EXECUTION VERSION
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION
OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THIS WARRANT.
TOLERRX, INC.
WARRANT TO PURCHASE 73,125 SHARES
OF SERIES B PREFERRED STOCK
THIS CERTIFIES THAT, for value received, GATX VENTURES, INC. and its
assignees are entitled to subscribe for and purchase 73,125 shares of the fully
paid and nonassessable Series B Preferred Stock (as adjusted pursuant to Section
4 hereof, the "Shares") of TolerRx, Inc., a Delaware corporation (the
"Company"), at the price of S 1.00 per share (such price and such other price as
shall result, from time to time, from the adjustments specified in Section 4
hereof is herein referred to as the "Warrant Price"), subject to the provisions
and upon the terms and conditions hereinafter set forth. As used herein, (a) the
term "Series Preferred" shall mean the Company's presently authorized Series B
Preferred Stock, and any stock into or for which such Series B Preferred Stock
may hereafter be converted or exchanged, and after the mandatory conversion of
the Series B Preferred Stock to Common Stock shall mean the Company's Common
Stock, (b) the term "Date of Grant" shall mean December 13, 2001, and (c) the
term "Other Warrants" shall mean any other warrants issued by the Company in
connection with the transaction with respect to which this Warrant was issued,
and any warrant issued upon transfer or partial exercise of or in lieu of this
Warrant. The term "Warrant" as used herein shall be deemed to include Other
Warrants unless the context clearly requires otherwise.
1. TERM. The purchase right represented by this Warrant is
exercisable, in whole or in part, at any time and from time to time from the
Date of Grant through December 13, 2011.
2. METHOD OF EXERCISE PAYMENT: ISSUANCE OF NEW WARRANT. Subject to
Section I hereof, the purchase right represented by this Warrant may be
exercised by the holder hereof, in whole or in part and from time to time, at
the election of the holder hereof, by (a) the surrender of this Warrant (with
the notice of exercise substantially in the form attached hereto as Exhibit A-1
duly completed and executed) at the principal office of the Company and by the
payment to the Company, by certified or bank check, or by wire transfer to an
account designated by the Company (a "Wire Transfer") of an amount equal to the
then applicable Warrant Price multiplied by the number of Shares then being
purchased; (b) if in connection with a registered public
offering of the Company's securities, the surrender of this Warrant (with the
notice of exercise form attached hereto as Exhibit A-2 duly completed and
executed) at the principal office of the Company together with notice of
arrangements reasonably satisfactory to the Company for payment to the Company
either by certified or bank check or by Wire Transfer from the proceeds of the
sale of shares to be sold by the holder in such public offering (if any) of an
amount equal to the then applicable Warrant Price per share multiplied by the
number of Shares then being purchased; or (c) exercise of the "net issuance"
right provided for in Section 10.2 hereof. The person or persons in whose
name(s) any certificate(s) representing shares of Series Preferred shall be
issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the shares represented thereby (and such shares shall be deemed to
have been issued) immediately prior to the close of business on the date or
dates upon which this Warrant is exercised. In the event of any exercise of the
rights represented by this Warrant, certificates for the shares of stock so
purchased shall be delivered to the holder hereof as soon as possible and in any
event within thirty (30) days after such exercise and, unless this Warrant has
been fully exercised or expired, a new Warrant representing the portion of the
Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the holder hereof as soon as possible and in
any event within such thirty-day period; provided, however, at such time as the
Company is subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, if requested by the holder of this Warrant, the Company
shall cause its transfer agent to deliver the certificate representing Shares
issued upon exercise of this Warrant to a broker or other person (as directed by
the holder exercising this Warrant) within the time period required to settle
any trade made by the holder after exercise of this Warrant.
3. STOCK FULLY PAID: RESERVATION OF SHARES. All Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance pursuant to the terms and conditions herein, be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. During the period within which the rights represented by this
Warrant may he exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Series
Preferred to provide for the exercise of the rights represented by this Warrant
and a sufficient number of shares of its Common Stock to provide for the
conversion of the Series Preferred into Common Stock.
4. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
A. RECLASSIFICATION OR MERGER. In case of any reclassification
or change of securities of the class issuable upon exercise of this
Warrant (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any merger of the Company with or into
another corporation (other than a merger with another corporation in
which the Company
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is the acquiring and the surviving corporation and which does not result
in any reclassification or change of outstanding securities issuable upon
exercise of this Warrant), or in case of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or
purchasing corporation, as the case may be, shall duly execute and
deliver to the holder of this Warrant a new Warrant (in form and
substance satisfactory to the holder of this Warrant), or the Company
shall make appropriate provision without the issuance of a new Warrant,
so that the holder of this Warrant shall have the right to receive, at a
total exercise price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, and in lieu of the shares of Series
Preferred theretofore issuable upon exercise of this Warrant, (i) the
kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification, change, merger or sale by a holder
of the number of shares of Series Preferred then purchasable under this
Warrant, or (ii) in the case of such a merger or sale in which the
consideration paid consists all or in part of assets other than
securities of the successor or purchasing corporation, at the option of
the Holder of this Warrant, the securities of the successor or purchasing
corporation having a value at the time of the transaction equivalent to
the valuation of the Series Preferred at the time of the transaction. Any
new Warrant shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 4. The provisions of this subparagraph (a) shall similarly apply
to successive reclassifications, changes, mergers and transfers.
B. SUBDIVISION OR COMBINATION OF SHARES. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide
or combine its outstanding shares of Series Preferred, the Warrant Price
shall be proportionately decreased and the number of Shares issuable
hereunder shall be proportionately increased in the case of a subdivision
and the Warrant Price shall be proportionately increased and the number
of Shares issuable hereunder shall be proportionately decreased in the
case of a combination.
C. STOCK DIVIDENDS AND OTHER DISTRIBUTIONS. If the Company at
any time while this Warrant is outstanding and unexpired shall (i) pay a
dividend with respect to Series Preferred payable in Series Preferred,
then the Warrant Price shall be adjusted, from and after the date of
determination of shareholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Warrant Price
in effect immediately prior to such date of determination by a fraction
(A) the numerator of which shall be the total number of shares of Series
Preferred outstanding immediately prior to such dividend or distribution,
and (B) the denominator of which shall be the total number of shares of
Series Preferred outstanding immediately after such dividend or
distribution; or (ii) make any other distribution with respect to Series
Preferred (except any distribution specifically provided for in Sections
4(a) and 4(b)), then, in each such case, provision shall be made by the
Company such that the holder of this Warrant shall receive upon exercise
of this Warrant a proportionate share of any such dividend or
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distribution as though it were the holder of the Series Preferred (or
Common Stock issuable upon conversion thereof) as of the record date
fixed for the determination of the shareholders of the Company entitled
to receive such dividend or distribution.
D. ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in the
Warrant Price, the number of Shares of Series Preferred purchasable
hereunder shall be adjusted, to the nearest whole share, to the product
obtained by multiplying the number of Shares purchasable immediately
prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately prior to such
adjustment and the denominator of which shall be the Warrant Price
immediately thereafter.
E. ANTIDILUTION RIGHTS. The other antidilution rights
applicable to the Shares of Series Preferred purchasable hereunder are
set forth in the Company's Certificate of Incorporation, as amended
through the Date of Grant, a true and complete copy of which is attached
hereto as Exhibit B (the "Charter"). Such antidilution rights shall not
be restated, amended, modified or waived if such restatement, amendment,
modification or waiver adversely affects the holder hereof but does not
similarly affect the other holders of the Series B Preferred Stock
without such holder's prior written consent. The Company shall promptly
provide the holder hereof with any restatement, amendment, modification
or waiver of the Charter promptly after the same has been made.
5. NOTICE OF ADJUSTMENTS. Whenever the Warrant Price or the number of
Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the
Company shall make a certificate signed by its chief financial officer setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the
Warrant Price and the number of Shares purchasable hereunder after giving effect
to such adjustment, and shall cause copies of such certificate to be mailed
(without regard to Section 13 hereof, by first class mail, postage prepaid) to
the holder of this Warrant. In addition, whenever the conversion price or
conversion ratio of the Series Preferred shall be adjusted, the Company shall
make a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the
conversion price or ratio of the Series Preferred after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (without
regard to Section 13 hereof, by first class mail, postage prepaid) to the holder
of this Warrant.
6. FRACTIONAL SHARES. No fractional shares of Series Preferred will
be issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor based on the
fair market value of the Series Preferred on the date of exercise as reasonably
determined in good faith by the Company's Board of Directors.
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7. COMPLIANCE WITH ACT: DISPOSITION OF WARRANT OR SHARES OF SERIES
PREFERRED.
A. COMPLIANCE WITH ACT. The holder of this Warrant, by
acceptance hereof, agrees that this Warrant, and the shares of Series
Preferred to be issued upon exercise hereof and any Common Stock issued
upon conversion thereof are being acquired for investment and that such
holder will not offer, sell or otherwise dispose of this Warrant, or any
shares of Series Preferred to be issued upon exercise hereof or any
Common Stock issued upon conversion thereof except under circumstances
which will not result in a violation of the Securities Act of 1933, as
amended (the "Act") or any applicable state securities laws. Upon
exercise of this Warrant, unless the Shares being acquired are registered
under the Act and any applicable state securities laws or an exemption
from such registration is available, the holder hereof shall confirm in
writing that the shares of Series Preferred so purchased (and any shares
of Common Stock issued upon conversion thereof) are being acquired for
investment and not with a view toward distribution or resale in violation
of the Act and shall confirm such other matters related thereto as may be
reasonably requested by the Company. This Warrant and all shares of
Series Preferred issued upon exercise of this Warrant and all shares of
Common Stock issued upon conversion thereof (unless registered under the
Act and any applicable state securities laws) shall be stamped or
imprinted with a legend in substantially the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY
BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION
STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL
OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii)
RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING
WITH THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER
WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR
INDIRECTLY."
Said legend shall be removed by the Company, upon the request of a
holder, at such time as the restrictions on the transfer of the applicable
security shall have terminated. In addition, in connection with the issuance of
this Warrant, the holder specifically represents to the Company by acceptance of
this Warrant as follows:
(1) The holder is aware of the Company's business
affairs and financial condition, and has acquired
information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this
Warrant. The holder is acquiring this Warrant for its own
account for
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investment purposes only and not with a view to, or for the
resale in connection with, any "distribution" thereof in
violation of the Act.
(2) The holder understands that this Warrant has
not been registered under the Act in reliance upon a
specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of the holder's
investment intent as expressed herein.
(3) The holder further understands that this
Warrant must be held indefinitely unless subsequently
registered under the Act and qualified under any applicable
state securities laws, or unless exemptions from
registration and qualification are otherwise available. The
holder is aware of the provisions of Rule 144, promulgated
under the Act.
(4) The holder is an "accredited investor" as
such term is defined in Rule 501 of Regulation D
promulgated under the Act.
B. DISPOSITION OF WARRANT OR SHARES. With respect to any
offer, sale or other disposition of this Warrant or any shares of Series
Preferred acquired pursuant to the exercise of this Warrant prior to
registration of such Warrant or shares, the holder hereof agrees to give
written notice to the Company prior thereto, describing briefly the
manner thereof, together with a written opinion of such xxxxxx's counsel,
or other evidence, if reasonably satisfactory to the Company, to the
effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Act as then in effect or any
federal or state securities law then in effect) of this Warrant or such
shares of Series Preferred or Common Stock and indicating whether or not
under the Act certificates for this Warrant or such shares of Series
Preferred to be sold or otherwise disposed of require any restrictive
legend as to applicable restrictions on transferability in order to
ensure compliance with such law. Upon receiving such written notice and
reasonably satisfactory opinion or other evidence, the Company, as
promptly as practicable but no later than fifteen (15) days after receipt
of the written notice, shall notify such holder that such holder may sell
or otherwise dispose of this Warrant or such shares of Series Preferred
or Common Stock, all in accordance with the terms of the notice delivered
to the Company. If a determination has been made pursuant to this Section
7(b) that the opinion of counsel for the holder or other evidence is not
reasonably satisfactory to the Company, the Company shall so notify the
holder promptly with details thereof after such determination has been
made. Notwithstanding the foregoing, this Warrant or such shares of
Series Preferred or Common Stock may, as to such federal laws, be
offered, sold or otherwise disposed of in accordance with Rule 144 or
144A under the Act, provided that the Company shall have been furnished
with such information as the Company may reasonably request to provide a
reasonable assurance that the provisions of Rule 144 or 144A have been
satisfied. Each certificate representing this Warrant or the shares of
Series Preferred thus transferred (except a transfer pursuant
-6-
to Rule 144 or 144A) shall bear a legend as to the applicable
restrictions on transferability in order to ensure compliance with such
laws, unless in the aforesaid opinion of counsel for the holder, such
legend is not required in order to ensure compliance with such laws.
The Company may issue stop transfer instructions to its transfer agent
in connection with such restrictions.
C. APPLICABILITY OF RESTRICTIONS. Neither any restrictions of
any legend described in this Warrant nor the requirements of Section 7(b)
above shall apply to any transfer of, or grant of a security interest in,
this Warrant (or the Series Preferred or Common Stock obtainable upon
exercise thereof) or any part hereof (i) to a partner of the holder if
the holder is a partnership or to a member of the holder if the holder is
a limited liability company, (ii) to a partnership of which the holder is
a partner or to a limited liability company of which the holder is a
member, or (iii) to any affiliate of the holder if the holder is a
corporation, bank or bank holding company; PROVIDED, HOWEVER, in any such
transfer, if applicable, the transferee shall on the Company's request
agree in writing to be bound by the terms of this Warrant as if an
original holder hereof. Notwithstanding the foregoing, the Company agrees
that the holder of this Warrant shall have the right to grant
participation interests in this Warrant.
D. TRANSFER RESTRICTION. At all times prior to the Company's
initial Public Offering the holder of this Warrant shall not, without the
prior written consent of the Company, transfer this Warrant (or any part
hereof), any shares of Series Preferred, or any securities issued or
issuable upon conversion of the Series Preferred, to any person who
directly competes with the Company, unless such transfer is in connection
with an acquisition, merger, or consolidation of the Company.
8. RIGHTS AS SHAREHOLDERS: INFORMATION. No holder of this Warrant, as
such, shall be entitled to vote or receive dividends or be deemed the holder of
Series Preferred or any other securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, as such, any of
the rights of a shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised
and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein. Notwithstanding the foregoing, the Company will
transmit to the holder of this Warrant such information, documents and reports
as are generally distributed to the holders of any class or series of the
securities of the Company concurrently with the distribution thereof to the
shareholders.
9. REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The Shares
shall have certain registration rights as set forth in that certain Registration
Rights Agreement of even date herewith between the holder and the Company (the
"Registration Rights Agreement"). The
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Company represents and warrants to Holder that the Company's execution, delivery
and performance of the Registration Rights Agreement (a) has been duly
authorized by all necessary corporate action of the Company's Board of Directors
and shareholders, (b) will not violate the Certificate or the Company's by-laws,
each as amended, (c) will not violate or cause a breach or default (or an event
which with the passage of time or the giving of notice or both, would constitute
a breach or default) under any agreement, instrument, mortgage, deed of trust or
other arrangement to which the Company is a party or by which it or any of its
assets is subject or bound, and (d) does not require the approval, consent or
waiver of or by any shareholder, registration rights holder or other third party
which approval, consent or waiver has not been obtained as of the date of
issuance of this Warrant.
10. ADDITIONAL RIGHTS.
10.1 ACQUISITION TRANSACTIONS. The Company shall provide the holder of
this Warrant with at least twenty (20) days' written notice prior to closing
thereof of the terms and conditions of any of the following transactions (to the
extent the Company has notice thereof): (i) the sale, lease, exchange,
conveyance or other disposition of all or substantially all of the Company's
property or business, or (ii) its merger into or consolidation with any other
corporation (other than a wholly-owned subsidiary of the Company), or any
transaction (including a merger or other reorganization) or series of related
transactions, in which more than 50% of the voting power of the Company is
disposed of.
10.2 RIGHT TO CONVERT WARRANT INTO STOCK: NET ISSUANCE.
A. RIGHT TO CONVERT. In addition to and without limiting the
rights of the holder under the terms of this Warrant, the holder shall
have the right to convert this Warrant or any portion thereof (the
"Conversion Right") into shares of Series Preferred (or Common Stock if
the Series Preferred has been automatically converted into Common Stock)
as provided in this Section 10.2 at any time or from time to time during
the term of this Warrant. Upon exercise of the Conversion Right with
respect to a particular number of shares subject to this Warrant (the
"Converted Warrant Shares"), the Company shall deliver to the holder
(without payment by the holder of any exercise price or any cash or other
consideration) that number of shares of fully paid and nonassessable
Series Preferred (or Common Stock if the Series Preferred has been
automatically converted into Common Stock) as is determined according to
the following formula:
X = B - A
-------
Y
Where: X = the number of shares of Series Preferred (or Common Stock
if the Series Preferred has been automatically converted to
Common Stock) that shall be issued to holder
-8-
Y = the fair market value of one share of Series Preferred (or
Common Stock if the Series Preferred has been automatically
converted to Common Stock)
A = the aggregate Warrant Price of the specified number of
Converted Warrant Shares immediately prior to the exercise
of the Conversion Right (I.E., the number of Converted
Warrant Shares MULTIPLIED BY the Warrant Price)
B = the aggregate fair market value of the specified number of
Converted Warrant Shares (I.E., the number of Converted
Warrant Shares MULTIPLIED BY the fair market value of one
Converted Warrant Share)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 10 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
B. METHOD OF EXERCISE. The Conversion Right may be exercised
by the holder by the surrender of this Warrant at the principal office of
the Company together with a written statement (which may be in the form
of Exhibit A-1 or Exhibit A-2 hereto) specifying that the holder thereby
intends to exercise the Conversion Right and indicating the number of
shares subject to this Warrant which are being surrendered (referred to
in Section 10.2(a) hereof as the Converted Warrant Shares) in exercise of
the Conversion Right. Such conversion shall be effective upon receipt by
the Company of this Warrant together with the aforesaid written
statement, or on such later date as is specified therein (the "Conversion
Date"), and, at the election of the holder hereof, may be made contingent
upon the closing of the sale of the Company's Common Stock to the public
in a public offering pursuant to a Registration Statement under the Act
(a "Public Offering"). Certificates for the shares issuable upon exercise
of the Conversion Right and, if applicable, a new warrant evidencing the
balance of the shares remaining subject to this Warrant, shall be issued
as of the Conversion Date and shall be delivered to the holder within
thirty (30) days following the Conversion Date.
C. DETERMINATION OF FAIR MARKET VALUE. For purposes of this
Section 10.2, "fair market value" of a share of Series Preferred (or
Common Stock if the Series Preferred has been automatically converted
into Common Stock) as of a particular date (the "Determination Date")
shall mean:
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(i) If the Conversion Right is exercised in
connection with and contingent upon a Public Offering, and
if the Company's Registration Statement relating to such
Public Offering ("Registration Statement") has been
declared effective by the Securities and Exchange
Commission, then the initial "Price to Public" specified in
the final prospectus with respect to such offering.
(ii) If the Conversion Right is not exercised in
connection with and contingent upon a Public Offering, then
as follows:
(a) If traded on a securities exchange,
the fair market value of the Common Stock shall be
deemed to be the average of the closing prices of
the Common Stock on such exchange over the five
trading days immediately prior to the Determination
Date, and the fair market value of the Series
Preferred shall be deemed to be such fair market
value of the Common Stock multiplied by the number
of shares of Common Stock into which each share of
Series Preferred is then convertible;
(b) If traded on the Nasdaq Stock Market
or other over-the-counter system, the fair market
value of the Common Stock shall be deemed to be the
average of the closing bid prices of the Common
Stock over the five trading days immediately prior
to the Determination Date, and the fair market value
of the Series Preferred shall be deemed to be such
fair market value of the Common Stock multiplied by
the number of shares of Common Stock into which each
share of Series Preferred is then convertible; and
(c) If there is no public market for the
Common Stock, then fair market value shall be
determined in good faith by the Board of Directors
of the Company.
10.3 EXERCISE PRIOR TO EXPIRATION. To the extent this Warrant is not
previously exercised as to all of the Shares subject hereto, and if the fair
market value of one share of the Series Preferred is greater than the Warrant
Price then in effect, this Warrant shall be deemed automatically exercised
pursuant to Section 10.2 above (even if not surrendered) immediately before its
expiration. For purposes of such automatic exercise, the fair market value of
one share of the Series Preferred upon such expiration shall be determined
pursuant to Section 10.2(c). To the extent this Warrant or any portion thereof
is deemed automatically exercised pursuant to this Section 10.3, the Company
agrees to promptly notify the holder hereof of the number of Shares, if any, the
holder hereof is to receive by reason of such automatic exercise.
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11. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the holder of this Warrant as follows:
A. This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and the
rules of law or principles at equity governing specific performance,
injunctive relief and other equitable remedies;
B. The Shares have been duly authorized and reserved for
issuance by the Company and, when issued in accordance with the terms
hereof, will be validly issued, fully paid and non-assessable;
C. The rights, preferences, privileges and restrictions
granted to or imposed upon the Series Preferred and the holders thereof
are as set forth in the Charter, and on the Date of Grant, each share of
the Series Preferred represented by this Warrant is convertible into one
share of Common Stock;
D. The shares of Common Stock issuable upon conversion of the
Shares have been duly authorized and reserved for issuance by the Company
and, when issued in accordance with the terms of the Charter will be
validly issued, fully paid and nonassessable;
E. The execution and delivery of this Warrant are not, and the
issuance of the Shares upon exercise of this Warrant in accordance with
the terms hereof will not be, inconsistent with the Company's Charter or
by-laws, do not and will not contravene any law, governmental rule or
regulation, judgment or order applicable to the Company, and do not and
will not conflict with or contravene any provision of, or constitute a
default under, any indenture, mortgage, contract or other instrument of
which the Company is a party or by which it is bound or require the
consent or approval of, the giving of notice to, the registration or
filing with or the taking of any action in respect of OR by, any Federal,
state or local government authority or agency or other person, except for
the filing of notices pursuant to federal and state securities laws,
which filings will be effected by the time required thereby; and
F. There are no actions, suits, audits, investigations or
proceedings pending or, to the knowledge of the Company, threatened
against the Company in any court or before any governmental commission,
board or authority which, if adversely determined, will have a material
adverse effect on the ability of the Company to perform its obligations
under this Warrant.
G. The number of shares of Common Stock of the Company
outstanding on the date hereof, on a fully diluted basis (assuming the
conversion of all outstanding
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convertible securities and the exercise of all outstanding options and
warrants), does not exceed 33,965,000 shares.
H. The authorized capital stock of the Company consists of
58,000,000 shares, consisting of 31,818,750 shares of Common Stock, $.001
par value per share, and 26,181,250 shares of preferred stock, $.001 par
value per share, 9,035,000 of which have been designated Series A
Preferred Stock and 17,146.250 of which have been designated Series B
Preferred Stock SCHEDULE 11 (h) sets forth all of the outstanding shares
of common stock and preferred stock and outstanding options, warrants,
convertible securities, convertible debentures, and rights to acquire,
subscribe for, and/or purchase any Common Stock, preferred stock and/or
other capital stock of the Company or any securities or debentures
convertible into or exchangeable for Common Stock, preferred stock and/or
other capital stock of the Company.
12. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
13. NOTICES. Any notice, request, communication or other document
required or permitted to be given or delivered to the holder hereof or the
Company shall be delivered, or shall be sent by certified or registered mail,
postage prepaid, to each such holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor on the signature
page of this Warrant.
14. BINDING EFFECT ON SUCCESSORS. This Warrant shall he binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets, and all of the obligations
of the Company relating to the Series Preferred issuable upon the exercise or
conversion of this Warrant shall survive the exercise, conversion and
termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the holder
hereof.
15. LOST WARRANTS OR STOCK CERTIFICATES. The Company covenants to the
holder hereof that, upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant or any
stock certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.
16. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. The language in this Warrant shall be
construed as to its fair meaning without regard to which party drafted this
Warrant.
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17. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.
18. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties of the Company and the holder hereof contained
herein shall survive the Date of Grant, the exercise or conversion of this
Warrant (or any part hereof) or the termination or expiration of rights
hereunder. All agreements of the Company and the holder hereof contained herein
shall survive indefinitely until, by their respective terms, they are no longer
operative.
19. REMEDIES. In case any one or more of the covenants and agreements
contained in this Warrant shall have been breached, the holders hereof (in the
case of a breach by the Company), or the Company (in the case of a breach by a
holder), may proceed to protect and enforce their or its rights either by suit
in equity and/or by action at law, including, but not limited to, an action for
damages as a result of any such breach and/or an action for specific performance
of any such covenant or agreement contained in this Warrant.
20. NO IMPAIRMENT OF RIGHTS. The Company will not, by amendment of its
Charter or through any other means, 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 impairment.
21. SEVERABILITY. The invalidity or unenforceability of any provision
of this Warrant in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction, or affect any other
provision of this Warrant, which shall remain in full force and effect.
22. RECOVERY OF LITIGATION COSTS. If any legal action or other
proceeding is brought for the enforcement of this Warrant, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Warrant, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
23. ENTIRE AGREEMENT; MODIFICATION. This Warrant constitutes the
entire agreement between the parties pertaining to the subject matter contained
in it and supersedes all prior and contemporaneous agreements, representations,
and undertakings of the parties, whether oral or written, with respect to such
subject matter.
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The Company has caused this Warrant to be duly executed and delivered as
of the Date of Grant specified above.
TOLERRX, INC.
By Xxxxxxx X. Xxxxxxx
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Title CEO
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Address:
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