WARRANT TO PURCHASE STOCK Corporation: COMPOUND THERAPEUTICS, INC. Number of Shares: 2.5% Coverage of Term Advances Class of Stock: Series A Preferred Initial Exercise Price: $0.50 per share Issue Date: July 8, 2005 Expiration Date: July , 2012
Exhibit 10.12
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINNION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
| WARRANT TO PURCHASE STOCK | ||
Corporation:
|
COMPOUND THERAPEUTICS, INC. | |
Number of Shares:
|
2.5% Coverage of Term Advances | |
Class of Stock:
|
Series A Preferred | |
Initial Exercise Price:
|
$0.50 per share | |
Issue Date:
|
July 8, 2005 | |
Expiration Date:
|
July , 2012 |
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, the receipt of which is
hereby acknowledged, COMERICA BANK or its assignee (“Holder”) is entitled to purchase the number of
fully paid and nonassessable glares of the class of securities (the “Shares”) of the corporation
(the “Company”) at the initial exercise price per Share (the “Warrant Price”) all as set forth
above and as adjusted pursuant to Article 2 of this warrant, subject to the provisions and upon the
terms and conditions set forth in this warrant. The number of shares that may be purchased under
this Warrant is equal to (i) the dollar amount that is 2.5% of the aggregate Term Advances made by
Holder to the Company under Section 2.1(b) of the Loan and Security Agreement dated as of December
16, 2003, as amended as of the Issue Date, divided by (ii) $0.50.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by delivering this warrant
and a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the
principal office of the Company. Unless Holder is exercising the conversion right set forth in
Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for
the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this warrant as specified in Section 1.1,
Holder may from time to time convert this warrant, in whole or in part, into a number of Shares
determined by dividing (a) the aggregate fair market value of the Shares or other securities
otherwise issuable upon exercise of this warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares shall be determined
pursuant to Section 1.3.
1.3 Fair Market Value. If the Company’s common stock (the “Common Stock”) is traded
on a nationally recognized securities exchange or over the counter market, the fair market value of
a Share shall be the product of (x) the closing price of a share of the Company’s
Common Stock reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company and (y) the number of shares of the Company’s Common Stock into
which each Share is convertible at the time of exercise. If the Company’s Common Stock is not
listed on a nationally recognized trading system as of the date of exercise, the fair market value
per Share shall be deemed to be the product of (x) the amount most recently determined in good
faith by the Board of Directors to represent the fair market value per share of the Company’s
Common Stock and (y) the number of shares of the Company’s Common Stock into which each Share is
convertible at the time of exercise.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or
converts this warrant, the Company shall deliver to Holder certificates for the Shares acquired
and, if this warrant has not been fully exercised or converted and has not expired, a new warrant
representing the Shares not so acquired.
1.5 Replacement of Warrants. On 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, on delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company or, in the case of mutilation, on surrender and cancellation of this warrant,
the Company at its expense shall execute and deliver, in lieu of this warrant, a new warrant of
like tenor.
1.6 Assumption Upon Acquisition of the Company. If upon the closing of any
Acquisition, the successor entity assumes the obligations of thin warrant, then this warrant shall
be exercisable for the same securities, cash and property as would be payable for the Shares
issuable upon exercise of the unexercised portion of this warrant as if such Shares were
outstanding on the record date for the Acquisition. The Warrant Price shall be adjusted
accordingly. If upon the closing of any Acquisition the successor entity does not assume the
obligations of this warrant and Holder has not otherwise exercise this warrant in full, then this
warrant shall be deemed to have been automatically converted Pursuant to Section 1.2 and thereafter
Holder shall participate in the Acquisition on the same terms as other holders of the same class of
securities of the Company. “Acquisition” means any acquisition, reorganization, consolidation, or
merger of the Company where the holders of the Company’s securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the surviving entity after
the transaction.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Adjustment for Conversion of Shares. If all of the outstanding shares of the
Shares are converted into Common Stock of the Company in accordance with the terms of the
Certificate of Incorporation of the Company, then, effective upon such conversion, (i) this warrant
shall be exercisable for such number of shares of Common Stock as is equal to the number et’ shares
of Common Stock that each share of the same class of stock as the Shares was converted into,
multiplied by the number of Shares subject to this warrant immediately prior to such conversion,
(ii) the Warrant Price shall be the price in effect immediately prior to such conversion divided by
the number of shares of Common Stock into which each share of the same class of stock as the Shares
was converted, and (iii) all references in this warrant to “Shares” shall thereafter be deemed to
refer to “Common Stock.”
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2.2 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its
common stock payable in common stock, or other securities, or subdivides the outstanding common
stock into a greater amount of common stock, then upon exercise of this warrant, for each Share
acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as of the date the
dividend or subdivision occurred.
2.3 Reclassification, Exchange or Substitution. Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or class of the securities
issuable upon exercise or conversion of this warrant, Holder shall be entitled to receive, upon
excise or conversion of this warrant, the number and kind of securities and property that Holder
would have received for the Shares if this warrant had been exercised immediately before such
reclassification, exchange, substitution, or other event. Such an event shall include any
automatic conversion of the outstanding securities of the Company of the same class or series as
the Shares into common stock pursuant to the terms of the Company’s Certificate of Incorporation
upon the closing of a registered public offering of the Company’s common stock. The Company or its
successor shall promptly issue to
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Holder a new warrant for such new securities or other property. The new warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the
number of securities or property issuable upon exercise of the new warrant. The provisions of this
Section 2.3 shall similarly apply to successive reclassifications, exchanges, substitutions, or
other events.
2.4 Adjustments for Combinations, Etc. If the outstanding Shares are combined or
consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price
shall be proportionately increased. If the outstanding shares of the Shares are combined or
consolidated, by reclassification or otherwise, into a greater number of shares, the Warrant Price
shall be proportionately decreased.
2.5 Antidilution. Additional antidilution rights applicable to the Shares purchasable
hereunder are as set forth in the Company’s Certificate of Incorporation as in effect from time to
time and shall be applicable with respect to the Shares issuable hereunder.
2.6 No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through a reorganization, transfer of assets, consolidation, merger, 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 to be observed or performed under this warrant by the Company,
but shall at all times in good faith assist in carving out all the provisions of this Article 2 and
in taking all such action as may be necessary or appropriate to protect Holder’s rights under this
Article against impairment.
2.7 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the
Company at its expense shall promptly compute such adjustment, and furnish Holder with a
certificate of its principal financial officer setting forth such adjustment and the facts upon
which such adjustment is based. The Company shall, upon written request, furnish Holder a
certificate setting forth the Warrant Price in effect upon the date thereof and the series of
adjustments leading to such Warrant Price.
2.8 Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by paying Holder amount
computed by multiplying the fractional interest by the fair market value of a full Share.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and warrants to the
Holder as follows:
(a) To the Company’s knowledge, the initial Warrant Price referenced on the first page of this
warrant is not greater than the fair market value of the Shares as of the date of this warrant.
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(b) All Shares which may be issued upon the exercise of the purchase rights represented by
this warrant, and all securities, if any, issuable upon conversion of the shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
(c) The Company’s capitalization table attached to this warrant is true and complete as of the
Issue Date.
3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any
dividend or distribution upon its common stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend; (b) to effect any reclassification or
recapitalization of common stock; or (c) to merge or consolidate with or into any other
corporation, or sell, lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up, then, in connection with each such event, the Company shall give
Holder (1) at least 10 days prior written notice of the date on which a record will be taken for
such dividend or distribution (and specifying the date ort which the holders of . common stock
will be entitled thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (a) above; and (2) in the case of the matters referred to in (b) and (c) above at
least 10 days prior written notice of the date when the same will take place (and specifying the
date on which the holders of common stock will be entitled to exchange their common stock for
securities or other property deliverable upon the occurrence of such event).
3.3 Information Rights. So long as the Holder holds this warrant and/or any of the
Shares, unless a class of the Company’s stock is publicly traded, the Company shall deliver to the
Holder (a) promptly after mailing, copies of written notices to the shareholders of the Company,
(b) within 150 days after the end of each fiscal year of the Company, the annual audited financial
statements of the Company certified by independent public accountants of recognized standing and
(c) within 45 days after the end of each of the first three quarters of each fiscal year, the
Company’s quarterly, unaudited financial statements.
3.4 Registration Under Securities Act of 1933, as amended. The Company agrees that
the shares of Common Stock issuable upon conversion of the Shares shall be entitled to “piggy-back”
or “incidental” registration rights set forth ha the Investor Rights Agreement dated March 31,
2003, as amended September 25, 2003, December 16, 2003 and December 15, 2004, among the Company and
certain other parties named therein.
ARTICLE 4. MISCELLANEOUS.
4.1 Term. This warrant is exercisable in whole or in part, at any time and from time
to time on or before the Expiration Date set forth above.
4.2 Legends. This warrant and the Shares (and the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE
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TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This warrant and the Shares issuable
upon exercise of this warrant (and the securities issuable, directly or indirectly, upon conversion
of the Shares, if any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the transferee (including,
without limitation, the delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company).
4.4 Transfer Procedure. Subject to the provisions of Section 4.3, Holder may transfer
all or part of this warrant or the Shares issuable upon exercise of this warrant (or the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company
notice of the portion of the
warrant being transferred setting forth the name, address and taxpayer identification number of the
transferee and surrendering this warrant to the Company for reissuance to the transferee(s) (and
Holder, if applicable); provided, however, that Holder may transfer all or part of this
warrant to its affiliates, including, without limitation, Comerica Incorporated, at any time
without notice to the Company, and such affiliate shall then be entitled to all the rights of
Holder under this warrant and any related agreements, and the Company shall cooperate fully in
ensuring that any stock issued upon exercise of this warrant is issued in the name of the affiliate
that exercises the warrant. Notwithstanding the foregoing, Holder will notify the Company of such
a transfer. Holder hereby notifies Company that it is transferring this warrant to Comerica
Incorporated. Company will not request a legal opinion with respect to such transfer. The terms
and conditions of this warrant shall inure to the benefit of, and be binding upon, the Company and
the holders hereof and their respective permitted successors and assigns. The Company shall have
the right to refuse to transfer any portion of this warrant to any person who directly competes
with the Company, unless the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934.
4.5 Notices. All notices and other communications from the Company to the Holder, or
vice versa, shall be deemed delivered and effective when given personally or sent by facsimile, or
by first-class registered or certified man, postage prepaid, at such address as may have been
furnished to the Company or the Holder, as the case may be, in writing by the Company or such
Holder from time to time. All notices to the Holder shall be addressed as follows:
| Comerica Bank | ||
| Attn: Warrant Administrator | ||
| 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, XX 0000 | ||
| Xxxxxxx, XX 00000 |
All notices to the Company shall be addressed as follows:
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| Compound Therapeutics, Inc. | ||
| 000 Xxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxxx, XX 00000 | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
| Attention: President | ||
| With a copy to | ||
| Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP | ||
| 00 Xxxxx Xxxxxx | ||
| Xxxxxx, XX 00000 | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
| Attention: Xxxxxx X. Xxxxxx, Esq. |
Notices given to the Company in accordance with this Section 4.5 shall be effective despite
any failure to provide a copy of such notice to Company’s counsel.
4.6 Amendments. This warrant and any term hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought:
4.7 Governing Law. This warrant shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to its principles regarding conflict of
law.
4.8 Lock-up Agreement. If requested in writing by the underwriter for the initial
underwritten public offering of securities of the Company, Holder shall agree to enter into the
form of look-up agreement provided by such underwriters to holders of capital stock of the Company,
providing that Holder shall not sell any shares of capital stock without the consent of such
underwriters for a period of not more than 180 days following the effective date of the
registration statement relating to such offering, provided that all officers and directors of the
Company and all five percent (5%) shareholders enter into substantially the same agreement.
4.9 Investment Representations. In connection with the issuance of this warrant, the
Holder represents to the Company by acceptance of this warrant as follows:
(a) 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 and its affiliates’
account for investment purposes only and not with a view to, or for the resale in connection with,
any “distribution” thereof in violation of the Securities Act of 1933, as amended (the “Act”).
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(b) 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 as expressed herein.
(c) 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.
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(d) The Holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D
promulgated under the Act.
| COMPOUND THERAPEUTICS, INC. | ||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | COO | |||
| COMERICA BANK | ||||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | Vice President | |||
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APPENDIX 1
NOTICE OF EXERCISE
1. The
undersigned hereby elects to purchase shares of the
stock of Compound Therapeutics, Inc. pursuant to the terms of the attached
warrant, and tenders herewith payment of the purchase price of such shares in full.
1. The undersigned hereby elects to convert the attached warrant into shares in the manner
specified in the warrant. This conversion is exercised with respect
to of the
shares covered by the warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:
| Comerica Bank | ||
| Attn: Warrant Administrator | ||
| 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, XX 0000 | ||
| Xxxxxxx, XX 00000 |
3. The undersigned represents it acquiring the shares solely for its own account and not as a
nominee for any other party and not with a view toward the resale or distribution thereof except in
compliance with applicable securities laws.
COMERICA BANK or Registered Assignee
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