Exhibit 10.25
THIS WARRANT AND THE SHARES OF
COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE
RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION
5 OF THIS WARRANT
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Date
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of Issuance:
October 28, 2004
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ACHILLION PHARMACEUTICALS, INC.
Common Stock Purchase Warrant
(Void after October 28,
2009)
Achillion Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), for value
received, hereby certifies that [name] or its registered assigns
(the “Registered Holder”), is entitled, subject to the
terms and conditions set forth below, to purchase from the Company,
at any time or from time to time on or after the Initial Exercise
Date (as defined below) and on or before 5:00 p.m. (Eastern
Standard Time) on October 28, 2009 that number of shares of
Common Stock, $.001 par value per share, of the Company (the
“Common Stock”) as is determined by application of the
formula set forth below.
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A.
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Qualified
Financing . In the event
of a closing of a Qualified Financing (as defined below) prior to
the closing of a Sale of the Company (as defined below), this
Warrant shall be exercisable from and after the date of the closing
of such Qualified Financing (the “Qualified Financing Initial
Exercise Date”) for a number of shares of Common Stock equal
to the quotient obtained by dividing (A) [$ ] (the “Base
Amount”), by (B) the Qualified Financing Conversion
Price (as defined below) and at a purchase price per share equal to
the Fair Market Value of the Common Stock on the Qualified
Financing Initial Exercise Date, as determined pursuant to the
provisions of Section 1(b)(ii) hereof.
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B.
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Sale of the
Company . If no Qualified
Financing has occurred prior to a Sale of the Company, this Warrant
shall be exercisable from and after the date immediately proceeding
the date of the closing of such Sale of the Company (the
“Sale Initial Exercise Date and, with the Qualified Financing
Initial Exercise Date, each an “Initial Exercise Date”)
for that number of shares of Common Stock equal to the quotient
obtained by dividing (A) [$ ] (the “Base Amount”),
by the Series C Conversion Price (as defined in the Certificate of
Incorporation of the Company (as amended and/or restated from time
to time, the “Charter”)) and at a purchase price per
share equal to the Fair Market Value of the Common Stock on the
Sale Initial Exercise Date, as determined pursuant to the
provisions of Section 1(b)(ii) hereof.
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a.
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“Warrant
Shares” means the shares purchasable upon exercise of this
Warrant, as adjusted from time to time pursuant to the provisions
of this Warrant
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b.
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“Purchase
Price” means the purchase price per share, as adjusted from
time to time pursuant to the provisions of this Warrant.
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c.
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“Qualified Financing” means the
first closing of the issuance and sale of convertible preferred
stock of the Company occurring after October 28, 2004 and
prior to the payment in full of the Notes issued pursuant to the
Note and Warrant Purchase Agreement dated as of the date hereof
between the Company and the Lenders named therein (the “Note
Purchase Agreement”) in which:
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i.
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the immediately
available gross proceeds to the Company, excluding
(a) proceeds from any indebtedness of the Maker, including
without limitation under any Notes issued pursuant to the Note
Purchase Agreement, that converts into equity in such financing and
(b) the amount, if any, invested in such financing by Vertex
Pharmaceuticals Incorporated, equal or exceed $10,000,000;
and
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ii.
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unless
otherwise agreed by the Lenders holding two-thirds of the principal
amount then outstanding under the Notes issued pursuant to the Note
Purchase Agreement, the investor purchasing the largest number of
shares in such financing is not a stockholder of the Company as of
the date hereof.
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d.
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“Qualified Financing Conversion
Price” means the conversion price of the shares of the
Company’s convertible preferred stock issued in the Qualified
Financing, as set forth in the Charter and as from time to time
adjusted in accordance with the provisions thereof.
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e.
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“Sale of
the Company” shall mean (i) any merger or consolidation
to which the Company is a party (except any merger or consolidation
in which the holders of capital stock of the Company immediately
prior to such merger or consolidation continue to hold, immediately
following such merger or consolidation and in approximately the
same relative proportions as they held voting stock of the Company,
at least 51% of the voting power of the capital stock of
(A) the surviving or resulting corporation or (B) if the
surviving or resulting corporation is a wholly-owned subsidiary of
another corporation immediately following such merger or
consolidation, of the parent corporation of such surviving or
resulting corporation), or (ii) the sale of all or
substantially all of the assets of the Company.
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(a) Exercise for Cash . On or
after the Initial Exercise Date, the Registered Holder may, at its
option, elect to exercise this Warrant, in whole or in part and at
any time or from time to time, by surrendering this Warrant, with
the purchase form appended hereto as Exhibit I duly
executed by or on behalf of the Registered Holder, at the principal
office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full, in lawful
money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such
exercise.
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(b) Cashless Exercise
.
(i) The Registered Holder may, at
its option, elect to exercise this Warrant, in whole or in part and
at any time or from time to time, on a cashless basis, by
surrendering this Warrant, with the purchase form appended hereto
as Exhibit I duly executed by or on behalf of the Registered
Holder, at the principal office of the Company, or at such other
office or agency as the Company may designate, by canceling a
portion of this Warrant in payment of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such
exercise. In the event of an exercise pursuant to this subsection
1(b), the number of Warrant Shares issued to the Registered Holder
shall be determined according to the following formula:
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Where:
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X =
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the number of
Warrant Shares that shall be issued to the Registered
Holder;
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Y =
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the number of
Warrant Shares for which this Warrant is being exercised (which
shall include both the number of Warrant Shares issued to the
Registered Holder and the number of Warrant Shares subject to the
portion of the Warrant being cancelled in payment of the Purchase
Price);
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A =
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the Fair Market
Value (as defined below) of one share of Common Stock;
and
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B =
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the Purchase
Price then in effect.
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(ii) The Fair Market Value per share
of Common Stock shall be determined as follows:
(1) If the Common Stock is listed on
a national securities exchange, the Nasdaq National Market or
another nationally recognized trading system as of the Actual
Exercise Date (as defined below), the Fair Market Value per share
of Common Stock shall be deemed to be the average of the high and
low reported sale prices per share of Common Stock thereon on the
trading day immediately preceding the Actual Exercise Date (
provided that if no such price is reported on such day, the
Fair Market Value per share of Common Stock shall be determined
pursuant to clause (2)).
(2) If the Common Stock is not
listed on a national securities exchange, the Nasdaq National
Market or another nationally recognized trading system as of the
Actual Exercise Date, the Fair Market Value per share of Common
Stock shall be deemed to be the amount most recently determined by
the Board of Directors of the Company (the “Board”) to
represent the fair market value per share of the Common Stock
(including without limitation a determination for purposes of
granting Common Stock options or issuing Common Stock under any
plan, agreement or arrangement with employees of the Company); and,
upon request of the Registered Holder, the Board (or a
representative thereof) shall, as promptly as reasonably
practicable, notify the Registered Holder of the Fair Market Value
per share of Common Stock
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and furnish the Registered Holder with
reasonable documentation of the Board’s determination of such
Fair Market Value. Notwithstanding the foregoing, if the Board has
not made such a determination within the three-month period prior
to the Actual Exercise Date, then (A) the Board shall make,
and shall provide or cause to be provided to the Registered Holder
notice of, a determination of the Fair Market Value per share of
the Common Stock within 15 days of a request by the Registered
Holder that it do so, and (B) the exercise of this Warrant
pursuant to this subsection 1(b) shall be delayed until such
determination is made and notice thereof is provided to the
Registered Holder.
(c) Actual Exercise Date .
Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in
subsection 1(a) or 1(b) above (the “Actual Exercise
Date”). At such time, the person or persons in whose name or
names any certificates for Warrant Shares shall be issuable upon
such exercise as provided in subsection 1(d) below shall be deemed
to have become the holder or holders of record of the Warrant
Shares represented by such certificates.
(d) Issuance of Certificates
. As soon as practicable after the exercise of this Warrant in
whole or in part, the Company, at its expense, will cause to be
issued in the name of, and delivered to, the Registered Holder, or
as the Registered Holder (upon payment by the Registered Holder of
any applicable transfer taxes) may direct:
(i) a certificate or certificates
for the number of full Warrant Shares to which the Registered
Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which the Registered Holder would otherwise be
entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in
part only, a new warrant or warrants (dated the date hereof) of
like tenor, calling in the aggregate on the face or faces thereof
for the number of Warrant Shares equal (without giving effect to
any adjustment therein) to the number of such shares called for on
the face of this Warrant minus the number of Warrant Shares for
which this Warrant was so exercised (which, in the case of an
exercise pursuant to subsection 1(b), shall include both the number
of Warrant Shares issued to the Registered Holder pursuant to such
partial exercise and the number of Warrant Shares subject to the
portion of the Warrant being cancelled in payment of the Purchase
Price).
2. Adjustments .
(a) Adjustment for Stock Splits
and Combinations . If the Company shall at any time or from
time to time after the Initial Exercise Date (or, if this Warrant
was issued upon partial exercise of, or in replacement of, another
warrant of like tenor, then the date on which such original warrant
was first issued) effect a subdivision of the outstanding Common
Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company
shall at any time or from time to time after the Initial Exercise
Date combine the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before the combination 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.
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(b) Adjustment for Certain
Dividends and Distributions . In the event the Company at any
time, or from time to time after the Initial Exercise Date shall
make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other
distribution payable in additional shares of Common Stock, then and
in each such event the Purchase Price 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
Purchase Price then in effect by a fraction:
(1) the numerator of which shall be
the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date, and
(2) the denominator of which shall
be the total number of shares of 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
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
Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Purchase Price
shall be adjusted pursuant to this paragraph as of the time of
actual payment of such dividends or distributions.
(c) Adjustment in Number of
Warrant Shares . When any adjustment is required to be made in
the Purchase Price pursuant to subsections 2(a) or 2(b),
the
