POLYMEDIX, INC.
SERIES B WARRANT TO PURCHASE CAPITAL STOCK
To Purchase [
] Shares of Preferred Stock or [
] Shares of Common Stock
THIS CERTIFIES
THAT, for value received, [
], or permitted registered assigns (the “ Holder
”), is entitled to subscribe for and purchase at the Exercise
Price (defined below) from PolyMedix, Inc., a Delaware corporation
(the “ Company ”), either (a) up to
[ ]
shares (“ Preferred Warrant Shares ”) of
Series 2008 Convertible Preferred Stock of the Company, par
value $0.001 per share (“ Preferred Stock ”), or
(b) if, at the time this Warrant is exercised (in whole or in
part) the Preferred Stock has been converted into shares of the
common stock of the Company, par value $0.001 per share (the
“ Common Stock ”), up to
[ ]
shares of Common Stock (“ Common Warrant Shares
”). This warrant is one of a series of warrants issued by the
Company as of the date hereof (individually a “
Warrant ”, collectively, “ Company
Warrants ”) pursuant to a series of securities purchase
agreements dated as of
, 2008, each between the Company and the investor named therein
(the “ Securities Purchase Agreement
”).
1.
DEFINITIONS . Capitalized terms used herein but not
otherwise defined herein shall have their respective meanings as
set forth in the Securities Purchase Agreement. As used herein, the
following terms shall have the following respective
meanings:
(a)
“ Conversion Date ” shall mean the date of
effectiveness of the Amendment to the Company’s
Charter.
(b)
“ Exercise Period ” shall mean the period
commencing with the date that is the earlier of (i) six months
after the Closing Date or (ii) the Conversion Date, unless
sooner terminated as a result of a Fundamental Transaction pursuant
to Section 7 below, and ending on the fifth anniversary of the
Closing Date.
(c)
“ Exercise Price ” shall mean $10.00 per share
with respect to the Preferred Warrant Shares if this Warrant is
exercisable for Preferred Warrant Shares and $1.00 per share with
respect to the Common Warrant Shares if this Warrant is exercisable
for Common Warrant Shares, in either case subject to adjustment
pursuant to Section 5 below.
(d)
“ Trading Day ” shall mean (i) any day on
which the Common Stock is listed or quoted on its primary trading
market, (ii) if the Common Stock is not then listed or quoted
and traded on any eligible market (meaning any of the New York
Stock Exchange, American Stock Exchange (“ AMEX
”) or The NASDAQ Global Market), then a day on which trading
occurs on the OTC Bulletin Board (or any successor thereto), or
(iii) if trading does not occur on the OTC Bulletin Board (or
any successor thereto), any business day.
(e)
“ Warrant Shares ” shall mean the shares of
Common Stock or Preferred Stock, as applicable, issuable upon
exercise of this Warrant.
2.1
TYPE OF WARRANT SHARES . This Warrant shall be exercisable
only for Preferred Warrant Shares unless and until the Preferred
Stock is converted into Common Stock pursuant to the Designations,
after which this Warrant shall be exercisable only for Common
Warrant Shares.
2.2
EXERCISE MECHANICS . The rights represented by this Warrant
may, subject to Section 6 below, be exercised in whole or in part
at any time during the Exercise Period, by delivery of the
following to the Company at its address set forth on the signature
page hereto (or at such other address as it may designate by notice
in writing to the Holder):
(a) An
executed Notice of Exercise in the form attached hereto;
and
(b) Payment
of the Exercise Price either in cash or by check or, if applicable,
in accordance with Section 4, (subject to the limitations in
Section 2.3 below.
Execution and
delivery of the Notice of Exercise shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Warrant
Shares, if any. If requested by the Company, Holder agrees to
provide this Warrant, or an affidavit of lost security, to the
Company within a reasonable period after the delivery of the Notice
of Exercise.
Certificates for
shares purchased hereunder shall be transmitted by the transfer
agent of the Company to the Holder by crediting the account of the
Holder’s prime broker with the Depository Trust Company
through its Deposits and Withdrawal at Custodian (DWAC) system
if the Company is a participant in such system, and otherwise by
physical delivery to the address specified by the Holder in the
Notice of Exercise within three business days from the delivery to
the Company of the Notice of Exercise, surrender of this Warrant
and payment of the aggregate Exercise Price as set forth above.
This Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company. The Warrant Shares shall
be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date
this Warrant has been exercised by payment to the Company of the
Exercise Price. In the event that this Warrant is exercisable for
Common Warrant Shares, if by the close of the third Trading Day
after delivery of a Notice of Exercise, the Company fails to
deliver to the Holder a certificate representing the required
number of Common Warrant Shares in the manner required pursuant to
this Section 2 , and such failure to deliver the Common
Warrant Shares is caused by the Company’s failure to use
commercially reasonable efforts to comply with this
Section 2 and/or the covenants in Section 3
herein, and if after such third Trading Day and prior to the
receipt of such Common Warrant Shares, the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Common
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “ Buy-In ”), then the Company shall,
within three Trading Days after the Holder’s request and in
the
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Holder’s
sole discretion, either (i) pay in cash to the Holder an
amount equal to the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased (the “ Buy-In Price ”), at which point
the Company’s obligation to deliver such certificate (and to
issue such Common Warrant Shares) shall terminate or
(ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such Common Warrant Shares
and pay cash to the Holder in an amount equal to the excess (if
any) of the Buy-In Price over the product of (A) such number
of Common Warrant Shares, times (B) the closing bid price on
the date of the event giving rise to the Company’s obligation
to deliver such certificate.
The person in
whose name any Warrant Shares are to be issued upon exercise of
this Warrant shall be deemed to have become the holder of record of
such shares on the date on which this Warrant was surrendered and
payment of the Exercise Price was made, irrespective of the date of
delivery of such certificate or certificates, except that, if the
date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer
books are open.
To the extent
permitted by law, the Company’s obligations to issue and
deliver Warrant Shares in accordance with the terms hereof are
absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment
against any person or entity or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder or any other person or
entity of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other person or entity, and
irrespective of any other circumstance which might otherwise limit
such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver
certificates representing the Warrant Shares upon exercise of this
Warrant as required pursuant to the terms hereof.
2.3
ISSUANCE OF NEW WARRANTS . Upon any partial exercise of this
Warrant, the Company, at its expense, will forthwith and, in any
event within five business days, issue and deliver to the Holder a
new warrant or warrants of like tenor, registered in the name of
the Holder, exercisable, in the aggregate, for the balance of the
number of the Warrant Shares remaining available for purchase under
this Warrant.
2.4
EXERCISE LIMITATIONS; HOLDER’S RESTRICTIONS . A Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2 or otherwise, to the extent that
after giving effect to such issuance after exercise, such Holder
(together with such Holder’s affiliates), as set forth on the
applicable Notice of Exercise, would beneficially own in excess of
9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to such issuance, unless the Holder
of this Warrant elects to waive the provisions of this Section
2.4 upon not less than 61 days’ prior notice to the
Company. For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by such Holder and its
affiliates shall include the number of shares of Common
Stock
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issuable upon
exercise of this Warrant if this Warrant is exercisable for Common
Warrant Shares with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (a) exercise of the
remaining, non-exercised portion of this Warrant beneficially owned
by such Holder or any of its affiliates and (b) exercise or
conversion of the unexercised or non-converted portion of any other
securities of the Company (including, without limitation, any other
shares of Common Stock or Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by such Holder or any of its affiliates. Except
as set forth in the preceding sentence, for purposes of this
Section 2.4 , beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act, it being
acknowledged by a Holder that the Company is not representing to
such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2.4
applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by such Holder) and of which
a portion of this Warrant is exercisable shall be in the sole
discretion of a Holder, and the submission of a Notice of Exercise
shall be deemed to be each Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned
by such Holder) and of which portion of this Warrant is
exercisable, in each case subject to such aggregate percentage
limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. For purposes of this
Section 2.4 , in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may
be, (y) a more recent public announcement by the Company or
(z) any other notice by the Company or the Company’s
transfer agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the
Company shall within two Trading Days confirm orally and in writing
to such Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Warrant, by such Holder or its affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported.
3.
COVENANTS OF THE COMPANY .
3.1
DUE AUTHORIZATION . The Company covenants and agrees that
all Warrant Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly
issued and outstanding, fully paid and nonassessable, and free from
all taxes, liens and charges with respect to the issuance
thereof.
3.2
FILING OF CERTIFICATE OF AMENDMENT . Subject to the
Stockholders Approval, the Company shall file the Certificate of
Amendment pursuant to Section 4.5(b) of the Securities
Purchase Agreement.
3.3
AVAILABLE SHARES . The Company covenants and agrees that the
Company will at all times during the Exercise Period, have
authorized and reserved, free from preemptive rights, a sufficient
number of shares of Preferred Stock or Common Stock, as applicable,
to provide for the exercise of the rights represented by this
Warrant. During the Exercise Period, the number of authorized but
unissued shares of Preferred Stock or Common
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Stock, as
applicable, shall not be sufficient to permit exercise of this
Warrant into the applicable Warrant Shares, the Company will take
such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of
Preferred Stock or Common Stock, as applicable, to suc
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