Document:

warrant.htm

  

  

  

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.

  

12regrights.htm

  

  

  

EXECUTION COPY

 

Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT is entered into as of April 5, 2012 by and between PolyMedix, Inc., a Delaware corporation (the “Company”), and MidCap Financial SBIC, LP, a Delaware limited partnership (“Initial Holder”).

 

RECITALS

 

WHEREAS, in connection with certain credit transactions of even date herewith between the Company its wholly-owned subsidiary, PolyMedix Pharmaceuticals, Inc., a Delaware corporation, and Initial Holder, the Company has issued to Initial Holder a certain Warrant of even date herewith (the “Warrant”), which Warrant evidences the right of Holder (as defined below) to purchase shares of the Common Stock (as defined below) of the Company; and

 

WHEREAS, as additional consideration to Initial Holder for its agreements in connection with the aforementioned credit transactions, Initial Holder desires to receive, and the Company has agreed to grant, certain registration rights with respect to the shares of Common Stock issued and issuable upon exercise of the Warrant, all as more fully set forth below;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                      Definitions.  In addition to the definitions set forth above, the following terms, as used herein, have the following meanings:

 

“Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person.  For the purposes of this definition, “control” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agreement” means this Registration Rights Agreement, as it may be amended, supplemented or restated from time to time.

 

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in The City of New York, New York are authorized by law to close.

 

“Charter” means the Certificate of Incorporation of the Company as filed with the Delaware Secretary of State, as amended and in effect from time.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

  

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“Common Stock” means the common stock, $0.001 par value per share, as presently constituted under the Charter, 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.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Holder” means the Initial Holder or any permitted assignee or transferee of the registration rights herein granted, who is the record or beneficial owner of any Registrable Securities.

 

“Indemnified Party” has the meaning set forth in Section 2.7.

 

“Indemnifying Party” has the meaning set forth in Section 2.7.

 

“Person” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Registrable Securities” means all shares of Common Stock issued and issuable upon exercise of the Warrant, and any additional shares of Common Stock issued as a dividend, distribution or exchange for, or in respect of, such shares (including as a result of combinations, recapitalizations, mergers, consolidations, reorganizations or otherwise), provided, that such shares of Common Stock shall cease to be Registrable Securities upon the earliest of (i) a registration statement (including a Resale Shelf Registration Statement) covering such shares has been declared effective by the Commission and such shares have been disposed of pursuant to such effective registration statement, (ii) such shares have been disposed of in a sale meeting the conditions of Rule 144; (iii) all such shares may be sold pursuant to Rule 144 without limitation as to amount or manner of sale, (iv) such shares may be sold pursuant to Rule 144 and could be sold in one transaction in accordance with the volume limitations contained in Rule 144(e), or (v) such shares have been otherwise transferred in a transaction that constitutes a sale thereof under the Securities Act, the Company has delivered a new certificate or other evidence of ownership for such shares not bearing the Securities Act restricted stock legend, and such shares may be resold without subsequent registration under the Securities Act.

 

“Registration Expenses” has the meaning set forth in Section 2.4.

 

“Resale Shelf Registration Statement” has the meaning set forth in Section 2.1(a).

 

“Rule 144” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

  

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“Selling Holder” means a Holder who is identified as a selling security holder in a Resale Shelf Registration Statement under the Securities Act covering Registrable Securities.

 

“Suspension Notice” means any written notice delivered by the Company pursuant to Section 2.11 with respect to the suspension of rights under a Resale Shelf Registration Statement or any prospectus contained therein.

 

ARTICLE II

 

REGISTRATION RIGHTS

 

Section 2.1                      Shelf Registration.

 

(a)           Subject to Section 2.11, the Company shall, at its sole expense and not later than the ninetieth (90th) day following the date hereof, prepare and file, and use its reasonable best efforts to cause to be declared effective by the Commission, a “shelf” registration statement with respect to the resale of Registrable Securities in respect of the Initial Shares (as defined in the Warrant), and not later than the sixtieth (60th) day following the advance of Tranche Two (as defined in the Warrant), if applicable, prepare and file, and use its reasonable best efforts to cause to be declared effective by the Commission, a “shelf” registration statement with respect to the resale of Registrable Securities in respect of the Additional Shares (as defined in the Warrant), in each case by the Holders thereof on an appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (the “Resale Shelf Registration Statement”) and permitting the resale of such Registrable Securities by such Holders in accordance with the methods of distribution set forth in the Resale Shelf Registration Statement.  Subject to Sections 2.3(d) and 2.11, the Company shall at its sole expense use its reasonable best efforts to keep such Resale Shelf Registration Statement continuously effective for a period ending when all shares of Common Stock covered by the Resale Shelf Registration Statement are no longer Registrable Securities.

 

(b)           [Reserved]

 

(c)           Registration Term.  The Company shall prepare and file such additional registration statements as necessary and use its reasonable best efforts to cause such registration statements to be declared effective by the Commission so that a shelf registration statement remains continuously effective, subject to Section 2.11, with respect to the Registrable Securities as and for the periods required under Section 2.1(a), such subsequent registration statements to constitute a Resale Shelf Registration Statement hereunder.

 

Section 2.2                      [Reserved]

 

Section 2.3                      Registration Procedures; Filings; Information.  In connection with any Resale Shelf Registration Statement:

 

(a)           The Company will, if requested, prior to filing a Resale Shelf Registration Statement or prospectus or any amendment or supplement thereto, furnish to each Selling Holder of the Registrable Securities covered by such registration statement 

 

  

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copies of such registration statement as proposed to be filed, and thereafter furnish to such Selling Holder such number of conformed copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Selling Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Holder.

 

(b)           After the filing of a Resale Shelf Registration Statement, the Company will promptly notify each Selling Holder of Registrable Securities covered by such registration statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered and promptly notify each such Selling Holder of the removal of such stop order.

 

(c)           The Company will use its reasonable best efforts to (i) register or qualify the Registrable Securities under such other securities or “blue sky” laws of such jurisdictions in the United States (where such registration or qualification is required in order to sell in such jurisdiction and an exemption does not apply) as any Selling Holder reasonably (in light of such Selling Holder’s intended plan of distribution) requests in writing, and (ii) do any and all other acts and things that may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder; provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (c), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

 

(d)           The Company will immediately notify each Selling Holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the Company’s receipt of any notification of the suspension of the qualification of any Registrable Securities covered by a Resale Shelf Registration Statement for sale in any jurisdiction and will immediately notify each such Selling Holder of the removal or lifting of any such suspension; or (ii) the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and promptly make available to each Selling Holder any such supplement or amendment.

 

(e)           The Company will otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make available to its securityholders, an earnings statement, which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder (or any successor rule or regulation hereafter adopted by the Commission).

 

  

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(f)           The Company will use its reasonable best efforts to cause all Registrable Securities covered by such Resale Shelf Registration Statement to be listed on the primary securities exchange on which similar securities issued by the Company are then listed.

 

(g)           Each Selling Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.3(b) or 2.3(d) or upon receipt of a Suspension Notice, such Selling Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Selling Holder’s receipt of written notice from the Company that such disposition may be made and, in the case of clause (ii) of Section 2.3(d) or, if applicable, Section 2.11, copies of any supplemented or amended prospectus contemplated by clause (ii) of Section 2.3(d) or, if applicable, prepared under Section 2.11, and, if so directed by the Company, such Selling Holder will deliver to the Company all copies, other than permanent file copies then in such Selling Holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.  Each Selling Holder of Registrable Securities agrees that it will immediately notify the Company at any time when a prospectus relating to the registration of such Registrable Securities is required to be delivered under the Securities Act of the happening of an event as a result of which information previously furnished by such Selling Holder to the Company in writing for inclusion in such prospectus contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made.

 

Section 2.4                      Registration Expenses.  In connection with any registration statement required to be filed hereunder, the Company shall pay the following registration expenses incurred in connection with the registration hereunder (the “Registration Expenses”), as applicable: (i) all registration and filing fees, (ii) fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities, (vi) all fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company, and (vii) all fees and expenses of any special experts retained by the Company in connection with such registration.  The Company shall have no obligation to pay any fees, discounts or commissions attributable to the sale of Registrable Securities, or any out-of-pocket expenses of the Holders (or the agents who manage their accounts).

 

Section 2.5                      Indemnification by the Company.  To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, managers, officers and directors of each Holder, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or 

 

  

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violations (collectively a “Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will pay as incurred to each such Holder, partner, manager, officer, director, or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the Company not be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, manager, officer, director, or controlling person of such Holder.

 

Section 2.6                      Indemnification by Holders of Registrable Securities.  Each Selling Holder agrees, severally but not jointly, to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act against any Violation to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Selling Holder expressly for use in connection with such registration; provided, that in no event shall any Selling Holder’s indemnity under this Section 2.6 exceed the net proceeds from the offering actually received by such Selling Holder.

 

Section 2.7                      Conduct of Indemnification Proceedings.  In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 2.5 or 2.6, such person (an “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (an “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Party to give such notice will not relieve such Indemnified Party of any obligations under Section 2.5 or 2.6, except to the extent such Indemnified Party is materially prejudiced by such failure.  In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) representation of the Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and the Indemnified Party.  It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by (i) in the 

 

  

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case of Persons indemnified pursuant to Section 2.5 hereof, the Selling Holders that owned a majority of the Registrable Securities sold under the applicable registration statement and (ii) in the case of Persons indemnified pursuant to Section 2.6, the Company.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

 

Section 2.8                      Contribution.  If the indemnification provided for in Section 2.5 or 2.6 hereof is unavailable to an Indemnified Party or insufficient in respect of any losses, claims, damages or liabilities referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Company and of each Selling Holder in connection with such statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative fault of the Company on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.8 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Selling Holder’s obligations to contribute pursuant to this Section 2.8 are several in proportion to the proceeds of the offering received by such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders, and not joint, and in no event shall any Selling Holder’s contribution obligation under this Section 2.8 exceed the net proceeds from the offering actually received by such Selling Holder.

 

Section 2.9                      Rule 144.  The Company covenants that it will (a) make and keep public information regarding the Company available as those terms are defined in Rule 144, (b) file in a timely manner any reports and documents required to be filed by it under the Exchange 

 

  

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Act, (c) furnish to any Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and the Exchange Act, and (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (d) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

 

Section 2.10                      Participation in Underwritten Offerings.  No Person may participate in any underwritten offerings hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the registration rights provided for in this Article II.

 

Section 2.11                      Suspension of Use of Registration Statement.

 

(a)           If the Board of Directors of the Company determines in its good faith judgment that the filing of a Resale Shelf Registration Statement under Section 2.1(a) or the use of any related prospectus would be materially detrimental to the Company because such action would require the disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or the disclosure of which would materially impede the Company’s ability to consummate a significant transaction, and that the Company is not otherwise required by applicable securities laws or regulations to disclose, upon written notice of such determination by the Company to the Holders which shall be signed by the Chief Executive Officer, President or any Executive Vice President of the Company certifying thereto, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to a Resale Shelf Registration Statement or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to a Resale Shelf Registration Statement shall be suspended until the earliest of (i) the date upon which the Company notifies the Holders in writing that suspension of such rights for the grounds set forth in this Section 2.11(a) is no longer necessary and they may resume use of the applicable prospectus, (ii) the date upon which copies of the applicable supplemented or amended prospectus is distributed to the Holders, and (iii) up to 60 consecutive days after the notice to the Holders; provided, that the Company shall not be entitled to exercise any such right more than two (2) times in any twelve month period or less than 30 days from the termination of the prior such suspension period.  The Company agrees to give the notice under (i) above as promptly as practicable following the date that such suspension of rights is no longer necessary.

 

(b)           If all reports required to be filed by the Company pursuant to the Exchange Act have not been filed by the required date without regard to any extension, or if the consummation of any business combination by the Company has occurred or is probable for purposes of Rule 3-05 or Article 11 of Regulation S-X promulgated under the Securities Act or any similar successor rule, upon written notice thereof by the 

 

  

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Company to the Holders, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to a Resale Shelf Registration Statement or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to a Resale Shelf Registration Statement shall be suspended until the date on which the Company has filed such reports or obtained and filed the financial information required by Rule 3-05 or Article 11 of Regulation S-X to be included or incorporated by reference, as applicable, in a Resale Shelf Registration Statement, and the Company shall notify the Holders as promptly as practicable when such suspension is no longer required.

 

Section 2.12                      [Reserved]

 

Section 2.13                      Survival.  The obligations of the Company and Holders under Sections 2.5 through 2.8 inclusive shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this agreement.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

 

ARTICLE III

 

MISCELLANEOUS

 

Section 3.1                      Remedies.  In addition to being entitled to exercise all rights provided herein and granted by law, including recovery of damages, the Holders shall be entitled to specific performance of the rights under this Agreement.  The Company agrees that monetary damages may not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

Section 3.2                      Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, in each case without the written consent of the Company and the Holders of a two-thirds of the Registrable Securities; provided, however, that the effect of any such amendment will be that the consenting Holders will not be treated more favorably than all other Holders (without regard to any differences in effect that such amendment or waiver may have on the Holders due to the differing amounts of Registrable Shares held by such Holders).  No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

 

Section 3.3                      Notices.  All notices and other communications in connection with this Agreement shall be made in writing by hand delivery, registered first-class mail, fax, air courier guaranteeing overnight delivery, or e-mail to a party at its address set forth in the Warrant.  All such notices and communications shall be deemed to have been duly given: at the 

 

  

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time delivered by hand, if personally delivered; when received if deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if faxed; when sent, unless a ‘bounce-back’ notice is received in response, if e-mailed; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

 

Section 3.4                      Successors and Assigns; Assignment of Registration Rights.  This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties.  Any Holder may assign its rights under this Agreement without the consent of the Company in connection with a transfer of such Holder’s Registrable Securities (to the extent such transfer is not prohibit by the Warrant or the Charter, and otherwise complies with applicable law); provided, that the Holder notifies the Company of such proposed transfer and assignment and the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement (provided that any such transferee or assignee shall not be obligated to assume such obligations if the securities to be transferred will cease to be Registrable Securities upon such transfer).

 

Section 3.5                      Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

 

Section 3.6                      Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware.

 

Section 3.7                      Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

Section 3.8                      Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Registrable Securities.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.9                      Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 3.10                      Termination.  The obligations of the parties hereunder shall terminate with respect to a Holder when it no longer holds Registrable Securities and with respect to the Company when there are no longer any Registrable Securities or, provided the Company shall have complied with its obligations hereunder, any effective Resale Shelf 

 

  

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Registration Statement, except, in each case, for any obligations under Sections 2.1(d), 2.4, 2.5, 2.6, 2.7, 2.8 and Article III.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]

  

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IN WITNESS WHEREOF, the undersigned have executed this Registration Rights Agreement as of the date first written above.

 

PolyMedix, Inc.

By:                                                                 

Name:          /s/ Edward F. Smith

Title:           Vice President, Chief Financial

                    Officer and Secretary

MidCap Financial SBIC, LP

By: Midcap Financial SBIC GP, LLC

By:                                                                 

Name:   /s/ Joshua Groman

Title:     Authorized Signatory

[Signature Page to Registration Rights Agreement]

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