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EXECUTION COPY

Exhibit 10.2
 
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS.
 

WARRANT

To Purchase Shares of the Common Stock of

PolyMedix, Inc.

Dated as of April 5, 2012 (the “Effective Date”)

WHEREAS, PolyMedix, Inc., a Delaware corporation (the “Company”), has entered
into a Loan and Security Agreement of even date herewith (the “Loan Agreement”)
with its wholly-owned subsidiary, PolyMedix Pharmaceuticals, Inc., a Delaware
corporation, and MidCap Financial SBIC, LP, a Delaware limited partnership
(“MidCap”);

WHEREAS, the Company desires to grant to MidCap, in consideration for, among
other things, the financial accommodations provided for in the Loan Agreement,
the right to purchase shares of its Common Stock (as defined herein) pursuant to
this Warrant to Purchase Shares of Common Stock (this “Warrant”);
 
NOW, THEREFORE, in consideration of MidCap executing and delivering the Loan
Agreement and providing the financial accommodations contemplated therein, and
in consideration of the mutual covenants and agreements contained herein, the
Company and MidCap agree as follows:
 
SECTION 1.  
GRANT OF THE RIGHT TO PURCHASE COMMON STOCK.

 
(a)           For value received, the Company hereby grants to MidCap or, if
MidCap shall have assigned this Warrant pursuant to Section 11 below, the
assignee of this Warrant (the “Holder”), and the Holder is entitled, upon the
terms and subject to the conditions hereinafter set forth, to subscribe for and
purchase, from the Company, up to the number of fully paid and non-assessable
shares of Common Stock as determined in accordance with Section 1(b) below, at a
purchase price equal to $1.24 (the “Exercise Price”), such number and Exercise
Price being subject to adjustment as provided herein.  As used in this Warrant,
the following terms shall have the following meanings:
 
“Act” means the Securities Act of 1933, as amended.
 
“Certificate of Incorporation” means the Company’s Certificate of Incorporation
or other constitutional document, as may be amended and in effect from time to
time.
 
“Common Stock” means the Company’s common stock, $0.001 par value per share, as
presently constituted under the Certificate of Incorporation and any class
and/or series of Company capital stock for or into which such common stock may
be converted or exchanged in a reorganization, recapitalization or similar
transaction.
 
“Merger Event” means a merger or consolidation of the Company into or with
another entity, in which the equity holders of the Company as of immediately
prior to the closing of the transaction own, in the aggregate, securities
representing less than a majority of the total outstanding
 
 
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combined voting equity of the successor or surviving entity as of immediately
after the closing of the transaction.
 
“Purchase Price” means, with respect to any exercise of this Warrant (whether in
whole or in part), an amount equal to the then-effective Exercise Price
multiplied by the number of shares of Common Stock as to which this Warrant is
then exercised.
 
(b)           Number of Shares.                                This Warrant
shall be exercisable for 161,290 shares of Common Stock (the “Initial Shares”)
and, in the event that the Lenders (as defined in the Loan Agreement) advance
Tranche Two (as defined in the Loan Agreement), an additional number of shares
of Common Stock equal to 2.5 percent of Tranche Two divided by the Exercise
Price in effect at the time of such advance (the “Additional Shares” and,
together with the Initial Shares, the “Shares”), subject to adjustment from time
to time in accordance with the provisions of this Warrant.
 
SECTION 2.  
TERM OF THE AGREEMENT.

 
Except as otherwise provided for herein, the term of this Warrant and the right
to purchase Common Stock as granted herein shall commence on the Effective Date
and shall be exercisable for a period ending at 4:00 PM New York City time on
the fifth (5th) anniversary of the Effective Date.
 
SECTION 3.  
EXERCISE OF THE PURCHASE RIGHTS.

 
The purchase rights set forth in this Warrant are exercisable by the Holder, in
whole or in part, at any time, or from time to time, prior to the expiration of
the term set forth in Section 2, by tendering this Warrant to the Company at its
principal office, together with a notice of exercise in the form attached hereto
as Exhibit I (the “Notice of Exercise”), duly completed and executed, and the
Purchase Price.  Promptly upon receipt of the Notice of Exercise and the payment
of the Purchase Price in accordance with the terms set forth below, and in no
event later than three (3) business days thereafter, the Company shall issue to
the Holder a certificate for the number of shares of Common Stock purchased and
shall execute the acknowledgment of exercise in the form attached hereto as
Exhibit II (the “Acknowledgment of Exercise”) indicating the number of shares
which remain subject to future purchases, if any.  The Purchase Price shall be
paid at the Holder’s election by certified or cashier’s check or by wire
transfer of funds to the Company’s designated account.
 
Upon partial exercise, the Company shall promptly issue an amended Warrant
representing the remaining number of shares purchasable hereunder. All other
terms and conditions of such amended Warrant shall be identical to those
contained herein, including, but not limited to the Effective Date hereof.
 
SECTION 4.  
RESERVATION OF SHARES.

 
During the term of this Warrant, the Company will at all times have authorized
and reserved a sufficient number of shares of its Common Stock to provide for
the exercise of the rights to purchase Common Stock as provided for herein.
 
SECTION 5.  
NO FRACTIONAL SHARES OR SCRIP.

 
No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant, but in lieu of such fractional shares the
Company shall make a cash payment therefor upon the basis of the Exercise Price
then in effect.
 
SECTION 6.  
NO RIGHTS AS STOCKHOLDER.

 
This Warrant does not entitle the Holder to any voting rights or other rights as
a stockholder of the Company prior to the issuance of any shares of Common Stock
purchased hereunder.
 
 
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SECTION 7.  
HOLDER REGISTRY.

 
The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant.  Holder’s initial address, for purposes of
such registry, is set forth in Section 12(g) below.  Holder may change such
address by giving written notice of such changed address to the Company.
 
SECTION 8.  
ADJUSTMENT RIGHTS.

 
The Exercise Price and the number of shares of Common Stock purchasable
hereunder are subject to adjustment, as follows:
 
(a) Merger Event.  If at any time there shall be Merger Event, then, as a part
of such Merger Event, lawful provision shall be made so that the Holder shall
thereafter be entitled to receive, upon exercise of this Warrant, the number of
shares of stock or other securities, cash or other property of the successor
corporation resulting from such Merger Event that would have been issuable if
Holder had exercised this Warrant immediately prior to the Merger
Event.  Following any Merger Event, the terms “Initial Shares” and “Additional
Shares” (if any) shall be deemed to refer to the securities, cash or other
property for which this Warrant is thereafter exercisable in accordance with the
provisions hereof.
 
(b) Reclassification of Shares.  Except as set forth in Section 8(a), if the
Company at any time shall, by combination, reclassification, exchange or
subdivision of securities or otherwise, change the Common Stock or any other
securities as to which purchase rights under this Warrant may then exist into
the same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities which were subject to the purchase rights under this Warrant
immediately prior to such combination, reclassification, exchange, subdivision
or other change.
 
(c) Subdivision or Combination of Shares.  If the Company at any time shall
combine or subdivide its Common Stock, (i) in the case of a subdivision, the
Exercise Price shall be proportionately decreased, and the number of shares of
Common Stock issuable upon exercise of this Warrant shall be proportionately
increased, or (ii) in the case of a combination, the Exercise Price shall be
proportionately increased, and the number of shares of Common Stock issuable
upon the exercise of this Warrant shall be proportionately decreased.
 
(d) Stock Dividends.  If the Company at any time while this Warrant is
outstanding and unexpired shall:
 
(i) pay a dividend with respect to the Common Stock payable in Common Stock,
then the Exercise Price shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction (A) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (B) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution; or
 
(ii) make any other distribution with respect to Common Stock (other than a cash
dividend out of undistributed net income) except any distribution specifically
provided for in any other clause of this Section 8, then, in each such case,
provision shall be made by the Company such that the Holder shall receive upon
exercise of this Warrant a proportionate share of any such distribution as
though it were the holder of the Common Stock as of the record date fixed for
the determination of the stockholders of the Company entitled to receive such
distribution.
 
(e)  Notice of Adjustments.  If: (i) the Company shall declare any dividend or
distribution upon its outstanding Common Stock, payable in stock, cash, property
or other securities (assuming, if the Loan Agreement is then in effect, that the
Agent and the Required Lenders, each as defined in the Loan
 
 
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Agreement, consents to such dividend or distribution); (ii) the Company shall
offer for subscription pro rata to the holders of its Common Stock any
additional shares of stock of any class or other rights; (iii) there shall be
any Merger Event; (iv) the Company shall sell, lease, license or otherwise
transfer all or substantially all of its assets; or (v) there shall be any
voluntary dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall give the Holder notice
thereof at the same time and in the same manner as it gives notice thereof to
the holders of Common Stock.
 
SECTION 9.  
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

 
(a) Reservation of Common Stock.  The Company covenants and agrees that all
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.  The Company further covenants and agrees that the Company will,
at all times during the term hereof, have authorized and reserved, free from
preemptive rights, a sufficient number of shares of Common Stock to provide for
the exercise of the rights represented by this Warrant.  If at any time during
the term hereof the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant in full, 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 Common Stock to such
number of shares as shall be sufficient for such purposes.
 
(b) Due Authority.  The execution and delivery by the Company of this Warrant
and the performance of all obligations of the Company hereunder, including the
issuance to Holder of the right to acquire the shares of Common Stock, have been
duly authorized by all necessary corporate action on the part of the
Company.  This Warrant: (1) does not violate the Company’s Certificate of
Incorporation or current bylaws; (2) does not contravene any law or governmental
rule, regulation or order applicable to it; and (3) does not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which it is a party or by which it is
bound.  This Warrant constitutes a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms.
 
(c) Consents and Approvals.  No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of any state,
federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant, except for any filings required under applicable state securities
laws.
 
(d) Issued Securities.  All issued and outstanding shares of Common Stock and
other securities of the Company have been duly authorized and validly issued and
are fully paid and nonassessable.  All outstanding shares of Common Stock and
other securities were issued in full compliance with all federal and state
securities laws.
 
(e) Insurance.  The Company has in full force and effect insurance policies,
with extended coverage, insuring the Company and its property and business
against such losses and risks, and in such amounts, as are customary for
corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
 
(f) Exempt Transaction.  Subject to the accuracy of the Holder’s representations
in Section 10, the issuance of the Common Stock upon exercise of this Warrant
will constitute a transaction exempt from (i) the registration requirements of
Section 5 of the Act, in reliance upon Section 4(2) thereof, and (ii) the
qualification requirements of the applicable state securities laws.
 
(g) Registration under Act.  The Company, at its sole expense, shall use its
reasonable best efforts to cause the Initial Shares to be registered for re-sale
by the Holder by means of an effective registration statement filed under the
Act on an appropriate form for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 under the Act within 90 days after the Effective
Date, and to
 
 
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cause the Additional Shares (if any) to be so registered within 60 days after
the advance of Tranche Two, in each case, permitting the resale of such Shares
by the Holder in accordance with the methods of distribution set forth in such
registration statement, all pursuant to and in accordance with that certain
Registration Rights Agreement of even date herewith between the Company and
Holder.
 
(h) Information Rights.  At all times (if any) during the term of this Warrant
when (i) the Company shall not be required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended, and/or (ii) the
Common Stock shall no longer be listed or quoted for trading on a national
securities exchange or over-the-counter market, Holder shall be entitled to the
information rights contained in Section 6.2(a) of the Loan Agreement and, to
such extent, Section 6.2(a) of the Loan Agreement is hereby incorporated into
this Warrant by this reference as though fully set forth herein.
 
SECTION 10.  
REPRESENTATIONS AND COVENANTS OF THE HOLDER.

 
This Warrant has been entered into by the Company in reliance upon the following
representations and covenants of the Holder:
 
(a) Investment Purpose.  This Warrant and the shares issued on exercise hereof
will be acquired for investment and not with a view to the sale or distribution
of any part thereof in violation of applicable federal and state securities
laws, and the Holder has no present intention of selling or engaging in any
public distribution of the same except pursuant to a registration or exemption.
 
(b) Private Issue.  The Holder understands (i) that the Common Stock issuable
upon exercise of this Warrant is not, as of the Effective Date, registered under
the Act or qualified under applicable state securities laws, and (ii) that the
Company’s reliance on exemption from such registration is predicated on the
representations set forth in this Section 10.
 
(c) Financial Risk.  The Holder has such knowledge and experi­ence in financial
and business matters as to be capable of evaluating the merits and risks of its
investment, and has the ability to bear the economic risks of its investment.
 
(d) Accredited Investor.  Holder is an “accredited investor” within the meaning
of the Securities and Exchange Rule 501 of Regulation D, as presently in effect.
 
SECTION 11.  
TRANSFERS.

 
Subject to compliance with applicable federal and state securities laws, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the holder hereof (except for transfer taxes) upon surrender of this
Warrant properly endorsed.  Each taker and holder of this Warrant, by taking or
holding the same, consents and agrees that this Warrant, when endorsed in blank,
shall be deemed negotiable, and that the holder hereof, when this Warrant shall
have been so endorsed and its transfer recorded on the Company’s registry, shall
be treated by the Company and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant.  The transfer of this Warrant shall be
recorded on registry of the Company upon receipt by the Company of a notice of
transfer in the form attached hereto as Exhibit III (the “Transfer Notice”), at
its principal offices and the payment to the Company of all transfer taxes and
other governmental charges imposed on such transfer.  Until the Company receives
such Transfer Notice, the Company may treat the registered owner hereof as the
owner and Holder for all purposes.
 
SECTION 12.  
MISCELLANEOUS.

 
(a) Effective Date.  The provisions of this Warrant shall be construed and shall
be given effect in all respects as if it had been executed and delivered by the
Company on the date hereof.  This Warrant shall be binding upon any successors
or assigns of the Company.
 
(b) Remedies.  In the event of any default hereunder, the non-defaulting party
may proceed to protect and enforce its rights either by suit in equity and/or by
action at law, including but not limited to
 
 
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an action for damages as a result of any such default, and/or an action for
specific performance for any default where the non-defaulting party will not
have an adequate remedy at law and where damages will not be readily
ascertainable.
 
(c) No Impairment of Rights.  The Company will not, by amendment of its
Certificate of Incorporation or through any other means, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate in order to
protect the rights of the Holder against impairment.
 
(d) Attorney’s Fees.  In any litigation, arbitration or court proceeding between
the Company and the Holder relating hereto, the prevailing party shall be
entitled to attorneys’ fees and expenses and all costs of proceedings incurred
in enforcing this Warrant.  For the purposes of this Section 12(d), attorneys’
fees shall include without limitation fees incurred in connection with the
following: (i) contempt proceedings; (ii) discovery; (iii) any motion,
proceeding or other activity of any kind in connection with an insolvency
proceeding; (iv) garnishment, levy, and debtor and third party examinations; and
(v) post-judgment motions and proceedings of any kind, including without
limitation any activity taken to collect or enforce any judgment.
 
(e) Severability.  In the event any one or more of the provisions of this
Warrant shall for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Warrant shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually acceptable
valid, legal and enforceable provision, which comes closest to the intention of
the parties underlying the invalid, illegal or unenforceable provision.
 
(f) Notices.  Except as otherwise provided herein, any notice, demand, request,
consent, approval, declaration, service of process or other communication that
is required, contemplated, or permitted under this Warrant or with respect to
the subject matter hereof shall be in writing, and shall be deemed to have been
validly served, given, delivered, and received upon the earlier of: (a) personal
delivery to the party to be notified, (b) when sent by confirmed telex,
electronic transmission or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt, and
shall be addressed to the party to be notified as follows:
 
If to Holder:
 
MidCap Financial SBIC, LP
7255 Woodmont Avenue, Suite 200
Bethesda, Maryland 20814
Attention:  Portfolio Management – Life Sciences
Facsimile:  301-941-1450
E-Mail :  lviera@midcapfinancial.com

with a copy to :

MidCap Financial, LLC
7255 Woodmont Avenue, Suite 200
Bethesda, Maryland 20814
Attention:  General Counsel
Facsimile:  301-941-1450
E-Mail :  rgoodridge@midcapfinancial.com
 
 
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If to the Company:
 
PolyMedix, Inc.
Attention: Chief Financial Officer
170 N. Radnor Chester Road, Suite 300
Radnor, PA 19087
Facsimile:  484-598-2333
Telephone: 484-598-2332

 
or to such other address as each party may designate for itself by like notice.
 
(g) Entire Agreement; Amendments.  This Warrant constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter hereof,
and supersedes and replaces in their entirety any prior proposals, term sheets,
letters, negotiations or other documents or agreements, whether written or oral,
with respect to the subject matter hereof.  None of the terms of this Warrant
may be amended except by an instrument executed by each of the parties hereto.
 
(h) Headings.  The various headings in this Warrant are inserted for convenience
only and shall not affect the meaning or interpretation of this Warrant or any
provisions hereof.
 
(i) Advice of Counsel.  Each of the parties represents to each other party
hereto that it has discussed (or had an opportunity to discuss) with its counsel
this Warrant and, specifically, the provisions of Sections 12(m), 12(n), 12(o).
12(p) and 12(q).
 
(j) No Strict Construction.  The parties hereto have participated jointly in the
negotiation and drafting of this Warrant.  In the event an ambiguity or question
of intent or interpretation arises, this Warrant shall be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Warrant.
 
(k) No Waiver.  No omission or delay by Holder at any time to enforce any right
or remedy reserved to it, or to require performance of any of the terms,
covenants or provisions hereof by the Company at any time designated, shall be a
waiver of any such right or remedy to which Holder is entitled, nor shall it in
any way affect the right of Holder to enforce such provisions thereafter.
 
(l) Survival.  All agreements, representations and warranties contained in this
Warrant or in any document delivered pursuant hereto shall be for the benefit of
Holder and shall survive the execution and delivery of this Warrant and the
expiration or other termination of this Warrant.
 
(m) Governing Law.  This Warrant shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
 
(n) Consent to Jurisdiction and Venue.  All judicial proceedings arising in or
under or related to this Warrant may be brought in any state or federal court of
competent jurisdiction located in the State of Delaware.  By execution and
delivery of this Warrant, each party hereto generally and unconditionally: (a)
consents to personal jurisdiction in County of Newcastle, State of Delaware; (b)
waives any objection as to jurisdiction or venue in County of Newcastle, State
of Delaware; (c) agrees not to assert any defense based on lack of jurisdiction
or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Warrant.  Service of process
on any party hereto in any action arising out of or relating to this Warrant
shall be effective if given in accordance with the requirements for notice set
forth in Section 12(f), and shall be deemed effective and received as set forth
in Section 12(f).  Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of either party to bring
proceedings in the courts of any other jurisdiction.
 
 
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(o) Mutual Waiver of Jury Trial.  Because disputes arising in connection with
complex financial transactions are most quickly and economically resolved by an
experienced and expert person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire that their
disputes be resolved by a judge applying such applicable laws.  EACH OF THE
COMPANY AND HOLDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF
ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY
OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY THE COMPANY AGAINST HOLDER OR
BY HOLDER AGAINST THE COMPANY.  This waiver extends to all such claims,
including Claims that involve persons or entities other the Company and Holder;
Claims that arise out of or are in any way connected to the relationship between
the Company and Holder; and any Claims for damages, breach of contract, specific
performance, or any equitable or legal relief of any kind, arising out of this
Warrant.
 
(p) Arbitration.  If the mutual waiver of jury trial set forth in Section 12(o)
is ineffective or unenforceable, the parties agree that all Claims shall be
submitted to binding arbitration in accordance with the commercial arbitration
rules of JAMS (the “Rules”), such arbitration to occur before one arbitrator,
which arbitrator shall be a retired Delaware state judge or a retired Federal
court judge.  Such proceeding shall be conducted in County of Newcastle, State
of Delaware, with Delaware rules of evidence and discovery applicable to such
arbitration.  The decision of the arbitrator shall be binding on the parties,
and shall be final and nonappealable to the maximum extent permitted by
law.  Any judgment rendered by the arbitrator may be entered in a court of
competent jurisdiction and enforced by the prevailing party as a final judgment
of such court.
 
(q) Pre-arbitration Relief.  In the event Claims are to be resolved by
arbitration, either party may seek from a court of competent jurisdiction
identified in Section 12(n), any prejudgment order, writ or other relief and
have such prejudgment order, writ or other relief enforced to the fullest extent
permitted by law notwithstanding that all Claims are otherwise subject to
resolution by binding arbitration.
 
(r) Counterparts.  This Warrant and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.
 
(s) Specific Performance.  The parties hereto hereby acknowledge that it may not
be possible to measure in money the damages which will accrue to Holder by
reason of the Company’s failure to perform any of the obligations under this
Warrant and agree that the terms of this Warrant shall be specifically
enforceable by Holder.  If Holder institutes any action or proceeding to
specifically enforce the provisions hereof, any person against whom such action
or proceeding is brought hereby waives the claim or defense therein that Holder
has an adequate remedy at law, and such person shall not offer in any such
action or proceeding the claim or defense that such remedy at law exists.
 
(t) Limitation on Exercise.  This Warrant may not be exercised to purchase
Common Stock to the extent that the purchase of such Common Stock (or the right
to purchase such Common Stock) would cause such Holder to become an “Acquiring
Person,” as that term is used in that certain Rights Agreement dated as of May
12, 2009, between the Company and American Stock Transfer & Trust Company, LLC,
as rights agent.
 
(u) Lost, Stolen, Mutilated or Destroyed Warrant.  If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or
destroyed.  Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be executed
by its officers thereunto duly authorized as of the Effective Date.

COMPANY:                                           POLYMEDIX, INC.

By:           /s/ Edward F. Smith

 
Title:
Vice President, Chief Financial Officer and Secretary

HOLDER:                                           MIDCAP FINANCIAL SBIC, LP

By:           /s/ Joshua Groman, Ph.D.

Title:        Authorized Signatory

 
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EXHIBIT I

NOTICE OF EXERCISE

To:           [____________________________]

(1)
The undersigned Holder hereby elects to purchase [_______] shares of the Common
Stock of [_________________], pursuant to the terms of the Warrant to Purchase
Common Stock dated the [___] day of [______, _____] (the “Warrant”) between
[_________________] and the Holder, and tenders herewith payment of the Purchase
Price in full, together with all applicable transfer taxes, if any.

(2)
Please issue a certificate or certificates representing said shares of Common
Stock in the name of the undersigned or in such other name as is specified
below.

_________________________________
(Name)

_________________________________
(Address)

HOLDER:                                            MIDCAP FINANCIAL SBIC, LP

By:           _________________________
 
 
Title:           _________________________

Date:           _________________________

 
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EXHIBIT II

ACKNOWLEDGMENT OF EXERCISE

The undersigned [____________________________________], hereby acknowledge
receipt of the “Notice of Exercise” from MidCap Financial SBIC, LP, to purchase
[____] shares of the Common Stock of [_________________], pursuant to the terms
of the Warrant, and further acknowledges that [______] shares remain subject to
purchase under the terms of the Warrant.

COMPANY:                                                      [_________________]

By:           ________________________________

Title:           ________________________________

Date:           ________________________________

 
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EXHIBIT III

TRANSFER NOTICE

(To transfer or assign the foregoing Warrant execute this form and supply
required information.  Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby transferred and assigned to

_________________________________________________________________
(Please Print)

whose address is___________________________________________________

_________________________________________________________________

Dated:           ____________________________________

Holder’s
Signature:                                _______________________________

Holder’s Address:                                _______________________________

_____________________________________________________

Signature
Guaranteed:                                           ____________________________________________

NOTE:                      The signature to this Transfer Notice must correspond
with the name as it appears on the face of the Warrant, without alteration or
enlargement or any change whatever. Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant.

 
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