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EXHIBIT 10.6
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
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Warrant No. ____ Number of Shares: 25,000
(subject to adjustment)
Date of Issuance: October 28, 1994
FREE RADICAL SCIENCES, INC.
Common Stock Purchase Warrant
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(Void after October 28, 2004)
Free Radical Sciences, Inc., a Delaware corporation (the
"Company"), for value received, hereby certifies that Massachusetts
Institute of Technology (the "Investor"), or its registered assigns
(the "Registered Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company, at any time or from time to time
on or after the date of issuance and on or before October 28, 1999 at
not later than 5:00 p.m. (Boston, Massachusetts time), 25,000 shares of
Common Stock, $.01 par value per share, of the Company, at a purchase
price of $1.00 per share; PROVIDED HOWEVER, that if the term of the
Lease Agreement, dated October 28, 1994, between the Company and the
Investor (the "Lease Agreement"), is extended pursuant to Section 2.2
of the Lease Agreement, the Investor or the Registered Holder will be
entitled to purchase such shares at any time before the termination of
the Extension Term (as that term is defined in the Lease). The shares
purchasable upon exercise of this Warrant, and the purchase price per
share, each as adjusted from time to time pursuant to the provisions of
this Warrant, are hereinafter referred to as the "Warrant Shares" and
the "Purchase Price," respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder,
in whole or in part, by surrendering this Warrant, with the purchase
form appended hereto as EXHIBIT I duly executed by such Registered
Holder or by such Registered Holder's duly authorized attorney, at the
principal office of the Company, or at such other office or agency as
the Company may designate, accompanied by payment in full, in lawful
money of the United States, of the Purchase Price payable in respect of
the number of Warrant Shares purchased upon such exercise.
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(b) The Registered Holder may, at its option, elect to pay
some or all of the Purchase Price payable upon an exercise of this
Warrant by cancelling a portion of this Warrant exercisable for such
number of Warrant Shares as is determined by dividing (i) the total
Purchase Price payable in respect of the number of Warrant Shares being
purchased upon such exercise by (ii) the excess of the Fair Market
Value per share of Common Stock as of the effective date of exercise,
as determined pursuant to subsection 1(c) below (the "Exercise Date")
over the Purchase Price per share. If the Registered Holder wishes to
exercise this Warrant pursuant to this method of payment with respect
to the maximum number of Warrant Shares purchasable pursuant to this
method, then the number of Warrant Shares so purchasable shall be equal
to the total number of Warrant Shares, minus the product obtained by
multiplying (x) the total number of Warrant Shares by (y) a fraction,
the numerator of which shall be the Purchase Price per share and the
denominator of which shall be the Fair Market Value per share of Common
Stock as of the Exercise Date. The Fair Market Value per share of
Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national
securities exchange, the NASDAQ National Market System, the NASDAQ
system, or another nationally recognized exchange or trading system as
of the Exercise Date, the Fair Market Value per share of Common Stock
shall be deemed to be the last reported sale price per share of Common
Stock thereon on the Exercise Date; or, if no such price is reported on
such date, such price on the next preceding business day (provided that
if no such price is reported on the next preceding business day, the
Fair Market Value per share of Common Stock shall be determined
pursuant to clause (ii)).
(ii) If the Common Stock is not listed on a national
securities exchange, the NASDAQ National Market System, the NASDAQ
system or another nationally recognized exchange or trading system as
of the Exercise Date, the Fair Market Value per share of Common Stock
shall be deemed to be the amount most recently determined by the Board
of Directors to represent the fair market value per share of the Common
Stock (including without limitation a determination for purposes of
granting Common Stock options or issuing Common Stock under an employee
benefit plan of the Company); and, upon request of the Registered
Holder, the Board of Directors (or a representative thereof) shall
promptly notify the Registered Holder of the Fair Market Value per
share of Common Stock. Notwithstanding the foregoing, if the Board of
Directors has not made such a determination within the three-month
period prior to the Exercise Date, then (A) the Fair Market Value per
share of Common Stock shall be the amount next determined by the Board
of Directors to represent the fair market value per
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share of the Common Stock (including without limitation a determination
for purposes of granting Common Stock options or issuing Common Stock
under an employee benefit plan of the Company), (B) the Board of
Directors shall make such a determination within 15 days of a request
by the Registered Holder that it do so, and (C) the exercise of this
Warrant pursuant to this subsection 1(b) shall be delayed until such
determination is made.
(c) 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 in subsection 1(a) above. At such time, the person or persons
in whose name or names any certificates for Warrant Shares shall be
issuable upon such exercise as provided in subsection 1(d) below shall
be deemed to have become the holder or holders of record of the Warrant
Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant
in full or in part, and in any event within 10 days thereafter, the
Company, at its expense, will cause to be issued in the name of, and
delivered to, the Registered Holder, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
Warrant Shares to which such Registered Holder shall be entitled upon
such exercise plus, in lieu of any fractional share to which such
Registered Holder would otherwise be entitled, cash in an amount
determined pursuant to Section 3 hereof; and
(ii) in case such exercise is in part only, a new warrant
or warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of Warrant Shares
equal (without giving effect to any adjustment therein) to the number
of such shares called for on the face of this Warrant minus the sum of
(a) the number of such shares purchased by the Registered Holder upon
such exercise plus (b) the number of Warrant Shares (if any) covered by
the portion of this Warrant cancelled in payment of the Purchase Price
payable upon such exercise pursuant to subsection 1(b) above.
2. ADJUSTMENTS.
(a) If outstanding shares of the Company's Common Stock shall
be subdivided into a greater number of shares or a dividend in Common
Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of
such dividend shall simultaneously with the
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effectiveness of such subdivision or immediately after the record date
of such dividend be proportionately reduced. If outstanding shares of
Common Stock shall be combined into a smaller number of shares, the
Purchase Price in effect immediately prior to such combination shall,
simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made
in the Purchase Price, the number of Warrant Shares purchasable upon
the exercise of this Warrant shall be changed to the number determined
by dividing (i) an amount equal to the number of shares issuable upon
the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Purchase Price in effect immediately prior to such
adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(b) If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in
par value or a subdivision or combination as provided for in subsection
2(a) above), or any consolidation or merger of the Company with or into
another corporation, or a transfer of all or substantially all of the
assets of the Company, then, as part of any such reorganization,
reclassification, consolidation, merger or sale, as the case may be,
lawful provision shall be made so that the Registered Holder of this
Warrant shall have the right thereafter to receive upon the exercise
hereof the kind and amount of shares of stock or other securities or
property which such Registered Holder would have been entitled to
receive if, immediately prior to any such reorganization,
reclassification, consolidation, merger or sale, as the case may be,
such Registered Holder had held the number of shares of Common Stock
which were then purchasable upon the exercise of this Warrant. In any
such case, appropriate adjustment (as reasonably determined in good
faith by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the
rights and interests thereafter of the Registered Holder of this
Warrant, such that the provisions set forth in this Section 2
(including provisions with respect to adjustment of the Purchase Price)
shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.
(c) When any adjustment is required to be made in the
Purchase Price, the Company shall promptly mail to the Registered
Holder a certificate setting forth the Purchase Price after such
adjustment and setting forth a brief statement of the facts requiring
such adjustment. Such certificate shall also set forth the kind and
amount of stock or other securities or property into which this Warrant
shall be exercisable following the occurrence of any of the events
specified in subsection 2(a) or (b) above.
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3. FRACTIONAL SHARES. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make
an adjustment therefor in cash on the basis of the Fair Market Value
per share of Common Stock, as determined pursuant to subsection 1(b)
above.
4. REQUIREMENTS FOR TRANSFER.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered
under the Securities Act of 1933, as amended (the "Act"), or (ii) the
Company first shall have been furnished with an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect that
such sale or transfer is exempt from the registration requirements of
the Act.
(b) Notwithstanding the foregoing, no registration or opinion
of counsel shall be required for (i) a transfer by a Registered Holder
which is a partnership to a partner of such partnership or a retired
partner of such partnership who retires after the date hereof, or to
the estate of any such partner or retired partner, if the transferee
agrees in writing to be subject to the terms of this Section 4, or (ii)
a transfer made in accordance with Rule 144 under the Act.
(c) Each certificate representing Warrant Shares shall bear a
legend substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is
not required."
The foregoing legend shall be removed from the certificates
representing any Warrant Shares, at the request of the holder thereof,
at such time as they become eligible for resale pursuant to Rule 144(k)
under the Act.
5. NO IMPAIRMENT. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution,
sale of assets 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
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action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against impairment.
6. LIQUIDATING DIVIDENDS. If the Company pays a dividend or
makes a distribution on the Common Stock payable otherwise than in
cash out of earnings or earned surplus (determined in accordance with
generally accepted accounting principles) except for a stock dividend
payable in shares of Common Stock (a "Liquidating Dividend"), then the
Company will pay or distribute to the Registered Holder of this
Warrant, upon the exercise hereof, in addition to the Warrant Shares
purchased upon such exercise, the Liquidating Dividend which would
have been paid to such Registered Holder if he had been the owner of
record of such Warrant Shares immediately prior to the date on which a
record is taken for such Liquidating Dividend or, if no record is
taken, the date as of which the record holders of Common Stock
entitled to such dividends or distribution are to be determined.
7. NOTICES OF RECORD DATE, ETC. In Case:
(a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time deliverable upon
the exercise of this Warrant) for the purpose of entitling or enabling
them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or
any other securities, or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation
or merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity),
or any transfer of all or substantially all of the assets of the
Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be
mailed to the Registered Holder of this Warrant a notice specifying, as
the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up
is to take place, and the time, if any is to be fixed, as of which the
holders of record of Common Stock (or such other stock or securities at
the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock
or
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securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the record date or effective date for the
event specified in such notice.
8. RESERVATION OF STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the exercise
of this Warrant, such number of Warrant Shares and other stock,
securities and property, as from time to time shall be issuable upon
the exercise of this Warrant.
9. EXCHANGE OF WARRANTS. Upon the surrender by the Registered
Holder of any Warrant or Warrants, properly endorsed, to the Company at
the principal office of the Company, the Company will, subject to the
provisions of Section 4 hereof, issue and deliver to or upon the order
of such Holder, at the Company's expense, a new Warrant or Warrants of
like tenor, in the name of such Registered Holder or as such Registered
Holder (upon payment by such Registered 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.
10. 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 loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if
reasonably required) in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation
of this Warrant, the Company will issue, in lieu thereof, a new Warrant
of like tenor.
11. TRANSFERS, ETC.
(a) The Company will maintain a register containing the names
and addresses of the Registered Holders of this Warrant. Any Registered
Holder may change its or his address as shown on the warrant register
by written notice to the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this
Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant with a properly executed assignment (in
the form of EXHIBIT II hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant
as the absolute owner hereof for all purposes;
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PROVIDED, HOWEVER, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the
bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
12. REGISTRATION RIGHTS. The shares of Common Stock issuable upon
exercise of this Warrant shall have the registration rights set forth
in Section 3 of the Registration Rights Agreement, dated April 5, 1994,
between the Company and certain investors listed on the signature pages
thereto.
13. MAILING OF NOTICES, ETC. All notices and other communications
from the Company to the Registered Holder of this Warrant shall be
mailed by first-class certified or registered mail, postage prepaid, to
the address furnished to the Company in writing by the last Registered
Holder of this Warrant who shall have furnished an address to the
Company in writing. All notices and other communications from the
Registered Holder of this Warrant or in connection herewith to the
Company shall be mailed by first-class certified or registered mail,
postage prepaid, to the Company at its principal office set forth
below. If the Company should at any time change the location of its
principal office to a place other than as set forth below, it shall
give prompt written notice to the Registered Holder of this Warrant and
thereafter all references in this Warrant to the location of its
principal office at the particular time shall be as so specified in
such notice.
14. NO RIGHTS AS STOCKHOLDER. Until the exercise of this
Warrant, the Registered Holder of this Warrant shall not have or
exercise any rights by virtue hereof as a stockholder of the
Company.
15. CHANGE OR WAIVER. Any term of this Warrant may be
changed or waived only by an instrument in writing signed by the
party against which enforcement of the change or waiver is sought.
16. HEADINGS. The headings in this Warrant are for purposes
of reference only and shall not limit or otherwise affect the
meaning of any provision of this Warrant.
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17. GOVERNING LAW. This Warrant will be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts.
FREE RADICAL SCIENCES, INC.
By: /s/ B. Xxxxxxxx Xxxxxx
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[Corporate Seal] Title: CFO/Secretary
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ATTEST:
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EXHIBIT I
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PURCHASE FORM
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To: Free Radical Sciences, Inc. Dated:______________
The undersigned, pursuant to the
provisions set forth in the attached Warrant (No. ___), hereby
irrevocably elects to purchase _____ shares of the Common Stock covered
by such Warrant. The undersigned herewith makes payment of
$____________, representing the full purchase price for such shares at
the price per share provided for in such Warrant. Such payment takes
the form of (check applicable box or boxes):
/ / $_________ in lawful money
of the United States,
and/or
/ / the cancellation of such
portion of the attached
Warrant as is exercisable
for a total of ______
Warrant Shares (using a
Fair Market Value of
$_______ per share for
purposes of this
calculation).
Signature:__________________________
Address:____________________________
____________________________
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EXHIBIT II
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ASSIGNMENT FORM
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FOR VALUE RECEIVED, ________________________________________
hereby sells, assigns and transfers all of the rights of the
undersigned under the attached Warrant (No. ____) with respect to the
number of shares of Common Stock covered thereby set forth below, unto:
Name of Assignee Address No. of Shares
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Dated:______________ Signature:_______________________________
Dated:______________ Witness:_________________________________
