Attached files
| file | filename |
|---|---|
| S-1/A - ASSEMBLY BIOSCIENCES, INC. | v196825_s1a.htm |
| EX-4.4 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex4-4.htm |
| EX-4.8 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex4-8.htm |
| EX-4.5 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex4-5.htm |
| EX-4.9 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex4-9.htm |
| EX-4.7 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex4-7.htm |
| EX-23.1 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex23-1.htm |
| EX-10.8 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex10-8.htm |
| EX-4.12 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex4-12.htm |
| EX-4.11 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex4-11.htm |
| EX-10.14 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex10-14.htm |
| EX-10.10 - ASSEMBLY BIOSCIENCES, INC. | v196825_ex10-10.htm |
Exhibit
10.9
CONSULTING
AGREEMENT
THIS CONSULTING AGREEMENT,
dated as of May 11, 2010 (this "Agreement"), is by and
between Ventrus Biosciences, Inc., a Delaware corporation (the “Company”), and Timothy Hofer
("Consultant").
WITNESSETH:
WHEREAS, Company is a
development stage biomedical and pharmaceutical company;
WHEREAS, Consultant
provides expertise in general matters relating to business and company
development;
WHEREAS, Company desires
that it be able to call upon the knowledge and experience of Consultant for
consultation services and advice; and
WHEREAS, Consultant is willing
to render such services to Company on the terms and conditions hereinafter set
forth in this Agreement.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
Section
1. Services. Consultant
agrees to provide general consulting services to Company focused on general
business and company development (the “Services”); provided
that the parties hereby acknowledge and agree that the Services shall not
include, and at no time will Consultant be deemed to be providing to the
Company, any legal services or legal advice. Consultant hereby
agrees that the
Services shall be provided at such times and at such places as the Company shall
reasonably request, and in accordance with the highest prevailing industry
standards and practices for the performance of similar services.
Section
2. Term of
Agreement. The retention of the
Consultant by the Company as provided in Section 1 above shall be for a period
of one (1) year from the date hereof, unless sooner terminated in accordance
herewith (the “Term”); provided,
however, that the Term shall be extended automatically for such longer period
time as may be agreed to in writing by Consultant and the Company. Notwithstanding anything
to the contrary contained herein, the Agreement may be terminated by Consultant
or the Company by either party providing the other with thirty (30) days prior
written notice. Immediately upon receipt of such notice from the
Company, Consultant shall institute such reasonable termination procedures as
may be specified in the notice and shall use his best efforts to minimize the
cost to Company resulting from such termination. Sections 5, 6, 7, 8
and 9 shall survive the expiration or termination of this
Agreement.
Section 3. Compensation. As full compensation for
the performance by Consultant of the Services hereunder, the Company shall grant
Consultant on the date hereof the warrant to purchase shares of the Company’s
common stock attached hereto as Appendix
A.
Section 4. Expenses. The
Company shall reimburse Consultant for all reasonable and necessary expenses
incurred by Consultant in connection with the Services provided hereunder; provided, however, that such
expenses are pre-approved in writing by the Company.
Section
5. Confidential Information and
Inventions.
(a) Consultant
recognizes and acknowledges that in the course of his duties Consultant is
likely to receive confidential or proprietary information owned by the Company
or third parties with whom the Company has an obligation of
confidentiality. Accordingly, during and after the Term, Consultant
shall use his best efforts to protect the confidentiality of the Confidential
and Proprietary Information and agrees to keep confidential and not disclose or
make accessible to any other person or use for any other purpose other than in
connection with the fulfillment of his duties under this Agreement, any
Confidential and Proprietary Information (as defined below) owned by, or
received by or on behalf of, the Company. “Confidential and
Proprietary Information” shall include, but shall not be limited to,
confidential or proprietary scientific or technical information, data, formulas
and related concepts, business plans (both current and under development),
client lists, promotion and marketing programs, trade secrets, or any other
confidential or proprietary business information relating to development
programs, costs, revenues, marketing, investments, sales activities, promotions,
credit and financial data, manufacturing processes, financing methods, plans or
the business and affairs of the Company or of any client of the
Company. Consultant expressly acknowledges the trade secret status of
the Confidential and Proprietary Information and that the Confidential and
Proprietary Information constitutes a protectable business interest of the
Company. Consultant agrees: (i) not to use any such Confidential and
Proprietary Information for himself or others; and (ii) not to take any Company
material or reproductions (including but not limited to writings,
correspondence, notes, drafts, records, invoices, technical and business
policies, computer programs or disks) thereof from the Company’s offices at any
time during the Term, except as required in the execution of Consultant’s duties
to the Company. Consultant agrees to return immediately all Company
material and reproductions (including but not limited, to writings,
correspondence, notes, drafts, records, invoices, technical and business
policies, computer programs or disks) thereof in his possession to the Company
upon request and in any event immediately upon termination or expiration of the
Term.
Section 6. Insider
Trading. Consultant recognizes that in the course of his
duties hereunder, Consultant may receive from the Company or others information
that may be considered "material, nonpublic information" concerning a public
company that is subject to the reporting requirements of the Securities and
Exchange Act of 1934, as amended. Consultant agrees NOT to:
(a) Purchase
or sell, directly or indirectly, any securities of any company while in
possession of relevant material, nonpublic information relating to such company
received from the Company or others in connection herewith;
(b) Provide
Company with information with respect to any public company that may be
considered material, nonpublic information with Company’s prior consent;
or
(c) Communicate
any material, nonpublic information to any other person in which it is
reasonably foreseeable that such person is likely to (i) purchase or sell
securities of any company with respect to which such information relates, or
(ii) otherwise directly or indirectly benefit from such
information.
Section 7. Representations,
Warranties and Covenants of Consultant. The Consultant hereby
represents, warrants and covenants to the Company as follows:
(a) Neither
the execution or delivery of this Agreement nor the performance by Consultant of
his duties and other obligations hereunder violate or will violate any statute,
law, determination or award, or conflict with or constitute a default or breach
of any covenant or obligation under (whether immediately, upon the giving of
notice or lapse of time or both) any prior employment agreement, contract, or
other instrument to which Consultant is a party or by which he is
bound.
(b) Consultant
has the full right, power and legal capacity to enter and deliver this
Agreement, as applicable, and to perform his duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding
obligation of Consultant enforceable against him in accordance with its
terms. No approvals or consents of any persons or entities are
required for Consultant to execute and deliver this Agreement, as applicable, or
perform his duties and other obligations hereunder.
Section 8. Consultant
not an Employee. Company and Consultant hereby acknowledge and
agree that Consultant shall perform the Services hereunder as an independent
contractor and not as an employee or agent of Company. Consultant
will be solely responsible for all taxes, withholding and other similar
statutory obligations. Consultant is not to represent that he is an
employee of Company under any circumstance. In addition, nothing in
this Agreement shall be construed as establishing any joint venture, partnership
or other business relationship between the parties hereto or representing any
commitment by either party to enter into any other agreement by implication or
otherwise except as specifically stated herein. Consultant shall not
have any authority, express or implied, to bind Company to any agreement,
contract, or other commitment. Consultant further understands and
agrees that this Agreement is entered into by Company on a non-exclusive
basis.
Section 9. Miscellaneous.
(a) This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York, without giving effect to its principles
of conflicts of laws.
(b) Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than Section 5 hereof), or regarding the interpretation thereof, shall be
finally settled by arbitration conducted in New York City in accordance with the
rules of the American Arbitration Association then in effect before a single
arbitrator appointed in accordance with such rules. Judgment upon any
award rendered therein may be entered and enforcement obtained thereon in any
court having jurisdiction. The arbitrator shall have authority to
grant any form of appropriate relief, whether legal or equitable in nature,
including specific performance. For the purpose of any judicial
proceeding to enforce such award or incidental to such arbitration or to compel
arbitration and for purposes of Section 5 hereof, the parties hereby submit to
the exclusive jurisdiction of the Supreme Court of the State of New York, New
York County, or the United States District Court for the Southern District of
New York, and agree that service of process in such arbitration or court
proceedings shall be satisfactorily made upon it if sent by registered mail
addressed to it at the address referred to in paragraph (g)
below. The costs of such arbitration shall be borne proportionate to
the finding of fault as determined by the arbitrator. Judgment on the
arbitration award may be entered by any court of competent
jurisdiction.
(c) This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective heirs, legal representatives, successors and permitted
assigns.
(d) This
Agreement, and Consultant’s rights and obligations hereunder, may not be
assigned, delegated or otherwise subcontracted by Consultant. The
Company may assign its rights, together with its obligations, hereunder in
connection with any sale, transfer or other disposition of all or substantially
all of its business or assets.
(e) This
Agreement cannot be amended orally, or by any course of conduct or dealing, but
only by a written agreement signed by the parties hereto.
(f) The
failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Agreement shall not be construed as a
waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No
waiver of any term or condition of this Agreement on the part of either party
shall be effective for any purpose whatsoever unless such waiver is in writing
and signed by such party.
(g) All
notices, demands or other communications desired or required to be given by any
party to any other party hereto shall be in writing and shall be deemed
effectively given upon (i) personal delivery to the party to be notified, (ii)
upon confirmation of receipt of telecopy or other electronic transmission, (iii)
one business day after deposit with a reputable overnight courier, prepaid for
priority overnight delivery, or (iv) five days after deposit with the United
States Post Office, postage prepaid, in each case to such party at the address
set forth above, or to such other addresses and to the attention of such other
individuals as any party shall have designated to the other parties by notice
given in the foregoing manner.
(h) This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
(i) The
section headings contained herein are for reference purposes only and shall not
in any way affect the meaning or interpretation of this
Agreement.
(j) This
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same instrument.
(k) As
used in this Agreement, the masculine, feminine or neuter gender, and the
singular or plural, shall be deemed to include the others whenever and wherever
the context so requires. Additionally, unless the context requires
otherwise, "or" is not exclusive.
[Remainder of Page Intentionally Left
Blank – Signature Page Follows]
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first written above
by proper person thereunto duly authorized.
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VENTRUS
BIOSCIENCES, INC.
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By:
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/s/ Thom Rowland
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Name:
Thom Rowland
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Title:
Acting President
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CONSULTANT
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/s/ Timothy Hofer
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Timothy
Hofer
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Exhibit
A
Form of
Warrant
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAW. THIS WARRANT AND SUCH SECURITIES MAY NOT BE OFFERED,
SOLD OR OTHERWISE PLEDGED, TRANSFERRED OR HYPOTHECATED IN THE ABSENCE OF SUCH
REGISTRATION OR DELIVERY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE
WITH RULE 144 UNDER THE ACT.
VENTRUS BIOSCIENCES,
INC.
Warrant
for the Purchase of Shares of
Common
Stock
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No. [3]
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[_____] Shares
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FOR
VALUE RECEIVED, VENTRUS BIOSCIENCES, INC., a Delaware corporation (the “Company”), hereby
certifies that Timothy Hofer, its designee or its permitted assigns is entitled
to purchase from the Company, at any time or from time to time commencing on
April [__], 2010 and prior to 5:00 P.M., New York City time, on April [__], 2017
(the “Exercise Period”), [__,000] fully paid and
non-assessable shares of common stock, $0.001 par value per share, as adjusted
pursuant to Section 3 hereof. The purchase price per share shall be
equal to the price per share of common stock issued in the Company’s next equity
financing (or series of related equity financings) sufficient to trigger
conversion of its presently existing senior convertible promissory notes in an
aggregate principal amount equal to $[________] on the date hereof (the “Senior Bridge Notes”)
into shares of capital stock, pursuant to the terms thereof (a “Qualified
Financing”). Notwithstanding the foregoing, in the event that
no such Qualified Financing occurs by September 10, 2010, then such price per
share shall be equal to the fair market value of the Company’s common stock, as
determined pursuant to a valuation performed by an independent appraisal firm
using generally accepted valuation principles under Internal Revenue Code
Section 409A (“Section
409A”). (Hereinafter, (i) said common stock, $0.001 par value
per share, of the Company, is referred to as the “Common Stock”; (ii)
the shares of the Common Stock (subject to adjustment as set forth herein)
purchasable hereunder are referred to as the “Warrant Shares”;
(iii) the aggregate purchase price payable for the Warrant Shares purchasable
hereunder is referred to as the “Aggregate Warrant
Price”; (iv) the price payable (as determined in accordance herewith) for
each of the Warrant Shares hereunder is referred to as the “Per Share Warrant
Price”; (v) the holder of this Warrant is referred to as the “Holder”; and (vi) the
then Current Market Price per share of the Common Stock (the “Current Market
Price”) shall be deemed to be the average closing sale price of the
Common Stock for the ten (10) Trading Days (as defined below) immediately prior
to such date or, in case no such reported sales take place on such days, the
average of the last reported bid and asked prices of the Common Stock on such
days, in either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not listed or admitted to
trading on any such exchange, the per share sale price of the Common Stock in
the over-the-counter market as reported by the OTC Bulletin Board or another
over the counter market, or if not so available, the fair market value of the
Common Stock as determined in good faith by the Company’s Board of
Directors. A “Trading Day” shall
mean any day on which such principal exchange or market is open for trading, or
if there is no such exchange or market, then any day except Saturdays, Sundays
or federal holidays. The Company hereby represents and warrants that
the Per Share Warrant Price will equal the fair market value of a Warrant Share
determined on the date of determination in accordance with the principles of
Section 409A. The Aggregate Warrant Price is not subject to
adjustment.
1. Exercise
of Warrant.
(a) This
Warrant may be exercised in whole at any time, or in part from time to time, by
the Holder during the Exercise Period:
(i) by
the surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in subsection 8(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part, with payment for the Warrant Shares made
by certified or official bank check payable to the order of, or wire transfer of
immediately available funds to, the Company; or
(ii) by
the surrender of this Warrant (with the cashless exercise form at the end hereof
duly executed) (a “Cashless Exercise”)
at the address set forth in subsection 8(a) hereof. Such presentation
and surrender shall be deemed a waiver of the Holder’s obligation to pay the
Aggregate Warrant Price, or the proportionate part thereof if this Warrant is
exercised in part. In the event of a Cashless Exercise, the Holder
shall exchange its Warrant for that number of Warrant Shares subject to such
Cashless Exercise multiplied by a fraction, the numerator of which shall be the
difference between the then Current Market Price and the Per Share Warrant
Price, and the denominator of which shall be the then Current Market
Price. For purposes of any computation under this subparagraph (ii),
the then Current Market Price shall be based on the Trading Day immediately
prior to the Cashless Exercise.
(b) If this
Warrant is exercised in part, this Warrant must be exercised for a number of
whole shares of the Common Stock and the Holder is entitled to receive a new
Warrant covering the Warrant Shares that have not been exercised and setting
forth the proportionate part of the Aggregate Warrant Price applicable to such
Warrant Shares. Upon surrender of this Warrant in connection with the
exercise of this Warrant pursuant to the terms hereof, the Company will (i)
issue a certificate or certificates in the name of the Holder for the largest
number of whole shares of the Common Stock to which the Holder shall be entitled
upon such exercise and, if this Warrant is exercised in whole, in lieu of any
fractional share of the Common Stock to which the Holder shall be entitled, pay
to the Holder cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, or the proportionate part thereof,
if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.
2. Reservation
of Warrant Shares; Listing.
The
Company agrees that, prior to the expiration of this Warrant, the Company shall
at all times (a) have authorized and in reserve, and shall keep available,
solely for issuance and delivery upon the exercise of this Warrant, the shares
of the Common Stock and other securities and properties as from time to time
shall be receivable upon the exercise of this Warrant, free and clear of all
restrictions on sale or transfer, other than under Federal or state securities
laws, and free and clear of all preemptive rights and rights of first refusal
and (b) if the Company hereafter lists its Common Stock on any national
securities exchange, use its commercially reasonable efforts to keep the Warrant
Shares authorized for listing on such exchange upon notice of
issuance.
3. Certain
Adjustments.
(a) If,
at any time or from time to time after the date of this Warrant, the Company
shall issue or distribute to all holders of shares of Common Stock by reason of
their ownership thereof evidence of its indebtedness, any other securities of
the Company or any cash, property or other assets (excluding a subdivision,
combination or reclassification, or dividend or distribution payable in shares
of Common Stock, referred to in subsection 3(b), and also excluding cash
dividends or cash distributions paid out of net profits legally available
therefor (any such non-excluded event being herein called a “Special Dividend”)),
the Per Share Warrant Price shall be adjusted (effective upon such issuance or
distribution) by multiplying the Per Share Warrant Price then in effect by a
fraction, the numerator of which shall be the then-current Per Share Warrant
Price less the fair market value (as determined in good faith by the Company’s
Board of Directors) of the evidence of indebtedness, cash, securities or
property, or other assets issued or distributed in such Special Dividend
applicable to one share of Common Stock and the denominator of which shall be
the then-current Per Share Warrant Price. An adjustment made pursuant
to this subsection 3(a) shall become effective immediately prior to the payment
date but after the record date of any such Special Dividend. If such dividend,
distribution, subdivision or combination is not consummated in full, the Per
Share Warrant Price and Warrant Shares shall be readjusted
accordingly.
(b) In
case the Company shall hereafter (i) pay a dividend or make a distribution on
its Common Stock in shares of Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii) combine or
reverse-split its outstanding shares of Common Stock into a smaller number of
shares or (iv) issue by reclassification of its Common Stock any shares of
capital stock of the Company, then the Per Share Warrant Price and the number of
Warrant Shares shall forthwith be proportionately decreased and increased,
respectively, in the case of a subdivision, distribution or stock dividend, or
proportionately increased and decreased, respectively, in the case of a
combination or reverse stock split. The Aggregate Warrant Price
payable for the then total number of Warrant Shares available for exercise under
this Warrant shall remain the same. Adjustments made pursuant to this
subsection 3(b) shall become effective on the record date in the case of a
dividend or distribution, and shall become effective immediately after the
effective date in the case of a subdivision, combination or
reclassification. If such dividend, distribution, subdivision or
combination is not consummated in full, the Per Share Warrant Price and Warrant
Shares shall be readjusted accordingly.
(c) In
case of any capital reorganization or reclassification, or any consolidation or
merger to which the Company is a party other than a merger or consolidation in
which the Company is the continuing corporation, or in case of any sale or
conveyance to another entity of all or substantially all of the assets of the
Company, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company but excluding any exchange of securities or
merger with another corporation in which the Company is a continuing corporation
and that does not result in any reclassification of or similar change in the
Common Stock), the Holder of this Warrant shall have the right thereafter to
receive on the exercise of this Warrant the kind and amount of securities, cash
or other property which the Holder would have owned or have been entitled to
receive immediately after such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance had this Warrant been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with respect to the
rights and interests thereafter of the Holder of this Warrant to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant; provided, however, that if the Holder of this Warrant shall have
the right thereafter to cash or in the event that the payment of securities,
cash or other property as contemplated hereunder on exercise of this Warrant
triggers or could reasonably be expected to trigger adverse tax consequences on
the Holder of this Warrant under Section 409A, such payment shall be made to the
Holder of this Warrant on the consummation of the transaction described in this
Section 3(c). The above provisions of this subsection 3(c) shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, statutory exchanges, sales or
conveyances. The Company shall require the issuer of any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant to be responsible for all of the agreements and obligations of the
Company hereunder. Notice of any such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and of said provisions so proposed to be made, shall be mailed to the Holder not
less than twenty (20) days prior to such event. A sale of all or
substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
(d) No
adjustment in the Per Share Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least $0.01 per share of
Common Stock; provided, however, that any
adjustments which by reason of this subsection 3(d) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
provided, further, however,
that adjustments shall be required and made in accordance with the provisions of
this Section 3 (other than this subsection 3(d)) not later than such time as may
be required in order to preserve the tax-free nature of a distribution, if any,
to the Holder of this Warrant or Common Stock issuable upon the exercise
hereof. All calculations under this Section 3 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may
be. Anything in this Section 3 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Per Share Warrant
Price, in addition to those required by this Section 3, as it in its discretion
shall deem to be advisable in order that any stock dividend, subdivision of
shares or distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.
(e) The number
of Warrant Shares issuable upon exercise of this Warrant shall be automatically
adjusted in the event that the Company consummates a Qualified Financing on or
after the date hereof, such that this Warrant is exercisable into [__] percent
(__%) of the Company’s outstanding Common Stock determined on a fully diluted
basis, after giving effect to such Qualified Financing (including the conversion
into capital stock of any Senior Bridge Notes triggered by such Qualified
Financing). The Company shall promptly issue a replacement Warrant to
Holder reflecting the aggregate number of Warrant Shares underlying this
Warrant, after any adjustment provided herein. Once the Company has
consummated a Qualified Financing, then the adjustment provided for herein shall
terminate. For the avoidance of doubt, the number of Warrant Shares
underlying this Warrant shall be adjusted after giving effect to such Qualified
Financing, so that the Warrant Shares equal [__] percent (__%) of the sum of (i)
then-outstanding shares of Common Stock, plus (ii) all Equity Securities issued
to holders of the Company’s Senior Bridge Notes pursuant to the conversion
thereof triggered by the Equity Financing, plus (iii) the Equity Securities
issuable to investors investing directly into such Qualified Financing, in each
case determined on a fully diluted basis.
(f) Whenever
the Per Share Warrant Price or the number of Warrant Shares is adjusted as
provided in this Section 3 and upon any modification of the rights of the Holder
in accordance with this Section 3, the Company shall promptly prepare a brief
statement of the facts requiring such adjustment or modification and the manner
of computing the same and cause copies of such certificate to be mailed to the
Holder. The Company may, but shall not be obligated to unless
requested by the Holder, obtain, at its expense, a certificate of a firm of
independent public accountants of recognized standing selected by the Board of
Directors (who may be the regular auditors of the Company) setting forth the Per
Share Warrant Price and the number of Warrant Shares in effect after such
adjustment or the effect of such modification, a brief statement of the facts
requiring such adjustment or modification and the manner of computing the same
and cause copies of such certificate to be mailed to the Holder.
(g) If the
Board of Directors of the Company shall declare any dividend or other
distribution with respect to the Common Stock other than a cash distribution out
of earned surplus, the Company shall mail notice thereof to the Holder not less
than ten (10) days prior to the record date fixed for determining
stockholders entitled to participate in such dividend or other
distribution.
(h) If,
as a result of an adjustment made pursuant to this Section 3, the Holder
thereafter surrendered for exercise shall become entitled to receive shares of
two or more classes of capital stock or shares of Common Stock and other capital
stock of the Company, the Board of Directors (whose determination shall be
conclusive and shall be described in a written notice to the Holder promptly
after such adjustment) shall determine, in good
faith, the allocation of the
adjusted Per Share Warrant Price between or among shares or such classes of
capital stock or shares of Common Stock and other capital stock.
(i) In
case any event shall occur as to which the other provisions of this Section 3
are not strictly applicable but as to which the failure to make any adjustment
would not fairly protect the purchase rights represented by this Warrant in
accordance with the essential intent and principles of the adjustments set forth
in this Section 3 then, in each such case, the Board of Directors of the Company
shall in good faith determine the adjustment, if any, on a basis consistent with
the essential intent and principles established herein, necessary to preserve
the purchase rights represented by the Warrants. Upon such determination, the
Company will promptly mail a copy thereof to the Holder and shall make the
adjustments described therein.
(j) Upon
the expiration of any rights, options, warrants or conversion privileges with
respect to the issuance of which an adjustment to the Per Share Warrant Price
had been made, if such option, right, warrant or conversion shall not have been
exercised, the number of Warrant Shares purchasable upon exercise of this
Warrant, to the extent this Warrant has not then been exercised, shall, upon
such expiration, be adjusted and shall thereafter be such as it would have been
had it been originally adjusted (or had the original adjustment not been
required, as the case may be) on the basis of (A) the number of shares of Common
Stock, if any, actually issued or sold upon the exercise of such rights,
options, warrants or conversion privileges, and (B) the amount of consideration
actually received by the Company upon such exercise plus the amount of
consideration, if any, actually received by the Company for the issuance, sale
or grant of all such rights, options, warrants or conversion privileges whether
or not exercised; provided, however, that no such readjustment shall have the
effect of decreasing the number of Warrant Shares purchasable upon exercise of
this Warrant by an amount in excess of the amount of the adjustment initially
made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion privileges.
(k) It
is intended that any adjustment under this Section 3 shall be performed in a
manner consistent with Section 409A.
4. Fully
Paid Stock; Taxes. The shares of the Common Stock represented
by each and every certificate for Warrant Shares delivered on the exercise of
this Warrant shall, subject to compliance by the Holder with the terms hereof,
at the time of such delivery, be duly authorized, validly issued and
outstanding, fully paid and nonassessable, and not subject to preemptive rights
or rights of first refusal imposed by any agreement to which the Company is a
party, and the Company will take all such actions as may be necessary to assure
that the par value, if any, per share of the Common Stock is at all times equal
to or less than the then Per Share Warrant Price. The Company shall
pay, when due and payable, any and all Federal and state stamp, original issue
or similar taxes which may be payable in respect of the issue of any Warrant
Share or any certificate thereof to the extent required because of the issuance
by the Company of such security.
5. Investment
Intent; Limited Transferability.
(a) By
accepting this Warrant, the Holder represents to the Company that it understands
that this Warrant and any securities obtainable upon exercise of this Warrant
have not been registered for sale under Federal or state securities laws and are
being offered and sold to the Holder pursuant to one or more exemptions from the
registration requirements of such securities laws. In the absence of
an effective registration of such securities or an exemption therefrom, any
certificates for such securities shall bear the legend set forth on the first
page hereof. The Holder understands that it must bear the economic
risk of its investment in this Warrant and any securities obtainable upon
exercise of this Warrant for an indefinite period of time, as this Warrant and
such securities have not been registered under Federal or state securities laws
and therefore cannot be sold unless subsequently registered under such laws,
unless an exemption from such registration is available. The Holder
further represents to the Company, by accepting this Warrant, that it has full
power and authority to accept this Warrant and make the representations set
forth herein.
(b) The
Holder, by its acceptance of this Warrant, represents to the Company that it is
acquiring this Warrant and will acquire any securities obtainable upon exercise
of this Warrant for its own account for investment and not with a view to, or
for sale in connection with, any distribution thereof in violation of the
Act. The Holder agrees, by acceptance of this Warrant, that this
Warrant and any such securities issuable under
this Warrant will not be sold or otherwise transferred unless (i) a
registration statement with respect to such transfer is effective under the Act
and any applicable state securities laws or (ii) such sale or transfer is made
pursuant to one or more exemptions from the Act.
(c) In
addition to the limitations set forth in Section 1 and in accordance with the
legend on the first page hereof, this Warrant may not be sold, transferred,
assigned or hypothecated by the Holder except in compliance with the provisions
of the Act and the applicable state securities “blue sky” laws, and is so
transferable only upon the books of the Company which it shall cause to be
maintained for such purpose. The Company may treat the registered Holder as it
appears on the Company’s books at any time as the Holder for all
purposes. The Company shall permit the Holder or its duly authorized
attorney, upon written request during ordinary business hours, to inspect and
copy or make extracts from its books showing the registered
Holder. All Warrants issued upon the transfer or assignment of this
Warrant will be dated the same date as this Warrant, and all rights of the
holder thereof shall be identical to those of the Holder unless, in each case,
otherwise prohibited by applicable law.
(d) The
Holder has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the Warrant or the exercise of the
Warrant; and (ii) the opportunity to request such additional information which
the Company possesses or can acquire without unreasonable effort or
expense.
(e) The
Holder did not (i) receive or review any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit, or generally available; or
(ii) attend any seminar, meeting or investor or other conference whose attendees
were, to such Holder’s knowledge, invited by any general solicitation or general
advertising.
(f) The
Holder is acquiring the Warrants for its own account and not with a present view
to, or for sale in connection with, any distribution thereof in violation of the
registration requirements of the Act, without prejudice, however, to the
Holder’s right, subject to the provisions of the Warrant, at all times to sell
or otherwise dispose of all or any part of such Warrant and Warrant
Shares.
(g) Either
by reason of such Holder’s business or financial experience or the business or
financial experience of its professional advisors (who are unaffiliated with and
who are not compensated by the Company or any affiliate, finder or selling agent
of the Company, directly or indirectly), such Holder has the capacity to protect
such Holder’s interests in connection with the transactions contemplated by this
Warrant. The Holder, by its acceptance of this Warrant, represents to
the Company that it is able to fend for itself, can bear the economic risk of
its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in this Warrant. The Holder also represents it has not been organized
for the purpose of acquiring this Warrant.
6. Loss,
etc., of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to the Company, if lost,
stolen or destroyed, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver to the Holder a new Warrant of
like date, tenor and denomination.
7. Warrant
Holder Not Stockholder. This Warrant does not confer upon the
Holder any right to vote on or consent to or receive notice as a stockholder of
the Company, as such, in respect of any matters whatsoever, nor any other rights
or liabilities as a stockholder, prior to the exercise hereof; this Warrant
does, however, require certain notices to the Holder as set forth
herein.
8. Communication. No
notice or other communication under this Warrant shall be effective or deemed to
have been given unless, the same is in writing and is mailed by certified
first-class mail, postage prepaid, or via recognized overnight courier with
confirmed receipt, addressed to:
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(a)
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the
Company at Ventrus Biosciences, Inc., at [_____________];
or
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(b)
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the
Holder at 49 Columbia Place, Apt. 1, Brooklyn, NY 11201 or other such
address as the Holder has designated in writing to the
Company.
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9. Headings. The
headings of this Warrant have been inserted as a matter of convenience and shall
not affect the construction hereof.
10. Applicable
Law. This Warrant shall be governed by and construed in
accordance with the law of the State of New York without giving effect to the
principles of conflicts of law thereof.
11. Amendment,
Waiver, etc. This Warrant may be amended and the observance of
any term of this Warrant may be waived, discharged or terminated only with the
written consent of the Company and the Holder.
* * * * *
IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by the undersigned duly authorized
officer, this [__]th day of April, 2010.
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VENTRUS
BIOSCIENCES, INC.
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By:
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__________________________
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Name:
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Thomas
Rowland
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Title:
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Acting
President
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SUBSCRIPTION (cash)
The
undersigned, ___________________, pursuant to the provisions of the foregoing
Warrant, hereby agrees to subscribe for and purchase ____________________ shares
of the Common Stock, par value $0.001 per share, of Ventrus Biosciences, Inc.
covered by said Warrant, and makes payment therefor in full at the price per
share provided by said Warrant.
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Dated:
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Signature:
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Address:
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CASHLESS
EXERCISE
The
undersigned _____________, pursuant to the provisions of the foregoing Warrant,
hereby elects to exchange its Warrant for ___________________ shares of Common
Stock, par value $0.001 per share, of Ventrus Biosciences, Inc. pursuant to the
Cashless Exercise provisions of the Warrant.
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Dated:
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Signature:
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Address:
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ASSIGNMENT
FOR
VALUE RECEIVED _______________ (“Assignor”) hereby
sells, assigns and transfers unto ____________________ (“Transferee”) the
foregoing Warrant and all rights evidenced thereby, and does irrevocably
constitute and appoint _____________________, attorney, to transfer said Warrant
on the books of Ventrus Biosciences, Inc. By acceptance of the
foregoing Warrant, Transferee shall become a Holder under said Warrant and
subject to the rights, obligations and representations of Holder set forth in
said Warrant.
ASSIGNOR:
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Dated:
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Signature:
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Address:
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TRANSFEREE:
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Dated:
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Signature:
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Address:
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PARTIAL
ASSIGNMENT
FOR
VALUE RECEIVED _______________ (“Assignor”) hereby
assigns and transfers unto ____________________ (“Transferee”) the
right to purchase _______ shares of Common Stock, par value $0.001 per share, of
Ventrus Biosciences, Inc. covered by the foregoing Warrant, and a proportionate
part of said Warrant and the rights evidenced thereby, and does irrevocably
constitute and appoint ____________________, attorney, to transfer such part of
said Warrant on the books of Ventrus Biosciences, Inc. By acceptance
of the proportionate part of foregoing Warrant, Transferee shall become a Holder
under said proportionate part of said Warrant and subject to the rights,
obligations and representations of Holder set forth in said
Warrant.
ASSIGNOR:
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Dated:
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Signature:
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Address:
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TRANSFEREE:
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Dated:
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Signature:
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Address:
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