Exhibit 10.18
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
EXEMPTION TO SUCH ACT.
Void after the Fifth Anniversary of the Date Hereof
WARRANT FOR THE
PURCHASE OF SHARES OF COMMON STOCK
of
GENE LOGIC INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT, for value received, ARE-708 QUINCE ORCHARD, LLC, a
Delaware limited liability company, having its principal offices at 000 Xxxxx
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, together with its
successors and assigns (the "Investor") is entitled to purchase, up to Twenty
Thousand (20,000) duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (the "Common Stock") of Gene Logic Inc.,
a Delaware corporation having its principal offices at 00000 Xxx Xxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Company"), at the per share purchase
price described in Section 1.3 below, subject to the provisions and upon the
terms and conditions hereinafter set forth.
1. Exercise of Warrant. The terms and conditions upon which this Warrant
may be exercised, and the Common Stock covered hereby (the "Warrant Stock")
may be purchased, are as follows:
1.1 Term. Subject to the terms hereof, the purchase right
represented by this Warrant may be exercised in whole or in part at any time
and from time to time from and after the date hereof and on or before the
date which is the earlier of (i) the fifth anniversary of the date of this
Warrant; (ii) the closing of the initial underwritten public offering by the
Company of its Common Stock effected pursuant to a Registration Statement
filed under the Securities Act of 1933, as amended (the "Act"); (iii) the
effective time of a merger or reorganization following which the stockholders
of the Company immediately prior to such transaction own after such
transaction less
than fifty percent (50%) of the equity securities of the surviving
corporation (or its parent, if any), or (iv) the closing of a sale of all or
substantially all of the Company's assets; provided that, if the last day on
which this Warrant may be exercised is a Sunday or a legal holiday or a day
on which banking institutions doing business in the City of Baltimore are
authorized by law to close, this Warrant may be exercised prior to 5:00 p.m.
(Baltimore time) on the next succeeding full business day with the same force
and effect as if exercised on such last day specified herein.
1.2 Number of Shares. The number of shares of Common Stock for
which this Warrant is initially exercisable is Twenty Thousand (20,000)
shares, which number is subject to adjustment pursuant to Section 2 of this
Warrant.
1.3 Purchase Price. The initial per share purchase price for the
shares of Common Stock to be issued upon exercise of this Warrant shall be
$5.40, subject to adjustment as provided herein (the "Warrant Price").
1.4 Method of Exercise. The exercise of the purchase rights
evidenced by this Warrant shall be effected by (a) the surrender of the
Warrant, together with a duly executed copy of the form of a subscription
attached hereto, to the Company at its principal offices and (b) the delivery
of the purchase price (i) by check or bank draft payable to the Company's
order or by wire transfer to the Company's account for the number of shares
for which the purchase rights hereunder are being exercised or any other form
of consideration approved by the Company's Board of Directors or (ii)
pursuant to the procedure set forth in Section 1.5. Each exercise of this
Warrant shall be deemed to have been effected immediately prior to the close
of business on the day on which this Warrant shall have been surrendered to
the Company as provided herein or at such latter date as may be specified in
the executed form of subscription, 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 herein shall be deemed
to have become the holder or holders of record thereof.
1.5 Cashless Exercise. In addition to and without limiting the
rights of the holder hereof under the terms hereof, at the holder's option
this Warrant may be exercised in whole or in part at any time or from time to
time prior to its expiration for a number of shares of Common Stock having an
aggregate fair market value on the date of such exercise equal to the
difference between (a) the fair market value of the number of shares of
Common Stock subject to this Warrant designated for exercise by the holder
hereof on the date of the exercise and (b) the aggregate Warrant Price for
such shares in effect at such time. For the purposes of this Warrant, the
"fair market value" of shares of Common Stock shall be calculated on the
basis of (a) if the Common Stock is then traded on a securities exchange, the
average of the closing prices of the Common Stock on such exchange over the
20 trading day period ending three (3)
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trading days prior to the date of exercise, (b) if the Common Stock is then
regularly traded over-the-counter, the average of the sale prices or
secondarily the closing bid of the Common Stock over the 20 trading day
period ending three (3) trading days prior to the date of exercise, or (c) if
there is no active public market for the Common Stock, the fair market value
thereof shall be determined in good faith by the Company's Board of
Directors. In the event the holder of this Warrant exercises this Warrant
contingent upon the closing of a public offering, the "fair market value" of
a share of Common Stock on the date of exercise shall be equal to the initial
price to the public specified in the final prospectus with respect to such
public offering. The following diagram illustrates how many shares would
then be issued upon exercise pursuant to this Section 1.5:
Let FMV = Fair market value per share of Common Stock
at date of exercise.
PSP = Per share Warrant Price at date of exercise.
N = Number of shares of Common Stock desired to
be exercised.
X = Number of shares of Common Stock issued upon
exercise.
X = (FMV)(N)-(PSP)(N)
-----------------
FMV
No payment of any cash or other consideration to the Company shall be
required from the holder of this Warrant in connection with any exercise of
this Warrant pursuant to this Section 1.5. Such exercise shall be effective
upon the date of receipt by the Company of the original Warrant surrendered
for cancellation and a written request from the holder hereof that the
exercise pursuant to this section be made, or at such later date as may be
specified in such request.
1.6 Issuance of Shares. As soon as reasonably practicable after
each exercise of this Warrant, in whole or in part, 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 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, and (b) in
case such exercise is in part only, a new Warrant or Warrants of like tenor,
calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock equal (without giving 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 herein.
2. Certain Adjustments.
2.1 Mergers Consolidations or Sale of Assets. If at any time
after the date hereof there shall be a capital reorganization (other than a
combination or subdivision of Common Stock otherwise provided for herein), or
spin-off, or a merger or consolidation of the Company with or into another
corporation, or the sale of all or substantially all of the Company's
properties and assets to any other person, then, as a part of such
reorganization, spin-off, merger, consolidation or sale, lawful provision
shall be made so that the Investor shall thereafter be entitled to receive
upon
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exercise of this Warrant, during the period specified in this Warrant and
upon payment of the purchase price, the number of shares of stock or other
securities, cash or property of the Company or the successor corporation
resulting from such reorganization, spin-off, merger, consolidation or sale,
to which a holder of the Common Stock deliverable upon exercise of this
Warrant would have been entitled under the provisions of the agreement in
such reorganization, spin-off, merger, consolidation or sale if this Warrant
had been exercised immediately before such reorganization, spin-off, merger,
consolidation or sale. In any such case, appropriate adjustment (as
determined reasonably and in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant with
respect to the rights and interests of the Investor after the reorganization,
spin-off, merger, consolidation or sale to the end that the provisions of
this Warrant (including adjustment of the purchase price then in effect and
the number of shares of Common Stock issuable upon exercise hereof) shall be
applicable after that event, as near as reasonably may be, in relation to any
shares or other property deliverable after that event upon exercise of this
Warrant.
2.2 Splits and Subdivisions Dividends. In the event the Company
should at any time or from time to time effect or fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common
Stock or the determination of the holders of Common Stock entitled to receive
a dividend or other distribution payable in additional shares of Common Stock
or other securities or warrants, options or other rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (hereinafter referred to as the "Common Stock
Equivalents") without payment of any consideration by such holder for the
additional shares of Common Stock or Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such distribution,
split or subdivision if no record date is fixed), the per share purchase
price shall be appropriately decreased and the number of shares of Common
Stock issuable upon exercise hereof shall be appropriately increased in
proportion to such increase of outstanding shares.
2.3 Combination of Shares. If the number of shares of Common
Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, the per share purchase
price shall be appropriately increased and the number of shares of Common
Stock issuable upon exercise hereof shall be appropriately decreased in
proportion to such decrease in outstanding shares.
2.4 Notice of Other Distributions. In the event the Company
intends to declare a distribution payable in securities of the Company (other
than Common Stock Equivalents) or other persons, evidences of indebtedness
issued by the Company or other persons, assets (including cash dividends) or
options or rights not referred to in subsection 2.2, then, in each such case
for purposes of this subsection 2.4, the Company shall deliver to the
Investor at least twenty (20) days prior to the date of any such distribution
written notice of the Company's intention to make such distribution and
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shall provide the Investor with any information related thereto as the
Investor shall reasonably request.
2.5 Issuance of Additional Common Stock
(a) If, after the date hereof, the Company shall issue or
sell (i) Additional Shares of Common Stock without consideration or for a
consideration per share less than the fair market value of a share of Common
Stock in effect immediately prior to such issue or sale, or (ii) options or
convertible securities with a minimum exercise or exchange price less than
the fair market value of a share of Common Stock then, and in each such case,
the 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 (i) the numerator of which shall be (A) the
number of shares of Common Stock outstanding immediately prior to such issue
or sale plus (B) the number of shares of Common Stock that the aggregate
consideration received by the Company upon such issuance or sale (or, in the
case of options or convertible securities, receivable by the Company upon
exercise or exchange) would purchase at such fair market value, and (ii) the
denominator of which shall be the number of shares of Common Stock
outstanding immediately after such issue or sale (in the case of options or
convertible securities assuming exercise or exchange thereof).
(b) For purposes of this Section 2.5 only, "Common Stock"
shall mean the Common Stock of the Company and all Common Stock Equivalents.
For the purposes of this Section 2.5, the consideration for the issue or sale
of 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 net amount of cash received by the Company, and (ii) insofar
as it consists of property (including securities) other than cash, 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. In the
event of a dispute in good faith by the Investor as to the fair market value
of the consideration consisting of property, at the option of the Investor,
the Company shall engage a consulting firm or investment banking firm
mutually agreed to by the Investor and the Company to prepare an independent
appraisal of the fair market value of such property to be distributed. The
expenses of such appraisal shall be borne by the Company. Insofar as the
consideration for the issue or sale of Additional Shares of Common Stock
consists of both cash and property, it shall be computed as provided in
clauses (i) and (ii) of this Section 2.5(b).
(c) (i) Notwithstanding anything contained herein to the
contrary, the consideration for any Common Stock Equivalents shall be the
total amount of consideration received by the Company for the issuance of
such Common Stock Equivalents plus the minimum amount of consideration
payable to the Company upon exercise, conversion or exchange of Common Stock
Equivalents (the "Net Consideration") determined as of the date of issuance
of such Common
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Stock Equivalents. Any obligation, agreement or understanding to issue
Common Stock Equivalents at any time in the future shall be deemed to be an
issuance at the time such obligation or agreement is made or arises. No
adjustment of the Warrant Price shall be made under this Section 2.5 upon the
issuance of any shares of Common Stock which are issued pursuant to the
exercise, conversion or exchange of any Common Stock Equivalents if any
adjustment shall previously have been made upon the issuance of any such
Common Stock Equivalents.
(ii) Should the Net Consideration for any such Common
Stock Equivalents be increased or decreased from time to time, then, upon the
effectiveness of such change, the Warrant Price will be that which would have
been obtained (A) had the adjustments made upon the issuance of such Common
Stock Equivalents been made upon the basis of the actual Net Consideration
(as so increased or decreased) of such Common Stock Equivalents, and (B) had
adjustments to such Warrant Price since the date of issuance of such Common
Stock Equivalents been made to such Warrant Price as adjusted pursuant to (A)
above. Any adjustment of the Warrant Price with respect to this paragraph
which relates to Common Stock Equivalents shall be disregarded if, as, and
when all of such Common Stock Equivalents expire or are canceled without
being exercised, so that the Warrant Price effective immediately upon
cancellation or expiration shall be equal to the Warrant Price in effect at
the time of the issuance of the expired or canceled Common Stock Equivalents,
with such additional adjustments as would have been made to such Warrant
Price had the expired or canceled Common Stock Equivalents not been issued.
(d) "Additional Shares of Common Stock" shall mean all shares
of Common Stock issued by the Company, whether or not subsequently reacquired
or retired by the Company other than:
(i) the issuance or sale of 2,000,000 shares of Common
Stock or such additional number of shares of Common Stock as authorized by
the Board of Directors, or the grant of options exercisable therefor, to
directors, officers, employees and consultants of the Company or any
subsidiary pursuant to any qualified or non-qualified stock option plan or
agreement, stock purchase plan or agreement, stock restriction agreement,
employee stock ownership plan (ESOP), consulting agreement, or such other
options, issuances, arrangements, agreements or plans approved by a majority
of the members of the Board of Directors.
(ii) shares of Common Stock issued or issuable upon the
exercise of outstanding warrants for an aggregate of 50,000 shares of Series
A-1 Preferred Stock of the Company issued to the holders of such Series A-1
Preferred Stock in connection with the acquisition of such shares;
(iii) shares of Common Stock issued or issuable upon
the exercise of warrants issued in connection with the establishment or
maintenance by the Company of
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credit facilities or equipment financing transactions, approved in each case
by the Board of Directors;
(iv) shares of Common Stock issued or deemed issued in
connection with that certain Equity Adjustment Agreement dated March 29,
1996, by and between the Company and Xxxxxxx X. Xxxxxxx, M.D., Ph.D.;
(v) shares of Common Stock issued or issuable in
connection with the acquisition of operating assets (including patents,
licenses and other intellectual property rights) or other businesses or the
establishment of joint ventures or strategic business relationships approved
in each case by the Board of Directors; and
(vi) 66,666 shares of Common Stock issued or issuable to
BIOS Laboratories, Inc., provided, that, if less than 66,666 shares are
issued to BIOS Laboratories, Inc., the remaining shares may be issued under
(i) above.
All such numbers shall be subject to equitable adjustment in the event of any
stock dividend, stock split, combination, reorganization, recapitalization,
reclassification or other similar event involving a change in the capital
structure of the Company.
(e) The number of shares of Common Stock that the holder of
this Warrant shall be entitled to receive upon each exercise hereof after any
adjustment pursuant to this Section 2.5 shall be determined by multiplying
(i) the number of shares of Common Stock that were issuable immediately prior
to such adjustment, by (ii) the fraction of which (A) the numerator is the
Warrant Price immediately prior to such adjustment and (B) the denominator is
the Warrant Price immediately following such adjustment.
2.6 Certificate as to Adjustments. In the case of each adjustment
or readjustment of the Warrant Price pursuant to this Section 2, the Company
at its expense will promptly compute such adjustment or readjustment in
accordance with the terms hereof and cause a certificate, signed by the
Company's Chief Financial Officer, setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based to be delivered to the holder of this Warrant. The
Company will furnish or cause to be furnished to such holder a certificate
setting forth (a) such adjustments and readjustments, (b) the Warrant Price
at the time in effect and how it was calculated and (c) the number of shares
of Common Stock issuable upon exercise hereof and the amount, if any, of
other property at the time receivable upon the exercise of the Warrant.
2.7 Other Dilutive Events. If any event shall occur as to which
the provisions of Section 2 are not strictly applicable but 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
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of such sections, then, in each such case, the Board of Directors of the
Company shall make such adjustment, if any, on a basis consistent with the
essential intent and principles established in Section 2, necessary to
preserve, without dilution, the purchase rights represented by this Warrant.
The Company will promptly notify the Investor of any such adjustments and
shall make the suggested adjustments.
2.8 No Dilution or Impairment. The Company will not, by amendment
of its certificate of incorporation 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.
Without limiting the generality of the foregoing, the Company (a) will
not permit the par value of any shares of stock receivable upon the exercise
of this Warrant to exceed the amount payable therefor upon such exercise, (b)
will take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares
of stock on the exercise of the Warrants from time to time outstanding; and
(c) will not take any action which results in any adjustments of the Warrant
Price if the total number of shares of Common Stock issuable after the action
upon the exercise of all of the Warrants would exceed the total number of
shares of Common Stock then authorized by the Company's certificate of
incorporation and available for the purpose of issue upon such exercise.
2.9 Notices of Record Date etc. In the event of: (a) any taking by
the Company of a record of the holders of any class of securities of the
Company for the purpose of determining the holders thereof who are entitled
to receive any dividend (other than a cash dividend payable out of earned
surplus at the same rate as that of the last such cash dividend theretofore
paid) 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
property, or to receive any other right; (b) any capital reorganization of
the Company, any reclassification or recapitalization of the capital stock of
the Company or any transfer of all or substantially all of the assets of the
Company to any other person or any consolidation or merger involving the
Company; or (c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, the Company will mail to the holder of this
Warrant at least twenty (20) days prior to the earliest date specified below,
a notice specifying: (i) the date on which any such record 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 on which
any such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding-up is expected to become effective and
the record date for determining stockholders entitled to vote thereon and the
time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be
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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.
3. Fractional Shares. No fractional shares shall be issued in
connection with any exercise of this Warrant. In lieu of the issuance of such
fractional share, the Company shall make a cash payment equal to the then
fair market value of such fractional share as determined in accordance with
Section 1.5 hereof.
4. Representations and Warranties of the Company.
4.1 Authorization. The Company has full power and authority to
enter into this Warrant. This Warrant has been duly authorized, executed and
delivered by the Company and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms.
4.2 Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this
Warrant, such number of its shares of Common Stock, free from preemptive
rights, as shall from time to time be sufficient to effect the exercise of
this Warrant, and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the exercise of the entire
Warrant, in addition to such other remedies as shall be available to the
holder of this Warrant, the Company will take such action as may be necessary
to increase its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purposes. If any shares of its
Common Stock to be reserved for the purpose of issuance upon exercise of the
Warrants require registration with or approval of any governmental authority
under any applicable law before such shares of Common Stock may be validly
issued or delivered, then it shall secure such registration or approval, as
the case may be, and maintain such registration or approval in effect so long
as so required. Nothing herein shall be deemed to require the Company to
register the sale of the Common Stock issued in connection with any exercise
of this Warrant.
4.3 Adjustment in Number of Shares Issuable and Purchase Price.
There has not been nor will there be any adjustment to the number of shares
issuable or the purchase price payable upon the exercise of any securities of
the Company convertible into or exchangeable for shares of Common Stock
resulting from the issuance or exercise of this Warrant.
4.4 Valid Issuance. This Warrant, when issued and delivered in
accordance with the terms hereof will be duly authorized and validly issued,
and the Common Stock issuable upon the exercise hereof, when issued pursuant
to the terms hereof and upon payment of the exercise price, shall, upon such
issuance, be duly authorized, validly issued, fully paid and nonassessable.
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4.5 Series C Convertible Preferred Stock. The per share purchase
price for the shares of Common Stock to be issued upon conversion of the
Company's outstanding Series C Convertible Preferred Stock is $4.50 as of the
date hereof.
5. Privilege of Stock Ownership. Prior to the exercise of this
Warrant, the Investor shall not be entitled, by virtue of holding this
Warrant, to any rights of a stockholder of the Company, including (without
limitation) the right to vote, receive dividends or other distributions,
exercise preemptive rights or be notified of stockholder meetings, and such
holder shall not be entitled to any notice or other communication concerning
the business or affairs of the Company. Nothing in this Section 5, however,
shall limit the right of the Investor to be provided the notices described in
Section 2 hereof or to participate in distributions described in Section 2
hereof if the Investor ultimately exercises this Warrant.
6. Limitation of Liability. Except as otherwise provided herein, in
the absence of affirmative action by the holder hereof to purchase the Common
Stock in accordance herewith, no mere enumeration herein of the rights or
privileges of the holder hereof shall give rise to an obligation on such
holder to purchase any securities or any liability of such holder for the
purchase price or as a stockholder of the Company, whether such obligation or
liability is asserted by the Company or by creditors of the Company.
7. Representations and Warranties of the Investor. The Investor
represents and warrants to the Company as follows:
7.1 Purchase Entirely for Own Account. This Warrant is being
acquired and, if this Warrant is exercised, the Common Stock issuable upon
exercise hereof will be acquired, for investment for such Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the federal or state
securities laws.
7.2 Investment Experience. The Investor represents that it can
bear the economic risk of its investment and has such knowledge and
experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the Warrant and the Common Stock
issuable upon exercise hereof. The Investor also represents it has not been
organized solely for the purpose of acquiring the Warrant or the Common Stock
issuable upon exercise hereof.
7.3 Restricted Securities. The Investor understands that the
Warrant being issued hereunder and the Common Stock issuable upon exercise
hereof are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and have not been registered
under the Act nor qualified under applicable state securities laws and that
under such laws and applicable regulations such securities may not be resold
without registration under the Act, except in certain limited
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circumstances. In this connection, the Investor represents that it is
familiar with Rule 144 promulgated under the Act ("Rule 144"), as presently
in effect, and understands the resale limitations imposed thereby and by the
Act.
7.4 Accredited Investor. The Investor is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Act.
7.5 Legends. It is understood that the certificates evidencing
the Common Stock issuable upon exercise hereof may bear one or all of the
following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN EXEMPTION TO SUCH ACT"
(b) Any legend required by the laws of the States of Delaware
or Maryland and any other state in which the securities will be issued.
8. Additional Agreements
8.1 Market Stand-Off Agreement Except to the extent necessary to
maintain Alexandria Real Estate Equities Inc.'s, the non-managing member of
the Investor ("ARE"), status as a Real Estate Investment Trust ("REIT") under
the Internal Revenue Code of 1986, as amended, the Investor hereby agrees
that, during the period of duration specified by the Company or an
underwriter of Common Stock or other securities of the Company, following the
effective date of a registration statement of the Company filed under the
Act, it shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase
or otherwise transfer or dispose of (other than to a donee who agree to be
similarly bound) any portion of this Warrant or any Common Stock issuable
upon exercise hereof held by it at any time during such period except Common
Stock included in such registration; provided, however, that: (a) all
executive officers and directors of the Company and all other persons with
registration rights enter into similar agreements; and (b) such period shall
not exceed three hundred sixty five (365) days beginning the day after the
effective date of such registration statement.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Common Stock issuable upon
exercise hereof until the end of such period.
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8.2 Confidentiality. In handling any confidential information Investor
shall exercise the same degree of care that it exercises with respect to its
own proprietary information of the same type to maintain the confidentiality
of any nonpublic information thereby received or received pursuant to the
Warrant except that disclosure of such information may be made (i) to the
subsidiaries or affiliates of Investor in connection with their present or
prospective business relations with the Company, (ii) to prospective
transferees or purchasers of any interest in this Warrant, provided that they
have entered into a comparable confidentiality agreement in favor of the
Company, (iii) as may be required in connection with the examination, audit
or similar investigation of Investor. Confidential information hereunder
shall not include information that either: (a) is in the public domain or in
the knowledge or possession of Investor when disclosed to Investor, or (b) is
disclosed to Investor by a third party, provided, that Investor does not
have actual knowledge that such third party is prohibited from disclosing
such information.
8.3 Refusal Rights. On or before the date on which the Company becomes
subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), if the Investor desires to sell all or any
part of the Common Stock acquired under this Warrant (including any
securities received in respect thereof pursuant to recapitalization and the
like), and an offeror (the "Offeror") has made an offer therefore, which
offer the Investor desires to accept, the Investor shall: (i) obtain in
writing a bona fide offer (the "Bona Fide Offer") for the purchase thereof
from the Offeror; and (ii) give written notice (the "Warrant Notice") to the
Company setting forth the Investor's desire to sell such shares, which
Warrant Notice shall be accompanied by a photocopy of the original executed
Bona Fide Offer and shall set forth at least the name and address of the
Offeror and the price and terms of the Bona Fide Offer. Upon receipt of the
Warrant Notice, the Company shall have an option to purchase any or all of
such shares of Common Stock specified in the Warrant Notice, such option to
be exercisable by giving, within fifteen (15) days after the receipt of the
Warrant Notice, a written counter-notice to the Investor. If the Company
elects to purchase any or all such shares of Common Stock, it shall be
obligated to purchase, and the Investor shall be obligated to sell to the
Company, such shares at the price and terms indicated in the Bona Fide Offer
within forty-five (45) days from the date of receipt by the Company of the
Warrant Notice.
The Investor may sell, pursuant to the terms of the Bona Fide
Offer, any or all of such shares not purchased or agreed to be purchased by
the Company at any time during the sixty (60) days immediately following the
expiration of the fifteen (15)-day period during which the Company may give
the aforesaid counter-notice. If any or all such shares of Common Stock are
not sold pursuant to a Bona Fide Offer within the time period permitted
above, the unsold shares of Common Stock shall remain subject to the terms of
this subsection 8.3.
9. Transfers and Exchanges.
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9.1 The Investor agrees not to sell, hypothecate, pledge or
otherwise dispose of any interest in the Warrant or the Common Stock issuable
upon exercise hereof in the United States, its territories, possessions or
any area subject to its jurisdiction, or to any person who is a national
thereof or resident therein (including any estate of such person), or any
corporation, partnership or other entity created or organized therein, other
than in accordance with the Act.
9.2 Upon presentation to the Company's transfer agent of the form
of Assignment attached hereto, a new Warrant shall be issued to the new
holder hereof. New warrants issued in connection with transfers or exchanges
shall not require the signature of the new holder hereof and shall be
identical in form and provision to this Warrant except as to the number of
shares.
9.3 Each certificate evidencing the shares of Common Stock issued
upon exercise of this Warrant, or upon any transfer of such shares (other
than a transfer registered under the Act or any subsequent transfer of shares
so registered) shall, at the option of the Company, contain a legend, in form
and substance reasonably satisfactory to the Company and its counsel,
restricting the transfer of such shares to sales or other dispositions exempt
from the requirements of the Act.
9.4 Ownership of Warrants. The Company may treat the person in
whose name any Warrant is registered on the register kept at the office of
the Company maintained pursuant to Section 9.5(a) as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary, except
that, if and when any Warrant is properly assigned in blank, the Company may
(but shall not be obligated to) treat the bearer thereof as the owner of such
Warrant for all purposes, notwithstanding any notice to the contrary. A
Warrant, if properly assigned, may be exercised by a new holder without a new
Warrant first having been issued.
9.5 Transfer and Exchange of Warrants.
(a) The Company's counsel, Xxxxxx Godward LLP, will serve as
transfer agent for the Company for purposes of this Warrant, where notices,
presentations and demands in respect of this Warrant may be made upon it,
until such time as the Company shall notify the holders of the Warrants of
any change in such transfer agent; and
(b) Upon the surrender of any Warrant, properly endorsed, for
registration of transfer or for exchange, the Company at its expense will
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 or Warrants so
surrendered.
13
10. Successors and Assigns. The terms and provisions of this Warrant
shall be binding upon the Company and the Investor and their respective
successors and assigns, subject at all times to the restrictions set forth
herein.
11. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated,
the Company will make and deliver a new warrant of like tenor and dated as of
such cancellation, in lieu of this Warrant.
12. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or Sunday or shall be a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a legal holiday.
13. Amendments and Waivers. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
Investor. Any such amendment or waiver shall be binding on the parties.
14. Governing Law. The terms and conditions of this Warrant shall be
governed by and construed in accordance with Delaware law, without regard to
conflict of law provisions.
15. Notices. Except as otherwise provided in this Warrant, any
requirement for a notice, demand or request under this Warrant will be
satisfied by a writing (a) hand delivered with receipt; (b) mailed by United
States registered or certified mail or Express Mail, return receipt
requested, postage prepaid; or (c) sent by Federal Express or any other
nationally recognized overnight courier service, and addressed as follows:
if to the Holder, at its address as shown on the books of the Company; and if
to the Company, at the address indicated therefor in the first paragraph of
this Warrant, Attn: Chief Financial Officer, with a copy to L. Xxx Xxxxxxxx,
Esq., Cooley Godward LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx,
Xxxxxxxxxx 00000. All notices that are sent in accordance with this Section
15 will be deemed received by the Holder or the Company on the earliest of
the following applicable time periods: (i) the date the return receipt is
executed; or (ii) the date delivered as documented by the overnight courier
service or the hand delivery receipt. Either the Holder or the Company may
designate a change of address by written notice to the other party.
16. Securities Matters
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From and after the date on which the Company becomes subject to the
reporting requirements of the Exchange Act and in order to make available the
benefits of certain rules and regulations of the Securities and Exchange
Commission (the "SEC") which may at any time permit the sale of the shares of
Common Stock issuable upon exercise of the Warrant to the public without
registration, the Company agrees to use its reasonable best efforts to: (a)
make and keep public information available, as those terms are understood and
defined in Rule 144; (b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Exchange Act; and (c)
furnish to the Investor, within a reasonable amount of time upon written
request, a written statement by the Company as to its compliance with the
public information requirements of Rule 144 of the Act and of the Exchange
Act, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as the Investor may
reasonably require to allow the Investor to sell any such securities without
registration.
15
[Warrant for the Purchase of Shares of Common Stock of Gene Logic Inc.]
GENE LOGIC INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President and CFO
Dated: August 29, 1997
ACCEPTED AND AGREED:
ARE-708 QUINCE ORCHARD, LLC
By: ARE-QRS Corp.
Its Sole Managing Member
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
Dated: August 29, 1997
16
SUBSCRIPTION
GENE LOGIC INC.
000 Xxxxxx Xxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxx
Ladies and Gentlemen:
The undersigned, _____________________, hereby elects to
purchase, pursuant to the provisions of the Warrant dated, _________
__, 1997 held by the undersigned, ________ shares of the Common Stock
of Gene Logic Inc., a Delaware corporation, and tenders herewith
payment of the purchase price of such shares in full.
In exercising its rights to purchase such Common Stock, the
undersigned hereby confirms the investment representations made in
Section 7 and the agreements made in Section 8 of such Warrant.
Dated: ___________ 19__ .
--------------------------------
By
-----------------------------
Address:
--------------------------------
--------------------------------
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[FORM OF ASSIGNMENT]
The undersigned hereby assigns this Warrant to
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------------------------------------------------------------------------------
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(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
---------------------------------------
and irrevocably appoints ___________________ as agent to transfer this
Warrant on the books of the Company. The agent may substitute another to act
for him or it.
Dated: Signed:
--------------------------- ---------------------------
------------------------------------------------------------------------------
(Sign exactly as name appears on the front of this Warrant)
Dated: Signed:
--------------------------- ---------------------------
Name:
----------------------------
Title:
----------------------------
18
