Document:

exv10w24

 

Exhibit 10.24

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT.

WARRANT FOR THE

PURCHASE OF SHARES OF COMMON STOCK

Of

AVALON PHARMACEUTICALS, INC.

(Incorporated under the laws of the State of Delaware)

     THIS CERTIFIES THAT, for value received, Compugen, Ltd., a company formed under the Laws of
Israel having its principal offices at 72 Pinchas Rosen St., Tel Aviv, Israel (“Compugen”)
together with its successors and assigns (each, a “holder”), is entitled to purchase two hundred
and fifty thousand (250,000) duly authorized validly issued, fully paid and non-assessable shares
of Common Stock, no par value per share, (the “Common Stock”) of Avalon Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), at the per share purchase price described in Section 1.3
below, subject to the provisions and upon the terms and conditions hereinafter set forth.

     1. Exercise of Warrant. The terms and conditions upon which this Warrant may be exercised and
the Common Stock covered hereby (the “Warrant Stock”) may be purchased are as follows:

          1.1
Term. The purchase right represented by this Warrant may be exercised in whole
or in part at any time and from time to time from and after the date hereof and on or before the
earlier of (i) the closing of the sale of all of the Company’s outstanding equity capital and (ii)
the third anniversary of a bona fide underwritten initial public offering of the Company’s shares
of Common Stock ; provided, that if the last day on which this Warrant may be exercised is
not a Business Day (as defined in Section 12 hereof), this Warrant may be exercised prior to 5:00
p.m. (New York time) on the next succeeding full Business Day with the same force and effect as if
exercised on such last day specified herein.

          1.2
Number of Shares. This Warrant is initially exercisable for two hundred and fifty
thousand (250,000) shares of Common Stock, subject to adjustment pursuant to Section 2 of this
Warrant, and may be exercised in whole or in part.

          1.3
Purchase Price. The initial per share purchase price for the shares of Common Stock to be
issued upon exercise of this Warrant shall be $4.00 (four U.S. Dollars), subject to adjustment
pursuant to Section 2 of this Warrant and/or pursuant to a certain letter agreement dated as of
even date by and between Compugen and the Company as set forth in Exhibit A attached hereto and
made a part hereof (the “Warrant Price”).

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     1.4 Methods of Exercise. The exercise of the purchase rights evidenced by
this Warrant shall be effected by (a) the surrender of this Warrant, together with a duly
executed copy of the form of subscription attached hereto, to the Company at its principal offices and
(b) the delivery of the purchase price (i) by check or bank draft payable to the Company’s order
or by wire transfer to the Company’s account for the number of shares for which the purchase rights
hereunder are being exercised or any other form of consideration approved by the Company’s
Board of Directors or (ii) pursuant to the procedure set forth in Section 1.5

     Each exercise of this Warrant shall be deemed to have been effected immediately prior to the
close of business on the day on which this Warrant shall have been surrendered to the Company as
provided herein or at such later date as may be specified in the executed form of subscription,
and at such time the person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such exercise as provided herein shall be deemed to
have become the holder or holders of record thereof.

     1.5 Cashless Exercise. In addition to and without limiting the rights of the
holder hereof under the terms hereof, at the holder’s option this Warrant may be exercised in
whole or in part at any time or from time to time prior to its expiration for an number of
shares of Common Stock having an aggregate fair market value on the date of such exercise equal to the
difference between (a) the fair market value of the number of shares of Warrant Stock
designated for exercise by the holder hereof on the date of exercise and (b) the aggregate Warrant Price
for such shares in effect at such time.

     The “fair market value” of shares of Common Stock shall, for all purposes under this Warrant,
be calculated on the basis of (a) if the Common Stock is then traded on a securities exchange, the
average of the closing prices of the Common Stock on such exchange over the twenty (20) trading day
period ending three (3) trading days prior to the date of exercise, (b) if the Common Stock is then
regularly traded over-the-counter, the average of the sale prices or, if sales prices for the
Common Stock are not regularly and publicly reported, the closing bid of the Common Stock over the
twenty (20) trading day period ending three (3) trading days prior to the date of exercise, or (c)
if there is no active public market for the Common Stock, the fair market value thereof shall be
determined in good faith by the Company’s Board of Directors; provided, that if the holder
disputes such a determination by the Company’s Board of Directors, then such value may be
determined by a nationally recognized investment banking firm, mutually acceptable to the Company
and the holder, with the costs of such valuation being borne by the holder. If the holder of this
Warrant exercises this Warrant contingent upon the closing of a public offering, the “fair market
value” of a share of Common Stock on the date of exercise shall be equal to the initial price to
the public specified in the final prospectus with respect to such public offering. The following
illustrates how many shares would be issued upon exercise of this Warrant pursuant to this Section
1.5:

	 	 	 	 	 	 	 
	Let

	 	FMV
	 	=
	 	Fair market value per share of Common Stock at date of exercise.
	

	 	PSP
	 	=
	 	Per Share Warrant Price at date of exercise.
	

	 	N
	 	=
	 	Number of shares of Common Stock desired to be exercised.
	

	 	X
	 	=
	 	Number of shares of Common Stock issued upon exercise.
	

	 	X
	 	=
	 	(FMV)(N)-(PSP)(N)

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FMV

No payment of any cash or other consideration to the Company shall be required from the holder of
this Warrant in connection with any exercise of this Warrant pursuant to this Section 1.5. Such
exercise shall be effective upon the date of receipt by the Company of this Warrant surrendered
for cancellation and a written request from the holder hereof that the exercise pursuant to this
section be made, or at such later date as may be specified in such request.

          1.6
Issuance of Shares. As soon as reasonably practicable after each exercise
of this Warrant, in whole or in part, the Company at its expense (including the payment by it
of
any applicable issue taxes) shall cause to be issued in the name of and delivered to the
holder
hereof or as such holder (upon payment by such holder of any applicable transfer taxes) may
direct, (a) a certificate or certificates for the number of duly authorized, validly issued,
fully paid
and nonassessable shares of Common Stock to which such holder shall be entitled upon such
exercise, and (b) in case such exercise is in part only, a new Warrant or Warrants of like
tenor,
representing in the aggregate the right to purchase the number of shares of Common Stock equal
(without giving effect to any adjustment thereof provided for in Section 2) to the number of
such
shares stated in this Warrant minus the number of such shares designated by the holder upon
such
exercise as provided herein.

          1.7 Conditional Exercise. If the exercise of this Warrant is being made in
connection with a public offering of the Company, the acquisition of the Company by a third
party, or any other corporate transaction (a “Corporate Transaction”), the exercise may, at
the
option of the holder, and if so expressly indicated in the notice of exercise, be conditioned
upon
the closing of such Corporate Transaction, in which event the holder shall not be deemed to
have
exercised this Warrant until immediately prior to the closing of such Corporate Transaction.

     2.
Certain Adjustments.

          2.1
Mergers, Consolidations or Sale of Assets. If after the date hereof there shall
be a capital reorganization (other than a combination or subdivision of Common Stock otherwise
provided for herein), or spin-off, or a merger or consolidation of the Company with or into another
corporation, a limited liability company, a partnership or any other legal entity (each of the
foregoing being referred to herein as a “Person”), or the sale of all or substantially all of the
Company’s properties and assets to any other Person, then, as a part of such transaction, lawful
provision shall be made so that the holder shall thereafter be entitled to receive upon exercise of
this Warrant, during the period specified in this Warrant and upon payment of the purchase price
required by this Warrant, the number of shares of stock or other securities, cash or property of
the Company or the successor corporation or other Person resulting from such transaction, to which
a holder of the Common Stock deliverable upon exercise of this Warrant would have been entitled
under the provisions of the agreement in such transaction (or otherwise pursuant to such
transaction) if this Warrant had been exercised immediately before such transaction. In any such
case, appropriate adjustment (as determined reasonably and in good faith by the Company’s Board of
Directors) shall be made in the application of the provisions of this Warrant with respect to the
rights and interests of the holder after such transaction to the end that the provisions of this
Warrant (including adjustment of the Warrant Price then in effect and the number of shares of
Common Stock issuable upon exercise hereof) shall be applicable after the transaction, as near as
reasonably may be, in relation to any shares or other property deliverable after the transaction
upon exercise of this Warrant.

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          2.2
Splits and Subdivisions; Dividends. If the Company should effect or fix
a record date for the effectuation of a split or subdivisions of the outstanding shares of
Common
Stock or the determination of the holders of Common Stock entitled to receive a dividend or
other
distribution payable in additional shares of Common Stock or other securities or warrants,
options
or other rights convertible into, or entitling the holder thereof to receive directly or
indirectly,
additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”)
without payment of any consideration by such holder for the additional shares of Common Stock
or Common Stock Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of such
distribution, split
or subdivision if no record date is fixed), the per share Warrant Price shall be appropriately
decreased, and the number of shares of Common Stock issuable upon exercise hereof shall be
appropriate increased, in proportion to such increase of outstanding shares.

          2.3 Combination of Shares. If the number of Shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of the outstanding
shares of Common Stock, the per share Warrant Price shall be appropriately increased, and the
number of shares of Common Stock issuable upon exercise hereof shall be appropriately
decreased, in proportion to such decrease in outstanding shares.

          2.4 Adjustments for Other Distributions. In the event the Company shall
declare a distribution payable in securities of the Company (other than Common Stock or
Common Stock Equivalents) or other Persons, evidences of indebtedness issued by the Company
or other Persons, assets (including cash dividends) or options or rights not referred to in
subsection 2.2, then, in each such case, upon exercise of this Warrant the holder hereof shall
be
entitled to a proportionate share of any such distribution as though such holder was the
holder of
the number of shares of Common Stock of the Company into which this Warrant may be
exercised as of the record date fixed for the determination of the holders of Common Stock of
the
Company entitled to receive such distribution.

          2.5
Issuance of Additional Common Stock.

	 	(a)  	 	If, after the date hereof, the Company shall issue or sell
	 
	 	 	  	(i) Additional Shares (as defined below) without consideration or
for a consideration per share that is less than the Warrant
Price, or
	 
	 	 	  	(ii) Common Stock Equivalents exercisable for Additional Shares
with a minimum exercise or exchange price that is less than the
Warrant Price,

then, and in each such case, the Warrant Price theretofore in
effect shall be reduced, concurrently with such
issue or sale, to a price (calculated to the nearest
..001 of a cent) determined:

                  by multiplying such Warrant Price by a fraction:

	 	(iii)  	the numerator of which shall be (A) the number of shares
of Common Stock outstanding

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	 	   	immediately prior to such issue or sale
(including any shares of Common Stock issuable
upon conversion of outstanding shares of
Preferred Stock and issuable upon exercise of
outstanding options, warrants or other
convertible securities) plus (B) the number of
shares of Common Stock that the aggregate
consideration received by the Company upon such
issuance or sale (or, in the case of Common Stock
Equivalents exercisable for Additional Shares,
receivable by the Company upon exercise or
exchange) would purchase at such Warrant Price,
and
	 
	 	(iv)  	the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such
issue or sale (assuming, in the case of Common Stock
Equivalents exercisable for Additional Shares,
exercise or exchange or all such Common Stock
Equivalents and including any shares of Common Stock
issuable upon conversion of outstanding shares of
Preferred Stock and issuable upon exercise of
outstanding options, warrants or other convertible
securities).

               (b) For
the purposes of this Section 2.5, the consideration for the
issue or sale of Additional Shares shall, irrespective of the accounting treatment of such
consideration, (i) insofar as it consists of cash, be computed at the net amount of cash received
by the Company, and (ii) insofar as it consists of property (including securities) other than cash,
be computed at the fair market value thereof at the time of such issue or sale as determined in
good faith by the Company’s Board of Directors. In the event of a dispute by the holder as to the
fair market value of any consideration consisting of property, the Company shall, at the option of
the holder, engage a consulting firm or investment banking firm mutually agreed to by the holder
and the Company to prepare an independent appraisal of the fair market value of such property to be
distributed. The expenses of such appraisal shall be borne by the holder.

               (c) Notwithstanding anything contained herein to the contrary, the
consideration for any Common Stock Equivalents shall be deemed to be the total amount of
consideration received by the Company for the issuance of such Common Stock Equivalents plus the
minimum amount of consideration payable to the Company upon exercise, conversion or exchange of
Common Stock Equivalents (the “Net Consideration”), determined as of the date of issuance of such
Common Stock Equivalents. Any obligation, agreement or understanding to issue Common Stock
Equivalents at any time in the future shall be deemed to be an issuance at the time such obligation
or agreement is made or arises. No adjustment of the Warrant Price shall be made under this Section
2.5, upon the issuance of any shares of Common Stock which are issued pursuant to the exercise,
conversion or exchange of any Common Stock Equivalents if any adjustment shall previously have been
made upon the issuance of any such Common Stock Equivalents.

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                    Should the Net Consideration for any such Common Stock
Equivalents be increased or decreased from time to time, then, upon the effectiveness of such
change, the Warrant Price will be that which would have been obtained (i) had the adjustments made
upon the issuance of such Common Stock Equivalents been made upon the basis of the actual Net
Consideration (as so increased or decreased) of such Common Stock Equivalents, and (ii) had
adjustments to such Warrant Price since the date of issuance of such Common Stock Equivalents been
made to such Warrant Price as adjusted pursuant to (i) above. Any adjustment of the Warrant Price
pursuant to this paragraph which relates to Common Stock Equivalents shall be disregarded if, as,
and when all of such Common Stock Equivalents expire or are canceled without being exercised, so
that the Warrant Price effective immediately upon cancellation or expiration shall be equal to the
Warrant Price in effect at the time of the issuance of the expired or canceled Common Stock
Equivalents, with such additional adjustment as would have been made to such Warrant Price had the
expired or canceled Common Stock Equivalents not been issued.

               (d) “Additional Shares” means all shares of Common Stock,
whether or not subsequently reacquired or retired by the Company, other than (i) shares of Common
Stock issued or to be issued to directors, officers, employees and consultants of the Company
pursuant to any bona fide qualified or non-qualified stock option plan, stock purchase plan, stock
restriction agreement, or employee stock ownership plan
(“ESOP”); (ii) all shares of Common Stock
issued or deemed to be issued and outstanding under this
Section 2.5 on the date of this Warrant;
(iii) all securities issued pursuant to any agreement to license technology and/or provide sponsored
research upon approval of the Board; and (iv) all securities issued in connection with the lease
of equipment or in similar transactions upon the approval of the Board.

               (e) The number of shares of Common Stock that the holder of this
Warrant shall be entitled to receive upon each exercise hereof after any adjustment pursuant to
this Section 2.5 shall be determined by multiplying (i) the number of shares of Common Stock that
were issuable immediately prior to such adjustment, by (ii) the fraction of which (A) the numerator
is the Warrant Price immediately prior to such adjustment and (B) the denominator is the Warrant
Price immediately following such adjustment.

          2.6
Certificate as to Adjustment. In the case of each adjustment or
readjustment of the Warrant Priced pursuant to this Section 2, the Company at its expense
shall
promptly compute such adjustment or readjustment in accordance with the terms hereof and
cause a certificate, signed by the Company’s Chief Financial Officer, setting forth such
adjustment or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, to be delivered to the holder of this Warrant. The certificate
furnished to
such holder shall set forth (a) such adjustments and readjustments, (b) the Warrant Price at
the
time in effect and how it was calculated and (c) the number of shares of Common Stock issuable
upon exercise hereof and the amount, if any, of other property at the time receivable upon the
exercise of this Warrant.

          2.7 No Impairment. The Company shall not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of assets,
dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance of
performance of any of the terms of this Warrant, but shall at all times in good faith assist
in the
carrying out of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against impairment.
Without limiting the generality of the foregoing, the Company (a) shall not permit the par
value

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of any shares of stock receivable upon the exercise of this Warrant to exceed the amount
payable therefore upon such exercise, (b) shall take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of stock on the exercise of the Warrants from time to time outstanding; and (c) shall not
take any action which results in any adjustments of the Warrant Price if the total number of
shares of Common Stock issuable after the action upon the exercise of all of the Warrants would
exceed the total number of shares of Common Stock then authorized by the Company’s certificate of
incorporation and available for the purpose of issue upon such
exercise.

          2.8 Notices of Record Date, etc. In the event of:

               (a) any taking by the Company of a record of the holders of any
class of securities of the Company for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend payable out of earned surplus at
the same rate as that of the last such cash dividend theretofore paid) or other distribution, or
any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right;

               (b) any acquisition or capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any transfer of all or
substantially all of the assets of the Company to any other person or any consolidation or merger
involving the Company; or

               (c) any voluntary or involuntary dissolution, liquidation or winding-up
 of the Company, the Company shall mail to the holder of this Warrant at least thirty (30)
days prior to the earliest date specified below, a notice specifying: (i) the date on which any
such records is to be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right; and (ii) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding-up is expected to become effective and the record date for determining stockholders
entitled to vote thereon and the time, if any such time is to be fixed, as of which the holders of
record of Common Stock shall be entitled to exchange their shares of Common Stock for the
securities or other property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or winding-up.

     3. Fractional
Shares. No fractional shares shall be issued in connection with any
exercise of this Warrant. In lieu of the issuance of a fractional share, the Company shall
make a
cash payment equal to the then fair market of such fractional share as determined in
accordance
with Section 1.5 hereof.

     4. Representations
and Warranties of the Company.

          4.1
Authorization. The Company has full power and authority to enter into this Warrant. This
Warrant has been duly authorized, executed and delivered by the Company and constitutes its valid
and legally binding obligation, enforceable in accordance with its terms.

          4.2
Reservation of Common Stock. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of this Warrant, such number of its shares of Common Stock, free from
preemptive rights, as shall from time to time be sufficient to effect the exercise of this

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Warrant, and if at any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the exercise of the entire Warrant, in addition to such other remedies as
shall be available to the holder of this Warrant, the Company will take such action as may be
necessary to increase its authorized but unissued shares of Common Stock to such number of shares
as shall be sufficient for such purposes. If any shares of its Common Stock to be reserved for the
purpose of issuance upon exercise of the Warrants require registration with or approval of any
governmental authority under any applicable law before such shares of Common Stock may be validly
issues or delivered, then the Company will secure such registration or approval, as the case may
be, and maintain such registration or approval in effect so long as so required.

          4.3 Adjustment in Number of Shares Issuable and Purchase Price. There has
not been nor will there be any adjustment to the number of shares issuable or the purchase
price
payable upon the exercise of any securities of the Company convertible into or exchangeable
for
shares of Common Stock resulting from the issuance or exercise of this Warrant.

          4.4 Valid Issuance. This Warrant, when issued and delivered in accordance
with the terms hereof will be duly authorized and validly issued, and the Common Stock
issuable
upon the exercise hereof, when issued pursuant to the terms hereof and upon payment of the
exercise price, shall, upon such issuance, be duly authorized, validly issued, fully paid and
nonassessable.

     5. Stock Ownership. Prior to the exercise of this Warrant, the holder shall not be
entitled, by virtue of holding this Warrant, to any rights of a stockholder of the Company,
including (without limitation) the right to vote, receive dividends or other distributions,
exercise
preemptive rights or be notified of stockholder meetings, and such holder shall not be
entitled to
any notice or other communication concerning the business or affairs
of the Company. Nothing
in this Section 5, however, shall limit the right of the holder to be provided the notices
described
in Section 2 hereof or to participate in distributions described in Section 2 hereof if the
holder
ultimately exercises this Warrant.

     6. Limitation of Liability. In the absence of affirmative action by the holder hereof
to purchase the Common Stock in accordance herewith, no mere enumeration herein of the rights
or privileges of the holder hereof shall give rise to an obligation on such holder to purchase
any
securities or any liability of such holder for the purchase price or as a stockholder of the
Company, whether such obligation or liability is asserted by the Company or by creditors of
the
Company.

     7. Representations and Warranties of the Holder. The holder hereof represents and warrants to the Company as follows:

          7.1 Investment Experience. The holder represents that it can bear the economic
risk of its investment and has such knowledge and experience in financial or business matters
that
it is capable of evaluating the merits and risks of the investment in the Warrant and the
Common
Stock issuable upon exercise hereof. The holder also represents it as not been organized
solely
for the purpose of acquiring the Warrant or the Common Stock issuable
upon exercise hereof.

          7.2 Restricted Securities. The holder understands that the Warrant being issued
hereunder and the Common Stock issuable upon exercise hereof are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and have not been registered under
the
Act nor qualified under applicable state securities laws and that under such laws and
applicable

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regulations such securities may not be resold without registration under the Act, except in
certain limited circumstances. In this connections, the holder represents that it is familiar with
Rule 144 promulgated under the Act (“Rule 144’), as presently in effect, and understands the resale
limitations imposed thereby and the Act.

          7.3
Accredited Investor. The holder is an “accredited investor” within the meaning of Rule 501
of Regulation D promulgated under the Act.

          7.4 Legends. It is understood that the certificates evidencing the Common Stock
issuable upon exercise hereof, or upon any transfer of such shares (other than a transfer
registered under the Act or any subsequent transfer of shares so registered) may bear the
following legend:

     “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, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.”

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     8. Reserved.

     9. Transfers and Exchanges.

          9.1 Compliance with Act. The holder agrees not to sell, hypothecate, pledge
or otherwise dispose of any interest in the Warrant or the Common Stock issuable upon exercise
hereof in the United States, its territories, possessions or any area subject to its
jurisdiction, or to
any person who is a national thereof or a resident therein (including any estate of such
person), or
any corporation, partnership or other entity created or organized therein, other then in
accordance
with the Act.

          9.2 New Warrants. Upon presentation to the Company’s transfer agent of the
form of Assignment attached hereto, a new Warrant shall be issued to the new holder hereof.
New
Warrants issued in connection with transfers or exchanges shall not require the signature of
the
new holder hereof and shall be identical in form and provision to this Warrant except as to
the
number of shares of Common Stock covered thereby.

          9.3 Ownership of Warrants. The Company may treat the person in whose name
any Warrant is registered on the register kept at the office of the Company maintained
pursuant to
Section 9.4(a) as the owner and holder thereof for all purposes, notwithstanding any notice to
the
contrary, except that, if and when any Warrant is properly assigned in blank, the Company may
(but shall not be obligated to) treat the bearer thereof as the owner of such Warrant for all
purposes, notwithstanding any notice to the contrary. A Warrant, if properly assigned, may
be
exercised by a new holder without a new Warrant first having been issued.

          9.4 Transfer and Exchange of Warrants.

               (a) The Company will serve as transfer agent for the purposes of this
Warrant, to whom and at which location notices, presentations and demands in respect of this
Warrant may be made upon the Company, until such time as the Company shall notify the
holders of the Warrants of any change in such transfer agent or in the designated office
locations
thereof; and

               (b) Upon the surrender of any Warrant, properly endorsed, for
registration of transfer or for exchange, the Company at its expense will execute and deliver
to or
upon the order of the holder thereof a new Warrant or Warrants of like tenor, in the name of
such
holder or as such holder (upon payment by such holder of any applicable transfer taxes) may
direct, representing the right to purchase individually at least 1,000 shares and in the
aggregate
the number of shares of Common Stock stated in the Warrant or Warrants so surrendered.

     10. Successors and Assigns. The terms and provisions of this Warrant shall be binding
upon the Company and the holder and their respective successors and assigns, subject at all times
to the restrictions set forth herein; provided that any assignment by the holder (other than
assignments or transfers made to an entity which is an affiliate of, controls, is controlled by, or
is under common control with, Compugen Ltd., or to an entity acquiring all or substantially all of
Compugen Ltd.’s assets) shall be approved by the Company in writing.

     11. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt of the Company of
evidence reasonable satisfactory to it of the loss, theft, destruction or mutilation of this

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Warrant, and in case of loss, theft or destruction, of indemnity or security reasonable
satisfactory to the Company, and upon reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new warrant of like tenor and dated as of such cancellation, in lieu of
this Warrant.

     12. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein is not a Business Day,
then
such action may be taken or such right may be exercised on the next succeeding full Business
Day.
For purposes of this Warrant, a Business Day is a day that is not a Saturday or a Sunday, a legal
holiday or a day on which banking institutions doing business in the City of New York or the Sate
of Maryland are authorized by law to close.

     13. Amendments and Waivers. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a particular
instance
and either retroactively or prospectively), only with the written consent of the Company and
the
holder. Any such amendment or waiver shall be binding on the parties.

     14. Governing Law. The terms and conditions of this Warrant shall be governed by and
construed in accordance with Delaware law, without regard to conflicts of law provisions.

     15. Notices. Except as otherwise provided in this Warrant, any requirement for a
notice, demand or request under this Warrant will be satisfied by a writing (a) hand delivered with
receipt; (b) mailed by registered or certified mail or Express Mail, return receipt requested,
postage prepaid; or (c) sent by Federal Express or any other nationally recognized overnight
courier service, and addressed as follows: if to the holder of this Warrant, at its address as
shown on the books of the Company;

	 	 	 
	and if to the Company, at:

	 	Avalon Pharmaceuticals, Inc.
	

	 	19 Firstfield Road
	

	 	Gaithersburg, MD 20878,
	

	 	Attn: Kenneth C. Carter, Ph.D.

11

 

	 	 	 
	with a copy to:

	 	Schmeltzer, Aptaker & Shepard, P.C.,
	

	 	The Watergate, Suite 1000
	

	 	2600 Virginia Avenue, N.W.
	

	 	Washington, D.C. 20037
	

	 	Attn: Mark L Gruhin.

All notices that are sent in accordance with this Section 15 shall be deemed received by the
holder or the Company on the earliest of the following applicable time periods: (i) the date the
return receipt is executed; or (ii) the date delivered as documented by the overnight courier
service or the hand delivery receipt. Either the holder of this Warrant or the Company may
designate a change of address by written notice to the other party.

     16. Registration
Rights.

          For purposes of this Section 16, the following terms shall have the meanings set forth below:

          “Register,” “registered,” and “registration” refer to a registration effected by preparing
and filing a registration statement in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.

          “Registrable Securities” means (i) shares of Common Stock of the Company issued upon exercise
of this Warrant; and (ii) any shares of Common Stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of, such
above-described securities. Notwithstanding the foregoing, Registrable Securities shall not
include any securities sold by a person to the public either pursuant to a registration statement
or Rule 144.

          (a) If at any lime the Company proposes to file a registration statement under the Act with
respect to an offering of equity securities by the Company for its own account or for the account
of any security holders of any class of its equity securities (other than (i) a registration
statement on Form S-4 or S-8 (or any form that may be adopted by the Securities and Exchange
Commission (the “Commission”) in substitution for such form or forms) or (ii) a registration
statement filed in connection with an exchange offer or offering of securities solely to the
Company’s existing security holders) then the Company shall give written notice of such proposed
filing to the holder as soon as practicable (but in no event less than twenty(20) days before the
anticipated filing date), and such notice shall offer the holder the opportunity to register such
number of shares of Registrable Securities as the holder may request (which request shall specify
the Registrable Securities intended to be disposed of and the intended method of distribution
thereof) (a “Piggy-Back Registration”).

               The Company shall use its best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten public offering to permit the Registrable
Securities requested by the holder thereof to he included in a Piggy-Back Registration on the same
terms and conditions as any similar securities of the Company or any other security holder included
therein and to permit the sale or other disposition of such Registrable Securities in accordance
with the intended method of distribution thereof; provided, that if the managing
Underwriter determines that marketing factors require a limitation of the number of shares to be
underwritten in any registration effected pursuant to this Section 16, the total number of

12

 

Registrable Securities to be distributed shall be accordingly limited and the Registrable
Securities of the holder shall be included in any such limited registration (i) only after and to
the extent the Company has first included, or had an opportunity to include, its Registrable
Securities therein and (ii) if so required, in a prorated amount (based on the holder’s Registrable
Securities constituting a percentage of all the Registrable
Securities sought to be registered).
The holder shall have the right to withdraw its request for inclusion of its Registrable Securities
in any registration statement pursuant to this Section 16 by giving written notice to the Company
if its request to withdraw. The Company may withdraw a Piggy-Back Registration at any time prior to
the time it becomes effective; provided, that the Company shall reimburse the holder for all
reasonable out-of-pocket expenses (including counsel fees and expenses) incurred prior to such
withdrawal.

13

 

                         No
failure to effect a registration under this Section 16(a) and to
complete the sale of Registrable Securities as herein provided shall relieve the Company of any
other obligation under this Agreement (including, without limitation, the Company’s obligations
under Sections 16(c) and 16(d)).

              (b) In connection with any Piggy-Back Registration, the Company shall, as expeditiously
as possible:

          (1) prepare and file with the Commission such pre-effective
amendments and post-effective amendments to the registration statement as may
be necessary to enable the registration statement to become effective and to
keep
in effective for as long as such registration statement to become effective
and to
keep it effective for as long as such registration is require to remain
effective
pursuant to the terms hereof, ahs shall cause the prospectus to be
supplemented
by any required prospectus supplement, and, as so supplemented, to be filed
pursuant to Rule 424 under the Act;

          (2) furnish to the holder at least one signed copy of the registration
statement and any post-effective amendment thereto, as soon as such documents
become available to the Company, and such number of conformed copies thereof
and such number of copies of the prospectus (including each preliminary
prospectus) and any amendments or supplements thereto, and any documents
incorporated by reference therein, as the holder may reasonably request as
soon
as such documents become available to the Company;

          (3) on or prior to the date on which the registration statement is
declared effective, register or qualify such Registrable Securities requested
to be
included under such other securities or blue sky laws of such jurisdictions as
the
holder requests and do any and all other acts and things which may be
reasonably
necessary or advisable to enable the holder to consummate the disposition in
such
jurisdictions of such Registrable Securities; provided, that the
Company will not
be required to (i) qualify generally to do business in any jurisdiction where
it
would not otherwise be required to qualify, (ii) subject itself to general
taxation
in any such jurisdiction or (iii) consent to general service of process in any
such
jurisdiction:

          (4) notify the holder at any time when a prospectus relating to such
Registrable Securities is required to be delivered under the Act of the
happening
of any event as a result of which the prospectus included in such registration
statement 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, and prepare a supplement or amendment o
such
prospectus so that, as thereafter delivered to the purchases 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 not misleading;

          (5) notify the holder of any stop order or other suspension of
effectiveness of the registration statement; and obtain the withdrawal of any

14

 

order suspending the effectiveness of the registration statement at the earliest possible
time;

          (6) enter into such agreements (including an underwriting agreement
in such form, scope and substance as is customary in underwritten offerings) and
take all such other actions in connection therewith (including those requested by
the managing underwriters, if any, or the holder) in order to expedite or facilitate
the disposition of such Registrable Securities and in such connection, whether or
not an underwriting agreement is entered into and whether or not the registration
is an underwritten registration (i) make such representations and warranties to the
holder and the underwriters, if any, with respect to the business of the Company
and its subsidiaries, the registration statement, the prospectus and the documents
incorporated by reference or deemed incorporate by reference therein, if any, in
each case, in such form, substance and scope as are customarily made by issuers
to underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof,
which counsel and opinions in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the holder, addressed to the
holder and each of the underwriters, if any, and the holder, addressed to the
holder and each of the underwriters, if any, covering the matters customarily
covered in opinions requested in underwritten offerings and such other matters as
may be reasonably requested by the holder and such underwriters, including
without limitation the matters referred to clause (i) above; (iii) obtain “cold
comfort” letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary any other certified public
accountants of any subsidiary of the Company or of any business acquired or to
be acquired by the Company for which financial statements and financial data is,
or is required to be, included in the registration statement), addressed to the
holder and each of the underwriters, if any, such letters to be in customary form
and covering matters of the type customarily covered in “cold comfort” letters
in connection with underwritten offerings; and (iv) deliver such documents and
certificates as may be requested by the holder, its counsel and the underwriters, if
any, to evidence the continued validity of the representations and warranties of
the Company and its subsidiaries made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company; and
notify the holder and the underwriters, if any, promptly of the receipt by the
Company of any notification with respect to the suspension of the qualification of
the Warrant and/or Common Stock for sale in any jurisdiction;

          (7) take all other steps reasonably necessary to effect the registration
and/or qualification of the Registrable Securities contemplated thereby;

          (8) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of twelve
(12) months, beginning within three (3) months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 1 l(a) of the Act; and

15

 

          (9) use its best efforts (i) to cause any class of Registrable
Securities to be listed on the national securities exchange (if such shares are
not already to listed), and on each additional national securities exchange, on
which similar securities issued by the Company are then listed, if any, or (ii) to
secure designation of all such Registrable Securities covered by such registration
statement as a NASDAQ “national market system security” within the meaning of Rule
l1Aa2-I of the Commission or, failing that, to secure NASDAQ authorization for
such Registrable Securities.

          (c) The Company shall keep effective and maintain any registration,
qualification, approval or listing specified in this Section 16 for such period as may be
necessary
for the holder to dispose of Registrable Securities in accordance with their intended method
or
methods of distribution, and from time to time shall amend or supplement the prospectus used
in
connection therewith to the extent necessary in order to comply with applicable law. All
expenses, disbursements and fees in connection with any action to be taken hereunder
(including,
without limitation, all registration and filing fees, fees and expenses of compliance with
securities
or blue sky laws, printing expenses and fees and expenses of counsel for the Company and its
independent certified public accountants and all fees and expenses of the holder and the
holder’s
counsel (all such expenses being herein called “Registration Expenses”) will be borne by the
Company; provided, that the proportionate amount of Registration Expenses associated with the
registration of the holder’s Registrable Securities in any registration after the first
registration
effected pursuant to this Section 16 shall be borne by the holder; provided, however, that the
holder shall not bear any such Registration Expenses in connection with any such subsequent
registration if the holder’s registration of Registrable Securities in the subsequent
registration
arises in connection with any limitations imposed on the number of holder’s Registrable
Securities the holder was able to register in any prior registration; provided, that in no
event shall
Registration Expenses include any underwriting discounts, sales commissions or similar fees
attributable to the sale of Registrable Securities.

          (d) The Company hereby indemnifies, to the fullest extent permitted by law,
the holder and each person, if any, who controls the holder within the meaning of Section 15
of
the Act, and the directors, officers, employees, agents and representatives of each of them,
against
all losses, claims, damages, liabilities, costs and expenses (including, without limitation,
fees and
expenses of counsel), as incurred, arising out of, relating to, or caused by any untrue
statement or
alleged untrue statement of a material fact contained in any registration statement,
prospectus or
preliminary prospectus (or any amendment or supplement thereto) or any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make
the
statements therein not misleading, except insofar as such losses, claims, damages, liabilities
or
expenses are caused by any untrue statement contained in, or omission from, information
furnished in writing to the Company by the holder expressly for use therein. In connection
with
any registration statement in which the holder is participating, the holder with furnish to
the
Company in writing such information as shall reasonably be requested by the Company for use in
any such registration statement or prospectus and will indemnify, to the extent permitted by
law,
the Company, its directors and officers and each person, if any, who controls the Company
within
the meaning of the Act against any losses, claims, damages, liabilities and expenses resulting
from any untrue statement of a material fact or any omission of a material fact required to be
stated in the registration statement or prospectus or necessary to make the statements therein
not
misleading, but only to the extent that such untrue statement of a material fact is contained
in, or
such material fact is omitted from, information so furnished in writing by such holder
expressly
for use therein.

          

16

 

          (e) For purposes of this Section 16, and each other provision of this Warrant,
the holder shall include any transferee of the holder if the relevant transfer is made in
accordance herewith.

     17. Remedies. The Company acknowledges and agrees that irreparable harm, for
which there may be no adequate remedy at law and for which the ascertainment of damages would be
difficult, would occur in the event any of the provisions of this Warrant were not performed in
accordance with its specific terms or were otherwise breached. The Company accordingly agrees that
the holders shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Warrant and to enforce specifically the terms and provisions hereof in any
court of the United States or any state thereof having jurisdiction, in each instance without
being required to post bond or other security and in addition to, and without having to prove the
inadequacy of other remedies at law.

     18. Securities
Matters.

     In order to make available the benefits of certain rules and regulations of the Commission,
including without limitation Rule 144 and any successor rule or regulation of the Commission, that
may at any time permit the sale of the shares of Common Stock issuable upon exercise of this
Warrant to the public without registration, the Company agrees (i) to file in a timely manner all
reports, statements and other information and documents required to be filed by it pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
(ii) whether or not the Company is subject to the reporting and other filing requirements of
Section 13 or 15(d) of the Exchange Act, to file with the Commission and, within fifteen (15) days
after the date if would be required to file such reports with the Commission if it were subject to
Such reporting and other filing requirements of the Exchange Act, to deliver to the holder of this
Warrant all such reports, information and Other documents as it would be required to file with the
Commission if it were subject to the requirements of Section 13 of 15(d) of the Exchange Act and
otherwise to make and keep publicly available all such information concerning the Company as shall
be necessary to enable the holder to comply with the aforementioned rules and regulations of the
Commission.

     Warrant for the Purchase of Shares of Common Stock of Avalon Pharmaceuticals, Inc.

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Avalon Pharmaceuticals, Inc.  
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Kenneth C. Carter, Ph.D.	 	 
	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	Kenneth C. Carter, Ph.D.	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Title:
	 	President & CEO	 	 
	

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ACCEPTED AND AGREED
	 	 	Compugen, Ltd.
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Mor Amitai	 	 
	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	Mor Amitai	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Title:
	 	President & CEO	 	 
	

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	  Dated:	 	March 23, 2001	 	 
	 	 	 	 	 	 	 

17

 

SUBSCRIPTION

Avalon Pharmaceuticals, inc.

19 Firstfield Road

Gaithersburg, MD 20878,

     Ladies and Gentlemen:

          The undersigned,                                         , hereby elects to purchase,
pursuant to the provisions of the Warrant, dated,
                                        , 2001, held by the
undersigned,
                                                             shares of the Common Stock of Avalon
Pharmaceuticals, Inc., a Delaware corporation, and [elects to pay for such shares through exercise
of the “cashless exercise” provisions of Section 1.5 of such Warrant] [tenders herewith payment of
the purchase price of such shares in full].

          In exercising its rights to purchase such Common Stock, the undersigned hereby confirms the
investment representations made in Section 7.

Dated:                      200_.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Address:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

18

 

[FORM OF ASSIGNMENT]

The undersigned hereby assigns
this Warrant to:

       (Print or type name, address and zip code of assignee)

Please
insert Social Security or other identifying number of assignee

And irrevocably appoints                                          as agent to transfer this Warrant on
the books of the Company. The agency may substitute another to act for him or it.

	 	 	 	 	 
	Dated:                                                             

	 	 	 	Signed:                                                             

       (Sign exactly as name appears on the front of this Warrant)

	 	 	 	 	 
	Dated:                                                             

	 	 	 	Signed:                                                             
	

	 	 	 	Name:                                                             
	

	 	 	 	Title:                                                             

19

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	1. Exercise of Warrant
	 	 	 	 
	1.1 Term
	 	 	 	 
	1.2 Number of Shares
	 	 	 	 
	1.3 Purchase Price
	 	 	 	 
	1.4 Method of Exercise
	 	 	 	 
	1.5 Cashless Exercise
	 	 	 	 
	1.6 Issuance of Shares
	 	 	 	 
	 
	 	 	 	 
	2. Certain Adjustments
	 	 	 	 
	2.1 Mergers, Consolidations or Sale of Assets
	 	 	 	 
	2.2 Splits and Subdivisions; Dividends
	 	 	 	 
	2.3 Combination of Shares
	 	 	 	 
	2.4 Adjustments for Other Distributions
	 	 	 	 
	2.5 Issuance of Additional Common Stock
	 	 	 	 
	2.6 Adjustment for Tender Offer
	 	 	 	 
	2.7 Certificate as to Adjustments
	 	 	 	 
	2.8 No Impairment
	 	 	 	 
	2.9 Notices of Record Date, etc.
	 	 	 	 
	 
	 	 	 	 
	3. Fractional Shares
	 	 	 	 
	 
	 	 	 	 
	4. Representations and Warranties of the Company
	 	 	 	 
	4.1 Authorization
	 	 	 	 
	4.2 Reservation of Common Stock
	 	 	 	 
	4.3 Adjustment in Number of Shares Issuable and Purchase Price
	 	 	 	 
	4.4 Vaild Issuances
	 	 	 	 
	 
	 	 	 	 
	5. Stock Ownership
	 	 	 	 
	 
	 	 	 	 
	6. Limitation of Liability
	 	 	 	 
	 
	 	 	 	 
	7. Representations and Warranties of the Holder
	 	 	 	 
	7.1 Investment Experience
	 	 	 	 
	7.2 Restricted Securities
	 	 	 	 
	7.3 Accredited Investor
	 	 	 	 
	7.4 Legends
	 	 	 	 
	 
	 	 	 	 
	8. Additional Agreements
	 	 	 	 
	8.1 Confidentiality
	 	 	 	 
	 
	 	 	 	 
	9. Transfers and Exchanges
	 	 	 	 
	9.1 Compliance with Act
	 	 	 	 
	9.2 New Warrants
	 	 	 	 
	9.3 Ownership of Warrants
	 	 	 	 
	9.4 Transfer and Exchange of Warrants
	 	 	 	 
	 
	 	 	 	 
	10. Successors and Assigns
	 	 	 	 

20

 

	 	 	 	 	 
	11. Loss, Theft, Destruction or Mutilation of Warrant
	 	 	 	 
	 
	 	 	 	 
	12. Saturdays, Sundays, Holidays, etc.
	 	 	 	 
	 
	 	 	 	 
	13. Amendments and Waivers
	 	 	 	 
	 
	 	 	 	 
	14. Governing Law
	 	 	 	 
	 
	 	 	 	 
	15. Notices
	 	 	 	 
	 
	 	 	 	 
	16. Registration Rights
	 	 	 	 
	 
	 	 	 	 
	17. Remedies
	 	 	 	 
	 
	 	 	 	 
	18. Securities Matters
	 	 	 	 

21exv10w25

 

Exhibit 10.25

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.

PLACEMENT AGENT WARRANT FOR THE

PURCHASE OF 1,543,795 SHARES Of

SERIES B CONVERTIBLE PREFERRED STOCK

Of

AVALON PHARMACEUTICALS, INC.

Dated: February 6, 2002

(Incorporated under the laws of the State of Delaware)

     THIS CERTIFIES THAT, for value received, Array Capital LLC, a Delaware Limited Liability
Company, (“Array” or “Placement Agent”), together with its successors and assigns (each, a
“holder”), is entitled to purchase 1,543,795 duly authorized validly issued, fully paid and
non-assessable shares of Series B Convertible Preferred Stock, $.01 par value per share, (the
“Series B Stock”) of Avalon Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), at the
per share purchase price described in Section 1.3 below, subject to the provisions and upon the
terms and conditions hereinafter set forth.

     1. Exercise
of Warrant. The terms and conditions upon which this Warrant may be
exercised and the Series B Stock covered hereby (the
“Warrant Stock”) may be purchased as follows:

          1.1
Term. The purchase right represented by this Warrant may be exercised in whole or
in part at any time and from time to time within five (5) years after February 6, 2002 (the
“Initial Expiry Date”) provided, however, that if the Company closes an underwritten public
offering (the “Series B IPO”) as contemplated in Section 2c(ii) of the Description of Series A and
Series B Preferred Stock set forth in Exhibit A of the Amended and Restated Certificate of
Incorporation dated October 24, 2001, as same may be amended from time to time (the “Description
of Preferred Stock”), prior to the Initial Expiry Date, this Warrant shall terminate at 5:00 p.m.
(New York time) on the earlier of (1) the Initial Expiry Date and (2) the second (2nd) anniversary
of the Series B IPO. If the last day on which this Warrant may be exercised is not a Business Day
(as defined in Section 11 hereof), this Warrant may be exercised prior to 5:00 p.m. (New York time)
on the next succeeding full Business Day with the same force and effect as if exercised on such last
day specified herein. Notwithstanding the foregoing, in the event of a liquidation, dissolution or
winding up of the Company (including a deemed liquidation, dissolution or winding up as
contemplated in Section 1 of the Description of Preferred Stock) (a “Liquidation”), this Warrant
shall terminate at the close of business on the last full business day preceding the date fixed for
payment of any amounts distributable to holders of Series B Stock in connection with such
Liquidation. The Company will deliver to the holder written notice of the closing of a Series B IPO
or a Liquidation, as the case may be, not less than ten (10) days prior to such event.

1

 

          1.2
Number of Shares. This Warrant is initially exercisable for
1,543,795
shares of Series B Stock, subject to adjustment pursuant to Section 2 of this Warrant.

          1.3
Purchase Price. The initial per share purchase price for the shares of
Series B Stock to be issued upon exercise of this Warrant shall be $ 3.5276, subject to
adjustment pursuant to Section 2 of this Warrant (the “Warrant Price”).

          1.4 Methods of Exercise. The exercise of the purchase rights evidenced by
this Warrant shall be effected by (a) the surrender of this Warrant, together with a duly
executed copy of the form of subscription attached hereto, to the Company at its principal offices and
(b) the delivery of the purchase price (i) by check or bank draft payable to the Company’s order
or by wire transfer to the Company’s account for the number of shares for which the purchase rights
hereunder are being exercised or any other form of consideration approved by the Company’s
Board of Directors or (ii) pursuant to the procedure set forth in Section 1.5

          Each exercise of this Warrant shall be deemed to have been effected immediately prior to the
close of business on the day on which this Warrant shall have been surrendered to the Company as
provided herein or at such later date as may be specified in the executed form of subscription,
and at such time the person or persons in whose name or names any certificate or certificates for
shares of Series B Stock shall be issuable upon such exercise as provided herein shall be deemed
to have become the holder or holders of record thereof.

          Notwithstanding any provision to the contrary contained herein, in the event that this
Warrant is exercised at any time when no shares of Series B Stock are outstanding as a result of
conversion or redemption of the shares of Series B Stock pursuant to Description of Preferred
Stock (each, a “Cancellation Event”), then the Company shall issue and the holder shall be
entitled to receive instead of the shares of Series B Stock, shares of common stock of the Company
(“Common Stock”) equal to the number of shares of Common Stock the holder would have been entitled
to receive had it exercised such purchase right immediately prior to the Cancellation Event and
received shares of Series B Stock and immediately thereafter converted such shares of Series B
Stock into shares of Common Stock in accordance with the provisions set forth in the Description
of Preferred Stock. In addition, the number of shares of Common Stock to be issued upon the
exercise of such purchase right shall be further adjusted in the manner set forth in Section 2
hereof from the date of the Cancellation Event to the date of the exercise of such purchase right.
In the event that such purchase right is exercised for shares of Common Stock after the
Cancellation Event, the provisions of this Warrant shall, except as otherwise provided for herein,
apply mutatis mutandis.

          1.5
Cashless Exercise. In addition to and without limiting (the rights of the holder hereof
under the terms hereof, at the holder’s option this Warrant may be exercised in whole or in part at
any time or from time to time prior to its expiration for a number of shares of Series B Stock
having an aggregate fair market value on the date of such exercise equal to the difference between
(a) the fair market value of the number of shares of Warrant Stock designated for exercise by the
holder hereof on the date of exercise and (b) the aggregate Warrant Price for such shares in effect
at such time.

2

 

          The following illustrates how many shares would be issued upon exercise of this Warrant
pursuant to this Section 1.5:

	 	 	 	 	 	 	 
	Let

	 	FMV
	 	=
	 	Fair market value per share of Series B Stock at date of exercise.
	 
	 	 	 	 	 	 
	

	 	PSP
	 	=
	 	Per Share Warrant Price at date of exercise.
	 
	 	 	 	 	 	 
	

	 	N
	 	=
	 	Number of shares of Warrant Stock desired to be exercised.
	 
	 	 	 	 	 	 
	

	 	X
	 	=
	 	Number of shares of Warrant Stock issued upon exercise.
	 
	 	 	 	 	 	 
	

	 	X
	 	=
	 	(FMV)(N) – (PSP)(N)
	

	 	 	 	 	 	              FMV

          The “fair market value” of shares of Series B Stock shall, for all purposes under this
Warrant, be the fair market value per share as determined in good faith by the Board of Directors
of the Company. If (the holder disputes such a determination by the Company’s Board of Directors,
then such value may be determined by a nationally recognized investment banking firm, mutually
acceptable to the Company and the holder, with the costs of such valuation being borne by the
holder. If the holder of this Warrant exercises this Warrant contingent upon the closing of a
public offering, the “fair market value” of a share of Series B Stock on the date of exercise
shall be calculated based on the initial price to the public of the Common Stock specified in the
final prospectus with respect to such public offering. If, however, the holder of this Warrant
exercises this Warrant following the closing of a public offering,
then the “fair market value” of
a share of Series B Stock on the date of exercise shall be calculated on the following basis: (1)
if the Common Stock is traded on an exchange or is quoted on the National Association of
Securities Dealers, Inc. Automated Quotation (“NASDAQ”) National Market, the closing price on the
day before the exercise date, (2) if the Common Stock is not traded on an exchange or on the
NASDAQ National Market but is traded in the over-the-counter market, the closing price on the day
before the exercise date, or (3) if the Common Stock is not traded on an exchange or on the NASDAQ
National Market or in the over-the-counter market, the fair market value per share as determined
in good faith by the Board of Directors of the Company in the manner provided for hereinabove.

          No payment of any cash or other consideration to the Company shall be required from the
holder of this Warrant in connection with any exercise of this Warrant pursuant to this Section
1.5. Such exercise shall be effective upon the date of receipt by the Company of this Warrant
surrendered for cancellation and a written request from the holder hereof that the exercise
pursuant to this section be made, or at such later date as may be
specified in such request.

          1.6
Issuance of Shares. As soon as reasonably practicable after each exercise of this Warrant,
in whole or in part, the Company at its expense (including the payment by it of any
applicable issue taxes) shall cause to be issued in the name of and delivered to the holder hereof
or as such holder (upon payment by such holder of any applicable transfer taxes) may direct, (a) a
certificate or certificates for the number of duly authorized, validly issued, folly paid and
nonassessable shares of Series B Stock to which such holder shall be entitled upon such exercise,
and (b) in case such exercise is in part only, a new Warrant or Warrants of like tenor,
representing in the aggregate the right to purchase the number of shares of Series B Stock equal
(without giving effect to any adjustment thereof provided for in Section 2) to the number of such

3

 

shares stated in this Warrant minus the number of such shares designated by the holder upon
such exercise as provided herein.

     2. Other
Rights.

          2.1 Adjustments. The number and kind of securities purchasable upon the exercise of the
Warrant and the Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows, provided, however, that no adjustments shall be made
hereunder if such adjustments are already provided for in the rights of the Series B Stock and
would be effected upon conversion of Series B Stock into Common Stock in the manner set forth in
the Description of Preferred Stock:

          2.1.1 Reclassification or Merger. In case of any reclassification, change or
conversion of securities of the class issuable upon exercise of this Warrant (other than a
change in par value, or from par value to no par value, or from no par value to par value, or as a
result of a
subdivision or combination), or in case of any merger of the Company with or into another
corporation (other than a merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding
securities
issuable upon exercise of this Warrant), or in ease of any sale of all or substantially all of
the assets of the Company, the Company, or such successor or purchasing corporation, as the case
may be, shall execute a new Warrant providing that the holder of this Warrant shall have the
right to exercise such new Warrant and upon such exercise to receive, in lieu of each share of stock
theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification, change or merger by a
holder of one share of stock issuable upon the exercise hereof. The provisions of this
paragraph 2.1.1 shall similarly apply to successive reclassifications, changes, mergers and transfers.

          2.1.2 Subdivisions or Combination of Securities. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine its stock, the
Warrant Price and the number of securities issuable upon exercise hereof shall be
proportionately adjusted.

          2.2
All Other Rights. All other rights to which the holder is entitled upon exercise of
this Warrant are set forth in the Description of Preferred Stock.

     3. Representations
and Warranties of the Company.

          3.1
Authorization. The Company has full power and authority to enter into
this Warrant. This Warrant has been duly authorized, executed and delivered by the Company
and constitutes its valid and legally binding obligation, enforceable in accordance with its
terms.

          3.2
Reservation of Series B Stock. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Series B Stock, solely for the
purpose of effecting the exercise of this Warrant, such number of its shares of Series B
Stock,
free from preemptive rights, as shall from time to time be sufficient to effect the exercise
of this
Warrant, and if at any time the number of authorized but unissued shares of Series B Stock
shall
not be sufficient to effect the exercise of the entire Warrant, in addition to such other
remedies as
shall be available to the holder of this Warrant, the Company will take such action as may be
necessary to increase its authorized but unissued shares of Series B Stock to such number of
shares as shall be sufficient for such purposes. If any shares of its Series B Stock to be
reserved
for the purpose of issuance upon exercise of the Warrants require registration with or
approval of

4

 

any
governmental authority under any applicable law before such shares of Series B Stock
may be validly issued or delivered, then it will secure such registration or approval, as the case
may be, and maintain such registration or approval in effect so long as so required.

          3.3
Adjustment in Number of Shares Issuable and Purchase Price. There has
not been nor will there be any adjustment to the number of shares issuable or the purchase
price payable upon the exercise of any securities of the Company convertible into or exchangeable
for shares of Series B Stock resulting from the issuance or exercise of this Warrant.

          3.4
Valid Issuance. This Warrant, when issued and delivered, in accordance
with the terms hereof will be duly authorized and validly issued, and the Series B Stock
issuable upon the exercise hereof, when issued pursuant to the terms hereof and upon payment of the
exercise price, shall, upon such issuance, be duly authorized, validly issued, fully paid and
nonassessable.

     4. Stock
Ownership. Prior to the exercise of this Warrant, the holder shall not be
entitled, by virtue of holding this Warrant, to any rights of a stockholder of the Company,
including (without limitation) the right to vote, receive dividends or other distributions,
exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be
entitled to any notice or other communication concerning the business or affairs of the Company. Nothing
in this Section 4, however, shall limit the right of the holder to be provided the notices
described in (the Description of Preferred Stock or to participate in distributions described in the
Description of Preferred Stock once the holder ultimately exercises
this Warrant.

     5. Limitation
of Liability. In the absence of affirmative action by the holder hereof
to purchase the Series B Stock in accordance herewith, no mere enumeration of the rights or
privileges of the holder hereof shall give rise to an obligation on such holder to purchase
any securities or any liability of such holder for the purchase price or as a stockholder of the
Company, whether such obligation or liability is asserted by the Company or by creditors of
the Company.

     6. Representations
and Warranties of the Holder. The holder hereof represents,
warrants and covenants to the Company as follows:

          6.1
Investment Experience. The holder represents that it can bear the
economic risk of its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment in the Warrant
and the Series B Stock issuable upon exercise hereof. The holder also represents it as not been
organized solely for the purpose of acquiring the Warrant or the Series B Stock issuable upon
exercise hereof.

          6.2
Restricted Securities. The holder understands that the Warrant being
issued hereunder and the Series B Stock issuable upon exercise hereof are characterized as
“restricted securities” under the federal securities laws inasmuch as they are being acquired
from the Company in a transaction not involving a public offering and
have not been registered
under the Act nor qualified under applicable state securities laws and that under such laws and
applicable regulations such securities may not be resold without registration under the Act,
except in certain limited circumstances. In this connections, the holder represents that it is
familiar with Rule 144 promulgated under the Act (“Rule 144”), as presently in effect, and understands the
resale limitations imposed thereby and the Act.

5

 

          6.3 Accredited Investor. The holder is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Act.

          6.4 Legends. It is understood that the certificates evidencing the Series B
Stock issuable upon exercise hereof, or upon any transfer of such shares (other than a
transfer registered under the Act or any subsequent transfer of shares so registered) may bear the
following legend:

          “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, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.”

          6.5 Stockholders Agreement and Registration Rights Agreement.
Upon exercise of this Warrant in whole or in part, the holder agrees to execute and
be bound by the Stockholders Agreement and Registration Rights Agreement, both dated
on or about October 26, 2001, and attached hereto as Exhibits B & C, each in its
then current form as of the date of exercise.

     7. Additional Agreements.

          7.1 Confidentiality. In handling any confidential information provided to the holder
by the Company, the holder shall exercise the same degree of care that it exercises with respect to
its own proprietary information of the same type to maintain the confidentiality thereof, except
that disclosure of such information may be made (i) to the subsidiaries of affiliates of the holder
in connection with their present or prospective business relations with the Company, (ii) to
prospective transferees or purchasers of any interest in this Warrant, in each case
provided that they have entered into a comparable confidentiality agreement in favor of the
Company, or (Hi) if otherwise required by law. Confidential information hereunder shall mean
non-public proprietary information of the Company identified as such prior to disclosure to the
holder but shall not include information that either: (a) is in the public domain or in the
knowledge or possession of the holder when disclosed to the holder, or (b) is disclosed to the
holder by a third party unless the holder has actual knowledge that such third party is prohibited
from disclosing such information.

     8. Transfers and Exchanges.

          8.1 Compliance with Act. The holder agrees not to sell, hypothecate, pledge or
otherwise dispose of any interest in the Warrant or the Series B Stock issuable upon exercise
hereof in the United States, its territories, possessions or any area subject to its jurisdiction,
or to any person who is a national thereof or a resident therein (including any estate of such
person), or any corporation, partnership or other entity created or organized therein, other then
in accordance with the Act.

          8.2 New Warrants. Upon presentation to the Company’s transfer agent of the form of
Assignment attached hereto, a new Warrant shall be issued to the new holder hereof. New Warrants
issued in connection with transfers or exchanges shall not require the signature of the

6

 

new holder hereof and shall be identical in form and provision to this Warrant except as to
the number of shares of Series B Stock covered thereby.

          8.3
Ownership of Warrants. The Company may treat the person in whose name
any Warrant is registered on the register kept at the office of the Company maintained
pursuant to
Section 8.4(a) as the owner and holder thereof for all purposes, notwithstanding any notice to
the contrary, except that, if and when any Warrant is properly assigned in blank, the Company may
(but shall not be obligated to) treat the bearer thereof as the owner of such Warrant for all
purposes, notwithstanding any notice to the contrary. A Warrant, if properly assigned, may
be exercised by a new holder without a new Warrant first having been issued.

          8.4
Transfer and Exchange of Warrants.

               (a) The Company will serve as transfer agent for the purposes of this
Warrant, to whom and at which location notices, presentations and demands in respect of this
Warrant may be made upon the Company, until such time as the Company shall notify the
holders of the Warrants of any change in such transfer agent or in the designated office
locations thereof; and

               (b) Upon the surrender of any Warrant, properly endorsed, for
registration of transfer or for exchange, the Company at its expense will execute and deliver
to or upon the order of the holder thereof a new Warrant or Warrants of like tenor, in the name of
such holder or as such holder (upon payment by such holder of any applicable transfer taxes) may
direct, representing the right to purchase individually at least 1,000 shares and in the
aggregate the number of shares of Series B Stock stated in the Warrant or Warrants so surrendered.

     9. Successors
and Assigns. The terms and provisions of this Warrant shall be binding
upon the Company and the holder and their respective successors and assigns, subject at all
times to the restrictions set forth herein; provided that any assignment by the holder must be
approved by the Company in writing. Notwithstanding any provision of this Warrant to the contrary,
the holder shall not sell, assign, hypothecate, pledge or otherwise dispose of any interest in
this Warrant without the prior written approval of the Board of Directors of the Company.

     10. Loss,
Theft, Destruction or Mutilation of Warrant. Upon receipt of the Company
of evidence reasonable satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonable
satisfactory to the Company, and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new warrant of like tenor and dated as of such cancellation, in lieu of
(this Warrant.

     11. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein is not a Business Day,
then such action may be taken or such right may be exercised on the next succeeding full Business
Day. For purposes of this Warrant, a Business Day is a day that is not a Saturday or a Sunday,
a legal, holiday or a day on which banking institutions doing business in the City of New York
or the State of Maryland are authorized by law to close.

     12. Amendments
and Waivers. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a particular
instance

7

 

and either retroactively or prospectively), only with the written consent of the Company
and the holder. Any such amendment or waiver shall be binding on the
parties.

     13. Governing
Law. The terms and conditions of this Warrant shall be governed by
and construed in accordance with Delaware law, without regard to conflicts of law provisions.

     14. Notices. Except as otherwise provided in this Warrant or in the Description of
Preferred Stock, any requirement for a notice, demand or request under this Warrant will be
satisfied by a writing (a) hand delivered with receipt; (b) mailed by United States registered
or certified mail or Express Mail, return receipt requested, postage prepaid; or (c) sent by
Federal Express or any other nationally recognized overnight courier service, and addressed as
follows:

     If to the holder of this Warrant, at its address as shown on the books of the Company; and

	 	 	 	 	 
	

	 	If to the Company, at:
	 	Avalon Pharmaceuticals, Inc.
	

	 	 	 	19 Firstfield Road
	

	 	 	 	Gaithersburg, MD 20878,
	

	 	 	 	Attn: Dr. Kenneth C, Carter
	 
	 	 	 	 
	

	 	With a copy to:
	 	Schmeltzer, Aptaker & Shepard, P.C.,
	

	 	 	 	The Watergate, Suite 1000
	

	 	 	 	2600 Virginia Avenue, N.W.
	

	 	 	 	Washington, D.C. 20037-1922
	

	 	 	 	Attn: Mark I. Gruhin

All notices that are sent in accordance with this Section 14 shall be deemed received by the
holder or the Company on the earliest of the following applicable time periods: (i) the date the
return receipt is executed; or (ii) the date delivered as documented by the overnight courier
service or the hand delivery receipt Either the holder of this Warrant or the Company may
designate a change of address by written notice to the other party.

     15. Remedies. The Company acknowledges and agrees that irreparable harm, for
which there may be no adequate remedy at law and for which the ascertainment of damages
would be difficult, would occur in the event any of the provisions of this Warrant were not
performed in accordance with its specific terms or were otherwise breached. The Company
accordingly agrees that the holders shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Warrant and to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof having jurisdiction, in each
instance without being required to post bond or other security and in addition to, and without having
to prove the inadequacy of other remedies at law.

8

 

Warrant for the Purchase
of Shares of Series B Stock of Avalon Pharmaceuticals, Inc.

	 	 	 	 	 
	 	Avalon Pharmaceuticals, Inc.

a Delaware corporation 

 	 
	 	By:  	/s/ Kenneth C. Carter
 	 
	 	 	Kenneth C. Carter, Ph.D. 	 
	 	 	President and CEO 	 
	 

	 	 	 	 	 
	 	ACCEPTED AND AGREED 

Array Capital LLC. a Delaware Limited

Liability Company

 	 
	 	By:  	/s/ Ken Sorenson
 	 
	 	 	Name:  	KEN SORENSON 	 
	 	 	Title:  	Port. MNGR CATALYTIX

 	 
		Dated:	  	

9

 

SUBSCRIPTION

name and address of corporation

Ladies and Gentlemen:

     The undersigned,                                                             , hereby elects to purchase,
pursuant to the provisions of the Warrant, dated
                                                            , 200_, held by the
undersigned,                                                              shares of the Series B Convertible Preferred Stock
of Avalon Pharmaceuticals, Inc., a Delaware corporation, and elects to pay for such shares through
exercise of the “cashless exercise” provisions of Section 1.5 of such Warrant tenders herewith
payment of the purchase price of such shares in full.

     In exercising its rights to purchase such Series B Preferred Stock, the undersigned hereby
confirms the investment representations made in Section 6 and the agreements made in Section 7 of
such Warrant.

Dated: ______________________ 20____.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Address:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

10

 

FORM OF ASSIGNMENT

	 	 	 
	The undersigned hereby assigns this Warrant to:
	 	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	(Print or type name, address and zip code of assignee)
	 	 

Please insert Social Security or other identifying number of assignee

And irrevocably appoints
                                                             as agent to transfer this Warrant on
the books of the Company. The agency may substitute another to act for him or it.

	 	 	 
	Dated:                                         

	 	Signed:                                         
	 
	 	 
	 
	 	 
	 
	(Sign
exactly as name appears on the front of this Warrant)

	Dated:                                         

	 	Signed:                                                             
	

	 	Name:                                                             
	

	 	Title:                                                             

11

 

Table of Contents

	1.  	Exercise of Warrant

	 	1.1.  	Term
	 	1.2.  	Number of Shares
	 	1.3.  	Purchase Price
	 	1.4.  	Method of Exercise
	 	1.5.  	Cashless Exercise
	 	1.6.  	Issuance of Shares

	2.  	Other Rights.

	 	2.1  	Reorganization, Reclassification, Consolidation or Merger
	 	2.2  	All Other Rights

	3.  	Representations and Warranties of the Company

	 	3.1.  	Authorization
	 	3.2.  	Reservation of Series B Stock
	 	3.3.  	Adjustment in Number of Shares Issuable and Purchase Price
	 	3.4.  	Valid Issuance

	4.  	Stock Ownership
	 
	5.  	Limitation of Liability
	 
	6.  	Representations and Warranties of the Holder

	 	6.1.  	Investment Experience
	 	6.2.  	Restricted Securities
	 	6.3.  	Accredited Investor
	 	6.4.  	Legend
	 	6.5.  	Shareholders Agreement and Registration Rights Agreement.

	7.  	Additional Agreements

	 	7.1.  	Confidentiality

8. Transfers and Exchanges

	 	8.1.  	Compliance with Act
	 	8.2.  	New Warrants
	 	8.3.  	Ownership of Warrants
	 	8.4.  	Transfer and Exchange of Warrants

	9.  	Successors and Assigns

	10.  	Loss, Theft, Destruction or Mutilation of Warrant

12

 

	11.  	Saturdays, Sundays, Holidays, etc.
	 
	12.  	Amendments and Waivers
	 
	13.  	Governing Law
	 
	14.  	Notices
	 
	15.  	Remedies

13

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