated business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated this
Agreement at arm’s length.

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

16

 

The
Default Amount, together with all other amounts payable hereunder, shall
immediately become due and payable, all without demand, presentment or notice,
all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder
shall be entitled to exercise all other rights and remedies available at law or
in equity.

 

(c) Posting Of Bond.  In the event that any
Event of Default occurs hereunder, the Company may not raise as a legal defense
(in any Lawsuit, as defined below, or otherwise) or justification to such Event
of Default any claim that such Holder or any one associated or affiliated with
such Holder has been engaged in any violation of law, unless the Company has
posted a surety bond (a “Surety Bond”) for the benefit of such Holder in
the amount of 130% of the aggregate Surety Bond Value (as defined below) of all
of the Holder’s Warrants (the “Bond Amount”), which Surety Bond shall
remain in effect until the completion of litigation of the dispute and the
proceeds of which shall be payable to such Holder to the extent Holder obtains
judgment.

 

For purposes hereof, a “Lawsuit” shall mean
any lawsuit, arbitration or other dispute resolution filed by either party
herein pertaining to any of this Warrant, the Facility Agreement and the
Registration Rights Agreement.

 

“Surety Bond Value,” for the Warrants shall
mean 130% of the of the Black-Scholes value of the remaining unexercised
portion of this Warrant on the Trading Day immediately preceding the date that
such bond goes into effect).

 

(d) Injunction And Posting Of
Bond. In the event
that the Event of Default referred to in subsection (c) above pertains to
the Company’s failure to deliver unlegended shares of Common Stock to the
Holder pursuant to a Warrant Exercise, legend removal request, or otherwise,
the Company may not refuse such unlegended share delivery based on any claim
that such Holder or any one associated or affiliated with such Holder has been
engaged in any violation of law, unless an injunction from a court, on prior
notice to Holder, restraining and or enjoining Exercise of all or part of said
Warrant shall have been sought and obtained by the Company and the Company has
posted a Surety Bond for the benefit of such Holder in the amount of the Bond
Amount, which Surety Bond shall remain in effect until the completion of
litigation of the dispute and the proceeds of which shall be payable to such
Holder to the extent Holder obtains judgment.

 

(e) Remedies, Other Obligations, Breaches And Injunctive Relief.
The remedies provided in
this Warrant shall be cumulative and in addition to all other remedies
available under this Warrant, the Facility Agreement and the Registration
Rights Agreement, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the
right of the Holder to pursue actual damages for any failure by the Company to
comply with the terms of this Warrant. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder
and that the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach,
the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

 

12. Mechanics of Holder’s Redemptions.

 

In the event that the Holder has sent a Default
Notice or a Major Transaction Redemption Notice to the Company pursuant to Section 5(c) or
a Default Notice pursuant to Section 11(b)(i), respectively (each, a “Redemption
Notice”), the Holder shall promptly submit this Warrant to the Company. If
the Holder has submitted a Major Transaction Redemption Notice in accordance
with Section 5(c)(iii), the Company shall deliver the applicable Major
Transaction Warrant Redemption Price to the Holder concurrently with the
consummation of such Major Transaction. 
In the event that the Company does not pay the applicable Major
Transaction Warrant Redemption Price to the Holder within the time period
required, at any time 

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

17

 

thereafter and until the Company pays such unpaid
Major Transaction Warrant Redemption Price in full, the Holder shall have the
option, in lieu of redemption, to require the Company to promptly return to the
Holder all or any portion of this Warrant that was submitted for redemption and
for which the applicable Major Transaction Warrant Redemption Price (together
with any late charges thereon) has not been paid. Upon the Company’s receipt of
such notice, (x) the applicable Redemption Notice shall be null and void
with respect to such Redemption Principal Amount, (y) the Company shall
immediately return this Warrant, or issue a new Warrant to the Holder
representing the portion of this Warrant that was submitted for redemption and (z) the
Exercise Price of this Warrant or such new Warrant shall be adjusted to the
lesser of (A) the Exercise Price as in effect on the date on which the
applicable Redemption Notice is voided and (B) the lowest closing price
for the Common Stock on NASDAQ, or, if NASDAQ is not the principal trading
market for the Common Stock, the principal securities exchange or other
securities market on which the Common Stock is then being traded, during the
period beginning on and including the date on which the applicable Redemption
Notice is delivered to the Company and ending on and including the date on
which the applicable Redemption Notice is voided. The Holder’s delivery of a
notice voiding a Redemption Notice and exercise of its rights following such
notice shall not affect the Company’s obligations to make any payments of
Failure Payments which have accrued prior to the date of such notice with
respect to the Warrant subject to such notice.

 

13. Benefits of this Warrant.

 

Nothing in this Warrant shall be construed to confer
upon any person other than the Company and Holder any legal or equitable right,
remedy or claim under this Warrant and this Warrant shall be for the sole and
exclusive benefit of the Company and Holder.

 

14. Governing Law.

 

All questions concerning the construction, validity,
enforcement and interpretation of this Agreement 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 Agreement (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, 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 Agreement 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. The parties hereby waive all
rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of this Agreement, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

 

15. Loss of Warrant.

 

Upon receipt by the Company of evidence of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnity or security reasonably satisfactory to the
Company, 

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

18

 

and upon surrender and cancellation of this Warrant,
if mutilated, the Company shall execute and deliver a new Warrant of like tenor
and date.

 

16. Notice or Demands.

 

Notices or demands pursuant to this Warrant to be
given or made by Holder to or on the Company shall be sufficiently given or
made if sent by overnight delivery with a nationally recognized overnight
courier service or by certified or registered mail, return receipt requested,
postage prepaid, and addressed, until another address is designated in writing
by the Company, to the address set forth in Section 2(a) above.
Notices or demands pursuant to this Warrant to be given or made by the Company
to or on Holder shall be sufficiently given or made if sent by overnight
delivery with a nationally recognized overnight courier service or by certified
or registered mail, return receipt requested, postage prepaid, and addressed,
to the address of Holder set forth in the Company’s records, until another
address is designated in writing by Holder.

 

[Remainder of page intentionally
left blank.]

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

19

 

IN WITNESS WHEREOF, the undersigned has executed
this Warrant as of the 29th day of April, 2008.

 

	
   

  	
  ARRAY BIOPHARMA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   R. Michael
  Carruthers

  
	
   

  	
   

  	
  Print Name: R. Michael Carruthers

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

20

 

EXHIBIT A

 

EXERCISE FORM FOR
WARRANT

 

TO: ARRAY
BIOPHARMA INC.

 

The undersigned hereby irrevocably Exercises the
right to purchase                     
of the shares of Common Stock (the “Common Stock”) of ARRAY BIOPHARMA INC., a Delaware
corporation (the “Company”), evidenced by the attached warrant (the “Warrant”),
and herewith makes payment of the Exercise Price with respect to such shares in
full, all in accordance with the conditions and provisions of said Warrant.

 

1. The undersigned agrees not to offer, sell,
transfer or otherwise dispose of any of the Common Stock obtained on Exercise
of the Warrant, except in accordance with the provisions of Section 8(a) of
the Warrant.

 

2. The number of shares of Common Stock beneficially
owned by the Holder and its Affiliates (as defined in the Warrant) and any
other persons or entities whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) (including shares held by
any “group” of which the Holder is a member, but excluding shares beneficially
owned by virtue of the ownership of securities or rights to acquire securities
that have limitations on the right to convert, exercise or purchase similar to
the limitation set forth herein) is
                .  For purposes hereof, “group” has the meaning
set forth in Section 13(d) of the Exchange Act and applicable
regulations of the Securities and Exchange Commission, and the number of shares
beneficially owned has been determined in a manner consistent with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder.

 

3. The undersigned requests that any stock
certificates for such shares be issued free of any restrictive legend, if
appropriate, and a warrant representing any unexercised portion hereof be
issued, pursuant to the Warrant in the name of the undersigned and delivered to
the undersigned at the address set forth below.

 

4.  The
undersigned is exercising the attached Warrant pursuant to:

 

	
  o Cash Exercise

  	
   

  	
  o Cashless Exercise

  

 

The undersigned hereby irrevocably directs that
the said Exercised shares be issued and delivered as follows:

 

	
  Name(s) in Full

  	
   

  	
  Address(es) (include Postal/Zip Code)

  	
   

  	
  Numbers(s) of

  Shares of Common

  Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

(Please print in full the name in which
certificates are to be issued.  If any of
the securities are to be issued to a person or persons other than the
undersigned, then the Transfer of Warrants form must be completed and the
transferee and the undersigned must pay to the Company all eligible transfer
taxes or other government charges.)

 

	
  DATED

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

21

 

	
   

  	
   

  	
   

  
	
    Witness or Signature Guarantee*

  	
   

  	
    Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Print Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Address

  

 

*  If the
underlying securities are to be issued to a person other than the Warrant
holder then the signature must
be guaranteed by a guarantee under the North American STAMP, SEMP or MSP
Medallion Programs.

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

22

 

EXHIBIT B

 

ASSIGNMENT

 

(To be executed by the
registered holder

desiring to transfer the
Warrant)

 

FOR VALUE RECEIVED, the undersigned holder of the
attached warrant (the “Warrant”) hereby sells, assigns and transfers unto the
person or persons below named the right to purchase
                    
shares of the Common Stock of ARRAY BIOPHARMA
INC., a Delaware corporation, evidenced by the attached Warrant and
does hereby irrevocably constitute and appoint
                    
attorney to transfer the said Warrant on the books of the Company, with full
power of substitution in the premises.

 

The undersigned hereby certifies
that the Warrant is being sold, assigned or transferred in accordance with all
applicable securities laws.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
					

 

 

Fill in for new registration of Warrant:

 

	
   

  	
   

  
	
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Please print name and address of assignee

  (including zip code number)

  	
   

  

 

 

NOTICE

 

The signature to the foregoing Assignment must
correspond to the name as written upon the face of the attached Warrant in
every particular, without alteration or enlargement or any change whatsoever.

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

23

 

EXHIBIT C

 

FORM OF OPINION

 

             ,
20

 

[                      ]

 

Re:                               Array BioPharma Inc. (the “Company”)

 

Dear Sir:

 

[                      ]
(“[                    ]”)
intends to transfer
              
Warrants (the “Warrants”) of the Company to
                    
(“                 ”)
without registration under the Securities Act of 1933, as amended (the “Securities
Act”).  In connection therewith, we have
examined and relied upon the truth of representations contained in an Investor
Representation Letter attached hereto and have examined such other documents
and issues of law as we have deemed relevant.

 

Based
on and subject to the foregoing, we are of the opinion that the transfer of the
Warrants by
              
to              may
be effected without registration under the Securities Act, provided, however,
that the Warrants to be transferred to
              
contain a legend restricting its transferability pursuant to the Securities Act
and that transfer of the Warrants is subject to a stop order.

 

The
foregoing opinion is furnished only to
                        
and may not be used, circulated, quoted or otherwise referred to or relied upon
by you for any purposes other than the purpose for which furnished or by any
other person for any purpose, without our prior written consent.

 

Very truly yours,

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

24

 

[FORM OF INVESTOR REPRESENTATION LETTER]

 

          ,
20

 

[                                  ]

Gentlemen:

 

                  
(“      ”) has agreed to purchase
                  
Warrants (the “Warrants”) of Array BioPharma Inc. (the “Company”) from
[                      ]
(“[                  ]”).  We understand that the Warrants are “restricted
securities.” We represent and warrant that
             is a
sophisticated institutional investor that qualifies as an “Accredited Investor”
as defined in Rule 501 of Regulation D under the Securities Act of 1933,
as amended (the “Securities Act”).

 

                
represents and warrants as of the date hereof as follows:

 

1.  That it is acquiring the Warrants and the
shares of common stock, $0.001 par value per share underlying such Warrants
(the “Exercise Shares”) solely for its account for investment and not with a
view to or for sale or distribution of said Warrants or Exercise Shares or any
part thereof.
                
also represents that the entire legal and beneficial interests of the Warrants
and Exercise Shares
                  
is acquiring is being acquired for, and will be held for, its account only;

 

2.  That the Warrants and the Exercise Shares
have not been registered under the Securities Act on the basis that no
distribution or public offering of the stock of the Company is to be effected.
              
realizes that the basis for the exemption may not be present if,
notwithstanding its representations,
              
has a present intention of acquiring the securities for a fixed or determinable
period in the future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the securities.
              
has no such present intention;

 

3.  That the Warrants and the Exercise Shares
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
                
recognizes that the Company has no obligation to register the Warrants, or to
comply with any exemption from such registration;

 

4.  That neither the Warrants nor the Exercise
Shares may be sold pursuant to Rule 144 adopted under the Securities Act
unless certain conditions are met, including, among other things, the existence
of a public market for the shares, the availability of certain current public
information about Company, the resale following the required holding period
under Rule 144 and the number of shares being sold during any three month
period not exceeding specified limitations;

 

5.  That it will not make any disposition of all
or any part of the Warrants or Exercise Shares in any event unless and until:

 

(i)            The Company shall have received a letter secured by
                  
from the Securities and Exchange Commission stating that no action will be
recommended to the Securities and Exchange Commission with respect to the
proposed disposition;

 

[***]
Confidential Treatment of 

Redacted Portions Has Been Requested

 

25

 

(ii)           There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with said registration statement; or

 

(iii)          shall have notified the Company of the proposed disposition
and shall have furnished counsel to the Company with an opinion of counsel,
reasonably satisfactory to counsel to the Company, that no registration under
the Securities Act or qualification under any state securities laws is required
for the proposed disposition.

 

We
acknowledge that the Company will place stop orders with respect to the
Warrants and the Exercise Shares, and if a registration statement is not
effective, the Exercise Shares shall bear substantially the following
restrictive legend:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (I) A
REGISTRATION STATEMENT REGISTERING SUCH SECURITIES UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE, OR (II) THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR (III) SUCH
SECURITIES ARE SOLD PURSUANT TO RULE 144 OR RULE 144A.

 

“THE
SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN REGISTRATION RIGHTS
AGREEMENT DATED AS OF
                ,
2008, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN HOLDERS OF
ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE COMPANY.”

 

At
any time and from time to time after the date hereof,
                  
shall, without further consideration, execute and deliver to
[                ]
or the Company such other instruments or documents and shall take such other
actions as they may reasonably request to carry out the transactions
contemplated hereby.

 

Very truly yours,

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

26

 

Schedule 1

 

Black-Scholes Value

 

	
   

  	
   

  	
  Calculation Under Section 5(c)(iii)

  	
   

  	
  Calculation Under Section 10(b) or 11(b)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Remaining Term

  	
   

  	
  Number of calendar days from date of public announcement of the Major
  Transaction until the last date on which the Warrant may be exercised.

  	
   

  	
  Number of calendar days from date of the Event of Failure until the
  last date on which the Warrant may be exercised.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest Rate

  	
   

  	
  A risk-free interest rate corresponding to the US$ LIBOR/Swap rate
  for a period equal to the Remaining Term.

  	
   

  	
  A risk-free interest rate corresponding to the US$ LIBOR/Swap rate
  for a period equal to the Remaining Term.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Volatility

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock Price

  	
   

  	
  [*****]

  	
   

  	
  [*****].

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividends

  	
   

  	
  Zero.

  	
   

  	
  Zero.

  

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

 

 

Schedule 1 to Exhibit 4.1

 

Warrant Number 1 was
issued to Deerfield
Private Design Fund, L.P. to purchase 2,298,000
shares of Common Stock

 

Warrant
Number 2 was issued to Deerfield Private Design International, L.P. to purchase
3,702,000 shares of Common Stock

 

[***] Confidential Treatment of 

Redacted Portions Has Been Requested

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