Exercise Price means (a) if Preferred Stock means Series B Preferred Stock, $1.88 per share, or (b) if Preferred Stock means Next Round Stock, the lowest price per share of Next Round Stock paid by investors in the Next Round, in either case subject to adjustment pursuant to Section 8;
Initial Public Offering means the initial underwritten public offering of the Companys Common Stock pursuant to a registration statement under the Act, which public offering has been declared effective by the Securities and Exchange Commission (SEC);
Merger Event means (i) any sale, lease, exclusive license or other transfer of all or substantially all assets of the Company or any merger or consolidation involving the Company in which the Company is not the surviving entity, or in which the outstanding shares of the Companys capital stock are otherwise converted into or exchanged for shares of preferred stock, other securities or property of another entity; or (ii) any Deemed Liquidation Event as such term is defined in the Charter;
Next Round means the next Equity Round in which the Company issues and sells shares of its preferred stock and any options, warrants, rights or other securities that are exercisable, convertible or exchangeable into, or otherwise provide the right to purchase or acquire shares of such preferred stock for aggregate gross cash proceeds of at least $25,000,000;
Preferred Stock means, at the election of the Warrantholder, (A) the Series B Preferred Stock of the Company or (B) upon the closing of the Next Round, the class and series of the preferred stock of the Company and any options, warrants, rights or other securities that are exercisable, convertible or exchangeable into, or otherwise provide the right to purchase or acquire shares of preferred stock (such preferred stock, the Next Round Stock), and, to the extent provided in Sections 8(a) and (b), any other stock into or for which such Preferred Stock may be converted or exchanged, provided, that notwithstanding anything to the contrary contained in this Warrant, if all of the preferred stock of the Company is converted into Common Stock (automatically upon an Initial Public Offering or otherwise), Preferred Stock: shall thereafter refer to Common Stock, with the appropriate adjustment to the number of such shares of Common Stock issuable upon exercise of this Warrant;
Purchase Price means, with respect to any exercise of this Agreement, an amount equal to the Exercise Price as of the relevant time multiplied by the number of shares of Preferred Stock requested to be exercised under this Agreement pursuant to such exercise; and
Warrant Coverage means $396,000.
SECTION 2. TERM OF THE AGREEMENT.
Except as otherwise provided for herein, the term of this Agreement and the right to purchase Preferred Stock as granted herein (the Warrant) shall commence on the Effective Date and shall be exercisable for a period ending upon the earlier to occur of (i) ten (10) years from the Effective Date.
SECTION 3. EXERCISE OF THE PURCHASE RIGHTS.
(a) Exercise. The purchase rights set forth in this Agreement are exercisable by the Warrantholder, in whole or in part, at any time, or from time to time, prior to the expiration of the term set forth in Section 2, by tendering to the Company at its principal office a notice of exercise in the form attached hereto as Exhibit I (the Notice of Exercise), duly completed and executed. Promptly upon receipt of the Notice of Exercise and the payment of the Purchase Price in accordance with the terms set forth below, and in no event later than three (3) days thereafter, the Company shall issue to the Warrantholder a certificate for the number of shares of Preferred Stock purchased and shall execute the acknowledgment of exercise in the form attached hereto as Exhibit II (the Acknowledgment of Exercise) indicating the number of shares which remain subject to future purchases, if any.
The Purchase Price may be paid at the Warrantholders election either (i) by cash or check, or (ii) by surrender of all or a portion of the Warrant for shares of Preferred Stock to be exercised under this Agreement and, if applicable, an amended Agreement representing the remaining number of shares purchasable hereunder, as determined below (Net Issuance). If the Warrantholder elects the Net Issuance method, the Company will issue Preferred Stock in accordance with the following formula: