EXHIBIT 10.18
Execution Copy
PHYSIOME SCIENCES, INC.
CONVERTIBLE PREFERRED STOCK
AGREEMENT OF SALE
DATED AS OF JULY 1, 2003
TABLE OF CONTENTS
Page No.
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1. Authorization; Sale of Shares............................................... 1
1.1 Authorization...................................................... 1
1.2 Sale of Securities................................................. 1
1.3 Agreement of Purchase.............................................. 2
1.4 Options and Warrants of The Company................................ 2
2. The Closing................................................................. 3
3. Representations of the Company.............................................. 3
3.1 Organization and Standing.......................................... 3
3.2 Subsidiaries, Etc.................................................. 4
3.3 Capitalization..................................................... 5
3.4 Issuance of Securities.............................................
3.5 Authority for Agreement; No Conflict............................... 5
3.6 Governmental Consents.............................................. 6
3.7 Litigation......................................................... 6
3.8 Financial Statements............................................... 7
3.9 Absence of Undisclosed Liabilities................................. 7
3.10 Absence of Changes................................................. 7
3.11 Taxes.............................................................. 7
3.12 Property and Assets................................................ 8
3.13 Intellectual Property.............................................. 8
3.14 Insurance.......................................................... 10
3.15 Material Contracts and Obligations................................. 10
3.16 Compliance......................................................... 11
3.17 Employees.......................................................... 11
3.18 ERISA.............................................................. 13
3.19 Books and Records.................................................. 13
3.20 Permits............................................................ 13
3.21 Environmental Matters.............................................. 13
3.22 Disclosures........................................................ 14
4. Representations of the Purchasers........................................... 15
4.1 Investment......................................................... 15
4.2 Authority.......................................................... 15
4.3 Experience......................................................... 15
5. Transfer of Shares.......................................................... 15
5.1 Restricted Shares.................................................. 15
5.2 Requirements for Transfer.......................................... 15
5.3 Legend............................................................. 16
6. Company Conduct Prior to Closing and Conditions to Closing; Termination..... 16
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TABLE OF CONTENTS
Page No.
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6.1 Company Conduct Prior to Closing................................... 16
6.2 Conditions to Closing.............................................. 17
6.3 Termination........................................................ 17
7. Miscellaneous............................................................... 18
7.1 Successors and Assigns............................................. 18
7.2 Survival of Representations and Warranties......................... 18
7.3 Brokers............................................................ 18
7.4 Severability....................................................... 18
7.5 Specific Performance............................................... 18
7.6 Governing Law; Jurisdiction........................................ 18
7.7 Notices............................................................ 19
7.8 Complete Agreement................................................. 19
7.9 Amendments and Waivers............................................. 19
7.10 Required Disclosures............................................... 20
7.11 Pronouns........................................................... 20
7.12 Counterparts; Facsimile Signatures................................. 20
7.13 Section Headings and References.................................... 20
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EXHIBITS
Exhibit A - List of Purchasers and Securities Purchased
Exhibit B - Financing Signature Page
Exhibit C - Amended and Restated Certificate of Incorporation of Physiome
Sciences, Inc.
Exhibit D - Stockholders Agreement
Exhibit E - Transaction Warrant
Exhibit F - Funding Warrant
Exhibit G - Exceptions to Representations
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PHYSIOME SCIENCES, INC.
CONVERTIBLE PREFERRED STOCK AGREEMENT OF SALE
This Agreement, dated as of July 1, 2003, is entered into by and among
Physiome Sciences, Inc., a Delaware corporation (the "Company"), Predix
Pharmaceuticals, Ltd., a corporation formed under the laws of Israel ("Predix
Ltd."), Predix Pharmaceuticals, Inc., a Delaware company and a wholly owned
subsidiary of Predix Ltd. ("Predix Inc." and together with Predix Ltd.,
"Predix") and the individuals and entities listed on Exhibit A hereto who become
parties to this Agreement by executing and delivering a financing signature page
in the form of Exhibit B hereto (the "Purchasers"), or such other form as may be
acceptable to the Company (the "Financing Signature Page"). In consideration of
the mutual promises and covenants contained in this Agreement, the parties
hereto agree as follows:
1. Authorization; Sale of Shares.
1.1 Authorization. The Company has, or before the Closing (as
defined in Section 2) will have, duly authorized for the sale and issuance of
such securities pursuant to the terms of this Agreement, of 2,500,000 shares of
a newly authorized Series B Convertible Preferred Stock, $.01 par value per
share (the "Series B Preferred Stock"), having the rights, privileges,
preferences and restrictions set forth in the Amended and Restated Certificate
of Incorporation attached hereto as Exhibit C (the "Certificate of
Incorporation"), 1,100,000 shares of a newly authorized Series A Convertible
Preferred Stock, $.01 par value per share (the "Series A Preferred Stock"),
having the rights, privileges, preferences and, restrictions set forth in the
Certificate of Incorporation, 40,000,000 shares of Common Stock, par value $.01
per share (the "Common Stock"), having the rights, privileges, preferences and
restrictions set forth in the Certificate of Incorporation, and 4,400,000 shares
of a newly authorized Class A Common Stock, par value $.01 per share (the "Class
A Common Stock"), having the rights, privileges, preferences and restrictions
set forth in the Certificate of Incorporation. The Company has, or before the
Closing will have, adopted and, will, simultaneous with the Closing, file the
Certificate of Incorporation with the Secretary of State of the State of
Delaware. Such Series B Preferred Stock and Series A Preferred Stock is separate
and distinct from the Company's authorized Series B Convertible Preferred Stock
issued and outstanding immediately prior to Closing (the "Prior Series B
Preferred Stock") and the Company's authorized Series A Convertible Preferred
Stock issued and outstanding immediately prior to Closing (the "Prior Series A
Preferred Stock"), which classes of Prior Series B Preferred Stock and Prior
Series A Preferred Stock shall not survive the Closing.
1.2 Sale of Securities. Subject to the terms and conditions of this
Agreement, at the Closing, the Company will sell and issue to each of the
Purchasers, and each of the Purchasers will purchase, the number of shares of
Series B Preferred Stock, the number of shares of Series A Preferred Stock, the
number of shares of Common Stock, the number of Transaction Warrants, as
hereinafter defined, and the number of Funding Warrants, as hereinafter defined,
set forth opposite such Purchaser's name on Exhibit A for the aggregate purchase
consideration set forth opposite each Purchaser's name on Exhibit A (all such
consideration having an aggregate fair market value of $US7,710,000), which
consideration shall be payable in Preferred Shares of Predix Ltd. and/or
Ordinary Shares of Predix Ltd. transferred to the Company pursuant to the
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Purchase Agreement, as defined below (the "Purchase Price"). The shares of
Series B Preferred Stock, Series A Preferred Stock and the shares of Common
Stock sold under this Agreement are referred to herein as the "Shares" and,
together with the Transaction Warrants and the Funding Warrants, are referred to
herein as the "Securities.
1.3 Agreement of Purchase. The parties hereto each acknowledge and
agree that: (i) the Closing shall occur simultaneous with and shall be
conditioned upon the closing of the transactions contemplated by that certain
Physiome Sciences, Inc. Agreement to Purchase All of the Capital Stock of Predix
Pharmaceuticals, Ltd., of even date herewith (the "Purchase Agreement"); and
(ii) that the Purchase Price herein shall be offset in full against the Purchase
Price (as defined in the Purchase Agreement) to be paid by the Company in
accordance with the Purchase Agreement.
1.4 Options and Warrants of The Company. At the Closing, all
outstanding options and warrants to purchase shares of the Company's Capital
Stock shall remain outstanding or shall be canceled and reissued, as reflected
on the post Closing capitalization table attached hereto as Exhibit G, and in
each such case shall be adjusted as and if necessary to reflect the revised
capital structure of the Company as set forth in the Certificate of
Incorporation.
2. The Closing. Subject to the terms and conditions of this Agreement, the
closing (the "Closing") of the sale and purchase of the Securities under this
Agreement shall take place at the offices of ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (or remotely via the exchange of
documents and signatures) on the date that is three (3) business days after the
satisfaction or waiver of all of the conditions to the obligations of the
parties to consummate the transactions contemplated hereby (the "Closing Date").
At the Closing the following transactions shall occur, which transactions shall
be deemed to take place simultaneously and no transaction shall be deemed to
have been completed or any document delivered until all such transactions have
been completed and all such documents delivered:
(a) the Company and the Purchasers shall execute and deliver
(by means of the Financing Signature Page) the Stockholders Agreement in the
form attached hereto as Exhibit D (the "Stockholders Agreement");
(b) the Company shall deliver to the Purchasers certificates,
as of the most recent practicable dates, (i) as to the corporate good standing
of the Company issued by the Secretary of State of the State of Delaware and
(ii) as to the due qualification of the Company as a foreign corporation issued
by the Secretary of State of New Jersey;
(c) the Company shall deliver to the Purchasers the
Certificate of Incorporation of the Company as amended and in effect as of the
Closing Date certified by the Secretary of State of the State of Delaware, which
Certificate of Incorporation shall be in the form attached hereto as Exhibit C;
(d) the Company shall deliver to the Purchasers a Certificate
of the Secretary of the Company attesting as to (i) the By-laws of the Company;
(ii) the signatures and titles of the officers of the Company executing this
Agreement or any of the other agreements to be executed and delivered by the
Company at the Closing; and (iii) resolutions of the Board of Directors and
stockholders of the Company, authorizing and approving all matters in connection
with this Agreement and the transactions contemplated hereby;
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(e) the Company shall deliver to each of the Purchasers a
certificate for the number of Securities set forth opposite such Purchaser's
name on Exhibit A, registered in the name of such Purchaser;
(f) the Company shall deliver to each of the Purchasers that
number of Transaction Warrants set forth opposite such Purchaser's name on
Exhibit A, and in the form attached hereto as Exhibit H;
(g) the Company shall deliver to each of the Purchasers that
number of Funding Warrants set forth opposite such Purchaser's name on Exhibit
A, and in the form attached hereto as Exhibit I;
(h) each Purchaser shall tender to the Company, the Purchase
Price for the Securities being purchased from the Company. The Closing shall not
be deemed to occur, and all such payments by any Purchaser shall be deemed to be
held in escrow, until all Purchasers listed on Exhibit A have tendered to the
Company the payment indicated thereon; and
(i) a duly executed Purchase Agreement shall be delivered to
each of the parties hereto.
3. Representations of the Company. Except as disclosed by the Company in
Exhibit G hereto, the Company hereby represents and warrants to each Purchaser
that the statements contained in this Section 3 are complete and accurate as of
the date of this Agreement. Exhibit G shall be arranged in sections
corresponding to the numbered and lettered sections and subsections contained in
this Section 3, and the disclosures in any section or subsection of Exhibit G
shall qualify only the corresponding section or subsection of this Section 3,
unless otherwise specified.
3.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted by it and to enter into and
perform this Agreement and all other agreements required to be executed by the
Company at or prior to the Closing pursuant to Section 2 (the "Ancillary
Agreements") and to carry out the transactions contemplated by this Agreement
and the Ancillary Agreements. The Company is duly qualified to do business as a
foreign corporation and is in good standing in the State of New Jersey and in
every other jurisdiction in which the failure so to qualify would have a
material adverse effect on the business, prospects, assets or condition
(financial or otherwise) of the Company (a "Company Material Adverse Effect").
The Company has furnished to the Purchasers complete and accurate copies of its
Certificate of Incorporation and By-laws, each as amended to date and presently
in effect and as in effect immediately upon the Closing. The Company has at all
times complied with all provisions of its Certificate of Incorporation and
By-laws and is not in default under, or in violation of, any such provision.
3.2 Subsidiaries, Etc. The Company has no subsidiaries and does not
own or control, directly or indirectly, any shares of capital stock of any other
corporation or any interest in any partnership, limited liability company, joint
venture or other non-corporate business enterprise.
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3.3 Capitalization.
(a) The authorized capital stock of the Company (immediately
prior to the Closing) consists of (i) 40,000,000 shares of Common Stock, $.01
par value per share (the "Existing Common Stock"), of which 3,665,354 shares are
issued and outstanding and no shares are held in the treasury of the Company,
and (ii) 21,469,982 shares of Preferred Stock, $.01 par value per share, of
which 43,745 shares have been designated as Series A Convertible Preferred
Stock, all of which are issued or outstanding; 6,060,606 shares have been
designated as Series B Convertible Preferred Stock, all of which are issued or
outstanding; 3,883,377 shares have been designated as Series C Convertible
Preferred Stock, 2,568,371 of which are issued or outstanding; 10,438,413 shares
have been designated as Series D Convertible Preferred Stock, all of which are
issued or outstanding; and 1,043,841 shares have been designated as Series E
Convertible Preferred Stock, none of which are outstanding.
(b) Exhibit G includes a complete and accurate list, as of the
date of the Agreement, of the holders of capital stock of the Company, showing
the number of shares of capital stock and other equity securities of the
Company, and the class or series of such shares and equity securities, held by
each stockholder and the number of shares of Existing Common Stock (if any) into
which such shares and equity securities are, convertible, both immediately prior
to and immediately following the Closing. None of such outstanding shares and
equity securities constitute restricted stock or are otherwise subject to a
repurchase or redemption right. All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. All of the issued and outstanding shares of
capital stock of the Company have been offered, issued and sold by the Company
in compliance with all applicable federal and state securities laws.
(c) Exhibit G includes a complete and accurate list, as of the
date of this Agreement of, and sets forth information both immediately prior to
and immediately following the Closing with respect to: (i) all stock option
plans and other stock or equity-related plans of the Company (the "Company Stock
Plans"), indicating for each Company Stock Plan the number of shares of Existing
Common Stock issued to date under such Company Stock Plan, the number of shares
subject to outstanding options under such Company Stock Plan and the number of
shares reserved for future issuance under such Company Stock Plan; (ii) all
holders of outstanding options to purchase shares of Existing Common Stock
("Company Stock Options"), indicating with respect to each Company Stock Option
the Company Stock Plan under which it was granted, the number of shares of
Existing Common Stock subject to such Company Stock Option, the exercise price,
the date of grant, and the vesting schedule (including any acceleration
provisions with respect thereto); and (iii) all holders of warrants or other
rights (other than Company Stock Options and outstanding convertible preferred
stock) to purchase or acquire shares of capital stock of the Company ("Company
Warrants"), indicating with respect to each Company Warrant the agreement or
other document under which it was granted, the number of shares of capital
stock, and the class or series of such shares, subject to such Company Warrant,
the exercise price, the date of issuance and the expiration date thereof. The
Company has furnished to the Purchasers complete and accurate copies of all
Company Stock Plans, forms of all stock option agreements evidencing all Company
Stock Options and all Company Warrants. All of the shares of capital stock of
the Company subject to Company Stock Options and Company Warrants will be, upon
issuance pursuant to the exercise of such instruments, duly authorized, validly
issued, fully paid and nonassessable.
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(d) Except as set forth in this Section 3.3 or Exhibit G, upon
closing: (i) no subscription, warrant, option, convertible security or other
right (contingent or otherwise) to purchase or acquire any shares of capital
stock of the Company is authorized or outstanding, (ii) the Company has no
obligation (contingent or otherwise) to issue any subscription, warrant, option,
convertible security or other such right, or to issue or distribute to holders
of any shares of its capital stock any evidences of indebtedness or assets of
the Company, (iii) the Company has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or to make any other distribution in
respect thereof, and (iv) there are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Company.
(e) Except as set forth in Exhibit G, and except for the
Ancillary Agreements and agreements that will be cancelled at Closing, there is
no agreement, written or oral, between the Company and any holders of its
securities, or, to the best of the Company's knowledge, among any holder of its
securities, relating to the sale or transfer (including without limitation
agreements relating to rights of first refusal, co-sale rights or "drag-along"
rights), registration under the Securities Act of 1933, as amended (the
"Securities Act"), or voting, of the capital stock of the Company.
(f) Upon the filing of the Certificate of Incorporation with
the Secretary of State of the State of Delaware: (i) each outstanding share of
the Company's existing Preferred Stock immediately prior to Closing shall be
duly exchanged into shares of Series A Preferred Stock or Series B Preferred
Stock on the terms set forth in and having the rights and preferences set forth
in the Certificate of Incorporation; and (ii) the reverse stock split
recapitalization of the Company's Capital Stock shall be immediately effective
and of full force and effect. Subject only to receipt of all requisite
stockholder approval, the Company has taken all requisite corporate action
necessary to file the Certificate of Incorporation with the Secretary of State
of the State of Delaware.
3.4 Issuance of Securities. The issuance, sale and delivery of the
Securities in accordance with this Agreement, and the issuance and delivery of
the shares of Preferred Stock or Common Stock issuable upon conversion of the
Securities and the shares of Common Stock underlying such Preferred Stock, have
been, or will be on or prior to the Closing (or in the case of shares of capital
stock to be issued upon the conversion of the Funding Warrant (the "Future
Shares"), will be, at such time or times as such Funding Warrants may be
converted), duly authorized by all necessary corporate action on the part of the
Company, and all such shares have been (or, in the case of the Future Shares,
will be) duly reserved for issuance. The Shares when so issued, sold and
delivered against payment therefor in accordance with the provisions of this
Agreement, and the shares of Preferred Stock and Common Stock issuable upon
conversion of the Securities and the shares of Common Stock underlying such
Preferred Stock when issued upon such conversion, will be duly and validly
issued, fully paid and nonassessable and, except as set forth in the Ancillary
Agreements, and except, with respect to the Funding Warrants which may be
subject to any and all terms and conditions to be determined without the consent
of the Purchasers at the time of their exercise, are free and clear from any
third party right whatsoever.
3.5 Authority for Agreement; No Conflict. The execution, delivery
and performance by the Company of this Agreement and the Ancillary Agreements,
and the consummation by the Company of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action. This
Agreement has been, and the Ancillary Agreements when executed at the Closing
will be, duly executed and delivered by the Company
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and constitute valid and binding obligations of the Company enforceable in
accordance with their respective terms, subject as to enforcement of remedies to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting generally the enforcement of creditors' rights and subject to a
court's discretionary authority with respect to the granting of a decree
ordering specific performance or other equitable remedies. The execution and
delivery of this Agreement and the Ancillary Agreements, the consummation of the
transactions contemplated hereby and thereby and the compliance with their
respective provisions by the Company will not (a) conflict with or violate any
provision of the Certificate of Incorporation or By-laws of the Company, (b)
require on the part of the Company any filing with, or any permit, order,
authorization, consent or approval of any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency (each of the foregoing is hereafter referred to as a
"Governmental Entity") other than the filing of the Certificate of Incorporation
with the Secretary of State of the State of Delaware, as provided for under
Section 3.3(f) above, (c) conflict with, result in a breach of, constitute (with
or without due notice or lapse of time or both) a default under, result in the
acceleration of obligations under, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice, consent or waiver under, any
contract, lease, sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of indebtedness, Security
Interest (as defined below) or other arrangement to which the Company is a party
or by which the Company is bound or to which its assets are subject, other than
any of the foregoing events listed in this clause (c) which do not and will not,
individually or in the aggregate, have a Company Material Adverse Effect, (d)
result in the imposition of any Security Interest upon any assets of the Company
or (e) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company or any of its properties or assets. For purposes of
this Agreement, "Security Interest" means any mortgage, pledge, security
interest, encumbrance, charge, or other lien (whether arising by contract or by
operation of law).
3.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Entity is required on the part of the Company in
connection with the offer, issuance, sale and delivery of the Securities, the
issuance and delivery of the shares of Preferred Stock or Common Stock issuable
upon conversion of the Securities, the shares of Common Stock underlying such
Preferred Stock, or the other transactions to be consummated at the Closing, as
contemplated by this Agreement and the Ancillary Agreements, except such filings
as shall be made prior to and shall be effective on and as of the Closing and
such filings required to be made after the Closing under applicable federal and
state securities laws, all of which filings are specified in Exhibit G. Based on
the representations made by each of the Purchasers in Section 4 of this
Agreement, the offer and sale of the Securities to each of the Purchasers will
be in compliance with applicable United States federal and state securities
laws.
3.7 Litigation. There is no action, suit or proceeding, or
governmental inquiry or investigation, pending, or, to the best of the Company's
knowledge, any basis therefor or threat thereof, against the Company, which
questions the validity of this Agreement, the Ancillary Agreements or the right
of the Company to enter into any such agreements, or which might result, either
individually or in the aggregate, in a Company Material Adverse Effect. There is
no litigation pending, or, to the best of the Company's knowledge, any basis
therefor or threat thereof, against the Company, or any of its employees by
reason of the past employment relationships of any of the employees, the
proposed activities of the Company, or negotiations by the Company with possible
investors in the Company. The Company is not subject to any outstanding
judgment, order or decree.
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3.8 Financial Statements. The Company has furnished to each of the
Purchasers a complete and accurate copy of (i) the audited balance sheet of the
Company at December 31, 2002 and the related audited statements of operations
and cash flows for the fiscal year then ended, and (ii) the unaudited balance
sheet of the Company (the "Balance Sheet") at April 30, 2003 (the "Balance Sheet
Date") and the related statements of operations and cash flows for the three
months then ended, (collectively, the "Financial Statements"). The Financial
Statements are in accordance with the books and records of the Company, present
fairly the financial condition and results of operations of the Company, at the
dates and for the periods indicated, and have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied, except
that the unaudited Financial Statements may not be in accordance with GAAP
because of the absence of footnotes normally contained therein and are subject
to normal year-end audit adjustments which in the aggregate will not be
material.
3.9 Absence of Undisclosed Liabilities. The Company does not have
any liability (whether known or unknown and whether absolute or contingent),
except for (a) liabilities shown on the Balance Sheet, (b) liabilities not in
excess of $10,000 in the aggregate, which have arisen since the Balance Sheet
Date in the ordinary course of business and which are similar in nature and
amount to the liabilities which arose during the comparable period of time in
the immediately preceding fiscal period and (c) contractual liabilities incurred
in the ordinary course of business which are not required by GAAP to be
reflected on a balance sheet and which would not, either individually or in the
aggregate, have or result in a Company Material Adverse Effect.
3.10 Absence of Changes. Since the Balance Sheet Date, there has
been no material adverse change in the business, prospects, condition (financial
or otherwise), or results of operations of the Company, other than changes
occurring in the ordinary course of business (which ordinary course changes have
not, individually or in the aggregate, had a Company Material Adverse Effect).
3.11 Taxes.
(a) "Taxes" shall mean all taxes or other similar assessments
or liabilities, including without limitation, income, gross receipts, ad
valorem, premium, value-added, excise, real property, personal property, assets,
sales, use, transfer, withholding, employment, unemployment, insurance, social
security, business license, business organization, environmental, workers
compensation, payroll, profits, license, lease, service, service use, severance,
stamp, occupation, windfall profits, customs, duties, franchise, net worth,
capital stock, gains and other taxes imposed by the United States, or any state,
local or foreign government, or any agency thereof, or other political
subdivision of the United States or any such government, and any interest,
fines, penalties, assessments or additions to tax resulting from, attributable
to or incurred in connection with any tax or any contest or dispute thereof.
"Tax Returns" shall mean all reports, returns, declarations, statements or other
information required to be filed with a taxing authority in connection with
Taxes.
(b) The Company has paid all Taxes due and payable by the
Company on or before the date hereof. Management believes that the unpaid Taxes
of the Company do not exceed the reserve for actual Taxes (as opposed to any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) as shown on the Balance Sheet.
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(c) The Company has timely filed or has obtained presently
effective extensions (which extensions, if any, are listed on Exhibit G) with
respect to all federal, state, local and foreign Tax Returns which are required
to be filed by it, such returns are complete and accurate and all Taxes shown
thereon to be due have been timely paid. The Company has not explicitly waived
any statute of limitation with respect to any Tax or agreed to any extension of
time with respect to a Tax assessment or deficiency. The Tax Returns of the
Company have not been under audit or examination by the Internal Revenue Service
or other relevant taxing authority, and no controversy with respect to Taxes of
any type is pending or, to the best of the Company's knowledge, threatened.
(d) The Company has withheld or collected from each payment
made to its employees, independent contractors, stockholders, creditors and
other third parties the amount of all Taxes required to be withheld or collected
therefrom and has paid all such amounts to the appropriate taxing authorities
when due. To the Company's knowledge, it has complied with all information
reporting requirements including maintenance of the required records with
respect thereto in connection with amounts paid to any employee, independent
contractor, stockholder, creditor or other third party.
(e) To the Company's knowledge, there are no liens for Taxes
upon the Company's assets, other than liens for ad valorem Taxes not yet due and
payable.
(f) The Company has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Section 6662 of the
Code.
(g) The Company has not distribution stock of another
corporation nor has its stock been distributed by another corporation in a
transaction that was purported or intended to be governed in whole or in part by
Section 355 or Section 361 of the Code.
(h) The Company's net operating losses for federal income Tax
purposes, as set forth in the Financial Statements, are not subject to any
limitations imposed by Section 382 of the Code.
(i) The Company is not a party to or member of any joint
venture, partnership, or other arrangement or contract which could be treated as
a partnership for federal, state, local or foreign income Tax purposes.
3.12 Property and Assets. The Company has good title to, or a valid
leasehold interest in, all of its material properties and assets, including all
properties and assets reflected in the Balance Sheet, except those disposed of
since the date thereof in the ordinary course of business, and none of such
properties or assets is subject to any Security Interest other than those the
material terms of which are described in the Balance Sheet or in Exhibit G.
3.13 Intellectual Property.
(a) Exhibit G lists (i) each patent, patent application,
copyright registration or application therefor, mask work registration or
application therefor, and trademark, service ▇▇▇▇ and domain name registration
or application therefor of the Company and (ii) each Customer Deliverable (as
defined below) of the Company.
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(b) The Company owns or has the right to use all Intellectual
Property (as defined below) necessary (i) to use, manufacture, market and
distribute the Customer Deliverables and (ii) to operate the Internal Systems
(as defined below). The Company has taken all reasonable measures to protect the
proprietary nature of each item of Company Intellectual Property (as defined
below), and to maintain in confidence all trade secrets and confidential
information, that it owns or uses. No other person or entity has any rights to
any of the Company Intellectual Property owned by the Company (except pursuant
to agreements or licenses specified in Exhibit G), and, to the best of the
Company's knowledge, no other person or entity is infringing, violating or
misappropriating any of the Company Intellectual Property.
(c) None of the Customer Deliverables, or the marketing,
distribution, provision or use thereof, infringes or violates, or constitutes a
misappropriation of, any Intellectual Property rights of any person or entity;
and neither the marketing, distribution, provision or use of any Customer
Deliverables currently under development by the Company will, when such Customer
Deliverables are commercially released by the Company, infringe or violate, or
constitute a misappropriation of, any Intellectual Property rights of any person
or entity that exist today. None of the Internal Systems, or the use thereof,
infringes or violates, or constitutes a misappropriation of, any Intellectual
Property rights of any person or entity. Exhibit G lists any complaint, claim or
notice, or written threat thereof, received by the Company alleging any such
infringement, violation or misappropriation; and the Company has provided to the
Purchasers complete and accurate copies of all written documentation in the
possession of the Company relating to any such complaint, claim, notice or
threat. The Company has provided to the Purchasers complete and accurate copies
of all written documentation in the Company's possession relating to claims or
disputes known to the Company concerning any Company Intellectual Property.
(d) Exhibit G identifies each license or other agreement
pursuant to which the Company has licensed, distributed or otherwise granted any
rights to any third party with respect to, any Company Intellectual Property.
Except as described in Exhibit G, the Company has not agreed to indemnify any
person or entity against any infringement, violation or misappropriation of any
Intellectual Property rights with respect to any Company Intellectual Property.
(e) Exhibit G identifies each item of Company Intellectual
Property that is owned by a party other than the Company, and the license or
agreement pursuant to which the Company uses it (excluding off-the-shelf
software programs licensed by the Company pursuant to "shrink wrap" licenses).
(f) The Company has not disclosed the source code for any
software developed by it, or other confidential information constituting,
embodied in or pertaining to such software, to any person or entity, except
pursuant to the agreements listed in Exhibit G, and the Company has taken
reasonable measure to prevent disclosure of such source code.
(g) All of the copyrightable materials incorporated in or
bundled with the Customer Deliverables have been created by employees of the
Company within the scope of their employment by the Company or by independent
contractors of the Company who have executed agreements expressly assigning all
right, title and interest in such copyrightable materials to the Company. No
portion of such copyrightable materials was jointly developed with any third
party.
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(h) The Customer Deliverables and the Internal Systems are
free from significant defects or programming errors and conform in all material
respects to the written documentation and specifications therefor.
(i) For purposes of this Agreement, the following terms shall
have the following meanings:
(i) "Customer Deliverables" shall mean (a) the products
that the Company (i) currently manufactures, markets, sells or licenses or (ii)
currently plans to manufacture, market, sell or license in the future and (b)
the services that the Company (i) currently provides or (ii) currently plans to
provide in the future.
(ii) "Internal Systems" shall mean the internal systems
of the Company that are used in its business or operations, including, computer
hardware systems, software applications and embedded systems.
(iii) "Intellectual Property" shall mean all: (a)
patents, patent applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, reexamination, utility model,
certificate of invention and design patents, patent applications, registrations
and applications for registrations; (b) trademarks, service marks, trade dress,
Internet domain names, logos, trade names and corporate names and registrations
and applications for registration thereof; (c) copyrights and registrations and
applications for registration thereof; (d) mask works and registrations and
applications for registration thereof; (e) computer software, data and
documentation; (f) inventions, trade secrets and confidential business
information, whether patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and techniques, research
and development information, copyrightable works, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information; (g) other proprietary rights
relating to any of the foregoing (including remedies against infringements
thereof and rights of protection of interest therein under the laws of all
jurisdictions); and (h) copies and tangible embodiments thereof.
(iv) "Company Intellectual Property" shall mean the
Intellectual Property owned by or licensed to the Company and incorporated in,
underlying or used in connection with the Customer Deliverables or the Internal
Systems.
3.14 Insurance. The Company maintains valid policies of workers'
compensation insurance and of insurance with respect to its directors and
officers and its properties and business of the kinds and in the amounts as the
management believes is suitable for companies engaged in the same or similar
business and similarly situated, including, without limitation, insurance
against loss, damage, fire, theft, public liability and other risks.
3.15 Material Contracts and Obligations. Exhibit G sets forth a list
of all material agreements or commitments of any nature (whether written or
oral) to which the Company is a party or by which it is bound, including without
limitation (a) any agreement which requires future expenditures by the Company
in excess of $10,000 in the aggregate or which might result in payments to the
Company in excess of $10,000 in the aggregate, (b) any employment and consulting
agreements, employee benefit, bonus, pension, profit-sharing, stock option,
stock purchase and similar plans and arrangements, (c) any distributor, sales
representative or similar agreement, (d) any agreement with any current or
former stockholder, officer or director of the Company, or any "affiliate" or
"associate" of such persons (as such
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terms are defined in the rules and regulations promulgated under the Securities
Act), including without limitation any agreement or other arrangement providing
for the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person or entity, (e) any agreement
under which the Company is restricted from carrying on any business anywhere in
the world, (f) any agreement relating to indebtedness for borrowed money, (g)
any agreement for the disposition of a material portion of the Company's assets
(other than for the sale of inventory in the ordinary course of business), (h)
any agreement for the acquisition of the business or securities or other
ownership interests of another party or (i) any other agreement that is material
to the operations, business or finances of the Company. The Company has
delivered to the Purchasers copies of the foregoing agreements (or an accurate
summary of any oral agreement). All of such agreements and contracts are valid,
binding and in full force and effect. Neither the Company, nor, to the best of
the Company's knowledge, any other party thereto, is in default of any of its
obligations under any of the agreements or contracts listed on Exhibit G, in a
manner which could have a Company Material Adverse Effect.
3.16 Compliance. The Company has, in all material respects, complied
with all laws, regulations and orders applicable to its present and proposed
business and has all material permits and licenses required thereby. There is no
term or provision of any mortgage, indenture, contract, agreement or instrument
to which the Company is a party or by which it is bound, or, to the best of the
Company's knowledge, of any provision of any state or federal judgment, decree,
order, statute, rule or regulation applicable to or binding upon the Company,
which materially adversely affects or, so far as the Company may now foresee, in
the future is reasonably likely to result in or have a Company Material Adverse
Effect. To the best of the Company's knowledge, no employee of the Company is in
violation of any term of any contract or covenant (either with the Company or
with another entity) relating to employment, patents, assignment of inventions,
proprietary information disclosure, non-competition or non-solicitation.
3.17 Employees.
(a) All current and former employees of the Company have
executed and delivered non-disclosure and assignment of inventions agreements
and all of such agreements are in full force and effect and shall remain in full
force and effect following the closing. All current and former employees of the
Company have executed and delivered non-competition and non-solicitation
agreements and all of such agreements are in full force and effect and shall
remain in full force and effect following the closing. All current and former
independent contractors of the Company that have performed development work or
provided technical services to the Company or have otherwise had access to
confidential or proprietary information of the Company have executed and
delivered non-disclosure and assignment of inventions agreements, copies of
which have been delivered to the Purchasers, and all of such agreements are in
full force and effect and shall remain in full force and effect following the
closing.
(b) The Company is not aware that any employee of the Company
that the Company has requested remain employed subsequent to the Closing who has
plans to terminate his or her employment relationship with the Company. All
employees of the Company are engaged by the Company on a full time basis. The
Company has complied in all material respects with all applicable laws relating
to wages, hours, equal opportunity, collective bargaining, workers' compensation
insurance and the payment of social security and other taxes. None of the
employees of the Company is represented by any labor union, and there is no
labor strike or other labor trouble pending with respect to the Company
(including, without limitation,
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any organizational drive) or, to the best of the Company's knowledge,
threatened. Exhibit G sets forth a list of all agreements between any officer of
the Company and a previous employer of such person that contains non-competition
or non-solicitation covenants. The Company has delivered copies of such
agreements to the Purchasers. No employee of the Company is obligated under any
contract or subject to any judgment, decree or administrative order that would
conflict or interfere with (i) the performance of the employee's duties as an
employee, director or officer of the Company, or (ii) the Company's business as
conducted or proposed to be conducted.
(c) The Company has provided to Predix a list of the salaries
and any bonus arrangements of each employee and independent contractor of the
Company. Such list of all employees of the Company is accurate as of the date of
this Agreement, and correctly reflects, in all material respects, their salaries
and terms and conditions of employment, any other compensation payable to them
(including compensation payable pursuant to bonus, deferred compensation or
commission arrangements, vacation pay balances, illness pay balances, and fringe
benefits including, without limitation, balances in pension funds, car,
telephone, or managers insurance), their dates of employment and their positions
and ranks (if any).
(d) The Company is not a party to any collective bargaining
contract or other contract with a labor union involving any of its employees.
(e) Other than the personal employment agreements referred to
in Exhibit G, there are no employment, severance or similar agreements or offer
letters, whether written or unwritten, between the Company and any of its
respective directors, officers, executives or employees which cannot be
terminated by the Company upon thirty (30) days notice without giving rise to a
claim for damages or compensation (except for statutory severance pay).
(f) As of the date hereof, there are no pending, or to the
knowledge of the Company threatened, or reasonably anticipated, claims or
actions outstanding against the Company by any person who is now or has been an
officer or employee of the Company, and there have been no material disputes
between the Company and any material number or category of employees. Further,
the Company is not aware of any formal or informal complaints by any employee of
the Company of any wrongdoing which could be construed as a complaint of
discrimination, workplace harassment or wrongful employment-related action or
inaction.
(g) The statutory and contractual overtime, severance pay,
accrued vacation, and any other employment-related benefits due to employees of
the Company as of the Closing is either funded or provided for in the Financial
Statements. No cause of action exists giving right to employees to any claim for
compensation for overtime or termination severance pay to which such employee is
entitled and to the knowledge of the Company, no such claims will be made by any
employee for payment of any compensation or provision of any right or benefit as
a result of the transactions contemplated hereby.
(h) The Company is not liable for any material arrears of
wages or any penalty for failure to comply with the foregoing.
(i) The Company is not liable for any payment to any trust or
other fund governed by or maintained by or on behalf of any governmental
authority, with respect to unemployment compensation benefits, social security
or other benefits or obligations for
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Employees (other than routine payments to be made in the normal course of
business and consistent with past practice).
(j) All amounts which the Company is legally or contractually
required to deduct from its employees' salaries and/or transfer to such
employees' pension, life insurance, incapacity insurance, continuing education
fund or otherwise have been duly paid into the appropriate fund or funds, and
the Company has no outstanding obligation to make any such transfer or provision
on account of overdue payments.
3.18 ERISA. Exhibit G hereto lists all employee benefit plans (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained by the Company. Each of such employee benefit
plans complies in all material respects with (i) all applicable requirements of
ERISA and (ii) all applicable requirements of the Code.
3.19 Books and Records. The minute books of the Company contain
complete and accurate records of all meetings and other corporate actions of its
stockholders and its Board of Directors and committees thereof. The stock ledger
of the Company is complete and accurate and reflects all issuances, transfers,
repurchases and cancellations of shares of capital stock of the Company.
3.20 Permits. Exhibit G sets forth a list of all material permits,
licenses, registrations, certificates, orders or approvals from any Governmental
Entity ("Permits") issued to or held by the Company. Such listed Permits are the
only Permits that are required for the Company to conduct its business as
presently or currently expected to be conducted, except for those the absence of
which would not have a Company Material Adverse Effect. Each such Permit is in
full force and effect and, to the best of the Company's knowledge, no suspension
or cancellation of such Permit is threatened and there is no basis for believing
that such Permit will not be renewable upon expiration.
3.21 Environmental Matters.
(a) The Company has complied with all applicable Environmental
Laws (as defined below), except for violations of Environmental Laws that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect. There is no pending or, to
the best of the Company's knowledge, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding, or investigation,
inquiry or information request by any Governmental Entity, relating to any
Environmental Law involving the Company. For purposes of this Agreement,
"Environmental Law" shall mean any federal, state or local law, statute, rule or
regulation or the common law relating to the environment or occupational health
and safety, including any statute, regulation, administrative decision or order
pertaining to (i) treatment, storage, disposal, generation and transportation of
industrial, toxic or hazardous materials or substances or solid or hazardous
waste; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release or threatened release into the environment of
industrial, toxic or hazardous materials or substances, or solid or hazardous
waste, including emissions, discharges, injections, spills, escapes or dumping
of pollutants, contaminants or chemicals; (v) the protection of wild life,
marine life and wetlands, including all endangered and threatened species; (vi)
storage tanks, vessels, containers, abandoned or discarded barrels and other
closed receptacles; (vii) health and safety of employees and other persons; and
(viii) manufacturing, processing, using, distributing,
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treating, storing, disposing, transporting or handling of materials regulated
under any law as pollutants, contaminants, toxic or hazardous materials or
substances or oil or petroleum products or solid or hazardous waste. As used
above, the terms "release" and "environment" shall have the meaning set forth in
the federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA").
(b) The Company has no liabilities or obligations arising from
the release of any Materials of Environmental Concern (as defined below) into
the environment. For purposes of this Agreement, "Materials of Environmental
Concern" shall mean any chemicals, pollutants or contaminants, hazardous
substances (as such term is defined under CERCLA), solid wastes and hazardous
wastes (as such terms are defined under the Resource Conservation and Recovery
Act), toxic materials, oil or petroleum and petroleum products or any other
material subject to regulation under any Environmental Law.
(c) The Company is not a party to or bound by any court order,
administrative order, consent order or other agreement between the Company and
any Governmental Entity entered into in connection with any legal obligation or
liability arising under any Environmental Law.
(d) The Company is not aware of any material environmental
liability of any solid or hazardous waste transporter or treatment, storage or
disposal facility that has been used by the Company.
(e) Set forth in Exhibit G is a list of all documents (whether
in hard copy or electronic form) that contain any environmental reports,
investigations and audits relating to premises currently or previously owned or
operated by the Company (whether conducted by or on behalf of the Company or a
third party, and whether done at the initiative of the Company or directed by a
Governmental Entity or other third party) which the Company has possession of or
access to. A complete and accurate copy of each such document has been provided
to the Purchasers.
3.22 Disclosures. Neither this Agreement nor any Exhibit hereto, nor
any Ancillary Agreement nor any report, certificate or instrument furnished to
any of the Purchasers or their counsel in connection with the transactions
contemplated by this Agreement, including without limitation the Stockholder
Information Statement of the Company dated July 1, 2003 (the "Stockholder
Information Statement"), when read together, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading. Each projection
furnished in the Stockholder Information Statement was prepared in good faith
based on reasonable assumptions and represents the Company's best estimate of
future results based on information available as of the date of the Stockholder
Information Statement.
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4. Representations of the Purchasers. Each of the Purchasers severally and
not jointly represents and warrants to the Company as follows:
4.1 Investment. Such Purchaser is acquiring the Securities, and the
shares of Preferred Stock or Common Stock into which the Securities may be
converted and the shares of Common Stock underlying such Preferred Stock, for
his, her or its own account for investment and not with a view to, or for sale
in connection with, any distribution thereof, nor with any present intention of
distributing or selling the same; and, except as contemplated by this Agreement
and the Exhibits hereto, such Purchaser has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or commitment
providing for the disposition thereof. Such Purchaser is an "accredited
investor" as defined in Rule 501(a) under the Securities Act.
4.2 Authority. Such Purchaser has full power and authority to enter
into and to perform this Agreement and the Ancillary Agreements in accordance
with their terms. Any Purchaser which is a corporation, limited liability
company, partnership or trust represents that it has not been organized,
reorganized or recapitalized specifically for the purpose of investing in the
Company.
4.3 Experience. Such Purchaser has carefully reviewed the
representations concerning the Company contained in this Agreement, has read the
Stockholder Information Statement and has made detailed inquiry concerning the
Company, its business and its personnel; the officers of the Company have made
available to such Purchaser any and all written information which he, she or it
has requested and have answered to such Purchaser's satisfaction all inquiries
made by such Purchaser; and such Purchaser has sufficient knowledge and
experience in finance and business that he, she or it is capable of evaluating
the risks and merits of his, her or its investment in the Company and such
Purchaser is able financially to bear the risks thereof.
5. Transfer of Shares.
5.1 Restricted Shares. "Restricted Shares" means (i) the Securities,
(ii) the shares of Preferred Stock or Common Stock issued or issuable upon
conversion of the Securities and the shares of Common Stock underlying such
Preferred Stock, and (iii) any other shares of capital stock of the Company
issued in respect of such shares (as a result of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events).
5.2 Requirements for Transfer.
(a) Restricted Shares shall not be sold or transferred unless
either (i) they first shall have been registered under the Securities 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 Securities Act.
(b) Notwithstanding the foregoing, no such sale or transfer
shall be permitted unless such sale or transfer is also in compliance with all
of the terms and further restrictions on sale or transfer set forth in the
Stockholders Agreement.
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5.3 Legend. Each certificate representing Restricted Shares shall
bear a legend substantially in the following form:
"The shares 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 shares 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."
6. Company Conduct Prior to Closing and Conditions to Closing;
Termination.
6.1 Company Conduct Prior to Closing. From the date hereof through
and including the earlier of the date of the Closing or the termination of this
Agreement, the Company will operate its business in a manner consistent with
prior practice and will maintain the goodwill of its clients, employees and
other persons with which it has commercial dealings.
In addition, The Company agrees that, except as otherwise agreed to in
writing by the Company, from the date hereof through the earlier of the date of
the Closing or the termination of this Agreement:
(a) There will not be any increases in salary or other
payments, disbursements or distributions in any manner or form to stockholders,
members, directors, officers, employees or current independent contractors (or
related parties thereto) of the Company or affiliated or related entities, or
changes in the cash or cash equivalent accounts of the Company, other than
normal and necessary transactions in the ordinary course of business of the
Company;
(b) Revenue and accounts receivable will be maintained on a
normal basis and there will be no changes in methods or procedures for billing,
collection or recording of client accounts receivable relating to the business
of the Company;
(c) All normal and recurring installments of bank debt,
leases, contractual obligations and other amounts due third parties, if any,
will be made in the ordinary course of business and as they become due;
(d) There will be no new bank debt, leases, loans,
encumbrances, liens, attachments, contractual obligations or other indebtedness,
except in the ordinary course of business, nor openings of new accounts nor
amendments of signatory powers except as agreed by Predix; and
(e) There will not be any hiring of additional employees by
the Company without the express written consent of Predix, except for the
replacement of terminated employees. If there are any new employees hired by
either party in accordance with the foregoing sentence, such party shall notify
the other party in writing and such notice shall include the name of the
employee and the terms of employment.
Notwithstanding any provision set forth in this Section 6. 1, the Company
retains the right and ability: (A) to license (whether on an exclusive or
non-exclusive basis), sell or transfer, subject only to the approval of the
Company's Board of Directors: (i) the Company's CMIS Drug
-16-
platform to Aukland or its affiliates; (ii) the Company's HUBIMS platform to PA
Consulting or its affiliates; (iii) the Company's Cell Editor and CardioPrism
technologies to Oxsoft or its affiliates; (iv) the Company's CardioPrism and
Pathway Prism technologies to any third party; and (v) the Company's Model Based
Assay Intellectual Property and work product to any third party; and (B) to
terminate any or all of its employees prior to Closing, as shall be approved by
the Company's Board of Directors in its sole discretion.
6.2 Conditions to Closing. (a) At or prior to Closing the Company
shall have provided evidence to Predix, which evidence must be satisfactory to
Predix in its sole discretion that:
(i) Each of (i) that certain Voting Agreement, dated as
of October 12, 1995 and as amended on October 31, 1997, by and among the Company
and the Stockholders (as defined therein) (the "Voting Agreement"); and (ii)
that certain Registration Rights Agreement dated as of October 31, 1997, and as
amended on May 13, 1999 and May 16, 2000, by and among the Company and the
Investors (as defined therein) (the "Registration Rights Agreement") shall have
been duly terminated and of no further force and effect.
(b) As promptly as practicable after the execution of the
Agreement, the Company shall use its commercially reasonable efforts to, in
accordance with the Delaware General Corporation Law and the Company's
Certificate of Incorporation and Bylaws, obtain the approval, by vote or written
consent of the Company's stockholders (the "Stockholder Approval") for the
filing with the Secretary of State of the State of Delaware of Physiome's
Amended and Restated Certificate of Incorporation, in the form attached hereto;
and
(c) As of the Closing:
(i) No temporary restraining order, preliminary or
permanent injunction or other order (whether temporary, preliminary or
permanent) issued by any court of competent jurisdiction, or other legal
restraint or prohibition shall be in effect which prevents the consummation of
the transactions contemplated by this Agreement, nor shall any proceeding
seeking any of the foregoing be pending.
(ii) The representation and warranties of each party to
this Agreement contained herein shall be true and correct in all material
respects, except for those which are qualified as to materiality, which shall be
true and correct in all respects.
(iii) All parties to this Agreement shall have performed
or complied in all respects with all agreements and covenants required to be
performed or complied with by such party by this Agreement.
6.3 Termination. In the event that: (i) any of the Conditions to
Closing set forth in Section 6.2(a) hereof are not satisfied in full, or waived
by Predix in its sole discretion; (ii) the Condition to Closing set forth in
Section 6.2(b) hereof is not satisfied in full; (iii) any of the Conditions to
Closing set forth in Section 6.2(c) hereof are not satisfied in full, or waived
by (a) both the Company and Predix with respect to Section 6.2(c)(i) or (b) the
Company or Predix, as the case may be with respect to the other party's
representations, warranties, agreements and covenants, with respect to Sections
6.2(c)(ii) and (iii); or (iv) the Purchase Agreement is terminated, then all of
the provisions of this Agreement shall terminate and there shall be no liability
on the part of any party hereto; provided, however, the provisions of Section
7.6 shall survive such termination. Notwithstanding anything to the contrary
contained herein, if the
-17-
Closing does not occur on or before July 31, 2003, unless such time period is
extended by mutual agreement of both Predix and Physiome, this Agreement shall
automatically terminate and shall have no further force and effect; provided,
however, the provisions of Section 7.6 shall survive such termination. If the
Agreement is terminated under this Section 6.3, the parties shall walk away from
this transaction and each party shall bear its own costs and expenses. Neither
party shall have a claim against the other party in respect with this
contemplated transaction and/or the negotiations that have preceded it.
7. Miscellaneous.
7.1 Successors and Assigns. This Agreement, and the rights and
obligations of the Company hereunder, may be assigned by the Company to any
affiliate, partner, member, stockholder or subsidiary of the Company. No
Purchaser may assign his, her or its rights under this Agreement.
7.2 Survival of Representations and Warranties. None of the
representations and warranties contained herein shall survive the Closing except
such representations and warranties as set forth in Section 3.1, Section 3.2,
Section 3.3, Section 3.4, Section 3.5, Section 4. 1, Section 4.2, and Section
4.3, which representations and warranties shall survive in perpetuity.
7.3 Brokers. Except as set forth in Exhibit B to the Purchase
Agreement, the Company, Predix and each Purchaser: (i) represents and warrants
to the other parties hereto that he, she or it has not retained a finder or
broker in connection with the transactions contemplated by this Agreement; and
(ii) will indemnify and save the other parties harmless from and against any and
all claims, liabilities or obligations with respect to brokerage or finders'
fees or commissions, or consulting fees in connection with the transactions
contemplated by this Agreement asserted by any person on the basis of any
statement or representation alleged to have been made by such indemnifying
party.
7.4 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
7.5 Specific Performance. In addition to any and all other remedies
that may be available at law in the event of any breach of this Agreement, each
Purchaser shall be entitled to specific performance of the agreements and
obligations of the Company hereunder and to such other injunctive or other
equitable relief as may be granted by a court of competent jurisdiction.
7.6 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Delaware
(without reference to the conflicts of law provisions thereof). Each of the
parties hereto: (a) submits to the jurisdiction of any state or United States
federal court sitting in the State of Delaware in any action or proceeding
arising out of or relating to this Agreement (including any action or proceeding
for the enforcement of any arbitral award made in connection with any
arbitration of a dispute hereunder), (b) agrees that all claims in respect of
such action or proceeding may be heard and determined in any such court, (c)
waives any claim of inconvenient forum or other challenge to venue in such
court, (d) agrees not to bring any action or proceeding arising out of or
relating to this Agreement in any other court and (e) waives any right it may
have to a trial by jury with respect to any action or proceeding arising out of
or relating to this Agreement. Each party hereto agrees to accept service of any
summons, complaint or other initial pleading made in the manner
-18-
provided for the giving of notices in Section 7.7, provided that nothing in this
Section 7.6 shall affect the right of any party to serve such summons, complaint
or other initial pleading in any other manner permitted by law
7.7 Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) seven business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) three business day after
being sent via a reputable international overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Company, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief Operating Officer, or at such other address
as may have been furnished in writing by the Company to the other parties
hereto, with a copy to ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.; or
If to Predix, at ▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Executive Officer, or at such other address as may have been furnished in
writing by Predix to the other parties hereto, with copies to Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. and Volovelsky,
▇▇▇▇▇▇▇▇, ▇▇▇▇ & Co., Law Offices, ▇▇▇▇▇▇ House, 14 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇, Advocate; or
If to a Purchaser, at its address set forth on Exhibit A, or at such other
address as may have been furnished in writing by such Purchaser to the other
parties hereto, with a copy to such Purchaser's counsel, if any, as such
Purchaser shall have notified the Company, in writing.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
7.8 Complete Agreement. This Agreement (including its Exhibits)
constitutes the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter including, without limitation,
that certain letter of intent dated April 25, 2003.
7.9 Amendments and Waivers. This Agreement may be amended or
terminated and the observance of any term of this Agreement may be waived with
respect to all parties to this Agreement (either generally or in a particular
instance and either retroactively or prospectively), after the Closing with the
written consent of the Company and the holders of at least 75% of the Shares
then held by all of the Purchasers or, if prior to Closing, with the Written
Consent of the Company and the holders of at least 75% of the outstanding
Preferred Shares and Ordinary Shares of Predix Ltd. constituting the Purchase
Price hereunder. Notwithstanding the foregoing, this Agreement may not be
amended or terminated and the observance of any term hereunder may not be waived
with respect to any Purchaser without the written consent of such Purchaser
unless such amendment, termination or waiver applies to all Purchasers in the
same fashion. The Company shall give prompt written notice of any amendment or
termination hereof
-19-
or waiver hereunder to any party hereto that did not consent in writing to such
amendment, termination or waiver. Any amendment, termination or waiver effected
in accordance with this Section 7.9 shall be binding on all parties hereto, even
if they do not execute such consent. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
7.10 Required Disclosures. Each party hereto (and each employee,
representative, or other agent of such party) may disclose to any and all
persons, without limitation of any kind, the United States federal tax treatment
and tax structure of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure. For this purpose, 'tax
structure' is limited to any facts relevant to the United States federal income
tax treatment of the transaction and does not include information relating to
the identity of the parties.
7.11 Pronouns. Whenever the context may require, any pronouns used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
7.12 Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts (including, in the case of the
Purchasers, Financing Signature Pages), each of which shall be deemed to be an
original, and all of which shall constitute one and the same document. This
Agreement (including the Financing Signature Pages) may be executed by facsimile
signatures.
7.13 Section Headings and References. The section headings are for
the convenience of the parties and in no way alter, modify, amend, limit or
restrict the contractual obligations of the parties. Any reference in this
agreement to a particular section or subsection shall refer to a section or
subsection of this Agreement, unless specified otherwise.
** ** ** *
-20-
Executed as of the date first written above.
PHYSIOME SCIENCES, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇. ▇▇▇ ▇▇▇▇▇
Title: Chief Operating Officer
and Chief Financial Officer
PREDIX PHARMACEUTICALS, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
PREDIX PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
STOCKHOLDERS OF
PREDIX PHARMACEUTICALS, LTD.
/s/ Illegible
-----------------------------------
▇▇. ▇▇▇▇ ▇▇▇▇▇▇, by YVC Yozma as
proxy holder
/s/ Illegible
-----------------------------------
▇▇▇ ▇▇▇▇, by YVC Yozma as proxy
holder
/s/ Illegible
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, by YVC Yozma as
proxy holder
/s/ HAIM AVIV
-----------------------------------
▇▇▇▇. ▇▇▇▇ Aviv
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ AT TEL AVIV UNIVERSITY LTD.
By: /s/ Illegible
-----------------------------------
By YVC Yozma as proxy-holder
YOZMA II(ISRAEL) LP
By: /s/ Illegible
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ & Chen ▇▇▇▇▇
Title: Partners
YOZMA MANAGEMENT AND INVESTMENT LTD.,
AS TRUSTEES FOR YOZMA II(BVI) LP
By: /s/ Illegible
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ & Chen ▇▇▇▇▇
Title: Partners
PCM VENTURE CAPITAL L.P.
By: /s/ Illegible
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ & Chen ▇▇▇▇▇
Title: Partners
ORBIMED ASSOCIATES LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Partner
CADUCEUS PRIVATE INVESTMENTS LP
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Partner
PW JUNIPER CROSSOVER FUND LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Partner
EXHIBIT A
LIST OF SELLERS AND SHARES SOLD
AGGREGATE AGGREGATE
SHARES OF SHARES OF MAXIMUM
PHYSIOME PHYSIOME AGGREGATE AGGREGATE AGGREGATE
NO. OF SERIES B SERIES A SHARES OF NUMBER OF PERCENT OF
NO OF ORDINARY EQUIVALENT PREFERRED PREFERRED PHYSIOME TRANSACTION FUNDING
PREFERRED SHARES CASH PURCHASE STOCK STOCK COMMON STOCK WARRANTS WARRANTS
NAME AND ADDRESS OF SELLER SHARES SOLD SOLD PRICE PURCHASED PURCHASED PURCHASED PURCHASED PURCHASED(1)
-------------------------- ----------- ---- ----- --------- --------- ----------- ---------- ------------
▇▇. ▇▇▇▇ ▇▇▇▇▇▇................ -- 24,000 $ 14,692 -- -- 14,692 -- --
Ramot at Tel Aviv University
Ltd............................ -- 24,000 $ 14,692 -- -- 14,692 -- --
▇▇▇ ▇▇▇▇....................... -- 4,000 $ 2,448 -- -- 2,448 -- --
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇.............. -- 24,000 $ 14,692 -- -- 14,692 -- --
▇▇▇▇. ▇▇▇▇ Aviv................ -- 24,000 $ 14,692 -- -- 14,692 -- --
Yozma II (Israel) LP........... 1,610,158 -- $ 772,1100 17,508 59,703 -- 30,491 3.05%
YVC-Yozma Management and
Investment Ltd., as
trustees for Yozma II
(BVI) LP.................. 2,744,594 -- $ 1,316,110 29,844 101,767 -- 51,974 5.20%
PCM Venture Capital LP......... 1,463,786 -- $ 701,9300 15,917 54,276 -- 27,719 2.77%
OrbiMed Associates LLC........ 176,636 -- $ 84,6900 1,920 6,549 -- 3,344 0.33%
Caduceus Private Investments
LP............................. 7,254,111 -- $ 3,478,570 78,880 268,977 -- 137,372 13.74%
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇................ 121,556 -- $ 58,280 1,321 4,507 -- 2,301 0.23%
PW Juniper Crossover Fund LLC.. 2,471,433 -- $ 1,185,130 26,874 91,639 -- 46,801 4.68%
---------- ------- ------------- --------- ------- ------------ ----------- ---------
Total 15,842,274 100,000 $ 7,658,036 172,264 587,418 61,216 300,002 30.0%
========== ======= ============= ========= ======= ============ =========== =========
--------
(1) Represents pro-rata portion of calculation done on date of closing.
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ HAIM AVIV
------------------------------------
Name of Purchaser
By: Haim Aviv
------------------------------------
Title: _________________________________
Date: 7 July 2003
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address:
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
OrbiMed Associates LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: DIRECTOR
Date: Aug. 5, 2003
Contact Person: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
PW Juniper Crossover Fund, L.L.C.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: DIRECTOR
Date: Aug. 5, 2003
Contact Person: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Caduceus Private Investment, L.P.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: DIRECTOR
Date: Aug. 5, 2003
Contact Person: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ Illegible
------------------------------------
YVC Yozma Management & Investments
Ltd. (as trustee for Yozma II (BVI)
L.P.)
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ Illegible
------------------------------------
Yozma II (Israel) L.P.
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ Illegible
------------------------------------
PCM Venture Capital L.P.
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ Illegible
------------------------------------
▇▇. ▇▇▇▇ ▇▇▇▇▇▇, by YVC Yozma as
proxy holder
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ Illegible
------------------------------------
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, by YVC Yozma as
proxy holder
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ Illegible
------------------------------------
▇▇▇▇. ▇▇▇ ▇▇▇▇, by YVC Yozma as
proxy holder
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ Illegible
------------------------------------
RAMOT at Tel. Aviv University Ltd.,
by YVC Yozma as proxy holder
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT B
FINANCING SIGNATURE PAGE
By execution and delivery of this signature page, the undersigned hereby
agrees to become a Purchaser, as defined in that certain Convertible Preferred
Stock Agreement of Sale (the "Purchase Agreement") by and among Physiome
Sciences, Inc., a Delaware corporation (the "Company"), Predix Pharmaceuticals,
Ltd., a corporation formed under the laws of Israel, and the Purchasers (as
defined in the Purchase Agreement), dated as of the Closing Date (as defined in
the Purchase Agreement), acknowledges having read the representations in the
Purchase Agreement section entitled "Representations of the Purchasers," and
hereby represents that the statements contained therein are complete and
accurate with respect to the undersigned as a Purchaser. The undersigned further
hereby agrees to be bound by the terms and conditions of (i) the Purchase
Agreement as a "Purchaser" thereunder, and (ii) the Stockholders Agreement (as
defined in the Purchase Agreement) as a "Purchaser" thereunder and authorizes
this signature page to be attached to the Purchase Agreement, the Stockholders
Agreement, or counterparts thereof.
Executed, in counterpart, as of the date set forth below.
PURCHASER:
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: ____________________________________
Title: _________________________________
Date: __________________________________
Contact Person: ________________________
Telephone No: __________________________
Telecopy No: ___________________________
Email Address: _________________________
EXHIBIT C
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF PHYSIOME SCIENCES, INC.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
PHYSIOME SCIENCES, INC.
Physiome Sciences, Inc., a corporation organized and existing under the
laws of the State of Delaware (hereinafter referred to as the "Corporation"),
hereby certifies as follows:
1. The name of the Corporation is Physiome Sciences, Inc. The Corporation
was originally incorporated under the game Takhus Pharmaceuticals, Inc. and
filed its original certificate of incorporation with the Secretary of State of
the State of Delaware on November 2, 1994.
2. This Amended and Restated Certificate of Incorporation amends and
restates in its entirety the Corporation's certificate of incorporation, as
amended and restated from time to time, to amend, among other things, the
following to: (i) change its name to Predix Pharmaceuticals Holdings, Inc.; (ii)
provide for a one-for-17.971067 reverse stock split of the Corporation's
Existing Common Stock; (iii) create a new class of Class A Common Stock; (iv)
reclassify and convert the outstanding shares of the Corporation's Series A
Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock into shares of a newly created class of Series A
Convertible Preferred Stock and delete all references to such prior preferred
classes; (v) reclassify and convert the outstanding shares of the Corporation's
Series D Convertible Preferred Stock into shares of a newly created class of
Series B Convertible Preferred Stock and delete all references to such prior
preferred class; and (vi) designate the newly created Series A Convertible
Preferred Stock and Series B Convertible Preferred Stock as set forth below.
3. This Amended end Restated Certificate of Incorporation was duly adopted
in accordance with the provisions of Sections 228, 242 and 245 of the General
Corporation Law of the State of Delaware, the requisite written consent of the
holders of each class of stock entitled to vote thereon has been voted in favor
of this Amended and Restated Certificate of Incorporation and written notice has
been given as provided by Section 228 of the General Corporation Law of the
State of Delaware. This Amended and Restated Certificate of Incorporation
(referred to hereinafter as the "Certificate of Incorporation") restates,
integrates and further amends the provisions of the Corporation's certificate of
incorporation, as amended to date (including all certificates of designation),
as follows:
FIRST. The name of the corporation is Predix Pharmaceuticals Holdings,
Inc. (the "Corporation").
SECOND. The address of the Corporation's registered office in the State of
Delaware is Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, in
the City of Wilmington, County of ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇. The name of its
registered agent at such address is the Corporation Service Company.
THIRD. The nature of the business or purposes to be conducted or promoted
by the Corporation is as follows:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the state of Delaware (the
"DGCL").
FOURTH. Upon this Amended and Restated Certificate of Incorporation
becoming effective pursuant to the DGCL (the "Effective Time"), a
one-for-17.971067 reverse stock split of the Corporation's Common Stock, $.01
par value per share (the "Existing Common Stock"), shall become effective,
pursuant to which each share of the Corporation's Existing Common Stock issued
and outstanding and held of record by each stockholder of the Corporation
(including treasury shares) immediately prior to the Effective Time shall be
reclassified and converted into 0.055645 fully paid and nonassessable shares of
the Corporation's Common Stock, $.01 par value per share (the "New Common
Stock"), automatically and without any action by the holder thereof upon the
Effective Time. Any stock certificate that, immediately prior to the Effective
Time, represented shares of the Corporation's Existing Common Stock shall
automatically and without the necessity of presenting the same for exchange,
represent 0.055645 shares of the Corporation's New Common Stock from and after
the Effective Time for each share of Existing Common Stock outstanding
immediately prior to the Effective Time and represented by such certificate. No
fractional shares of New Common Stock shall be issued as a result of such
reclassification and conversion. In lieu of any fractional shares to which the
stockholder would otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the then fair market value of the Corporation's New
Common Stock as determined by the Board of Directors of &a Corporation.
Upon the Effective Time, each share of the Corporation's Series A
Convertible Preferred Stock, $.01 par value per share (the "Existing Series A
Preferred Stock"), issued and outstanding or held in treasury of the Corporation
is hereby reclassified and converted (irrespective of any accrued dividends or
adjustments to the conversion price of the Existing Series A Preferred Stock)
into 0.022104 fully paid and nonassessable shares of the Corporation's New
Series A Preferred Stock, as defined in Article FIFTH, automatically and without
any action by the holder thereof upon the Effective Time and all accrued and
unpaid dividends thereon, if any, shall be cancelled. Any stock certificate
that, immediately prior to the Effective Time, represented shares of the
Corporation's Existing Series A Preferred Stock shall, automatically and without
the necessity of presenting the same for exchange, represent 0.022104 shares of
the Corporation's New Series A Preferred Stock from and after the Effective Time
for each share of Existing Series A Preferred Stock outstanding immediately
prior to the Effective Time and represented by such certificate. No fractional
shares of New Series A Preferred Stock shall be issued as a result of such
reclassification and conversion. In lieu of any fractional shares to which the
stockholder would otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the then fair market value of the Corporation's New
Series A Preferred Stock as determined by the Board of Directors of the
Corporation.
Upon the Effective Time, each share of the Corporation's Series B
Convertible Preferred Stock, $.01 par value per share (the "Existing Series B
Preferred Stock"), issued and outstanding or held in treasury of the Corporation
is hereby reclassified and converted (irrespective of any accrued dividends or
adjustments to the conversion price of the Existing Series B Preferred
Stock) into 0.035661 fully paid and nonassessable shares of the
Corporation's New Series A Preferred Stock automatically and without any action
by the holder thereof upon the Effective Time and all accrued and unpaid
dividends thereon, if any, shall be cancelled. Any stock certificate that,
immediately prior to the Effective Time, represented shares of the Corporation's
Existing Series B Preferred Stock shall, automatically and without the necessity
of presenting the same for exchange, represent 0.035661 shares of the
Corporation's New Series A Preferred Stock from and after the Effective Time for
each share of Existing Series B Preferred Stock outstanding immediately prior to
the Effective Time and represented by such certificate. No fractional shares of
New Series A Preferred Stock shall be issued as a result of such
reclassification and conversion. In lieu of any fractional shares to which the
stockholder would otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the then fair market value of the Corporation's New
Series A Preferred Stock as determined by the Board of Directors of the
Corporation
Upon the Effective Time, each share of the Corporation's Series C
Convertible Preferred Stock, $.01 par value per share (the "Series C Preferred
Stock"), issued and outstanding or held in treasury of the Corporation is hereby
reclassified and converted (irrespective of any accrued dividends or adjustments
to the conversion price of the Series C Preferred Stock) into 0.084149 fully
paid and nonassessable shares of the Corporation's New Series A Preferred Stock
automatically and without any action by the holder thereof upon the Effective
Time and all accrued and unpaid dividends thereon, if any, shall be cancelled.
Any stock certificate that, immediately prior to the Effective Time, represented
shares of the Corporation's Series C Preferred Stock stall, automatically and
without the necessity of presenting the same for exchange, represent 0.084149
shares of the Corporation's New Series A Preferred Stock from and after the
Effective Time for each share of Series C Preferred Stock outstanding
immediately prior to the Effective Time and represented by such certificate. No
fractional shares of New Series A Preferred Stock shall be issued as a result of
such reclassification and conversion. In lieu of any fractional shares to which
the stockholder would otherwise be entitled, the Corporation shall pay cash
equal to such fraction multiplied by the then fair market value of the
Corporation's New Series A Preferred Stock as determined by the Board of
Directors of the Corporation.
Upon the Effective Time, each share of the Corporation's Series D
Convertible Preferred Stock, $.01 par value per share (the "Series D Preferred
Stock"), issued and outstanding or held in treasury of the Corporation is hereby
reclassified and converted (irrespective of any accrued dividends or adjustments
to the conversion price of the Series D Preferred Stock) into 0.123774 fully
paid and nonassessable shares of the Corporation's New Series B Preferred Stock,
as defined in Article FIFTH, automatically and without any action by the holder
thereof upon the Effective Time and all accrued and unpaid dividends thereon, if
any, shall be cancelled. Any stock certificate that, immediately prior to the
Effective Time, represented shares of the Corporation's Series D Preferred Stock
shall, automatically and without the necessity of presenting the same for
exchange, represent 0.123774 shares of the Corporation's New Series B Preferred
Stock from and after the Effective Time for each share of Series D Preferred
Stock outstanding immediately prior to the Effective Time and represented by
such certificate. No fractional shares of New Series B Preferred Stock shall be
issued as a result of such reclassification and conversion. In lieu of any
fractional shares to which the stockholder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
fair market value of the Corporation's New Series B Preferred Stock as
determined by the Board of Directors of the Corporation.
FIFTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty eight million (48,000,000)
shares, consisting of: (i) forty million (40,000,000) shares of New Common
Stock; (ii) four million four hundred thousand (4,400,000) shares of Class A
Common Stock, $0.01 par value per share (the "Class A Common Stock"); (iii) one
million one hundred thousand (1,100,000) shares of Series A Convertible
Preferred Stock, $0.01 par value per share (the "New Series A Preferred Stock"
or the "Series A Preferred Stock"); and (iv) two million five hundred thousand
(2,500,000) shares of Series B Convertible Preferred Stock, $0.01 per value per
share (the "New Series B Preferred Stock" or the "Series B Preferred Stock").
The Series A Preferred. Stock and the Series B Preferred Stock are sometimes
referred to herein as the "Designated Preferred Stock". The New Common Stock and
the Class A Common Stock are sometimes referred to herein as the "Common Stock".
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK
1. Dividends. The holders of Common Stock, subject to the preferential
rights of the holders of any of the then outstanding Series A Preferred Stock,
Series B Preferred Stock and any other class or series of shares ranking (as to
dividends) senior to the Common Stock, shall be entitled to receive dividends
and the Corporation shall pay dividends thereon, as, if and when declared by the
Board of Directors of the Corporation out of funds legally available for the
payment of dividends, in such amount and in such form as the Board of Directors
may from time to time determine. All dividends which the Board of Directors may
declare on the New Common Stock shall be declared and paid in equal amounts per
share on all New Common Stock at the time outstanding, All dividends which the
Board of Directors may declare on the Class A Common Stock shall be declared and
paid in equal amounts per share on all Class A Common Stock at the time
outstanding.
2. Liquidation. In the event of the liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary, or other distribution of
assets of the Corporation among its stockholders for the purpose of winding up
its affairs, pursuant to applicable law, the holders of the Common Stock,
subject to the preferential rights of any of the holders of the then outstanding
Series A Preferred Stock, Series B Preferred Stock and any other class or series
of stock ranking on liquidation, dissolution or winding up senior to the Common
Stock, and except as may otherwise be provided pursuant to Section B.2 below,
shall be entitled to receive all the assets of the Corporation available for
distribution to its stockholders. Such distributions shall be paid in equal
amounts per share on all Common Stock at the time outstanding. Notwithstanding
the foregoing, the New Common Stock shall have such preferential rights over the
Class A Common Stock in the event of any liquidation, dissolution or winding up
of the Corporation or other distribution of Assets of the Corporation among its
stockholders for the purposes of winding up its affairs as set forth herein.
3. Voting. The holders of Common Stock shall be entitled to receive notice
of and to attend all meetings of the stockholders of the Corporation and shall
have one vote for each share of Common Stock held at all meetings of the
stockholders of the Corporation, except for meetings at which only holders of
another specified class or series of shares of the Corporation are entitled to
vote separately as a class or series.
B. SERIES A CONVERTIBLE PREFERRED STOCK AND SERIES B CONVERTIBLE PREFERRED
STOCK
1. Dividends.
(a) The Corporation shall not declare, pay or set aside any
dividends (other than dividends payable in shares of New Common Stock) on Common
Stock unless the holders of the Series A Preferred Stock and Series B Preferred
Stock then outstanding shall first receive, or simultaneously receive, a
dividend on each outstanding share of Series A Preferred Stock and Series B
Preferred Stock equal to the product of (i) the per share dividend to be
declared, paid or set aside for the Common Stock multiplied by (ii) the number
of shares of New Common Stock into which each share of Series A Preferred Stock
or Series B Preferred Stock is then convertible.
(b) In the event that there shall be declared but unpaid dividends
outstanding with respect to the Series A Preferred Stock or Series B Preferred
Stock immediately prior to, and in the event of, a conversion of any shares of
Series A Preferred Stock or Series B Preferred Stock as provided in Section 4
hereof, the Corporation shall, at the option of each holder of such shares, pay
in cash, out of funds legally available therefor, to each such holder the full
amount of any such dividends or, unless registration or qualification of such
New Common Stock would be required under applicable securities laws, allow such
dividends to be converted into New Common Stock in accordance with, and pursuant
to the terms specified in, Section 4 hereof.
2. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations
and Asset Sales
(a) Liquidation. In the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, or other
distribution of assets of the Corporation among its stockholders for the purpose
of winding up its affairs, pursuant to applicable law, all the assets of the
Corporation available for distribution among the stockholders shall be
distributed to them in the following order and preference:
(i) First, each holder of Series B Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of any of the
assets of the Corporation to any other stockholders by reason of their ownership
thereof, an amount equal to the Series B Conversion Price (as defined in Section
4 below) (as adjusted to reflect stock splits, stock dividends,
recapitalizations and similar transactions) for each outstanding share of Series
B Preferred Stock held by such stockholder (the "Preferred B Preference"). If
upon the occurrence of such event, the assets and funds thus distributed among
the holders of the Series B Preferred Stock shall be insufficient to permit the
payment to such holders of the full Preferred B Preference, then the entire
assets and funds of the Corporation legally available for distribution
shall be distributed ratably among the holders of the Series B
Preferred Stock in proportion to the amount of such stock owned by each such
holder.
(ii) Second, following payment of the Preferred B Preference,
each holder of Series A Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets of the Corporation to any
other stockholders by reason of their ownership thereof, an amount equal to the
Series A Conversion Price (as defined in Section 4 below) (as adjusted to
reflect stock splits, stock dividends, recapitalizations and similar
transactions) for each outstanding share of Series A Preferred Stock held by
such stockholder (the "Preferred A Preference"). If upon the occurrence of such
event, the assets and funds thus distributed among the holders of the Series A
Preferred Stock shall be insufficient to permit the payment to such holders of
the full Preferred A Preference, then the entire remaining assets and funds of
the Corporation legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock in proportion to the amount of
such stock owned by each such holder.
(iii) Third, following payment of the Preferred A Preference,
each holder of New Common Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Corporation to any
other stockholders by reason of their ownership thereof, an amount equal to
$1.00 (as adjusted to reflect stock splits, stock dividends, recapitalizations
and similar transactions) for each outstanding share of New Common Stock held by
such stockholder (the "New Common Preference"). If upon the occurrence of such
event, the assets and funds thus distributed among the holders of the New Common
Stock shall be insufficient to permit the payment to such holders of the full
New Common Preference, then the entire remaining assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among the holders of the New Common Stock in proportion to the amount of such
stock owned by each such holder.
(iv) Fourth, after payment of the Preferred B Preference,
Preferred A Preference and New Common Preference, the entire remaining assets
and funds of the Corporation legally available for distribution, if any, shall
be distributed pro rata among all holders of the Series B Preferred Stock,
Series A Preferred Stock and Common Stock (treating all holders of Series B
Preferred Stock and Series A Preferred Stock as holders of Common Stock on an
as-converted to New Common Stock basis).
(b) Other Liquidation Events (Cash Consideration Only). In the event
of (i) a merger or consolidation of the Corporation with or into another entity
(except if such merger or consolidation does not result in the transfer of more
than 50% by voting power of the outstanding capital stock of the Corporation or
in which the holders of 50% or more by voting power of the outstanding capital
stock of the Corporation immediately prior to such transaction continue, by
virtue of their holdings of securities of the Corporation, to hold 50% or more
by voting power of the outstanding capital stock of the surviving corporation
immediately after the transaction); or (ii) the sale, in a single transaction or
series of related transactions, by the Corporation of all or substantially all
the assets of the Corporation (except where such sale is to a wholly-owned
subsidiary of the Corporation) (such events described in Section 2(b)(i) and
Section 2(b)(ii) referred to as "Deemed Liquidation Events"), pursuant to which
the consideration in connection with such Deemed Liquidation Events is paid
solely in cash, such consideration, less any
obligations of the Corporation not specifically assumed in writing
by the potential acquiror under the terms of the contemplated transaction, shall
be distributed among the Corporation's stockholders in the following order and
preference:
(A) First, each holder of Series B Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of any of the
funds of the Corporation to any other stockholders by reason of their ownership
thereof, an amount equal to the Preferred B Preference for each outstanding
share of Series B Preferred Stock held by such stockholder. If upon the
occurrence of such event, the funds thus distributed among the holders of the
Series B Preferred Stock shall be insufficient to permit the payment to such
holders of the full Preferred B Preference, then such consideration less any
required obligations of the Corporation shall be distributed ratably among the
holders of the Series B Preferred Stock in proportion to the amount of such
stock owned by each such holder.
(B) Second, following payment of the Preferred B Preference
pursuant to Section 2(b)(A), the holders of Series A Preferred Stock and New
Common Stock shall be entitled to receive, prior and in preference to any
distribution of any of the funds of the Corporation to any other stockholders by
reason of their ownership thereof, an amount equal to the New Common Preference
(treating all holders of Series A Preferred Stock on an as-converted to New
Common Stock basis). If upon the occurrence of such event, the funds thus
distributed among the holders of the Series A Preferred Stock (on an
as-converted to New Common Stock basis) and New Common Stock shall be
insufficient to permit the full payment of the New Common Preference to such
holders, then such consideration less any required obligations of the
Corporation shall be distributed ratably among the holders of the Series A
Preferred Stock and New Common Stock in proportion to the amount of such stock
owned by each holder, on an as-converted to New Common Stock basis.
(C) Third, after the payments set forth in Section 2(b)(A) and
Section 2(b)(B) above, the entire remaining consideration, if any, shall be
distributed pro rata among all holders of the Series B Preferred Stock, Series A
Preferred Stock and Common Stock (treating all holders of Series B Preferred
Stock and Series A Preferred Stock as holders of Common Stock on an as-converted
to New Common Stock basis).
(c) Other Liquidation Events (Including Non-Cash Consideration). In
the event of a Deemed Liquidation Event pursuant to which the consideration to
the Corporation in connection with such Deemed Liquidation Event is paid (i)
solely in property, rights and/or securities of the acquiring person, firm or
other entity or (ii) in a combination of property, rights and/or securities of
the acquiring person, firm or other entity and cash, such consideration, less
any obligations of the Corporation not specifically assumed in writing by the
potential acquiror under the terms of the contemplated transaction, shall be
distributed among the Corporation's stockholders in the following order and
preference:
(A) First, all cash consideration shall be distributed in
accordance with the procedure set forth in Sections 2(b)(A)-(C) above.
(B) Second, the value of such property, rights and/or
securities shall be determined in good faith by the Board of Directors of the
Corporations and shall be
distributed pro rata among all holders of the Series B Preferred Stock, Series A
Preferred Stock and Common Stock (treating all holders of Series B Preferred
Stock and Series A Preferred Stock as holders of Common Stock on as as-converted
to New Common Stock basis).
3. Voting
(a) On any matter presented to the stockholders of the Corporation
for their action or consideration at any meeting of stockholders of the
Corporation (or by written action of stockholders in lieu of meeting), each
holder of outstanding Designated Preferred Stock shall be entitled to the number
of votes equal to the number of whole shares of New Common Stock into which the
Designated Preferred Stock held by such holder is convertible as of the record
date for determining stockholders entitled to vote on such matter. Except as
provided by law or otherwise provided herein, the holders of Designated
Preferred Stock shall vote together with the holders of Common Stock, and with
the holders of any other class or series of capital stock the terms of which so
provide, as a single class.
(b) Until the consummation of an Initial Public Offering (as defined
in Section 5), the Corporation shall not, without the affirmative vote of the
holders of at least 60% of the issued and outstanding shares of Series B
Preferred Stock take any action which alters or modifies the rights, preferences
or privileges of the Series B Preferred Stock set forth in Section 2 hereof.
(c) Until the consummation of an Initial Public Offering, the
Corporation shall not, without the affirmative vote of the holders of at least
60% of the issued and outstanding shares of capital stock of the Corporation,
voting as a single class on an as-converted to Common Stock basis, effect a
Deemed Liquidation Event.
4. Optional Conversion.
The holders of the Designated Preferred Stock shall have conversion rights as
follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock and
Series B Preferred Stock shall be convertible, at the option of the holder
thereof, at any time and from time to time, and without the payment of
additional consideration by the holder thereof, into such number of fully paid
and nonassessable shares of New Common Stock as is determined by dividing
$100.00 by the Series A Conversion Price (as defined below) or Series B
Conversion Price (as defined below), as applicable, in effect at the time of
conversion. The "Series A Conversion Price" and "Series B Conversion Price"
shall initially be $10.00 per share. Such initial Series A Conversion Price and
Series B Conversion Price, and the rate at which Series A Preferred Stock and
Series B Preferred Stock may be converted into New Common Stock, shall be
subject to adjustment as provided below.
In the event of a liquidation, dissolution or winding up of the Corporation, the
Conversion Rights shall terminate at the close of business on the last full day
preceding the date fixed for the payment of any such amounts distributable on
such event to the holders of Series A Preferred Stock and Series B Preferred
Stock. In the event of such a liquidation, dissolution or winding up, the
Corporation shall provide to each holder of Series A Preferred Stock and Series
B Preferred
Stock notice of such liquidation, dissolution or winding up, which notice shall
(i) be sent at least 15 days prior to the termination of the Conversion Rights
and (ii) state the amount per share of Series A Preferred Stock and Series B
Preferred Stock that will be paid or distributed on such liquidation,
dissolution or winding up, as the case may be.
(b) Fractional Shares. No fractional shares of New Common Stock
shall be issued upon conversion of the Series A Preferred Stock or Series B
Preferred Stock. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then fair market of the New Common Stock as determined by the
Board of Directors of the Corporation.
(c) Mechanics of Conversion.
(i) In order for a holder of Designated Preferred Stock to
convert such Designated Preferred Stock into New Common Stock, such holder shall
surrender the certificate or certificates for such Designated Preferred Stock,
at the office of the transfer agent for the Designated Preferred Stock (or at
the principal office of the Corporation if the Corporation serves as its own
transfer agent), together with written notice that such holder elects to convert
all or any number of shares of the Designated Preferred Stock represented by
such certificate or certificates. Such notice shall state such holder's name in
which such holder wishes the certificate or certificates for New Common Stock to
be issued. If required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or his or its attorney duly authorized in writing. The
date of receipt of such certificates and notice by the transfer agent (or by the
Corporation if the Corporation serves as its own transfer agent) shall be the
conversion date ("Conversion Date"), and the New Common Stock issuable upon
conversion of the shares represented by such certificate shall be deemed to be
outstanding of record as of such date. The Corporation shall, as soon as
practicable after the Conversion Date, issue and deliver at such office to such
holder of Designated Preferred Stock, a certificate or certificates for the
number of shares of New Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when Designated
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued capital stock, for the purpose of effecting the
conversion of the Designated Preferred Stock, such number of shares of its duly
authorized New Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of Designated Preferred Stock.
(iii) Upon any such conversion, no adjustment to the Series A
Conversion Price or Series B Conversion Price shall be made for any declared but
unpaid dividends on the Designated Preferred Stock surrendered for conversion or
on the New Common Stock delivered upon conversion.
(iv) All Designated Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall immediately cease and terminate on
the Conversion Date, except only the right of the holders
thereof to receive New Common Stock in exchange therefor and
payment of any dividends declared but unpaid thereon. Any Designated Preferred
Stock so converted shall be retired and cancelled and shall not be reissued.
(v) The Corporation shall pay any and all issue and other
similar taxes that may be payable in respect of any issuance or delivery of New
Common Stock upon conversion of Designated Preferred Stock pursuant to this
Section 4. The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and delivery
of New Common Stock in a name other than that in which the Designated Preferred
Stock so converted were registered, and no such issuance or delivery shall be
made unless and until the person or entity requesting such issuance has paid to
the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax bas been paid.
(d) Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the date the Corporation first
issued its Designated Preferred Stock (the "Original Issue Date") effect a
subdivision of the outstanding New Common Stock or combine the outstanding
Designated Preferred Stock, the Series A Conversion Price or Series B Conversion
Price, as applicable, then in effect immediately before that subdivision or
combination shall be proportionately decreased. If the Corporation shall at any
time or from time to time after the Original Issue Date combine the outstanding
New Common Stock or effect a subdivision of the outstanding Series A Preferred
Stock, the Series A Conversion Price or Series B Conversion Price, as
applicable, then in effect immediately before the combination or subdivision
shall be proportionately increased. Any adjustment under this paragraph shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
(e) Adjustment for Certain Dividends and Distributions. In the event
the Corporation at any time, or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of
New Common Stock entitled to receive, a dividend or other distribution payable
is additional New Common Stock, then and in each such event the Series A
Conversion Price or Series B Conversion Price, as applicable, then in effect
immediately before such event shall be decreased as of the time of such issuance
or, in the event such a record date shall have been fixed, as of the close of
business on such record date, by multiplying the Series A Conversion Price or
Series B Conversion Price, as applicable, then in effect by a fraction:
(i) the numerator of which shall be the total number of shares
of New Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number of
shares of New Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the number of
shares of New Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Series A Conversion Price or Series B Conversion Price, as
applicable, shall be recomputed accordingly as of the close of business on such
record date and thereafter the Series A Conversion Price or Series B Conversion
Price, as applicable, shall be adjusted pursuant to this paragraph as of the
time of actual payment of such dividends or distributions; and provided,
further, however, that no such adjustment shall be made if the holders of
Designated Preferred Stock simultaneously receive (i) a dividend or other
distribution of shares of New Common Stock in a number equal to the number of
shares of New Common Stock as they would have received if all outstanding shares
of Designated Preferred Stock had been converted into New Common Stock on the
date of such event or (ii) a dividend or other distribution of Designated
Preferred Stock which is convertible, as of the date of such event, into such
number of shares of New Common Stock as is equal to the number of additional
shares of New Common Stock being issued with respect to each share of New Common
Stock in such dividend or distribution.
(f) Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of
New Common Stock entitled to receive, a dividend or other distribution payable
in securities of the Corporation (other than New Common Stock) or in cash or
other property, then and in each such event the holders of Designated Preferred
Stock shall receive, simultaneously with the distribution to the holders of
Common Stock, a dividend or other distribution of such securities, cash or other
property in an amount equal to the amount of such securities, cash or other
property as they would have received if all outstanding shares of Designated
Preferred Stock had been converted into Common Stock on the date of such event.
(g) Adjustment for Merger or Reorganization, etc. Subject to the
provisions of Section 2, if there shall occur any reorganization,
recapitalization, reclassification, consolidation, plan of merger involving the
Corporation in which the New Common Stock (but not the Designated Preferred
Stock) is converted into or exchanged for securities, cash or other property
(other than a transaction covered by paragraphs (d), (e) or (f) of this Section
4), then, following any such reorganization, recapitalization, reclassification,
consolidation or plan of merger, each share of Designated Preferred Stock shall
be convertible into the kind and amount of securities, cash or other property
which a holder of the number of shares of New Common Stock of the Corporation
issuable upon conversion of one share of Designated Preferred Stock immediately
prior to such reorganization, recapitalization, reclassification, consolidation,
plan of merger would have been entitled to receive pursuant to such transaction;
and, in such case, appropriate adjustment (as determined in good faith by the
Board of Directors of the Corporation) shall be made in the application of the
provisions in this Section 4 with respect to the rights and interests thereafter
of the holders of the Designated Preferred Stock, to the end that the provisions
set forth in this Section 4 (including provisions with respect to changes in and
other adjustments of the Series A Conversion Price or Series B Conversion Price
shall thereafter be applicable, as nearly as reasonably may be, in relation to
my securities or other property thereafter deliverable upon the conversion of
the Designated Preferred Stock.
(h) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any 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 hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Designated Preferred Stock against impairment.
(i) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series A Conversion Price or Series B
Conversion Price pursuant to this Section 4, the Corporation at its expense
shall, as promptly as reasonably practicable but in any event not later than 15
days thereafter, compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of Designated Preferred Stock a
certificate setting forth such adjustment or readjustment (including the kind
and amount of securities, cash or other property into which the Designated
Preferred Stock is convertible) and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, as promptly as
reasonably practicable after the written request at any time of any holder of
Designated Preferred Stock (but in any event not later than 15 days thereafter),
furnish or cause to be furnished to such holder a certificate setting forth (i)
the Series A Conversion Price or Series B Conversion Price, as applicable, then
in effect, and (ii) the number of shares of New Common Stock and the amount, if
any, of other securities, cash or property which then would be received upon the
conversion of Designated Preferred Stock.
(j) Notice of Record Date. In the event:
(i) the Corporation shall take a record of the holders of its
Common Stock (or other shares or securities at the time issuable upon conversion
of the Designated Preferred Stock) 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
(ii) of any capital reorganization of the Corporation, any
reclassification of the Common Stock of the Corporation, any consolidation, plan
of merger of the Corporation with or into another entity (other than a
consolidation, plan of merger in which the Corporation is the surviving entity
and the Common Stock is not converted into or exchanged for any other securities
or property, or any transfer of all or substantially all of the assets of the
Corporation; or
(iii) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation or other distribution of assets of the
Corporation among its stockholders for the purpose of winding up its affairs,
then, and in each such case, the Corporation will send or cause to be sent to
the holders of the Designated Preferred Stock a notice specifying, as the case
may be, (i) the record date for such dividend, distribution or right, and the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
plan of 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 issuable upon the conversion of the Designated Preferred Stock)
shall be entitled to exchange their Common Stock (or such other shares or
securities) for securities or other property, including cash, deliverable upon
such reorganization, reclassification, consolidation, plan of merger, transfer,
dissolution, liquidation or winding up. Such notice shall be sent at least 10
days prior to the record date or effective date for the event specified in such
notice.
5. Mandatory Conversion.
(a) Upon the earlier of (A) the closing of the sale of New Common
Stock to the public in a firm commitment underwritten public offering pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, resulting in gross proceeds to the Corporation of at least $25 million
(prior to the deduction of underwriters' commissions, discounts and expenses)
and at a pre-money valuation of the Corporation of no less than $100 million (an
"Initial Public Offering"), or (B) a date agreed to in writing by the holders of
at least sixty percent (60%) of the voting power of the then outstanding
Designated Preferred Stock (each, a "Mandatory Conversion Date"), (i) all
outstanding shares of Designated Preferred Stock shall automatically be
converted into New Common Stock, at the then effective conversion rate and (ii)
such shares may not be reissued by the Corporation as Designated Preferred
Stock.
(b) All holders of record of Designated Preferred Stock shall be
given written notice of the Mandatory Conversion Date and the place designated
for mandatory conversion of all such Designated Preferred Stock pursuant to this
Section 5. Such notice need not be given in advance of the occurrence of the
Mandatory Conversion Date. Such notice shall be sent by first class or
registered mail, postage prepaid, or given by electronic communication, in
compliance with the provisions of the Corporation's governing corporate statute,
to each record holder of Designated Preferred Stock. Upon receipt of such
notice, each holder of Designated Preferred Stock shall surrender his, her or
its certificate or certificates for all such shares to the Corporation at the
place designated in such notice, and shall thereafter receive certificates for
the number of shares of New Common Stock to which such holder is entitled
pursuant to this Section 5. On the Mandatory Conversion Date, all outstanding
shares of Designated Preferred Stock shall be deemed to have been converted into
New Common Stock, which shall be deemed to be outstanding of record, and all
rights with respect to the Designated Preferred Stock so converted, including
the rights, if any, to receive notices and vote (other than as a holder of New
Common Stock) will terminate, except only the rights of the holders thereof,
upon surrender of their certificate or certificates therefor, to receive
certificates for the number of shares of New Common Stock into which such shares
of Designated Preferred Stock have been converted, and payment of any declared
but unpaid dividends thereon. If so required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by written
instrument or instruments of transfer, in form satisfactory to the Corporations,
duly executed by the registered holder or by his or its attorney duly authorized
in writing. As soon as practicable after the Mandatory Conversion Date and the
surrender of the certificate or certificates for Designated Preferred Stock, the
Corporation shall cause to be issued and delivered to such holder, or on his or
its written order, a certificate or certificates for the number of full shares
of New Common Stock issuable on such conversion in accordance with the
provisions hereof and cash as provided in Subsection 4(b) in respect of, any
fraction of a share of New Common Stock otherwise issuable upon such conversion.
(c) All certificates evidencing Designated Preferred Stock which are
required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the Mandatory Conversion Date, be deemed to have
been retired and cancelled and the Designated Preferred Stock represented
thereby converted into New Common Stock for all purposes, notwithstanding the
failure of the holder or holders thereof to surrender such certificates on or
prior to such date. Such converted Designated Preferred Stock may not be
reissued, and the Corporation may thereafter take such appropriate action
(without the need for stockholder action) as may be necessary to reduce the
authorized number of shares of Designated Preferred Stock accordingly.
SIXTH. The Directors shall have power to adopt, amend, or repeal the
By-Laws of the Corporation.
SEVENTH. Election of Directors need not be by written ballot unless the
By-Laws of the Corporation so provide.
EIGHTH. Except as expressly provided herein, the Corporation shall
indemnify and hold harmless any director or officer of the Corporation or of any
wholly-owned subsidiary from and against any and all expenses and liabilities
that may be imposed upon or incurred in connection with, or as a result of, any
proceeding in which he or she may become involved, as a party or otherwise, by
reason of the fact that he or she is or was such a director or officer, whether
or not he or she continues to be such at the time such expenses and liabilities
shall have been imposed or incurred, to the fullest extent permitted by the DGCL
as it may be amended from time to time.
The Corporation shall provide indemnification as follows:
1. Actions, Suits and Proceedings Other than by or in the Right of the
Corporation. The Corporation shall indemnify each person who was or is a party
or threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he or she is or was, or has agreed to become, a director or officer of
the Corporation or of a wholly owned subsidiary thereof, or is or was serving,
or has agreed to serve, at the request of the Corporation, as a director or
officer, partner, employee, agent or trustee of, or in a similar capacity with,
another corporation, partnership, joint venture, trust or other enterprise
(including any employee benefit plan) (all such persons being referred to
hereafter as an "Indemnitee"), or by reason of any action alleged to have been
taken or omitted in such capacity, against all expenses (including, attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by or on behalf of Indemnitee in connection with such action, suit or
proceeding and any appeal therefrom, if Indemnitee acted in good faith and in a
manner which Indemnitee reasonably believed to be in, or not opposed to, the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that Indemnitee did not act in good
faith and in a manner which Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
2. Actions or Suits by or in the Right of the Corporation. The Corporation
shall indemnify any Indemnitee who was or is a party to or threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that Indemnitee is or was, or has agreed to become, a director or officer
of the Corporation, or is or was serving, or has agreed to serve, at the request
of the Corporation, as a director or officer, partner, employee, agent or
trustee of, or in a similar capacity with, another corporation, partnership,
joint venture, trust or other enterprise (including any employee benefit plan),
or by reason of any action alleged to have been taken or omitted in such
capacity, against all expenses (including attorneys' fees) and, to the extent
permitted by law, amounts paid in settlement actually and reasonably incurred by
or on behalf of Indemnitee in connection with such action, suit or proceeding
and any appeal therefrom, if Indemnitee acted in good faith and in a manner
which Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except that no indemnification shall be made under
this Section 2 in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Corporation, unless, and only to
the extent, that the Court of Chancery of Delaware shall determine upon
application that, despite the adjudication of such liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses (including attorneys' fees) which the Court of
Chancery of Delaware shall deem proper.
3. Indemnification for Expenses of Successful Party. Notwithstanding any
other provisions of this Article EIGHTH, to the extent that an Indemnitee has
been successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article EIGHTH, or in defense
of any claim, issue or matter therein, or on appeal from any such action, suit
or proceeding, Indemnitee shall be indemnified against all expenses (including
attorneys' fees) actually and reasonably incurred by or on behalf of Indemnitee
in connection therewith. Without limiting the foregoing, if any action, suit or
proceeding is disposed of, on the merits or otherwise (including a disposition
without prejudice), without (i) the disposition being adverse to Indemnitee,
(ii) an adjudication that Indemnitee was liable to the Corporation, (iii) a plea
of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee
did not act in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, or (v) with respect to any
criminal proceeding, an adjudication that Indemnitee had reasonable cause to
believe his conduct was unlawful, Indemnitee shall be considered for the
purposes hereof to have been wholly successful with respect thereto.
4. Notification and Defense of Claim. As a condition precedent to an
Indemnitee's right to be indemnified, such indemnitee must notify the
Corporation in writing as soon as practicable of any action, suit, proceeding or
investigation involving such Indemnitee for which indemnity will or could be
sought. With respect to any action, suit, proceeding or investigation of which
the Corporation is so notified, the Corporation will be entitled to participate
therein at its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to Indemnitee. After notice
from the Corporation to Indemnitee of its election so to assume such defense,
the Corporation shall not be liable to Indemnitee for any legal or other
expenses subsequently incurred by Indemnitee in connection with such action,
suit,
proceeding or investigation, other than as provided below in this Section
4. Indemnitee shall have the right to employ his or her own counsel in
connection with such action, suit, proceeding or investigation, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of Indemnitee unless
(i) the employment of counsel by Indemnitee has been authorized by the
Corporation, (ii) counsel to Indemnitee shall have reasonably concluded that
there may be a conflict of interest or position on any significant issue between
the Corporation and Indemnitee in the conduct of the defense of such action,
suit, proceeding or investigation or (iii) the Corporation shall not in fact
have employed counsel to assume the defense of such action, suit, proceeding or
investigation, in each of which cases the fees and expenses of counsel for
Indemnitee shall be at the expense of the Corporation, except as otherwise
expressly provided by this Article EIGHTH. The Corporation shall not be
entitled, without the consent of Indemnitee, to assume the defense of any claim
brought by or in the right of the Corporation or as to which counsel for
Indemnitee shall have reasonably made the conclusion provided for in clause (ii)
above. The Corporation shall not be required to indemnify Indemnitee under this
Article EIGHTH for any amounts paid in settlement of any action, suit,
proceeding or investigation effected without its written consent. The
Corporation shall not settle any action, suit, proceeding or investigation in
any manner which would impose any penalty or limitation on Indemnitee without
Indemnitee's written consent. Neither the Corporation nor Indemnitee will
unreasonably withhold or delay its Consent to any proposed settlement.
5. Advance of Expenses. Subject to the provisions of Section 6 of this
Article EIGHTH, in the event that the Corporation does not assume the defense
pursuant to Section 4 of this Article EIGHTH of any action, suit, proceeding or
investigation of which the Corporation receives notice under this Article, say
reasonable expenses (including attorneys' fees) incurred by or on behalf of an
Indemnitee in defending an action, suit, proceeding or investigation or any
appeal therefrom shall, to the fullest extent permitted by law, be paid by the
Corporation in advance of the final disposition of such matter, and only upon
receipt of and review by the Corporation of written estimates of such expenses;
provided, however, that the payment of such expenses incurred by or on behalf of
Indemnitee in advance of the final disposition of such matter shall be made only
upon receipt of (i) an undertaking by or on behalf of Indemnitee to repay all
amounts so advanced in the event that it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Corporation as authorized in
this Article, and (ii) written invoices evidencing such expenses; and provided
further that no such advancement of expenses shall be made under this Article
EIGHTH if it is determined (in the manner described in Section 6) that (i)
Indemnitee did not act in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the Corporation, or
(ii) with respect to any criminal action or proceeding, Indemnitee had
reasonable cause to believe his or her conduct was unlawful. Such undertaking
shall be accepted without reference to the financial ability of Indemnitee to
make such repayment.
6. Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article EIGHTH,
an Indemnitee shall submit to the Corporation a written request. Any such
advancement of expenses shall be made promptly, and in any event within 30 days
after receipt by the Corporation of the written request of Indemnitee, unless
the Corporation determines within such 30-day period that Indemnitee did not
meet the applicable standard of conduct set forth, in Section 1, 2 or 5 of this
Article EIGHTH, as the case may be. Any such indemnification, unless
ordered by a court, shall be made with respect to requests under Section 1 or 2
only as authorized in the specific case upon a determination by the Corporation
that the indemnification of Indemnitee is proper because Indemnitee has met the
applicable standard of conduct set forth in Section 1 or 2, as the case may be.
Such determination shall be made in each instance (a) by a majority vote of the
directors of the Corporation consisting of persons who are not at that time
parties to the action, suit or proceeding in question ("disinterested
directors'"), whether or not a quorum, (b) by a committee of disinterested
directors designated by majority vote of disinterested directors, whether or not
a quorum, (c) if there are no disinterested directors, or if the disinterested
directors so direct, by independent legal counsel (who may, to the extent
permitted by law, be regular legal counsel to the Corporation) in a written
opinion, or (d) by the stockholders of the Corporation.
7. Remedies. The right to indemnification or advancement of expenses as
granted by this Article EIGHTH shall be enforceable by Indemnitee in any court
of competent jurisdiction. Neither the failure of the Corporation to have made a
determination prior to the commencement of such action that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Corporation pursuant to Section 6
of this Article EIGHTH that Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct. Indemnitee's expenses
(including attorneys' fees) reasonably incurred in connection with successfully
establishing Indemnitee's right to indemnification, in whole or in part, in any
such proceeding shall also be indemnified by the Corporation.
8. Limitations. Notwithstanding anything to the contrary in this Article
EIGHTH, except as set forth in Section 7 of this Article EIGHTH, the Corporation
shall not indemnify an Indemnitee pursuant to this Article EIGHTH in connection
with a proceeding (or part thereof) initiated by such Indemnitee unless the
initiation thereof was approved by the Board of Directors of the Corporation.
Notwithstanding anything to the contrary in this Article EIGHTH, the Corporation
shall not indemnify an Indemnitee to the extent such Indemnitee is reimbursed
from the proceeds of insurance, and in the event the Corporation makes any
indemnification payments to an Indemnitee and such Indemnitee is subsequently
reimbursed from the proceeds of insurance, Indemnitee shall promptly refund such
indemnification payments to the Corporation to the extent of such insurance
reimbursement.
9. Subsequent Amendment. To the fullest extent permitted by law, no
amendment, termination or repeal of this Article EIGHTH or of the relevant
provisions of the DGCL or any other applicable laws shall affect or diminish in
any way the rights of any Indemnitee to indemnification under the provisions
hereof with respect to any action, suit, proceeding or investigation arising out
of or relating to any actions, transactions or facts occurring prior to the
final adoption of such amendment, termination or repeal.
10. Other Rights. The indemnification and advancement of expenses provided
by this Article EIGHTH shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or disinterested directors or otherwise, both as to
action in Indemnitee's official capacity and as to action in any other
capacity while holding a directorship or office for the Corporation, and shall
continue as to an Indemnitee who has ceased to be a director or officer, and
shall inure to the benefit of the estate, heirs, executors and administrators of
Indemnitee. Nothing contained in this Article EIGHTH shall be deemed to
prohibit, and the Corporation is specifically authorized to enter into,
agreements with officers and directors providing indemnification rights and
procedures different from those set forth in this Article EIGHTH. In addition,
the Corporation may, to the extent authorized from time to time by its Board of
Directors, grant indemnification rights to other employees or agents of the
Corporation or other persons serving the Corporation and such rights may be
equivalent to, or greater or less than, those set forth in this Article EIGHTH.
11. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Article EIGHTH to indemnification by the Corporation for some
or a portion of the expenses (including attorneys' fees), judgments, fines or
accounts paid in settlement actually and reasonably incurred by or on behalf of
Indemnitee in connection with any action, suit, proceeding or investigation and
any appeal therefrom but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such
expenses (including attorneys' fees), judgments, fines or amounts paid in
settlement to which Indemnitee is entitled.
12. Insurance. The Corporation may purchase and maintain insurance, at its
expense, to protect itself and any director or officer of the Corporation or of
a wholly owned subsidiary or another corporation, partnership, joint venture,
trust or other enterprise (including any employee benefit plan) against any
expense, liability or loss incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the DGCL.
13. Savings Clause. If this Article EIGHTH or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Article EIGHTH that shall not have been invalidated and to the fullest extent
permitted by applicable law.
14. Definitions. Terms used herein and defined in Section 145(h) and
Section 145(i) of the DGCL shall have the respective meanings assigned to such
terms in such Section 145(h) and Section 145(i).
NINTH. No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of Title 8 of the DGCL or (iv) for any transaction
from which the director derived an improper personal benefit.
TENTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ELEVENTH Except as provided in the provisions establishing a class of
stock, the number of authorized shares of any class or series of stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the capital
stock of the Corporation entitled to vote irrespective of the provisions of
Section 242(b)(2) of the DGCL.
****
IN WITNESS WHEREOF, the undersigned has signed this Amended and Restated
Certificate of Incorporation on behalf of the Corporation this 7th day of
August, 2003.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Operating Officer and
Chief Financial Officer
EXHIBIT D
STOCKHOLDERS AGREEMENT
EXHIBIT E
TRANSACTION WARRANT
Form of Transaction Warrant
THIS TRANSACTION WARRANT AND THE SHARES OBTAINABLE UPON ITS EXERCISE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS (COLLECTIVELY, THE "ACTS"), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER ALL APPLICABLE ACTS OR UNLESS AN OPINION OF COUNSEL IS
DELIVERED TO THE ISSUER IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER ALL
APPLICABLE ACTS.
THE SHARES OBTAINABLE UPON EXERCISE OF THIS TRANSACTION WARRANT SHALL BE
SUBJECT TO CERTAIN TRANSFER RESTRICTIONS SET FORTH IN A STOCKHOLDERS
AGREEMENT, DATED JULY [ ], 2003 BY AND AMONG THE COMPANY AND THE
STOCKHOLDERS NAMED THEREIN, AS IT MAY BE AMENDED FROM TIME TO TIME (THE
"STOCKHOLDERS AGREEMENT"), A COPY OF WHICH MAY BE INSPECTED AT THE
COMPANY'S PRINCIPAL OFFICE UPON EXECUTION. THE COMPANY WILL NOT REGISTER
THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND
UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE
STOCKHOLDERS AGREEMENT.
No. [TW-1] July [ ], 2003
PREDIX PHARMACEUTICALS HOLDINGS, INC.
TRANSACTION WARRANT
THIS CERTIFIES THAT, for value received, [ ], or its registered assigns
(the "Holder"), is entitled to subscribe for and purchase from Predix
Pharmaceuticals Holdings, Inc., a Delaware corporation (the "Company"), at any
time prior to or upon July [ ], 2004, or, in the event such date is a Saturday,
Sunday or United States holiday, the next business day (the "Expiration Date"),
up to that number of Shares set forth on Schedule I attached hereto and at the
relevant Exercise Price (each as defined in Section 1(a) below).
This warrant is one of a series of Transaction Warrants (each a
"Transaction Warrant," and collectively, the "Transaction Warrants") of like
tenor which may be issued to each of the holders of Preferred Stock (the
"Physiome Preferred Holders") of Physiome Sciences, Inc., a Delaware
corporation, and each of the holders of Preferred Stock (the "Predix Preferred
Holders") of Predix Pharmaceuticals Ltd. ("Predix Ltd."), an organization formed
under the laws
of Israel, in connection with: (i) the recapitalization of the Company; and (ii)
the purchase by the Company of all of the issued and outstanding capital stock
of Predix Ltd., which recapitalization and share purchases are to be effected on
or about the date hereof.
This Transaction Warrant is subject to the following terms and conditions:
1. Shares; Exercise Price; Additional Shares.
(a) As used herein, the term "Shares" means: (i) that number of shares of
the Company's Series B Convertible Preferred Stock, par value $.01 per share
(the "Series B Preferred Stock") set forth opposite the Holder's name on
Schedule 1 attached hereto, or (ii) in the event that the Series B Preferred
Stock shall have been mandatorily converted in accordance with its terms, and
this Transaction Warrant has not been fully exercised, "Shares" shall mean that
number of shares of the Company's new post-split Common Stock, par value $0.01
per share (the "Common Stock"), that would be issuable upon conversion of the
Series B Preferred Stock that would have been issuable under this Transaction
Warrant upon payment of the applicable Exercise Price had such mandatory
conversion not occurred, measured at the time of such conversion. The exercise
price per Share shall be equal to: (A) $8.00 (the "Initial Exercise Price"); or
(B) if, prior to the Expiration Date, the Company has not received final
acceptance by the Food and Drug Administration with respect to the Company's
Investigational New Drug Application (or a Clinical Trial Exemption that is
substantially the European equivalent thereto), $5.00 (the "Alternative Exercise
Price", the Initial Exercise Price or the Alternative Exercise Price, as the
case may be, are referred to herein as the "Exercise Price." The number of
Shares issuable under this Section 1(a) and the Exercise Price are subject to
adjustment from time to time pursuant to Section 4 and Section 5 hereof.
(b) If a Holder exercises this Transaction Warrant prior to the Expiration
Date at the Initial Exercise Price and the exercise price per Share is
subsequently adjusted to the Alternative Exercise Price, the Holder shall be
entitled to additional Shares calculated in accordance with Section 5 herein.
2. Exercise; Payment.
(a) Cash Exercise. The purchase rights represented by this Transaction
Warrant may be exercised by the Holder, in whole or in part, at any time, or
from time to time, by the surrender of this Transaction Warrant (together with a
duly executed notice of exercise (the "Notice of Exercise") in the form attached
hereto as Exhibit A) at the address of the Company's principal corporate offices
set forth in Section 8 hereof, and by payment to the Company of an amount equal
to the Exercise Price multiplied by the number of the Shares being purchased,
which amount may be paid by the Holder by wire transfer or check payable to the
order of the Company. The Person in whose name any certificate representing the
Shares issuable upon any exercise of this Transaction Warrant shall be deemed to
have become the holder of record of, and shall be treated for all purposes as
the record holder 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 such surrender and payment are made. As used herein,
the term "Person" means any individual or any corporation, partnership, trust,
limited liability company or other entity or organization of any kind.
-2-
(b) Stock Certificates. In the event of any exercise of the rights
represented by this Transaction Warrant, as promptly as practicable on or after
the date of exercise and in any event within thirty days thereafter, the Company
at its expense shall issue and deliver to the Person or Persons entitled to
receive the same a certificate or certificates representing the number of Shares
issued upon such exercise. In the event that this Transaction Warrant is
exercised in part, as promptly as practicable on or after the date of exercise
and in any event within thirty days thereafter, the Company at its sole expense
will execute and deliver a new Transaction Warrant of like tenor exercisable for
the number of Shares for which this Transaction Warrant may then be exercised.
(c) Taxes. The issuance of the Shares upon the exercise of this
Transaction Warrant, and the delivery of certificates or other instruments
representing such Shares, shall be made without charge to the Holder for any tax
or other charge of whatever nature in respect of such issuance and the Company
shall bear any such taxes in respect of such issuance.
3. Stock Fully Paid; Reservation of Shares. All of the Shares issuable
upon the exercise of the rights represented by this Transaction Warrant will,
upon issuance and receipt of the Exercise Price therefor, be fully paid and
nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges of whatever nature, except as may be set
forth in that certain Stockholders Agreement (the "Stockholders Agreement") of
even date herewith by and among the Company and the Company's stockholders named
therein, with respect to the issuance thereof. During the period within which
the rights represented by this Transaction Warrant may be exercised, the Company
shall use its best efforts, including soliciting its stockholders for requisite
approval, to at all times have authorized and reserved for issuance a sufficient
number of shares of its Series B Preferred Stock, or its Common Stock if the
Series B Preferred Stock has been mandatorily converted to Common Stock, to
provide for the full exercise of the rights represented by this Transaction
Warrant. In connection with any amendment to the Company's Certificate of
Incorporation (the "Certificate of Incorporation") to effect the foregoing, the
Holder will vote all shares of the Company's capital stock held by such Holder
in favor of such amendment. The Company hereby agrees that the issuance of this
Transaction Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
proper certificates for Shares upon the full or each partial exercise of this
Transaction Warrant and shares of Common Stock issuable upon any conversion of
all or any portion of such Shares.
4. Adjustment of Exercise Price and Number of Shares. The number and class
or series of Shares purchasable upon the exercise of this Transaction Warrant
and the Exercise Price therefor shall be subject to adjustment from time to time
upon the occurrence of certain events, as follows:
(a) Adjustment for Reclassification, Consolidation or Merger. If while
this Transaction Warrant, or any portion hereof, remains outstanding and
unexpired there shall be (i) a reorganization or recapitalization (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), (ii) a merger or consolidation of the Company with or into
another Person in which the Company is not the surviving entity, or a reverse
merger in which the Company is the surviving entity but the shares of the
Company's capital stock outstanding immediately prior to the merger are
converted by virtue of the merger
-3-
into other property, whether in the form of securities, cash, or otherwise, or
(iii) a sale or transfer of the Company's properties and assets as, or
substantially as, an entirety to any other Person in one transaction or a series
of related transactions, then, as a part of such reorganization,
recapitalization, merger, consolidation, sale or transfer, unless otherwise
directed by the Holder, all necessary or appropriate lawful provisions shall be
made so that the Holder shall thereafter be entitled to receive upon exercise of
this Transaction Warrant, during the period specified herein and upon payment of
the Exercise Price then in effect, the greatest number of shares of stock or
other securities or property that a holder of the Shares deliverable upon
exercise of this Transaction Warrant would have been entitled to receive in such
reorganization, recapitalization, consolidation, merger, sale or transfer if
this Transaction Warrant had been exercised immediately prior to such
reorganization, recapitalization, merger, consolidation, sale or transfer, all
subject to further adjustment as provided in this Section 4. If the per Share
consideration payable to the Holder for Shares in connection with any such
transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. The foregoing provisions of this paragraph shall similarly
apply to successive reorganizations, recapitalizations, consolidations, mergers,
sales and transfers and to the stock or securities of any other corporation that
are at the time receivable upon the exercise of this Transaction Warrant. In all
events, appropriate adjustment shall be made in the application of the
provisions of this Transaction Warrant (including adjustment of the Exercise
Price and number of Shares purchasable pursuant to the terms and conditions of
this Transaction Warrant) with respect to the rights and interests of the Holder
after the transaction, to the end that the provisions of this Transaction
Warrant shall be applicable after that event, as near as reasonably may be, in
relation to any shares or other property deliverable or issuable after such
reorganization, recapitalization, merger, consolidation, sale or transfer upon
exercise of this Transaction Warrant.
(b) Adjustments for Split, Subdivision or Combination of Shares. If the
Company at any time while this Transaction Warrant, or any portion hereof,
remains outstanding and unexpired shall split or subdivide any class of
securities as to which purchase rights under this Transaction Warrant exist,
into a different number of securities of the same class, the number of shares of
such class issuable upon exercise of this Transaction Warrant immediately prior
to such split or subdivision shall be proportionately adjusted and the Exercise
Price for such class of securities shall be proportionately adjusted. If the
Company at any time while this Transaction Warrant, or any portion hereof,
remains outstanding and unexpired shall combine any class of securities as to
which purchase rights under this Transaction Warrant exist, into a different
number of securities of the same class, the number of shares of such class
issuable upon exercise of this Transaction Warrant immediately prior to such
combination shall be proportionately adjusted and the Exercise Price for such
class of securities shall be proportionately adjusted.
(c) Adjustments for Dividends in Stock or Other Securities or Property. If
while this Transaction Warrant, or any portion hereof, remains outstanding and
unexpired, the holders of any class of securities as to which purchase rights
under this Transaction Warrant exist at the time shall have received, or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock or other securities or property (other than cash) of the
Company by way of dividend, then and in each case, this Transaction Warrant
shall represent the right to acquire, in addition to the number of shares of
such class of security receivable upon exercise of this Transaction Warrant,
-4-
and without payment of any additional consideration therefor, the amount of such
other or additional stock or other securities or property (other than cash) of
the Company that such holder would hold on the date of such exercise had it been
the holder of record of the class of security receivable upon exercise of this
Transaction Warrant on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained such
shares and/or all other additional stock available by it as aforesaid during
said period, giving effect to all adjustments called for during such period by
the provisions of this Section 4.
(d) Further Adjustments. In case at any time or from time to time the
Company shall take any action that affects the Shares, other than an action
described herein, then, unless such action will not have a materially adverse
effect upon the rights of the Holder, the number of Shares into which this
Transaction Warrant is exercisable shall be adjusted in such a manner and at
such time as shall be equitable in the circumstances.
(e) Notice of Adjustments. Upon any adjustment of the Exercise Price and
any increase or decrease in the number of Shares purchasable upon the exercise
of this Transaction Warrant, then, and in each such case, the Company, within 30
days thereafter, shall give written notice thereof to the Holder at the address
of such Holder as shown on the books of the Company which notice shall state the
Exercise Price as adjusted and, if applicable, the increased or decreased number
of Shares purchasable upon the exercise of this Transaction Warrant, setting
forth in reasonable detail the method of calculation of each.
5. Adjustment of Shares. In the event a Holder exercises this Transaction
Warrant for Shares prior to the Expiration Date at the Initial Exercise Price
and the exercise price per Share is later adjusted to the Alternative Exercise
Price pursuant to the terms of Section 1(a)(B) above, such Holder shall be
entitled to that number of additional Shares calculated by multiplying the
number of Shares originally issued to such Holder by 0.60. As promptly as
practicable on or after the date of the Expiration Date, and in any event within
thirty days thereafter, the Company at its expense shall issue and deliver to
the Person or Persons entitled to receive the same a certificate or certificates
representing such additional number of Shares.
6. Transfers, etc.
(a) At any time prior to the Expiration Date, each of the Transaction
Warrants issued on the date hereof shall only be transferable to: (i) in the
case of Transaction Warrants held by Physiome Preferred Holders, to other
Physiome Preferred Holders; (ii) in the case of Transaction Warrants held by
Predix Preferred Holders, to other Predix Preferred Holders; and (iii) in the
case of Transaction Warrants held by either Physiome Preferred Holders or Predix
Preferred Holders that at the date of issuance of this Transaction Warrant were
organized as a corporation, partnership or other business entity, for the
primary purpose of conducting venture fund financings, to any Affiliate (as
defined below) thereof (each transferee pursuant to clause (i), (ii) and (iii)
above, shall be referred to as a "Permitted Transferee"); and, provided further,
that any such transfer does not increase the total number of holders of
Transaction Warrants by more than one (taking into account all prior transfers
of any one Transaction Warrant) and will not increase the total number of
stockholders of the Company by more than one (taking into account all prior
transfers of any one Transaction Warrant). For purposes of this Transaction
Warrant, "Affiliate" of a Holder shall mean any of the stockholders,
subsidiaries, officers, directors, members or
-5-
partners of such Holder, and any other corporation, partnership or other
business entity which directly or indirectly controls, is controlled by or is
under common control with, such Holder.
(b) Any transfer pursuant to Section 6(a) shall be effected upon surrender
of this Transaction Warrant with a properly executed assignment (in the form
attached hereto as Exhibit B) at the principal office of the Company (or, if
another office or agency has been designated by the Company for such purpose,
then at such other office or agency).
7. Right to Purchase Additional Shares.
(a) In the event a Physiome Preferred Holder (or a Permitted Transferee of
such Holder) fails to exercise this Transaction Warrant in full prior to the
Expiration Date, the right to purchase the Shares underlying this Transaction
Warrant (the "Physiome Remaining Warrant Shares") shall be offered on a pro rata
basis to all other Physiome Preferred Holders (the "Physiome Participating
Purchasers") who fully exercised their respective Transaction Warrants, subject
to the terms and conditions set forth below. Each such Physiome Participating
Purchaser's pro rata share shall equal a fraction of the aggregate Physiome
Remaining Warrant Shares, the numerator of which is the number of shares of the
Company's Common Stock plus the number of shares of the Company's Common Stock
issued or issuable upon conversion of the Company's Preferred Stock held by such
Physiome Participating Purchaser at the time such offer is made to all other
Physiome Preferred Holders, and the denominator of which is the total number of
shares of the Company's Common Stock plus the number of shares of the Company's
Common Stock issued or issuable upon conversion of the Company's Preferred Stock
held by all Physiome Participating Purchasers at the time such offer is made to
all other Physiome Preferred Holders. Within five days of the Expiration Date,
the Company shall give each Physiome Participating Purchaser written notice (the
"Physiome Rights Notice") describing the number of Physiome Remaining Warrant
Shares that such Physiome Participating Purchaser has the right to purchase
under this Section 7(a), together with the applicable Exercise Price. Each such
Physiome Participating Purchaser shall have ten (10) days from delivery of the
Physiome Rights Notice to agree to purchase (i) all or any part of its pro rata
share of such Physiome Remaining Warrant Shares and (ii) all or any part of the
pro rata share of any other Physiome Participating Purchasers to the extent that
such Physiome Participating Purchasers do not elect to purchase their full pro
rata share, upon the general terms specified in the Physiome Rights Notice, by
giving written notice to the Company setting forth the quantity of Physiome
Remaining Warrant Shares to be purchased. If the Physiome Participating
Purchasers who elect to purchase their full pro rata share also elect to
purchase in the aggregate more than 100% of the Physiome Remaining Warrant
Shares, such Physiome Remaining Warrant Shares shall be sold to such Physiome
Participating Purchasers in accordance with their respective pro rata share. A
failure to provide the Company with written notice setting forth the quantity of
Physiome Remaining Warrant Shares to be purchased by any such Physiome
Participating Purchaser in accordance with this Section 7(a) shall be deemed to
be a waiver by such Physiome Participating Purchaser of its right to purchase
any portion of its pro rata portion of such Physiome Remaining Warrant Shares.
At the end of the period specified in the Physiome Rights Notice, if any
Physiome Remaining Warrant Shares remain unallocated (the "Final Physiome
Warrant Shares"), such
-6-
Final Physiome Warrant Shares shall be offered, in accordance with the terms set
forth in Section 7(c) below, to each Predix Participating Purchaser who elects
to purchase all or any part of its pro rata share of the Predix Remaining
Warrant Shares (the "Predix Final Purchasers").
(b) In the event a Predix Preferred Holder (or a Permitted Transferee of
such Holder) fails to exercise this Transaction Warrant in full prior to the
Expiration Date, the right to purchase the Shares underlying this Transaction
Warrant (the "Predix Remaining Warrant Shares") shall be offered on a pro rata
basis to all other Predix Preferred Holders (the "Predix Participating
Purchasers") who fully exercised their respective Transaction Warrants, subject
to the terms and conditions set forth below. Each such Predix Participating
Purchaser's pro rata share shall equal a fraction of the aggregate Predix
Remaining Warrant Shares, the numerator of which is the number of shares of the
Company's Common Stock plus the number of shares of the Company's Common Stock
issued or issuable upon conversion of the Company's Preferred Stock held by such
Predix Participating Purchaser at the time such offer is made to all other
Predix Preferred Holders, and the denominator of which is the total number of
shares of the Company's Common Stock plus the number of shares of the Company's
Common Stock issued or issuable upon conversion of the Company's Preferred Stock
held by all Predix Participating Purchasers at the time such offer is made to
all other Predix Preferred Holders. Within five days of the Expiration Date, the
Company shall give each Predix Participating Purchaser written notice (the
"Predix Rights Notice") describing the number of Predix Remaining Warrant Shares
that such Predix Participating Purchaser has the right to purchase under this
Section 7(b), together with applicable Exercise Price. Each such Predix
Participating Purchaser shall have ten (10) days from delivery of the Predix
Rights Notice to agree to purchase (i) all or any part of its pro rata share of
such Predix Remaining Warrant Shares and (ii) all or any part of the pro rata
share of any other Predix Participating Purchasers to the extent that such
Predix Participating Purchasers do not elect to purchase their full pro rata
share, upon the general terms specified in the Predix Rights Notice, by giving
written notice to the Company setting forth the quantity of Predix Remaining
Warrant Shares to be purchased. If the Predix Participating Purchasers who elect
to purchase their full pro rata share also elect to purchase in the aggregate
more than 100% of the Predix Remaining Warrant Shares, such Predix Remaining
Warrant Shares shall be sold to such Predix Participating Purchasers in
accordance with their respective pro rata share. A failure to provide the
Company with written notice setting forth the quantity of Predix Remaining
Warrant Shares to be purchased by any such Predix Participating Purchaser in
accordance with this Section 7(b) shall be deemed to be a waiver by such Predix
Participating Purchaser of its right to purchase any portion of its pro rata
portion of such Predix Remaining Warrant Shares. At the end of the period
specified in the Predix Rights Notice, if any Predix Remaining Warrant Shares
remain unallocated (the "Final Predix Warrant Shares"), such Final Predix
Warrant Shares shall be offered, in accordance with the terms set forth in
Section 7(d) below, to each Physiome Participating Purchaser who elects to
purchase all or any part of its pro rata share of the Physiome Remaining Warrant
Shares (the "Physiome Final Purchasers").
(c) At the end of the ten-day period specified in the Physiome Rights
Notice, the Company shall give each Predix Final Purchaser written notice (the
"Final Predix Rights Notice") describing the number of Final Physiome Warrant
Shares that such Predix Final Purchaser has the right to purchase under this
Section 7(c). Each such Predix Final Purchaser shall have ten (10) days from
delivery of the Final Predix Rights Notice to agree to purchase (i) all or any
part of its pro rata share of such Final Physiome Warrant Shares and (ii) all or
any
-7-
part of the pro rata share of any other Predix Final Purchasers to the extent
that such Predix Final Purchasers do not elect to purchase their full pro rata
share, upon the general terms specified in the Final Predix Rights Notice, by
giving written notice to the Company setting forth the quantity of Final
Physiome Warrant Shares to be purchased. If the Predix Final Purchasers who
elect to purchase their full pro rata share also elect to purchase in the
aggregate more than 100% of the Final Physiome Warrant Shares, such Final
Physiome Warrant Shares shall be sold to such Predix Final Purchasers in
accordance with their respective pro rata share. A failure to provide the
Company with written notice setting forth the quantity of Final Physiome Warrant
Shares to be purchased by any such Predix Final Purchaser in accordance with
this Section 7(c) shall be deemed to be a waiver by such Predix Final Purchaser
of its right to purchase any portion of its pro rata portion of such Final
Physiome Warrant Shares. At the end of the period specified in the Final Predix
Rights Notice, if any Final Physiome Warrant Shares remain unallocated, the
right to purchase such Final Physiome Warrant Shares shall expire.
(d) At the end of the ten-day period specified in the Predix Rights
Notice, the Company shall give each Physiome Final Purchaser written notice (the
"Final Physiome Rights Notice") describing the number of Final Predix Warrant
Shares that such Physiome Final Purchaser has the right to purchase under this
Section 7(d). Each such Physiome Final Purchaser shall have ten (10) days from
delivery of the Final Physiome Rights Notice to agree to purchase (i) all or any
part of its pro rata share of such Final Predix Warrant Shares and (ii) all or
any part of the pro rata share of any other Physiome Final Purchasers to the
extent that such Physiome Final Purchasers do not elect to purchase their full
pro rata share, upon the general terms specified in the Final Physiome Rights
Notice, by giving written notice to the Company setting forth the quantity of
Final Predix Warrant Shares to be purchased. If the Physiome Final Purchasers
who elect to purchase their full pro rata share also elect to purchase in the
aggregate more than 100% of the Final Predix Warrant Shares, such Final Predix
Warrant Shares shall be sold to such Physiome Final Purchasers in accordance
with their respective pro rata share. A failure to provide the Company with
written notice setting forth the quantity of Final Predix Warrant Shares to be
purchased by any such Physiome Final Purchaser in accordance with this Section
7(d) shall be deemed to be a waiver by such Physiome Final Purchaser of its
right to purchase any portion of its pro rata portion of such Final Predix
Warrant Shares. At the end of the period specified in the Final Physiome Rights
Notice, if any Final Predix Warrant Shares remain unallocated, the right to
purchase such Final Predix Warrant Shares shall expire.
(e) The closing of the purchase, if any, of Physiome Remaining Warrant
Shares, Final Physiome Warrant Shares, Predix Remaining Warrant Shares or Final
Predix Warrant Shares, as applicable, by the Holders exercising their rights
hereunder shall take place at such location, date and time as the parties shall
agree, but not later than August [ ], 2004. At the closing, the Company shall
deliver to such Holders certificates representing all of the Physiome Remaining
Warrant Shares, Final Physiome Warrant Shares, Predix Remaining Warrant Shares
or Final Predix Warrant Shares, as applicable. At the closing, such purchasing
Holders shall deliver to the Company (i) payment for the Physiome Remaining
Warrant Shares, Final Physiome Warrant Shares, Predix Remaining Warrant Shares
or Final Predix Warrant Shares, as applicable, and (ii) at the request of the
Company, a duly executed certificate reasonably satisfactory to the Company
containing such representations and warranties of the purchasing Holders with
respect to federal and state securities laws. The certificates representing the
Physiome Remaining Warrant Shares, Final Physiome Warrant Shares, Predix
Remaining
-8-
Warrant Shares or Final Predix Warrant Shares, as applicable, may contain a
legend stating that they are issued subject to the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and applicable
state securities laws.
8. Notices.
(a) All notices, requests, consents, and other communications under this
Transaction Warrant shall be in writing and shall be deemed delivered (i) seven
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) three business days after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient as set forth below:
If to the Company, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief Operating Officer, or at such other address
as may have been furnished in writing by the Company to the Holder, with a copy
to ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.; or
If to a Holder, at its address set forth on the signature page hereto, or
at such other address as may be furnished in writing by such Holder to the
Company.
(b) Either party may give any notice, request, consent or other
communication under this Transaction Warrant using any other means (including,
without limitation, personal delivery, messenger service, telecopy, first class
mail or electronic mail), but no such notice, request, consent or other
communication shall be deemed to have been duly given unless and until it is
actually received by the party for whom it is intended. Either party may change
the address to which notices, requests, consents or other communications
hereunder are to be delivered by giving the other party notice in the manner set
forth in this Section.
9. Legends. Each certificate evidencing the Shares issued upon exercise of
this Transaction Warrant, or transfer of such Shares (other than a transfer
registered under the Securities Act, or any subsequent transfer of Shares so
registered) shall be stamped or imprinted with legends substantially in the
following forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS AGREEMENT, AS MAY BE AMENDED FROM TIME TO TIME, BY AND AMONG
THE
-9-
REGISTERED OWNER OF THIS CERTIFICATE, THE COMPANY AND CERTAIN OTHER
STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH IS AVAILABLE FOR INSPECTION
AT THE OFFICES OF THE SECRETARY OF THE COMPANY.
10. Fractional Shares. No fractional Shares will be issued in connection
with any exercise hereunder. Instead, the Company shall pay to such Holder an
amount in cash equal to any fractional share to which such Holder would be
entitled, multiplied by the Fair Market Value of a Share, as determined in good
faith by the Company's Board of Directors. For purposes of this Section 10, the
Fair Market Value of one Share shall equal: (a) the average of the closing sale
price of the Series B Preferred Stock (or any other security for which this
Transaction Warrant is then exercisable) as quoted on the Nasdaq Stock Market or
in the Over-The-Counter Market Summary or the closing price quoted on any
national securities exchange on which such securities are listed, whichever is
applicable, as reported in The Wall Street Journal for the ten trading days
immediately prior to the date of determination of Fair Market Value (or, if no
sales take place on any such trading day, the average of the closing bid and
asked prices on such trading day); or (b) if the Series B Preferred Stock (or
any other security for which this Transaction Warrant is then exercisable) is
not quoted on the Nasdaq Stock Market or Over-The-Counter or on a national
securities exchange, the Fair Market Value of a Share shall be established in
good faith by the Company's Board of Directors.
11. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Holder as follows:
(a) This Transaction 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;
(b) The Company shall use its best efforts to ensure that 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
nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges of whatever nature, except as may set
forth in the Stockholders Agreement; and
(c) The execution and delivery of this Transaction Warrant are not, and
the issuance of the Shares upon exercise of this Transaction Warrant in
accordance with the terms hereof will not be, inconsistent with the Company's
Certificate of Incorporation, as then in effect, and the Company's by-laws (the
"By-Laws"), as then in effect.
12. Representations and Warranties by the Holder. The Holder represents
and warrants to the Company as follows:
(a) This Transaction Warrant is being acquired for its own account, for
investment and not with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act. Upon exercise of
this Transaction Warrant, the Holder shall, if so requested by the Company,
confirm in writing, in a form reasonably satisfactory to the Company, that the
Shares issuable upon exercise of this Transaction Warrant are being acquired for
investment and not with a view toward distribution or resale that would violate
the Securities Act.
-10-
(b) The Holder understands that the Transaction Warrant and the Shares
have not been registered under the Securities Act by reason of their issuance in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act pursuant to Section 4(2) thereof, and that they must be
held by the Holder indefinitely, and that the Holder must therefore bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Securities Act or is exempted from such
registration.
(c) The Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the purchase of
this Transaction Warrant and the Shares purchasable pursuant to the terms of
this Transaction Warrant and of protecting its interests in connection
therewith.
(d) The Holder is able to bear the economic risk of the purchase of the
Shares pursuant to the terms of this Transaction Warrant.
(e) The Holder is an "accredited investor" within the meaning of Rule 501
of Regulation D under the Securities Act.
13. Rights of Stockholders. Subject to Section 4 hereof, no Holder, as
such, shall be entitled to vote or receive dividends or be deemed the holder of
the Shares or any other securities of the Company that 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, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Transaction Warrant shall have been exercised and the Shares purchasable upon
the exercise hereof shall have become issuable, as provided herein.
14. Expiration of Warrant. Subject to the provisions of Section 7, this
Transaction Warrant shall expire and shall no longer be exercisable as of 5:00
p.m., Eastern Time, on July [ ], 2004.
15. Miscellaneous.
(a) This Transaction Warrant shall be governed by and construed for all
purposes under and in accordance with the laws of the State of Delaware without
regard to principles of conflicts of law.
(b) The headings in this Transaction Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
(c) The representations, warranties, covenants and conditions of the
respective parties contained herein or made pursuant to this Transaction Warrant
shall survive the execution and delivery of this Transaction Warrant.
-11-
(d) The terms of this Transaction Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Company and of the
Holder and of the Shares issued or issuable upon the exercise hereof.
(e) This Transaction Warrant and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.
(f) The Company shall not, by amendment of its Certificate of
Incorporation or By-Laws, or through any other means, directly or indirectly,
avoid or seek to avoid the observance or performance of any of the terms of this
Transaction Warrant and shall 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 against impairment.
(g) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Transaction Warrant and, in the
case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Transaction
Warrant, the Company, at its expense, will execute and deliver to the Holder, in
lieu thereof, a new Transaction Warrant of like date and tenor.
(h) This Transaction Warrant and any provision hereof may be amended,
waived or terminated only by an instrument in writing signed by the Company and
the Holder.
[Signature Page Follows]
-12-
IN WITNESS WHEREOF, the Company has caused this Transaction Warrant to be signed
by its duly authorized officer.
Predix Pharmaceuticals Holdings, Inc.
By __________________________________
Name:
Title:
Acknowledged and Accepted:
[ ]
By __________________________
Name:
Title:
Address:
SCHEDULE 1
NUMBER OF SHARES OF SERIES B
PREFERRED STOCK PURCHASABLE NUMBER OF SHARES OF SERIES B
UPON EXERCISE OF THIS PREFERRED STOCK PURCHASABLE UPON
TRANSACTION WARRANT AT $8.00 EXERCISE OF THIS TRANSACTION WARRANT
HOLDER PER SHARE AT $5.00 PER SHARE
------ ------------------------------ ---------------------------------------
EXHIBIT A
NOTICE OF EXERCISE
TO: Predix Pharmaceuticals Holdings, Inc.
Attention: President
1. The undersigned hereby elects to purchase _____________________shares
of:
(i) Series B Preferred Stock; or
(ii) Class A Common Stock, if the Series B Preferred Stock has been
mandatorily converted to Class A Common Stock; of Predix Pharmaceuticals
Holdings, Inc. pursuant to the terms of this Transaction Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said securities
in the name of the undersigned or in such other name as is specified below:
___________________________
(Name)
___________________________
___________________________
(Address)
3. The undersigned hereby represents and warrants that the aforesaid
securities are being acquired for the account of the undersigned for investment
and not with a view to, or for resale, in connection with the distribution
thereof, and that the undersigned has no present intention of distributing or
reselling such shares and all representations and warranties of the undersigned
set forth in Section 12 of the attached Transaction Warrant are true and correct
as of the date hereof.
___________________________
(Signature and Date)
EXHIBIT B
FORM OF ASSIGNMENT
(To be executed by the Holder if such Holder
desires to transfer the Transaction Warrant)
FOR VALUE RECEIVED ____________________________________________ (the
"Transferor") hereby sells, assigns and transfers unto
_____________________________________________________________ (the "Transferee")
(Please print name and address of transferee)
this Transaction Warrant, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
as its Attorney to transfer the such Transaction Warrant on the books of Predix
Pharmaceuticals Holdings, Inc., with full power of substitution. The Transferor
has provided a written instrument to the Company notifying the Company of such
transfer and pursuant to which the Transferee hereunder has agreed in writing to
be bound by the terms of the Transaction Warrant dated July [ ], 2003 issued by
Predix Pharmaceuticals Holdings, Inc., a Delaware corporation, a copy of which
has been provided to the Transferee by the Transferor.
Dated: Signature ___________________________________________
(Signature must conform in all respects
to name of Holder as specified on the
face of the Transaction Warrant)
___________________________________________
(Insert Social Security or other
Identifying Number of Holder)
EXHIBIT F
FUNDING WARRANT
Form of Funding Warrant
THIS FUNDING WARRANT HAS NOT BEEN AND THE SHARES OBTAINABLE UPON ITS
EXERCISE WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS (COLLECTIVELY, THE "ACTS"), AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER ALL APPLICABLE ACTS OR UNLESS AN OPINION
OF COUNSEL IS DELIVERED TO THE ISSUER IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT AN EXEMPTION FROM REGISTRATION IS
AVAILABLE UNDER ALL APPLICABLE ACTS.
THE SHARES OBTAINABLE UPON EXERCISE OF THIS FUNDING WARRANT SHALL BE
SUBJECT TO CERTAIN TRANSFER RESTRICTIONS SET FORTH IN A STOCKHOLDERS
AGREEMENT, DATED JULY [ ], 2003 BY AND AMONG THE COMPANY AND THE
STOCKHOLDERS NAMED THEREIN, AS IT MAY BE AMENDED FROM TIME TO TIME (THE
"STOCKHOLDERS AGREEMENT"), A COPY OF WHICH MAY BE INSPECTED AT THE
COMPANY'S PRINCIPAL OFFICE UPON EXECUTION. THE COMPANY WILL NOT REGISTER
THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND
UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE
STOCKHOLDERS AGREEMENT.
No. [FW-1] July [ ], 2003
PREDIX PHARMACEUTICALS HOLDINGS, INC.
FUNDING WARRANT
THIS CERTIFIES THAT, for value received, [ ], or its registered assigns
(the "Holder"), is entitled to subscribe for and purchase from Predix
Pharmaceuticals Holdings, Inc., a Delaware corporation (the "Company"), at any
time prior to or upon July [ ], 2008, or, in the event such date is a Saturday,
Sunday or United States holiday, the next business day (the "Expiration Date"),
the Shares at the Exercise Price (each as defined in Section 1(a) below).
This warrant is one of a series of Funding Warrants (each a "Funding
Warrant," and collectively, the "Funding Warrants") of like tenor which may be
issued to each of the holders of Preferred Stock (the "Physiome Preferred
Holders") of Physiome Sciences, Inc., a Delaware
1
corporation, and each of the holders of Preferred Stock (the "Predix Preferred
Holders") of Predix Pharmaceuticals Ltd. ("Predix Ltd."), an organization formed
under the laws of Israel, in connection with: (i) the recapitalization of the
Company; and (ii) the purchase by the Company of all of the issued and
outstanding capital stock of Predix Ltd., which recapitalization and share
purchases are to be effected on or about the date hereof.
This Funding Warrant is subject to the following terms and conditions:
1. Shares; Exercise Price; Cancellation.
(a) As used herein, the term "Shares" means that number of shares (or
other applicable denomination) of Subsequent Financing Securities issued in a
Subsequent Financing (each as defined in Section 1(b) below) equal to the
Holder's Pro Rata Share (as defined in Section 1(c) below) of such Subsequent
Financing Securities at the per share (or other applicable denomination) price
at which such Subsequent Financing Securities are first sold (the "Exercise
Price").
(b) As used herein, the term "Subsequent Financing" means the consummation
of a sale by the Company after the date hereof of capital stock of the Company
to a third party investor, or of securities convertible into or exchangeable for
such capital stock, or any options, warrants or rights to purchase such capital
stock or securities (collectively, "Subsequent Financing Securities")
(excluding: (i) issuances of shares of capital stock of the Company upon
exercise of any options, warrants or rights to purchase such capital stock that
are outstanding on the date hereof or upon conversion of any securities
convertible into or exchangeable for shares of such capital stock that are
outstanding on the date hereof; (ii) the issuance and exercise of Transaction
Warrants and Funding Warrants issued to Physiome Preferred Holders and Predix
Preferred Holders on the date hereof (and the issuance of any shares upon
conversion of any shares issued upon exercise of such Transaction Warrants and
Funding Warrants); (iii) shares of capital stock issuable or issued to
employees, consultants, officers or directors of the Company either directly or
pursuant to a stock option plan or other incentive plan approved by the Board of
Directors of the Company, where such issuance is approved by the Board of
Directors of the Company or a committee designated by the Board of Directors;
and (iv) shares of capital stock issuable or issued (A) to equipment lessors or
equipment vendors in connection with any equipment lease financing by the
Company, (B) in connection with a strategic commercial transaction (i.e., with a
primary purpose other than that of providing financing), licensing transaction
or any debt financing with a financial institution or other strategic financing,
as determined by the Board of Directors of the Company, or (C) in connection
with a business acquisition of or by the Company, whether by merger,
consolidation, purchase of assets, purchase or exchange of stock with a primary
purpose other than that of providing financing).
(c) For purposes of this Section 1, "Pro Rata Share" shall equal a
fraction of the aggregate Subsequent Financing Securities to be issued to a
third party or parties in each Subsequent Financing, the numerator of which is
the number of shares of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"), issuable upon conversion of the Company's Preferred Stock
held by such Holder on July [ ], 2003, and the denominator of which is the total
number of shares of the Company's Common Stock issuable upon conversion of then
outstanding shares of the Company's Preferred Stock on such date. For purposes
of
-2-
clarification, the aggregate Subsequent Financing Securities issued to
holders of Funding Warrants shall be issued in addition to those Subsequent
Financing Securities issued to third party investors. For example, if the
Company plans to effect a Subsequent Financing pursuant to which $5.0 million of
Subsequent Financing Securities shall be issued to third party investors and the
Pro Rata Share of all holders of Funding Warrants exercising such Warrants
equals $2.5 million, the aggregate value of Subsequent Financing Securities
issued in such Subsequent Financing shall equal $7.5 million.
(d) In the event a Holder (or a Permitted Transferee of such Holder (as
defined in Section 3(a) below)) fails to exercise this Funding Warrant in full
in connection with any Subsequent Financing prior to the Expiration Date, the
right to purchase Shares underlying this Funding Warrant in connection with such
a Subsequent Financing shall be offered in accordance with Section 4 herein, and
thereafter, this Funding Warrant shall be immediately cancelled and shall not be
exercisable in any Subsequent Financings.
2. Exercise; Payment. In the event the Company intends to effect a
Subsequent Financing, it shall provide each Holder with written notice (the
"Subsequent Financing Notice"), which notice shall describe the general terms of
the Subsequent Financing. Each Holder shall have ten (10) days from the date of
delivery of the Subsequent Financing Notice to exercise its purchase rights
hereunder. The purchase rights represented by this Funding Warrant may be
exercised by the Holder or a Permitted Transferee, in whole or in part, by
delivery of a duly executed notice of exercise (the "Notice of Exercise") in the
form attached hereto as Exhibit A, at the address of the Company's principal
corporate offices set forth in Section 5 hereof, and by payment to the Company
of an amount equal to the Exercise Price multiplied by the number of the Shares
being purchased, which amount shall be paid at the closing of each Subsequent
Financing, at the election of the Holder, by wire transfer or check payable to
the order of the Company. The Person in whose name any certificate representing
the Shares issuable upon any exercise of this Funding Warrant shall be deemed to
have become the holder of record of, and shall be treated for all purposes as
the record holder of, the Shares represented thereby (and such Shares shall be
deemed to have been issued) on the date or dates of such closing and upon which
such delivery and payment are made. As used herein, the term "Person" means any
individual or any corporation, partnership, trust, limited liability company or
other entity or organization of any kind.
3. Transfers, etc.
(a) At any time prior to the Expiration Date, each of the Funding Warrants
issued on the date hereof shall only be transferable to: (i) in the case of
Funding Warrants held by Physiome Preferred Holders, to other Physiome Preferred
Holders; (ii) in the case of Funding Warrants held by Predix Preferred Holders
to other Predix Preferred Holders; and (iii) in the case of Funding Warrants
held by either Physiome Preferred Holders or Predix Preferred Holders that at
the date of issuance of this Funding Warrant were organized as a corporation,
partnership or other business entity, for the primary purpose of conducting
venture fund financings, to any Affiliate (as defined below) thereof (each
transferee pursuant to clause (i), (ii) and (iii) above, shall be referred to as
a "Permitted Transferee"); and, provided further, that any such transfer does
not increase the total number of holders of Funding Warrants by more than one
(taking into account all prior transfers of any one Funding Warrant) and will
not increase the total number of
-3-
stockholders of the Company by more than one (taking into account all prior
transfers of any one Funding Warrant). For purposes of this Funding Warrant,
"Affiliate" of a Holder shall mean any of the stockholders, subsidiaries,
officers, directors, members or partners of such Holder, and any other
corporation, partnership or other business entity which directly or indirectly
controls, is controlled by or is under common control with, such Holder.
(b) Any transfer pursuant to Section 3(a) shall be effected upon surrender
of this Funding Warrant with a properly executed assignment (in the form
attached hereto as Exhibit B) at the principal office of the Company (or, if
another office or agency has been designated by the Company for such purpose,
then at such other office or agency).
4. Right to Purchase Additional Shares.
(a) In the event a Physiome Preferred Holder (or a Permitted Transferee of
such Holder) fails to exercise this Funding Warrant in full in connection with
each Subsequent Financing prior to the Expiration Date (in addition to the
cancellation of the Holder's future rights under this Transaction Warrant set
forth in Section 1(d)), the right to purchase the Shares underlying this Funding
Warrant (the "Physiome Remaining Warrant Shares") shall be offered on a pro rata
basis to all other Physiome Preferred Holders (the "Physiome Participating
Purchasers") who fully exercised their respective Funding Warrants, subject to
the terms and conditions set forth below. Each such Physiome Participating
Purchaser's pro rata share shall equal a fraction of the aggregate Physiome
Remaining Warrant Shares, the numerator of which is the number of shares of the
Company's Common Stock issuable upon conversion of the Company's Preferred Stock
held by such Physiome Participating Purchaser, and the denominator of which is
the total number of shares of the Company's Common Stock issuable upon
conversion of the Company's Preferred Stock held by all Physiome Participating
Purchasers. The Company shall give each Physiome Participating Purchaser written
notice (the "Physiome Rights Notice") describing the number of Physiome
Remaining Warrant Shares that such Physiome Participating Purchaser has the
right to purchase under this Section 4(a), together with the applicable Exercise
Price. Each such Physiome Participating Purchaser shall have ten (10) days from
delivery of the Physiome Rights Notice to agree to purchase (i) all or any part
of its pro rata share of such Physiome Remaining Warrant Shares and (ii) all or
any part of the pro rata share of any other Physiome Participating Purchasers to
the extent that such Physiome Participating Purchasers do not elect to purchase
their full pro rata share, upon the general terms specified in the Physiome
Rights Notice, by giving written notice to the Company setting forth the
quantity of Physiome Remaining Warrant Shares to be purchased. If the Physiome
Participating Purchasers who elect to purchase their full pro rata share also
elect to purchase in the aggregate more than 100% of the Physiome Remaining
Warrant Shares, such Physiome Remaining Warrant Shares shall be sold to such
Physiome Participating Purchasers in accordance with their respective pro rata
share. A failure to provide the Company with written notice setting forth the
quantity of Physiome Remaining Warrant Shares to be purchased by any such
Physiome Participating Purchaser in accordance with this Section 4(a) shall be
deemed to be a waiver by such Physiome Participating Purchaser of its right to
purchase any portion of its pro rata portion of such Physiome Remaining Warrant
Shares. At the end of the period specified in the Physiome Rights Notice, if any
Physiome Remaining Warrant Shares remain unallocated (the "Final Physiome
Warrant Shares"), such Final Physiome Warrant Shares shall be offered, in
accordance with the terms set forth in Section 4(c) below, to each Predix
Participating Purchaser who has
-4-
elected to purchase all or any part of its pro rata share of the Predix
Remaining Warrant Shares (the "Predix Final Purchasers").
(b) In the event a Predix Preferred Holder (or a Permitted Transferee of
such Holder) fails to exercise this Funding Warrant in full in connection with
each Subsequent Financing prior to the Expiration Date (in addition to the
cancellation of the Holder's future rights under this Transaction Warrant set
forth in Section 1(d)), the right to purchase the Shares underlying this Funding
Warrant (the "Predix Remaining Warrant Shares") shall be offered on a pro rata
basis to all other Predix Preferred Holders (the "Predix Participating
Purchasers") who fully exercised their respective Funding Warrants, subject to
the terms and conditions set forth below. Each such Predix Participating
Purchaser's pro rata share shall equal a fraction of the aggregate Predix
Remaining Warrant Shares, the numerator of which is the number of shares of the
Company's Common Stock plus the number of shares of the Company's Common Stock
issued or issuable upon conversion of the Company's Preferred Stock held by such
Predix Participating Purchaser, and the denominator of which is the total number
of shares of the Company's Common Stock plus the number of shares of the
Company's Common Stock issued or issuable upon conversion of the Company's
Preferred Stock held by all Predix Participating Purchasers. The Company shall
give each Predix Participating Purchaser written notice (the "Predix Rights
Notice") describing the number of Predix Remaining Warrant Shares that such
Predix Participating Purchaser has the right to purchase under this Section
4(b), together with applicable Exercise Price. Each such Predix Participating
Purchaser shall have ten (10) days from delivery of the Predix Rights Notice to
agree to purchase (i) all or any part of its pro rata share of such Predix
Remaining Warrant Shares and (ii) all or any part of the pro rata share of any
other Predix Participating Purchasers to the extent that such Predix
Participating Purchasers do not elect to purchase their full pro rata share,
upon the general terms specified in the Predix Rights Notice, by giving written
notice to the Company setting forth the quantity of Predix Remaining Warrant
Shares to be purchased. If the Predix Participating Purchasers who elect to
purchase their full pro rata share also elect to purchase in the aggregate more
than 100% of the Predix Remaining Warrant Shares, such Predix Remaining Warrant
Shares shall be sold to such Predix Participating Purchasers in accordance with
their respective pro rata share. A failure to provide the Company with written
notice setting forth the quantity of Predix Remaining Warrant Shares to be
purchased by any such Predix Participating Purchaser in accordance with this
Section 4(b) shall be deemed to be a waiver by such Predix Participating
Purchaser of its right to purchase any portion of its pro rata portion of such
Predix Remaining Warrant Shares. At the end of the period specified in the
Predix Rights Notice, if any Predix Remaining Warrant Shares remain unallocated
(the "Final Predix Warrant Shares"), such Final Predix Warrant Shares shall be
offered, in accordance with the terms set forth in Section 4(d) below, to each
Physiome Participating Purchaser who has elected to purchase all or any part of
its pro rata share of the Physiome Remaining Warrant Shares (the "Physiome Final
Purchasers").
(c) At the end of the ten-day period specified in the Physiome Rights
Notice, the Company shall give each Predix Final Purchaser written notice (the
"Final Predix Rights Notice") describing the number of Final Physiome Warrant
Shares that such Predix Final Purchaser has the right to purchase under this
Section 4(c). Each such Predix Final Purchaser shall have ten (10) days from
delivery of the Final Predix Rights Notice to agree to purchase (i) all or any
part of its pro rata share of such Final Physiome Warrant Shares and (ii) all or
any part of the pro rata share of any other Predix Final Purchasers to the
extent that such Predix Final
-5-
Purchasers do not elect to purchase their full pro rata share, upon the general
terms specified in the Final Predix Rights Notice, by giving written notice to
the Company setting forth the quantity of Final Physiome Warrant Shares to be
purchased. If the Predix Final Purchasers who elect to purchase their full pro
rata share also elect to purchase in the aggregate more than 100% of the Final
Physiome Warrant Shares, such Final Physiome Warrant Shares shall be sold to
such Predix Final Purchasers in accordance with their respective pro rata share.
A failure to provide the Company with written notice setting forth the quantity
of Final Physiome Warrant Shares to be purchased by any such Predix Final
Purchaser in accordance with this Section 4(c) shall be deemed to be a waiver by
such Predix Final Purchaser of its right to purchase any portion of its pro rata
portion of such Final Physiome Warrant Shares. At the end of the period
specified in the Final Predix Rights Notice, if any Final Physiome Warrant
Shares remain unallocated, the right to purchase such Final Physiome Warrant
Shares shall expire.
(d) At the end of the ten-day period specified in the Predix Rights
Notice, the Company shall give each Physiome Final Purchaser written notice (the
"Final Physiome Rights Notice") describing the number of Final Predix Warrant
Shares that such Physiome Final Purchaser has the right to purchase under this
Section 4(d). Each such Physiome Final Purchaser shall have ten (10) days from
delivery of the Final Physiome Rights Notice to agree to purchase (i) all or any
part of its pro rata share of such Final Predix Warrant Shares and (ii) all or
any part of the pro rata share of any other Physiome Final Purchasers to the
extent that such Physiome Final Purchasers do not elect to purchase their full
pro rata share, upon the general terms specified in the Final Physiome Rights
Notice, by giving written notice to the Company setting forth the quantity of
Final Predix Warrant Shares to be purchased. If the Physiome Final Purchasers
who elect to purchase their full pro rata share also elect to purchase in the
aggregate more than 100% of the Final Predix Warrant Shares, such Final Predix
Warrant Shares shall be sold to such Physiome Final Purchasers in accordance
with their respective pro rata share. A failure to provide the Company with
written notice setting forth the quantity of Final Predix Warrant Shares to be
purchased by any such Physiome Final Purchaser in accordance with this Section
4(d) shall be deemed to be a waiver by such Physiome Final Purchaser of its
right to purchase any portion of its pro rata portion of such Final Predix
Warrant Shares. At the end of the period specified in the Final Physiome Rights
Notice, if any Final Predix Warrant Shares remain unallocated, the right to
purchase such Final Predix Warrant Shares shall expire.
(e) The closing of the purchase, if any, of Physiome Remaining Warrant
Shares, Final Physiome Warrant Shares, Predix Remaining Warrant Shares or Final
Predix Warrant Shares, as applicable, by the Holders exercising their rights
hereunder shall take place at the closing of the applicable Subsequent
Financing. At the closing, the Company shall deliver to such Holders
certificates representing all of the Physiome Remaining Warrant Shares, Final
Physiome Warrant Shares, Predix Remaining Warrant Shares or Final Predix Warrant
Shares, as applicable. At the closing, such purchasing Holders shall deliver to
the Company (i) payment for the Physiome Remaining Warrant Shares, Final
Physiome Warrant Shares, Predix Remaining Warrant Shares or Final Predix Warrant
Shares, as applicable, and (ii) at the request of the Company, a duly executed
certificate reasonably satisfactory to the Company containing such
representations and warranties of the purchasing Holders with respect to federal
and state securities laws. The certificates representing the Physiome Remaining
Warrant Shares, Final Physiome Warrant Shares, Predix Remaining Warrant Shares
or Final Predix Warrant Shares, as applicable, may contain a legend stating that
they are issued subject to the registration
-6-
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and applicable state securities laws.
5. Notices.
(a) All notices, requests, consents, and other communications under this
Funding Warrant shall be in writing and shall be deemed delivered (i) seven
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) three business days after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient as set forth below:
If to the Company, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief Operating Officer, or at such other address
as may have been furnished in writing by the Company to the Holder, with a copy
to ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.; or
If to a Holder, at its address set forth on the signature page hereto, or
at such other address as may be furnished in writing by such Holder to the
Company with a copy, in the case of the Predix Preferred Holders, to Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention : ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(b) Either party may give any notice, request, consent or other
communication under this Funding Warrant using any other means (including,
without limitation, personal delivery, messenger service, telecopy, first class
mail or electronic mail), but no such notice, request, consent or other
communication shall be deemed to have been duly given unless and until it is
actually received by the party for whom it is intended. Either party may change
the address to which notices, requests, consents or other communications
hereunder are to be delivered by giving the other party notice in the manner set
forth in this Section.
6. Legends. Each certificate evidencing the Shares issued upon exercise of
this Funding Warrant, or transfer of such Shares (other than a transfer
registered under the Securities Act, or any subsequent transfer of Shares so
registered) shall be stamped or imprinted with 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 (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
7. Fractional Shares. No fractional Shares will be issued in connection
with any exercise hereunder. Instead, the Holder shall be permitted to exercise
this Funding Warrant for that number of Shares rounded to the nearest whole
Share.
-7-
8. Representations and Warranties by the Holder. The Holder represents and
warrants to the Company as follows:
(a) This Funding Warrant is being acquired for its own account, for
investment and not with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act. Upon exercise of
this Funding Warrant, the Holder shall, if so requested by the Company, confirm
in writing, in a form reasonably satisfactory to the Company, that the Shares
issuable upon exercise of this Funding Warrant are being acquired for investment
and not with a view toward distribution or resale that would violate the
Securities Act.
(b) The Holder understands that the Funding Warrant has not been and the
Shares will not be registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act pursuant to Section 4(2) thereof, and that
they must be held by the Holder indefinitely, and that the Holder must therefore
bear the economic risk of such investment indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act or is exempted from
such registration.
(c) The Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the purchase of
this Funding Warrant and the Shares purchasable pursuant to the terms of this
Funding Warrant and of protecting its interests in connection therewith.
(d) The Holder is able to bear the economic risk of the purchase of the
Shares pursuant to the terms of this Funding Warrant.
(e) The Holder is an "accredited investor" within the meaning of Rule 501
of Regulation D under the Securities Act.
9. Rights of Stockholders. No Holder, as such, shall be entitled to vote
or receive dividends or be deemed the holder of the Shares or any other
securities of the Company that 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, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until this Funding Warrant shall
have been exercised and the Shares purchasable upon the exercise hereof shall
have become issuable, as provided herein.
10. Expiration of Warrant. Subject to the provisions of Section 1(d) and
Section 4, this Funding Warrant shall expire and shall no longer be exercisable
as of 5:00 p.m., Eastern Time, on July [ ], 2008.
11. Miscellaneous.
-8-
(a) This Funding Warrant shall be governed by and construed for all
purposes under and in accordance with the laws of the State of Delaware without
regard to principles of conflicts of law.
(b) The headings in this Funding Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
(c) The representations, warranties, covenants and conditions of the
respective parties contained herein or made pursuant to this Funding Warrant
shall survive the execution and delivery of this Funding Warrant.
(d) The terms of this Funding Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Company and of the
Holder and of the Shares issued or issuable upon the exercise hereof.
(e) This Funding Warrant and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.
(f) The Company shall not, by amendment of its certificate of
incorporation or by-laws, or through any other means, directly or indirectly,
avoid or seek to avoid the observance or performance of any of the terms of this
Funding Warrant and shall 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 against impairment.
(g) Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Funding Warrant and, in the case
of any such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Funding Warrant, the
Company, at its expense, will execute and deliver to the Holder, in lieu
thereof, a new Funding Warrant of like date and tenor.
(h) This Funding Warrant and any provision hereof may be amended, waived
or terminated only by an instrument in writing signed by the Company and the
Holder.
[Signature Page Follows]
-9-
IN WITNESS WHEREOF, the Company has caused this Funding Warrant to be
signed by its duly authorized officer.
Predix Pharmaceuticals Holdings, Inc.
By __________________________________
Name:
Title:
Acknowledged and Accepted:
[ ]
By ________________________________________
Name:
Title:
Address:
EXHIBIT A
NOTICE OF EXERCISE
TO: Predix Pharmaceuticals Holdings, Inc.
Attention: President
1. The undersigned hereby elects to purchase _______________Subsequent
Financing Securities of Predix Pharmaceuticals Holdings, Inc. pursuant to the
terms of this Funding Warrant, and tenders herewith payment of the purchase
price of such shares in full.
2. Please issue a certificate or certificates representing said securities
in the name of the undersigned or in such other name as is specified below:
_________________________________
(Name)
_________________________________
_________________________________
(Address)
3. The undersigned hereby represents and warrants that the aforesaid
securities are being acquired for the account of the undersigned for investment
and not with a view to, or for resale, in connection with the distribution
thereof, and that the undersigned has no present intention of distributing or
reselling such shares and all representations and warranties of the undersigned
set forth in Section 8 of the attached Funding Warrant are true and correct as
of the date hereof.
_________________________________
(Signature and Date)
EXHIBIT B
FORM OF ASSIGNMENT
(To be executed by the Holder if such Holder
desires to transfer the Funding Warrant)
FOR VALUE RECEIVED ____________________ (the "Transferor") hereby sells,
assigns and transfers unto _______________________________(the "Transferee")
(Please print name and address of transferee)
this Funding Warrant, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint as its Attorney to transfer the
such Funding Warrant on the books of Predix Pharmaceuticals Holdings, Inc., with
full power of substitution. The Transferor has provided a written instrument to
the Company notifying the Company of such transfer and pursuant to which the
Transferee hereunder has agreed in writing to be bound by the terms of the
Funding Warrant dated July [ ], 2003 issued by Predix Pharmaceuticals Holdings,
Inc., a Delaware corporation, a copy of which has been provided to the
Transferee by the Transferor.
Dated: Signature _____________________________________________
(Signature must conform in all respects to name of
Holder as specified on the face of the Funding Warrant)
_______________________________________________________
(Insert Social Security or other Identifying Number of
Holder)