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EXHIBIT 10.27
Form of Stock Purchase Warrant
This Warrant and any shares acquired upon the exercise of this Warrant have
not been registered under the Securities Act of 1933, as amended, and may
not be transferred, sold, offered for sale, hypothecated or otherwise
disposed of (i) in the absence of a registration statement in effect with
respect to the securities under such Act, or (ii) an opinion of counsel
satisfactory to the Company that such registration is not required or (iii)
pursuant to an exemption from registration under said Act.
This Warrant and any shares acquired upon the exercise of this warrant are
subject to the provisions of a Registration Rights Agreement dated as of
March 20, 1995 by and among the Company and the investors named therein, a
copy of which is on file at the offices of the Company.
GENOME THERAPEUTICS CORP.
Common Stock Purchase Warrant
No. W-___ March 20, 1995
GENOME THERAPEUTICS CORP., a Massachusetts corporation (the "Company"), for
value received, hereby certifies that __________________________________________
the "Investor") or registered and permitted assigns, is entitled to purchase
from the Company ______________ duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock, $.10 par value per share (the "Common
Stock"), of the Company at the purchase price per share of $2.43 (the "Initial
Warrant Price"), at any time or from time to time prior to 5:00 P.M., New York
City time, on
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March 20, 2000 (the "Expiration Date"), all subject to the terms, conditions and
adjustments set forth below in this Warrant.
This Common Stock Purchase Warrant is issued pursuant to the Stock and
Warrant Purchase Agreement dated as of March 20, 1995 between the Company and
the Investor.
Certain capitalized terms used in this Warrant are defined in Section 10
hereof.
1. EXERCISE OR CONVERSION OF WARRANT.
1.1. Manner of Exercise or Conversion; Payment.
1.1.1. Exercise. This Warrant may be exercised by the holder
hereof, in whole or in part, during normal business hours on any business
day on or prior to the Expiration Date, by surrender of this Warrant to the
Company at its office maintained pursuant to Section 9.2(a) hereof,
accompanied by an exercise notice in substantially the form attached to
this Warrant (or a reasonable facsimile thereof) duly executed by such
holder and accompanied by payment, in cash or by check payable to the order
of the Company, in the amount obtained by multiplying (a) the number of
shares of Common Stock designated in such subscription by (b) the Warrant
Price (as defined in Section 2.1 hereof), and such holder shall thereupon
be entitled to receive the number of shares of Common Stock determined as
provided in Section 2 hereof.
1.1.2. Conversion. This Warrant may be converted by the holder
hereof, in whole or in part, into shares of Common Stock, during normal
business hours on any business day on or prior to the Expiration Date, by
surrender of this Warrant to the Company at its office maintained pursuant
to Section 9.2(a) hereof, accompanied by a conversion notice in
substantially the form attached to this Warrant (or a reasonable facsimile
thereof) duly executed by such holder, and such holder shall thereupon be
entitled to receive the same number of shares of Common Stock that such
holder would receive if the Warrant were being exercised pursuant to
Section 1.1.1 for the number of shares designated in the
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conversion notice minus a number of shares equal to (x) the Warrant Price
multiplied by (y) the number of shares designated in the conversion notice
divided by (z) the Current Market Price.
For all purposes of this Warrant (other than this Section 1.1), any
reference herein to the exercise of this Warrant shall be deemed to include
a reference to the conversion of this Warrant into Common Stock in
accordance with the terms of this Section 1.1.2.
1.2. When Exercise Effective. Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the business
day on which this Warrant shall have been surrendered to the Company as provided
in Section 1.1 hereof, and at such time the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such exercise as provided in Section 1.3 hereof shall be deemed to
have become the holder or holders of record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as practicable after each
exercise of this Warrant, in whole or in part, and in any event within five
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof or, subject to Section 7 hereof, as such holder
(upon payment by such holder of any applicable transfer taxes) may direct:
(a) a certificate or certificates for the number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock to
which such holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash in
an amount equal to the same fraction of the Market Price per share on the
business day next preceding the date of such exercise; and
(b) in case such exercise is in part only, a new Warrant or Warrants
of like tenor, dated the date hereof and calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock equal
(without giving
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effect to any adjustment thereof) to the number of such shares called for
on the face of this Warrant minus the number of such shares designated by
the holder upon such exercise as provided in Section 1.1 hereof.
2. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.
2.1. General; Number of Shares; Warrant Price. The number of shares of
Common Stock which the holder of this Warrant shall be entitled to receive upon
each exercise hereof shall be determined by multiplying the number of shares of
Common Stock which would otherwise (but for the provisions of this Section 2) be
issuable upon such exercise, as designated by the holder hereof pursuant to
Section 1.1 hereof, by the fraction of which (a) the numerator is the Initial
Warrant Price and (b) the denominator is the Warrant Price in effect on the date
of such exercise. The "Warrant Price" shall initially be the Initial Warrant
Price, shall be adjusted and readjusted from time to time as provided in this
Section 2 and, as so adjusted or readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by this Section 2.
2.2. Adjustment of Warrant Price. Except as provided in Section 2.6, in
case the Company at any time or from time to time after the date hereof shall
issue or sell Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 2.3 or 2.4 hereof) without
consideration or for a consideration (determined pursuant to Section 2.5 hereof)
per share less than the lesser of (i) the Warrant Price in effect immediately
prior to such issue or sale or (ii) the Current Market Price, then, and in each
such case, subject to Section 2.8 hereof, such Warrant Price shall be reduced,
concurrently with such issue or sale, to a price (calculated to the nearest .001
of a cent) determined by multiplying such Warrant Price by a fraction:
(a) the numerator of which shall be (i) the number of shares of
Common Stock outstanding immediately prior to such issue or sale plus (ii)
the number of shares of Common Stock which the aggregate consideration
received by the Company for the total number of such Additional Shares of
Common Stock so issued or sold would purchase at such Warrant Price
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or Current Market Price, as the case may be; and
(b) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale.
2.3. Treatment of Options and Convertible Securities. Except as provided in
Section 2.6, in case the Company at any time or from time to time after the date
hereof shall issue, sell, grant or assume, or shall fix a record date for the
determination of holders of any class of securities entitled to receive any
Options or Convertible Securities, then, and in each such case, the maximum
number of Additional Shares of Common Stock (as determined in accordance with
the instrument(s) and other documents relating thereto) at any time issuable
upon the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of the time of
such issue, sale, grant or assumption or, in case such a record date shall have
been fixed, as of the close of business on such record date (or, if the Common
Stock trades on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading); provided, however, that such Additional Shares of Common
Stock shall not be deemed to have been issued unless the consideration per share
(determined pursuant to Section 2.5 hereof) of such shares would be less than
the lesser of (i) the Warrant Price then in effect or (ii) the Current Market
Price on the date of and immediately prior to such issue, sale, grant or
assumption or immediately prior to the close of business on such record date
(or, if the Common Stock trades on an ex-dividend basis, on the date prior to
the commencement of ex-dividend trading), as the case may be; and provided,
further, that in any such case in which Additional Shares of Common Stock are
deemed to be issued:
(a) no further adjustment of the Warrant Price shall be made upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities and the consequent issue or sale of Convertible Securities or
shares of Common Stock;
(b) if such Options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for
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any increase in the consideration payable to the Company, or decrease in
the number of Additional Shares of Common Stock issuable, upon the
exercise, conversion or exchange thereof (by change of rate or otherwise),
the Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be, with
respect thereto), and any subsequent adjustments based thereon, shall, upon
any such increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options, or the rights
of conversion or exchange under such Convertible Securities, which are
outstanding at such time;
(c) upon the expiration (or purchase by the Company and cancellation
or retirement) of any such Options which shall not have been exercised, or
the expiration of any rights of conversion or exchange under any such
Convertible Securities which (or purchase by the Company and cancellation
or retirement of any such Convertible Securities the rights of conversion
or exchange under which) shall not have been exercised, the Warrant Price
computed upon the original issue, sale, grant or assumption thereof (or
upon the occurrence of the record date, or date prior to the commencement
of ex-dividend trading, as the case may be, with respect thereto), and any
subsequent adjustments based thereon, shall, upon (and effective as of)
such expiration (or such cancellation or retirement, as the case may be),
be recomputed as if:
(i) in the case of Options or Convertible Securities, the only
Additional Shares of Common Stock issued or sold were the Additional
Shares of Common Stock, if any, actually issued or sold upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities and the consideration received therefor was the
consideration actually received by the Company for (A) the issue,
sale, grant or assumption of all such Options, whether or not
exercised, plus the consideration actually received by the Company
upon such exercise, or for (B) the issue or sale of all such
Convertible Securities which were actually converted or exchanged,
plus the additional
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consideration, if any, actually received by the Company upon such
conversion or exchange, and
(ii) in the case of Options for Convertible Securities, only the
Convertible Securities, if any, actually issued or sold upon the
exercise of such Options were issued at the time of the issue, sale,
grant or assumption of such Options, and the consideration received by
the Company for the Additional Shares of Common Stock deemed to have
then been issued was the consideration actually received by the
Company for the issue, sale, grant or assumption of all such Options,
whether or not exercised, plus the consideration deemed to have been
received by the Company (pursuant to Section 2.5 hereof) upon the
issue or sale of such Convertible Securities with respect to which
such Options were actually exercised; and
(d) no readjustment pursuant to clause (b) or (c) above (either
individually or cumulatively together with all prior readjustments as made
in respect of such Options or Convertible Securities) shall have the effect
of increasing the Warrant Price to a price higher than the Warrant Price
that would have been in effect if such Options or Convertible Securities
had never been issued, and in any event no such readjustment shall have the
effect of increasing the Warrant Price to an amount greater than the
Initial Warrant Price.
If the consideration provided for in any Option or the additional consideration,
if any, payable upon the conversion or exchange of any Convertible Security
shall be reduced, or the rate at which any Option is exercisable or any
Convertible Security is convertible into or exchangeable for shares of Common
Stock shall be increased, at any time under or by reason of provisions with
respect thereto designed to protect against dilution, by agreement of the
parties or otherwise, then, effective concurrently with each such change, the
Warrant Price then in effect shall first be adjusted to eliminate the effects
(if any) of the issuance (or deemed issuance) of such Option or Convertible
Security on the Warrant Price and then readjusted as if such Option or
Convertible Security had been issued on the date of such change with the terms
in effect after such change, but only
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if as a result of such adjustment the Warrant Price then in effect hereunder is
thereby reduced.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the Company
at any time or from time to time after the date hereof shall declare or pay any
dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.
2.5. Computation of Consideration. For the purposes of this Section 2:
(a) the consideration for the issue or sale of any Additional Shares
of Common Stock shall, irrespective of the accounting treatment of such
consideration:
(i) insofar as it consists of cash, be computed at the amount of
cash paid for such Additional Shares of Common Stock, without
deduction for any expenses paid or incurred by the Company or any
commissions or compensations paid or concessions or discounts allowed
to underwriters, dealers or others performing similar services in
connection with such issue or sale;
(ii) insofar as it consists of property (including securities)
other than cash actually received by the Company, be computed at the
fair value thereof at the time of such issue or sale, as determined in
good faith by the Board of Directors of the Company;
(iii) insofar as it consists neither of cash nor of other
property, be computed as having no value; and
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(iv) in case Additional Shares of Common Stock are issued or sold
together with other stock or securities or other assets of the Company
for a consideration which covers both, be the portion of such
consideration so received, computed as provided in clauses (i), (ii)
and (iii) above, allocable to such Additional Shares of Common Stock,
all as determined in good faith by the Board of Directors of the
Company;
Whenever the Board of Directors of the Company shall be required to make a
determination in good faith of any allocation or the fair value of any item
under this Section 2.5(a), such determination may be challenged in good faith by
the holder of any Warrant, and any dispute shall be resolved by an investment
banking or appraisal firm of recognized national standing selected by the
Company and acceptable to the holders of Warrants representing a majority of the
number of shares of Common Stock issuable upon all such Warrants. The decision
of such investment banking or appraisal firm shall be binding on the Company and
all holders of Warrants. The fees and expenses of such investment bank or
appraisal firm shall be borne one-half by the Company and one-half by the
holders of the Warrants challenging such good faith determination.
(b) Additional Shares of Common Stock deemed to have been issued
pursuant to Section 2.3 hereof shall be deemed to have been issued for a
consideration per share determined by dividing:
(i) the total amount of cash and other property, if any,
received and receivable by the Company as direct consideration for the
issue, sale, grant or assumption of the Options or Convertible
Securities in question, plus the minimum aggregate amount of
additional consideration (as determined in accordance with the
instrument(s) and other documents relating thereto) payable to the
Company upon the exercise in full of such Options or the conversion or
exchange of such Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible
Securities, in each case computing such consideration as provided in
the
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foregoing clause (a),
by
(ii) the maximum number of shares of Common Stock (as determined
in accordance with the instrument(s) and other documents relating
thereto) issuable upon the exercise of such Options or the conversion
or exchange of such Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been issued
pursuant to Section 2.4 hereof shall be deemed to have been issued for no
consideration.
2.6. Company Benefit Plans. No adjustment in the Warrant Price shall be
made pursuant to this Section 2 in connection with the issuance or sale of
Additional Shares of Common Stock, Options or Convertible Securities to
employees or directors of, or consultants to, the Company or any of its
subsidiaries in connection with their employment or their provision of services
to the Company or any of its Subsidiaries; provided that: (i) such Additional
Shares of Common Stock, Options or Convertible Securities are issued pursuant to
stock based incentive plans or agreements approved by the Board of Directors and
shareholders of the Company and (ii) immediately following the issuance of any
such Additional Shares of Common Stock, Options and Convertible Securities the
sum of (A) the total number of Additional Shares of Common Stock issued pursuant
to this Section 2.6 or to which this Section 2.6 would have applied if this
Warrant had been outstanding at the time of issuance thereof (including any
shares of Common Stock issued upon exercise of any Options or Convertible
Securities issued pursuant to this Section 2.6 or to which this Section 2.6
would have applied if this Warrant has been outstanding at the time of issuance
of such Options or Convertible Securities) and (B) the maximum number of shares
of Common Stock issuable upon exercise of any Options or Convertible Securities
issued pursuant to this Section 2.6 or to which this Section 2.6 would have
applied if this Warrant had been outstanding at the time of issuance of such
Options and Convertible Securities that are still outstanding at the time of
determination will not exceed 4,000,000 shares (subject to adjustment for any
stock dividend, stock split, reverse split or similar combination or subdivision
of the Common Stock subsequent
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to March 15, 1995).
2.7. Adjustments for Combinations, etc. In case the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2.8. Minimum Adjustment of Warrant Price. If the amount of any adjustment of
the Warrant Price required pursuant to this Section 2 would be less than
one-tenth (1/10) of one percent (1%) of the Warrant Price in effect at the time
such adjustment is otherwise so required to be made, such amount shall be
carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least one tenth
(1/10) of one percent (1%) of such Warrant Price.
2.9. Shares Deemed Outstanding. For all purposes of the computations to be
made pursuant to this Section 2, (i) there shall be deemed to be outstanding all
shares of Common Stock issuable pursuant to the exercise of Options and
conversion of Convertible Securities outstanding upon the Closing (including
without limitation this Warrant, or any Options or Convertible Securities
outstanding after the Closing and referred to in Section 2.6), but only to the
extent that the exercise price of such Options or the conversion price of such
Convertible Securities is less than or equal to the Market Price then in effect,
(ii) immediately after any Additional Shares of Common Stock are deemed to have
been issued pursuant to Section 2.3 or 2.4 hereof, such Additional Shares shall
be deemed to be outstanding if the result of such deemed issuance was a
reduction in the Warrant Price then in effect (provided that if such reduction
is subsequently reversed pursuant to Section 2.3(b) or (c), such Additional
Shares of Common Stock shall thereafter no longer be deemed to be outstanding
under this clause (ii)), (iii) treasury shares shall not be deemed to be
outstanding and (iv) no adjustment shall be made in the Warrant Price upon the
issuance of shares of Common Stock pursuant to Options and Convertible
Securities so deemed to be outstanding, but this
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Section 2.9 shall not prevent other adjustments in the Warrant Price arising by
virtue of such outstanding Options or Convertible Securities pursuant to the
provisions of Section 2.3 hereof; provided, however, that, for purposes of
calculating adjustments to the Warrant Price, there shall be deemed to be
outstanding (subject to the limitations set forth in clauses (i) and (ii) above)
immediately after giving effect to any issuance of shares of Common Stock,
Options or Convertible Securities all shares of Common Stock issuable upon the
exercise of Options and conversion of Convertible Securities then outstanding
(including without limitation the Warrants) after giving effect to antidilution
provisions contained in all such outstanding Options and Convertible Securities
which cause an adjustment in the number of shares of Common Stock so issuable,
either by virtue of such issuance of shares of Common Stock, Options or
Convertible Securities or by virtue of the operation of such antidilution
provisions.
2.10. Other Dilutive Events. In case any event shall occur as to which the
other provisions of this Section 2 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 hereof (including, without limitation, the issuance of securities
other than Common Stock which have the right to participate in distributions to
the holders of Common Stock, or the granting of "phantom stock" rights or "stock
appreciation rights"), then, in each such case, the holders of Warrants
representing a majority of the number of shares of Common Stock issuable upon
exercise of all such Warrants may appoint an independent investment bank or firm
of independent public accountants reasonably acceptable to the Company, which
shall give their opinion as to 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 receipt of such
opinion, the Company will promptly mail a copy thereof to the holder of this
Warrant and shall make the adjustments described therein. The fees and expenses
of such investment bank or independent public accountants shall be borne
one-half by the Company and one-half by the holders of the Warrants requesting
such opinion.
3. CONSOLIDATION, MERGER, ETC. In case the Company after the
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date hereof (a) shall consolidate with or merge into any other Person and shall
not be the continuing or surviving corporation of such consolidation or merger,
or (b) shall permit any other Person to consolidate with or merge into the
Company and the Company shall be the continuing or surviving Person but, in
connection with such consolidation or merger, the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock (other than a capital
reorganization or reclassification to the extent that such capital
reorganization or reclassification results in the adjustment in the Warrant
Price as provided in Section 2.2 hereof), then, and in the case of each such
transaction, proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the holder of this Warrant,
upon the exercise hereof at any time at or prior to the consummation of such
transaction, shall be entitled to receive (at the aggregate Warrant Price in
effect at the time of such consummation, for all Common Stock issuable upon such
exercise immediately prior to such consummation in each case after giving effect
to the resulting adjustment under Section 2 above), in lieu of the Common Stock
issuable upon such exercise, the greatest amount of securities, cash or other
property to which such holder would actually have been entitled as a stockholder
of record of the Company with respect to such transaction.
4. NO IMPAIRMENT. The Company will not, by amendment of its articles of
organization or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against
dilution or other impairment.
5. REPORT AS TO ADJUSTMENTS. In each case of any adjustment or readjustment in
the Warrant Price and/or in the shares of Common Stock issuable upon the
exercise of this Warrant, the Company at its expense will promptly compute such
adjustment or readjustment
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in accordance with the terms of this Warrant and prepare a report setting forth
such adjustment or readjustment and showing in reasonable detail the method of
calculation thereof and the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration received or to be received
by the Company for any Additional Shares of Common Stock issued or sold or
deemed to have been issued, (b) the number of shares of Common Stock outstanding
or deemed to be outstanding, and (c) the Warrant Price in effect immediately
prior to such issue or sale and as adjusted and readjusted (if required by
Section 2 hereof) on account thereof. The Company will forthwith mail a copy of
each such report to the holder of this Warrant and will, upon the written
request at any time of any holder of this Warrant, furnish to such holder a like
report setting forth the Warrant Price at the time in effect and showing in
reasonable detail how it was calculated. The Company will also keep copies of
all such reports at its office maintained pursuant to Section 9.2(a) hereof and
will cause the same to be available for inspection at such office during normal
business hours by any holder of this Warrant or any prospective purchaser of a
Warrant designated by the holder thereof.
6. NOTICES OF CORPORATE ACTION. In the event of
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger involving the Company and any other Person or any transfer of all or
substantially all the assets of the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
the Company will mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record
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is to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right and (ii) the date
or expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, the time, if any such time is to be fixed, as of
which the holders of record of Common Stock shall be entitled to exchange their
shares of Common Stock for the securities or other property deliverable upon
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up and a description in reasonable
detail of the transaction. Such notice shall be mailed to the extent practicable
at least 15 days prior to the date therein specified.
7. RESTRICTIONS ON TRANSFER.
7.1. Restrictive Legends. Except as otherwise permitted by this Section 7,
each certificate for Common Stock issued upon the exercise of any Warrant, each
certificate issued upon the direct or indirect transfer of any such Common
Stock, each Warrant issued upon direct or indirect transfer or in substitution
for any Warrant pursuant to Section 9 hereof shall be transferable only upon
satisfaction of the conditions specified in this Section 7 and shall be stamped
or otherwise imprinted with legends in substantially the form appearing at the
beginning of this Warrant.
7.2. Notice of Proposed Transfer; Opinion of Counsel. Prior to any transfer
of any Restricted Securities, the holder thereof will give written notice to the
Company of such holder's intention to effect such transfer and to comply in all
other respects with this Section 7.2. Each such notice shall describe the manner
and relevant circumstances of the proposed transfer. If in the opinion of
counsel for the holder, which opinion is reasonably acceptable to the Company
and its counsel, the proposed transfer may be effected without registration of
such Restricted Securities under the Securities Act, such holder shall thereupon
be entitled to transfer such Restricted Securities in accordance with the terms
of the notice delivered by such holder to the Company.
7.3. Termination of Restrictions. Except as set forth in
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the proviso to this sentence, the restrictions imposed by this Section 7 upon
the transferability of Restricted Securities shall cease and terminate as to any
particular Restricted Securities (a) when such Restricted Securities shall have
been effectively registered under the Securities Act, or (b) when, in the
opinion of counsel for the holder thereof, which opinion is reasonably
acceptable to the Company and its counsel, such restrictions are no longer
required in order to insure compliance with the Securities Act. Whenever any
restrictions on transferability imposed by this Section 7 shall cease and
terminate as to any Restricted Securities, the holder thereof shall be entitled
to receive from the Company, without expense (other than applicable transfer
taxes, if any), new securities of like tenor not bearing the applicable legend
or legends required by Section 7.1 hereof.
8. RESERVATION OF STOCK, ETC. The Company will at all times reserve and keep
available, solely for issuance and delivery upon exercise of this Warrant, the
number of shares of Common Stock from time to time issuable upon exercise of
this Warrant. All shares of Common Stock issuable upon exercise of this Warrant
shall be duly authorized and, when issued upon such exercise, shall be validly
issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof. At any such time as the Common
Stock is listed on any national securities exchange or NASDAQ, the Company will,
at its expense, obtain promptly and maintain the approval for listing on each
such exchange or NASDAQ, upon official notice of issuance, the shares of Common
Stock issuable upon exercise of this Warrant and maintain the listing of such
shares after their issuance.
9. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
9.1. Ownership of Warrants. The Company may treat the person in whose name
this Warrant is registered on the register kept at the office of the Company
maintained pursuant to Section 9.2(a) hereof as the owner and holder thereof for
all purposes, notwithstanding any notice to the contrary.
9.2. Office; Transfer and Exchange of Warrants.
(a) The Company will maintain an office (which may be an agency
maintained at a bank) at 100 Beaver Street, Waltham, MA 02154 where notices,
presentations and demands
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in respect of this Warrant may be made upon it. Such office shall be
maintained at until such time as the Company shall notify the holder of this
Warrant of any change of location of such office.
(b) The Company shall cause to be kept at its office maintained
pursuant to Section 9.2(a) hereof a register for the registration and
transfer of this Warrant. The name and address of the holder of this
Warrant, the transfers thereof and the names and addresses of transferees of
this Warrant shall be registered in such register.
(c) Upon the surrender of this Warrant, properly endorsed, for
registration of transfer or for exchange at the office of the Company
maintained pursuant to Section 9.2(a) hereof, the Company at its expense
will (subject to compliance with Section 7 hereof, if applicable) execute
and deliver to or upon the order of the holder thereof a new Warrant or
Warrants of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling
in the aggregate on the face or faces thereof for the number of shares of
Common Stock called for on the face or faces of the Warrant so surrendered.
9.3. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of indemnity reasonably satisfactory to the Company in form and amount
or, in the case of any such mutilation, upon surrender of this Warrant for
cancellation at the office of the Company maintained pursuant to Section 9.2(a)
hereof, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor and dated the date hereof.
9.4. Division or Combination. This Warrant may be divided or combined with
other Warrants upon presentation hereof at the office of the Company maintained
pursuant to Section 9.2(a) hereof, together with a written notice specifying the
names and denominations in which new Warrants are to be issued, signed by the
holder hereof or its agent or attorney. Subject to compliance with the
provisions of this Warrant as to any transfer
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which may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to
be divided or combined in accordance with such notice.
10. DIVIDENDS. In the event that the Company at any time or from time to time
after March 20, 1995 shall declare, order, pay or make a dividend or
distribution in respect of its Common Stock, whether payable in cash, evidences
of indebtedness or other securities or property (other than a stock dividend
subject to the provisions of Section 2.4 above), then upon any exercise of this
Warrant the Company shall pay to the holder hereof the amount of cash, and shall
deliver to the holder hereof in kind the evidences of indebtedness, securities
or other property, that would have been payable or deliverable with respect to
each share of Common Stock being purchased upon such exercise (including, in the
event of a conversion of this Warrant pursuant to Section 1.1.2 above, any
shares of Common Stock being subtracted from the number of shares that would
otherwise be issuable upon exercise hereof) if such shares of Common Stock had
been outstanding as of the record date for such dividend or distribution. In
connection with the delivery to the holder hereof of any such evidences of
indebtedness, securities or other property, the Company shall also pay or
deliver to such holder any interest, dividends or other payments that the holder
of this Warrant would have received had such holder continuously held such
evidences of indebtedness, securities or other property from the date of the
related dividend payment or distribution until the date of exercise of this
Warrant.
11. DEFINITIONS. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
Additional Shares of Common Stock: All shares (including treasury shares)
of Common Stock issued or sold (or, pursuant to Section 2.3 or 2.4 hereof,
deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than the shares of
Common Stock issued upon the exercise of this Warrant.
Closing: The time of the closing of the purchase by the Investor of this
Warrant and 850,000 shares of the Common Stock
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of the Company as provided in that certain Stock and Warrant Purchase Agreement
dated as of March 20, 1995 between the Company and the Investor.
Common Stock: As defined in the introduction to this Warrant, such term
includes any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock. Common Stock
will include any stock and other securities of the Company or any other Person
which the holder of this Warrant at any time shall be entitled to receive, or
shall have received, upon the exercise of this Warrant, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock pursuant to
Section 3 hereof or otherwise.
Company: Genome Therapeutics Corp., a Massachusetts corporation.
Convertible Securities: Any evidences of indebtedness, shares of stock
(other than Common Stock) or other securities directly or indirectly convertible
into or exchangeable for Additional Shares of Common Stock.
Current Market Price: On any date specified herein, the average daily Market
Price during the period of the most recent 30 trading days, ending on such date,
except that if no class of the Common Stock is then listed or admitted to
trading on any national securities exchange or quoted in the over-the-counter
market, the Current Market Price shall be the Market Price on such date.
Expiration Date: As defined in the introduction to this Warrant.
Investors: Those persons identified as investors on Schedule I hereto.
Market Price: On any date specified herein, the amount per share of Common
Stock equal to (a) the last sale price of Common Stock, regular way, on such
date or, if no such sale takes place on such date, the average of the closing
bid and asked prices thereof on such date, in each case as officially reported
on the
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principal national securities exchange on which Common Stock is then listed or
admitted to trading, or (b) if Common Stock is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security by the NASD, the last trading price of Common Stock on
such date, or (c) if there shall have been no trading on such date or if Common
Stock is not so designated, the average of the closing bid and asked prices of
Common Stock on such date as shown by the NASD automated quotation system, or
(d) if Common Stock is not then listed or admitted to trading on any national
exchange or quoted in the over-the-counter market, the fair value thereof
determined in good faith by the Board of Directors of the Company as of the date
as of which the determination is to be made; provided that such determination of
fair value may be challenged in good faith by the holder of any Warrant, and any
dispute shall be resolved by an investment banking or appraisal firm of
recognized national standing selected by the Company and acceptable to the
holders of Warrants representing a majority of the number of shares of Common
Stock issuable upon all such Warrants. The decision of such investment banking
or appraisal firm shall be binding on the Company and all holders of Warrants.
The fees and expenses of such investment bank or appraisal firm shall be borne
one-half by the Company and one-half by the holders of the Warrants challenging
such good faith determination.
NASD: The National Association of Securities Dealers, Inc.
Options: Rights, options or warrants to subscribe for, purchase or otherwise
acquire either Additional Shares of Common Stock or Convertible Securities.
Person: A corporation, an association, a partnership, an organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.
Restricted Securities: All of the following: (a) any Warrant bearing the
applicable restricted securities legend referred to in Section 7.1 hereof, (b)
any shares of Common Stock which have been issued upon the exercise of any
Warrant and which are evidenced by a certificate or certificates bearing the
applicable restricted securities legend referred to in such Section, (c) unless
the context otherwise requires, any shares of
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Common Stock which are at the time issuable upon the exercise of any Warrant and
which, when so issued, will be evidenced by a certificate or certificates
bearing the applicable restricted securities legend referred to in such Section.
Securities Act: The Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations thereunder of the Securities and
Exchange Commission or any successor federal agency, all as the same shall be in
effect at the time.
Warrant Price: As defined in Section 2.1 hereof.
Warrants: This Warrant and any warrant of like tenor issued pursuant to the
Purchase Agreement, upon partial exercise of any such Warrant in accordance with
Section 1.3 hereof, upon transfer or exchange of any such Warrant in accordance
with Section 9.2 hereof or upon replacement of any such Warrant in accordance
with Section 9.3 hereof.
12. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in this Warrant
shall be construed as conferring upon the holder hereof any rights as a
stockholder of the Company or as imposing any obligation on such holder to
purchase any securities or as imposing any liabilities on such holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.
13. NOTICES. Any notice or other communication in connection with this Warrant
shall be deemed to be delivered if in writing (or in the form of a telex or
telecopy) addressed as hereinafter provided and if either (x) actually delivered
at said address (evidenced in the case of a telex by receipt of the correct
answerback) or (y) in the case of a letter, three business days shall have
elapsed after the same shall have been deposited in the United States mails,
postage prepaid and registered or certified: (a) if to any holder of this
Warrant, at the registered address of such holder as set forth in the register
kept at the office of the Company maintained pursuant to Section 9.2(a) hereof;
or (b) if to the Company, to the attention of its President at its office
maintained pursuant to Section 9.2(a) hereof; provided, however, that the
exercise of this Warrant shall be effective in the manner provided in
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Section 1 hereof.
[Remainder of page intentionally left blank].
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14. MISCELLANEOUS. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of The Commonwealth of Massachusetts. The section
headings in this Warrant are for purposes of convenience only and shall not
constitute a part hereof.
IN WITNESS WHEREOF, GENOME THERAPEUTICS CORP. has caused this Common Stock
Purchase Warrant to be signed by its duly authorized officer under its corporate
seal.
GENOME THERAPEUTICS CORP.
By:
--------------------------------------
Title:
24
Schedule I
List of Investors
PURCHASER WARRANTS
Biotechnology Value Fund, L.P 313,788
One Sansome Street
San Francisco, CA
Investment 10 L.L.C 134,484
333 W. Wacker Dr. #1600
Chicago, IL 60606
Biotech 1 Investment L.L.C 0
333 W. Wacker Dr. #1600
Chicago, IL 60606
Biotech 2 Investment L.L.C 448,272
333 W. Wacker Dr. #1600
Chicago, IL 60606
Four Partners 111,108
667 Madison Ave
New York, NY
Julian Baker 12,348
667 Madison Ave
New York, NY
---------
TOTAL: 1,020,000
25
FORM OF EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
To GENOME THERAPEUTICS CORP.
The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, __________(1) shares of
the Common Stock covered by the within Warrant and herewith makes payment in
full therefor of $_____ per share or $_______ in the aggregate, and requests
that the certificates for such shares be issued in the name of, and delivered to
, whose address is
Dated:
-----------------------------------------
(Name)
-----------------------------------------
(Title)
-----------------------------------------
(Corporation)
-----------------------------------------
(Street Address)
- --------------
(1) Insert here the number of shares called for on the face of this
Warrant (or, in the case of a partial exercise, the portion thereof as to which
this Warrant is being exercised), in either case without making any adjustment
in the number of shares (or securities, cash or property) to be delivered upon
exercise pursuant to the adjustment provisions of this Warrant. In the case of a
partial exercise, a new Warrant or Warrants will be issued and delivered,
representing the unexercised portion of the Warrant, to the holder surrendering
the Warrant.
26
-----------------------------------------
(City) (State) (Zip Code)
27
FORM OF CONVERSION NOTICE
[To be executed only upon conversion of Warrant]
To GENOME THERAPEUTICS CORP.
The undersigned registered holder of the within Warrant hereby irrevocably
converts such Warrant with respect to __________(1) shares of the Common Stock
covered by the within Warrant which such holder would be entitled to receive
upon the exercise hereof, and requests that the certificates for such shares be
issued in the name of, and delivered to , whose address is
Dated:
-----------------------------------------
(Name)
-----------------------------------------
(Title)
-----------------------------------------
(Corporation)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
- --------------
(1) Insert here the number of shares called for on the face of this
Warrant (or, in the case of a partial conversion, the portion thereof as to
which this Warrant is being converted), in either case without making any
adjustment in the number of shares (or securities, cash or other property) to be
delivered upon conversion pursuant to the adjustment provisions of this Warrant.
In the case of a partial conversion, a new Warrant or Warrants will be issued
and delivered, representing the unconverted portion of the Warrant, to the
holder surrendering the Warrant.
28
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto the right represented by such Warrant
to purchase __________(1) shares of Common Stock of GENOME THERAPEUTICS CORP. to
which such Warrant relates, and appoints Attorney to make such transfer on the
books of GENOME THERAPEUTICS CORP. maintained for such purpose, with full power
of substitution in the premises.
Dated:
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
Signed in the presence of:
-----------------------------------------
(Name)
- -------------------------- -----------------------------------------
(Title)
-----------------------------------------
(Corporation)
- --------------
(1) Insert here the number of shares called for on the face of this
Warrant (or, in the case of a partial assignment, the portion thereof as to
which this Warrant is being assigned), in either case without making any
adjustment in the number of shares (or securities, cash or other property) to be
delivered upon assignment pursuant to the adjustment provisions of this Warrant.
In the case of a partial assignment, a new Warrant or Warrants will be issued
and delivered, representing the unassigned portion of the Warrant, to the holder
surrendering the Warrant.