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Exhibit 4.2    
    

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. 

STOCK PURCHASE WARRANT

To Purchase Shares of Series C Preferred Stock of

Metabasis Therapeutics, Inc. 

        THIS
CERTIFIES that, for value received, GATX Ventures, Inc., a Delaware corporation (the "Investor"), is entitled, upon the terms and subject to the conditions hereinafter set
forth, at any time on or after the date hereof and on or prior to December 31, 2007 (the "Termination Date"), but not thereafter, to subscribe for and purchase, from Metabasis
Therapeutics, Inc., a Delaware corporation (the "Company"), 8,938 shares of Series C Preferred Stock (the "Shares") with an exercise price (the "Exercise Price") of $1.25 per Share. 

        1.    Title to Warrant.    Prior to the expiration hereof and subject to compliance with applicable laws, this Warrant
and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company, referred to in Section 2 hereof, by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. 

        2.    Exercise of Warrant.    The purchase rights represented by this Warrant are exercisable by the registered holder
hereof, in whole or in part, at any time before the close of business on the Termination Date by the surrender of this Warrant and the Notice of Exercise form annexed hereto duly executed at the
office of the Company in San Diego, California (or such other office or agency of the Company as it
may designate by notice in writing to the registered holder hereof at the address of such holder appearing on the books of the Company), and upon payment of the Exercise Price for the Shares thereby
purchased (by cash or by check or bank draft payable to the order of the Company or by cancellation of indebtedness of the Company to the holder hereof, if any, at the time of exercise in an amount
equal to the purchase price of the Shares thereby purchased); whereupon the holder of this Warrant shall be entitled to receive a certificate for the number of shares of Preferred Stock so purchased.
The Company agrees that if at the time of the surrender of this Warrant and purchase the holder hereof shall be entitled to exercise this Warrant, the shares so purchased shall be and be deemed to be
issued to such holder as the record owner of such shares at the close of business on the date on which this Warrant shall have been exercised as aforesaid. 

        3.    Right to Convert Warrant.    The registered holder hereof shall have the right to convert this Warrant, by the
surrender of this Warrant and the Notice of Conversion form annexed hereto duly executed at the office of the Company in San Diego, California (or such other office or agency of the Company as it may
designate by notice in writing to the registered holder hereof at the address of such holder appearing on the books of the Company), in whole but not in part, at any time before the close of business
on the Termination Date, into the Shares as provided for in this Section 3. Upon exercise of this conversion right, the holder hereof shall be entitled to receive that number of Shares equal to
the quotient obtained by dividing [(A - B)(X)] by (A), where: 

	(A)
	=
the Fair Market Value (as defined below) of one (1) Share on the date of conversion of this Warrant. 

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	(B)
	=
the Exercise Price for one (1) Share under this Warrant.

	(X)
	=
the number of Shares issuable upon exercise of this Warrant. 

        If
the above calculation results in a negative number, then no Shares shall be issued or issuable upon conversion of this Warrant. 

        "Fair
Market Value" of a Share shall mean: 

	(a)
	if
the conversion right is being exercised upon the occurrence of the Company's initial public offering, the initial public offering price per share (before deducting underwriting
commissions and discounts and offering expenses) multiplied by the number of shares of Common Stock issuable upon conversion of one (1) Share issuable upon exercise of this Warrant;

	(b)
	if
the conversion right is being exercised after, and not in connection with the Company's initial public offering, and: 

          (i)  if
traded on a securities exchange, the fair market value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty
(30) day period ending three (3) days before the day the current fair market value of the securities is being determined; or 

         (ii)  if
actively traded over-the-counter, the fair market value shall be deemed to be the average of the closing bid or sale prices (whichever are
applicable) over the thirty (30) day period ending three (3) days before the day the current fair market value of the securities is being determined; and 

	(c)
	in
all other cases, the fair value as determined in good faith by the Company's Board of Directors. 

        Upon
conversion of this Warrant, the registered holder hereof shall be entitled to receive a certificate for the number of Shares determined as aforesaid. 

        4.    Issuance of Stock; No Fractional Shares or Scrip.    Certificates for the stock purchased hereunder or issuable
upon conversion hereof shall be delivered to the holder hereof promptly after the date on which this Warrant shall have been exercised or converted as aforesaid. The Company covenants that all Shares
which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and nonassessable and free from all taxes,
liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). The Company agrees that, if at the time of the surrender of
this Warrant and exercise of the rights represented hereby, the holder hereof shall be entitled to exercise such rights, the Shares so issued shall be and be deemed to be issued to such holder as the
record owner of such Shares as of the close of business on the date on which this Warrant shall have been exercised or converted as aforesaid. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise or conversion of this Warrant. With respect to any fraction of a Share called for upon the exercise or conversion of this Warrant, an amount equal
to such fraction multiplied by the then current price at which each Share may be purchased hereunder shall be paid in cash to the holder of this Warrant. 

        5.    Charges, Taxes and Expenses.    Issuance of certificates for the Shares upon the exercise or conversion of this
Warrant shall be made without charge to the holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name of the holder of this Warrant or in such name or names as may be directed by the holder of this Warrant;  provided, however,
 that in the event certificates for Shares are to be issued in a name other than the name of the 

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holder
of this Warrant, this Warrant when surrendered for exercise or conversion shall be accompanied by the Assignment Form attached hereto duly executed by the holder hereof; and  provided further, that upon
any transfer involved in the issuance or delivery of any certificates for the Shares, the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. 

        6.    No Rights as Shareholders.    This Warrant does not entitle the holder hereof to any voting rights or other
rights as a shareholder of the Company prior to the exercise or conversion thereof. 

        7.    Exchange and Registry of Warrant.    This Warrant is exchangeable, upon the surrender hereof by the registered
holder at the above-mentioned office or agency of the Company, for a new Warrant of like tenor and dated as of such exchange. 

        The
Company shall maintain at the above-mentioned office or agency a registry showing the name and address of the registered holder of this Warrant. This Warrant may be surrendered for
exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the
contrary, upon such registry. 

        8.    Loss, Theft, Destruction or Mutilation of Warrant.    Upon receipt by the Company of evidence reasonably
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 reasonably satisfactory to it, 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. 

        9.    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 shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day
not a legal holiday. 

        10.    Early Termination and Dilution.    

        (a)    Qualified Initial Public Offering.    If at any time after the date hereof the Company proposes to consummate
the sale of its Common Stock in a bona fide firm commitment underwriting pursuant to a registration statement on Form S-1 (or successor form) under the Securities Act of 1933, as
amended, which results in gross offering proceeds to this corporation (before underwriting discounts, commissions and fees) of at least $25,000,000, the public offering price of which was not less
than $3.00 per share (adjusted to reflect subsequent stock dividends, stock splits or recapitalizations) ("Qualified IPO"), then the Company shall give the Investor written notice of such impending
transaction not later than thirty (30) days prior to the closing of the Qualified IPO. Such notice shall describe the material terms and conditions of the Qualified IPO, and the Company shall
thereafter give the holder of this Warrant prompt notice of any material changes. If the Warrant has not been exercised or converted by the closing of the Qualified IPO it shall terminate. 

        (b)    Reclassification, etc.    If the Company at any time shall, by subdivision, combination or reclassification of
securities or otherwise, change any of the securities to which purchase rights under this Warrant exist into the same or a different number of securities of any class or classes, this Warrant shall
thereafter be 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 subdivision, combination, reclassification or other change. If the Shares issuable upon the exercise of this Warrant are subdivided or combined into a greater or
smaller number of the Shares, the purchase price under this Warrant shall be proportionately reduced in case of subdivision of shares or proportionately 

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increased
in the case of combination of shares, in both cases by the ratio which the total number of the Shares to be outstanding immediately after such event bears to the total number of the Shares
outstanding immediately prior to such event. 

        (c)    Cash Distributions.    No adjustment on account of dividends on the Shares issuable upon the exercise of this
Warrant will be made to the purchase price under this Warrant. 

        (d)    Authorized Shares.    The Company covenants that, during the period the Warrant is outstanding, it will reserve
from its authorized and unissued Preferred Stock a sufficient number of shares to provide for the issuance of the Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary
certificates for the Shares upon the exercise of the purchase rights under this Warrant. 

        (e)    Conversion Price Adjustments.    The rate at which the Shares are convertible into shares of Common Stock of
the Company is subject to adjustment as set forth in the Company's Certificate of Incorporation, as amended. Any adjustment to the conversion rate of the Shares issuable upon the exercise of this
Warrant effected prior to any exercise or conversion of this Warrant shall apply to any Shares thereafter issued pursuant to the terms hereof. 

        11.    Restrictions on Transferability of Securities.    

        (a)    Restrictions on Transferability.    This Warrant, the Shares issuable upon exercise of this Warrant, and the
shares of Common Stock issuable upon conversion of the Shares (collectively the "Securities") shall not be sold, assigned, transferred or pledged except upon the conditions specified in this
Section 11, which conditions are intended to ensure compliance with the provisions of the Securities Act of 1933, as amended (the "Securities Act"). Each holder of any of the Securities will
cause any proposed purchaser, assignee, transferee, or pledgee of the Securities held by such holder to agree to take and hold such Securities subject to the provisions and upon the conditions
specified in this Section 11. 

        (b)    Restrictive Legend.    Each certificate representing the Securities and any other securities issued in respect
of the Securities upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of Section 11(c) below) be
stamped or otherwise imprinted with legends in the following form (in addition to any legend required under applicable state securities laws): 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT." 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO MARKET STAND-OFF RESTRICTION PURSUANT TO AN AGREEMENT EXECUTED BY THE HOLDER OF THE SHARES, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE ISSUER. THE HOLDER OF THESE SHARES HAS CONSENTED TO THE ENTRY OF STOP TRANSFER INSTRUCTIONS WITH THE ISSUER'S TRANSFER AGENT AGAINST THE TRANSFER OF THESE SHARES IN ORDER TO
ENFORCE THE PROVISIONS OF SUCH AGREEMENT. AS A RESULT OF 

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THIS
MARKET STAND-OFF RESTRICTION, THESE SHARES MAY NOT BE TRANSFERRED DURING THE PERIOD ENDING 180 DAYS AFTER THE DATE OF THE FINAL PROSPECTUS RELATING TO THE PUBLIC OFFERING OF THE
ISSUER." 

        Each
holder of Securities and each subsequent transferee (hereinafter collectively referred to as a "Holder") consents to the Company making a notation on its records and giving
instructions to any transfer agent of the Securities in order to implement the restrictions on transfer established in this Section 11. 

        (c)    Notice of Proposed Transfers.    Each Holder of a certificate representing the Securities, by acceptance
thereof, agrees to comply in all respects with the provisions of this Section 11(c). Prior to any proposed sale, assignment, transfer or pledge of any Securities (other than (i) a
transfer not involving a change in beneficial ownership, (ii) in transactions involving the distribution without consideration of Securities by a Holder to any of its partners, or retired
partners, or to the estate of any of its partners or retired partners, (iii) a transfer to an affiliated fund, partnership or company, which is not a competitor of the Company, subject to
compliance with applicable securities laws or (iv) transfers in compliance with Rule 144, so long as the Company is furnished with satisfactory evidence of compliance with such Rule),
unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the Holder thereof shall give written notice to the Company of such Holder's intention to
effect such transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge in sufficient detail, and shall be
accompanied, at such Holder's expense, by either (i) an opinion of counsel (who shall, and whose opinion shall be, addressed to the Company and reasonably satisfactory to the Company) to the
effect that the proposed transfer of the Securities may be effected without registration under the Securities Act or (ii) a "no action" letter from the Securities and Exchange Commission (the
"Commission") to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto,
whereupon the Holder of such Securities shall be entitled to transfer such Securities in accordance with the terms of the notice delivered by such Holder to the Company. Each certificate evidencing
the Securities transferred as above provided shall bear, except if such transfer is made pursuant to Rule 144, the appropriate restrictive legend set forth in Section 11(b) above, except
that such certificate shall not bear such restrictive legend if in the opinion of counsel for such Holder and in the opinion of counsel for the Company such legend is not required in order to
establish compliance with any provision of the Securities Act. 

        (d)    Removal of Restrictions on Transfer of Securities.    Any legend referred to in Section 11(b) hereof
stamped on a certificate evidencing the Securities and the stock transfer instructions and record notations with respect to the Securities shall be removed, and the Company shall issue a certificate
without such legend to the Holder of the Securities if the Securities are registered under the Securities Act, or if such Holder provides the Company with an opinion of counsel (which may be counsel
for the Company) reasonably satisfactory to the Company to the effect that a public sale or transfer of such security may be made without registration under the Securities Act or such Holder provides
the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel (which may be counsel for the Company) reasonably satisfactory to the Company, that such
security can be sold pursuant to paragraph (k) of Rule 144 (or any successor provision) under the Securities Act. 

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        12.    Investment Representations of the Investor.    With respect to the acquisition of any of the Securities, the
Investor hereby represents and warrants to the Company as follows: 

        (a)    Experience.    The Investor has substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own
interests. The Investor is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act. 

        (b)    Investment.    The Investor is acquiring the Securities for investment for its own account, not as a nominee or
agent, and not with the view to, or for resale in connection with, any distribution thereof. The Investor understands that the Securities have not been, and will not be, registered under the
Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the Investor's representations as expressed herein. 

        (c)    Rule 144.    The Investor acknowledges that the Securities must be held indefinitely unless subsequently
registered under the Securities Act, or unless an exemption from such registration is available. The Investor is aware of the provisions of Rules 144 and 144A promulgated under the Securities
Act that permit limited resale of securities purchased in a private placement subject to satisfaction of certain conditions. 

        (d)    No Public Market.    The Investor understands that no public market now exists for any of the securities issued
by the Company and that the Company has made no assurances that a public market will ever exist for the Securities. 

        (e)    Access to Data.    The Investor has had an opportunity to discuss the Company's business, management and
financial affairs with the Company's management and has also had an opportunity to ask questions of the Company's officers, which questions were answered to its satisfaction. 

        13.    Registration Rights/Lock-Up.    The Company grants registration rights to the holder of this
Warrant for any Common Stock of the Company obtained upon conversion of the Shares, comparable to the registration rights granted to the investors in that certain Amended and Restated Investors'
Rights Agreement, dated as of July 18, 2000, (the "Investors' Rights Agreement"), with the following exceptions and clarifications: 

	(a)
	The
holder will have no demand registration rights.

	(b)
	The
holder will be subject to the same provisions regarding indemnification as contained in the Investors' Rights Agreement.

	(c)
	The
registration rights are freely assignable by the holder of this Warrant in connection with a permitted transfer of this Warrant or all of the Shares. 

        The
Purchaser agrees, in connection with the Company's initial public offering of the Company's securities, (i) not to sell, make short sales of, loan, grant any options for the
purchase of, or otherwise dispose of any shares of Common Stock of the Company held by the Purchaser (other than those shares included in the registration) without the prior written consent of the
Company or the underwriters managing such initial underwritten public offering of the Company's securities for one hundred eighty (180) days from the effective date of such registration and
(ii) further agrees to execute any agreement reflecting (i) above as may be requested by the underwriters at the time of the public offering; provided, however that the agreements set
forth it items (i) and (ii) herein shall only apply if all officers, directors, and key employees of the Company, all five percent security holders, and all other persons with
registration rights enter into similar agreements with such underwriters. 

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        14.    Notices.    

        (a)    Notice of Public Offering.    If at any time prior to the exercise or conversion of this Warrant in full the
Company shall determine to effect a registered public offering of its securities, then the Company will
give the holder of this Warrant at least thirty (30) days prior written notice of the proposed effective date of the transaction. 

        (b)    Notice of Record Date.    If at any time prior to the exercise or conversion of this Warrant in full the
Company takes a record of the holders of the Company's stock for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, 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, the Company will give to the holder of this Warrant, at least
thirty (30) days prior to the date specified therein, written notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right. 

        15.    Miscellaneous.    

        (a)    Issue Date.    The provisions of this Warrant shall be construed and shall be given effect in all respect as if
it had been issued and delivered by the Company on the date hereof. This Warrant shall be binding upon any successors or assigns of the Company. This Warrant shall be governed in all respects by the
laws of the State of California. 

        (b)    Waivers and Amendments.    With the written consent of the Company and the Investor, the obligations of the
Company and the right of the Investor may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely), and
with the same consent the Company and the Investor may enter into a supplementary agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions
of this Warrant. 

        (c)    Notices.    All notices and other communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed effectively given upon personal delivery, delivery by nationally recognized courier or upon deposit with the United States Post Office (by first class mail, postage
prepaid) addressed as follows: (i) if to the Company, at the address of its principal office in the State of California, or at such other address as the Company shall have furnished me in
writing, and (ii) if to the Investor, to GATX Ventures, Inc., 3687 Mt. Diablo Blvd. Suite 200, Lafayette, CA 94549, Attn: Legal Department. 

        (d)    Survival.    The provisions of Section 11 hereof shall survive the exercise or conversion of this
Warrant and shall remain in effect until such time as the Investor no longer holds Securities. 

        (e)    Binding Effect on Successors.    This Warrant shall be binding upon any corporation succeeding the Company by
merger, consolidation or acquisition of all or substantially all of the Company's assets. All of the covenants and agreements of the Company shall inure to the benefit of successors and assigns of the
holder hereof. 

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        IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized. 

	Dated: February 6, 2001	 	 	 
	

 	

 	
 	
METABASIS THERAPEUTICS, INC.
	

 	
 	
 	

By:	

/s/  JOHN W. BECK      

	

 	

 	
 	

Title:	

VP of Finance & CFO

	

 	

 	
 	

 	

 
	Agreed and Accepted:	 	 	 
	

Name:	

GATX VENTURES, INC.
	
 	

 	

 
	

By:	

  
	
 	

 	

 
	

Title:	

  
	
 	

 	

 

8

NOTICE OF EXERCISE  

To:    Metabasis
Therapeutics, Inc. 

        (1)   The
undersigned hereby elects to purchase            shares of Series C Preferred Stock of Metabasis Therapeutics, Inc. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price in full, together with all applicable transfer taxes, if any. 

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

	 	 	    
 (Name)	 	 
	

 	
 	

    
    
 (Address)

	
 	

 

        (3)   The
undersigned represents that the aforesaid shares of Series C Preferred Stock are being acquired for the account of the undersigned for investment and not with
a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with
securities laws applicable to the Company and the Company's shareholders. 

	 	 	 	    
 (Signature)
	

    
 (Date)	
 	

 	

 

NOTICE OF CONVERSION  

To:    Metabasis
Therapeutics, Inc. 

        (1)   The
undersigned hereby elects to convert the attached Warrant into such number of shares of Series C Preferred Stock of Metabasis Therapeutics, Inc. as is
determined pursuant to Section 3 of such Warrant, which conversion shall be effected pursuant to the terms of the attached Warrant. 

        (2)   Please
issue a certificate of certificates representing said shares of Metabasis Therapeutics, Inc. Series C Preferred Stock in the name of the undersigned
or in such other name as is specified below: 

	 	 	    
 (Name)	 	 
	

 	
 	

    
    
 (Address)

	
 	

 

        (3)   The
undersigned represents that the aforesaid shares of Metabasis Therapeutics, Inc. Series C Preferred Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such
shares, all except as in compliance with securities laws applicable to the Company and the Company's shareholders. 

	 	 	 	    
 (Signature)
	

    
 (Date)	
 	

 	

 

ASSIGNMENT FORM  

(To 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 assigned to 

	        	 	 	 	 	 	 
	

	(Please Print)
	

whose address is
	 	

	(Please Print)
	        	 	 	 	 	 	 
	

	

 	

 	

Dated:	

 	

 	

, 20	

 
	 	 	 	
	 	

	

 	

 	

Holder's Signature:	

 	

 	

 
	 	 	 	 	

	

 	

 	

Holder's Address:	

 	

 	

 
	 	 	 	 	

	

 	

 	

 	

	

Signature Guaranteed:	

 	

 	

 	

 	

 	

 
	 	

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

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Exhibit 4.2QuickLinks
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Exhibit 4.3    
    

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
(i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED,
(iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 8 OF THIS
WARRANT.

METABASIS THERAPEUTICS, INC.  

WARRANT TO PURCHASE 26,000 SHARES

OF SERIES C PREFERRED STOCK 

        THIS
CERTIFIES THAT, for value received, GATX Ventures, Inc., a Delaware corporation, and its assignees are entitled to subscribe for and purchase 26,000 shares of the fully paid
and nonassessable Series C Preferred Stock (as adjusted pursuant to Section 5 hereof, the "Shares") of Metabasis Therapeutics Inc., a Delaware corporation (the "Company"), at the
price of $1.25 per share (such price and such other price as shall result, from time to time, from the adjustments specified in Section 5 hereof is herein referred to as the "Warrant Price"),
subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, (a) the term "Series Preferred" shall mean the Company's presently authorized Series C
Preferred Stock, and any stock into or for which such Series C Preferred Stock may hereafter be converted or exchanged, and after the automatic conversion of the Series C Preferred Stock
to Common Stock pursuant to the Company's Certificate of Incorporation shall mean the Company's Common Stock, (b) the term "Date of Grant" shall mean February 6, 2001, and (c) the
term "Other Warrants" shall mean any other warrants issued by the Company in connection with the transaction with respect to which this Warrant was issued, and any warrant issued upon transfer or
partial exercise of or in lieu of this Warrant. The term "Warrant" as used herein shall be deemed to include Other Warrants unless the context clearly requires otherwise. 

        1.    Decrease in Number of Shares.    If pursuant item (f) of Part II of Schedule 3 to the Loan
Equipment and Security Agreement, dated as of February 6, 2001, between GATX and the Company (the "Loan Agreement"), GATX does not make any Loan (as defined in the Loan Agreement) requested by
the
Company (the "Requested Loan") by the Commitment Termination Date (as defined in the Loan Agreement) or any extension of the Commitment Termination Date requested by the Company and agreed to by GATX
in its sole discretion, the Shares shall automatically decrease by an amount equal to the Shares times the quotient equal to the aggregate Requested Loans divided by the Credit Amount (as defined in
the Loan Agreement) (as thereafter adjusted pursuant to Section 5 hereof, which reduced shares shall thereafter be referred to as the "Shares"). 

        2.    Term.    The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and
from time to time from the Date of Grant through the earlier of (i) seven (7) years after the Date of Grant or (ii) three (3) years after the closing of the Company's
initial public offering of its Common Stock ("IPO") effected pursuant to a Registration Statement on Form S-1 (or its successor) filed under the Securities Act of 1933, as amended
(the "Act"). 

        3.    Method of Exercise; Payment; Issuance of New Warrant.    Subject to Section 2 hereof, the purchase right
represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with
the notice of exercise substantially in the form attached hereto as Exhibit A-1 duly completed and executed) at the principal office of the Company and by the payment to the
Company, by certified or bank check, or by wire transfer to an account designated by the Company (a "Wire Transfer") of an amount equal to the then applicable Warrant Price multiplied by the number of
Shares then being purchased; (b) if in connection with a registered public offering of the Company's securities, the surrender of this Warrant (with the notice of exercise form attached hereto
as Exhibit A-2 duly 

 

completed
and executed) at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company either by certified or bank check
or by Wire Transfer from the proceeds of the sale of shares to be sold by the holder in such public offering of an amount equal to the then applicable Warrant Price per share multiplied by the number
of Shares then being purchased; or (c) exercise of the "net issuance" right provided for in Section 11.2 hereof. The person or persons in whose name(s) any certificate(s) representing
shares of Series Preferred shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of,
the shares represented thereby (and such shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. In the event
of any exercise of the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the holder hereof as soon as possible and in any event within thirty
(30) days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant
shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such thirty-day period; provided, however, at such time as the
Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, if requested by the holder of this Warrant, the Company shall cause its transfer agent to deliver
the certificate representing Shares issued upon exercise of this Warrant to a broker or other person (as directed by the holder exercising this Warrant) within the time period required to settle any
trade made by the holder after exercise of this Warrant. 

        4.    Stock Fully Paid; Reservation of Shares.    All Shares that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue
thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise
of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Series Preferred to provide for the exercise of the rights represented by this Warrant and a sufficient number of
shares of its Common Stock to provide for the conversion of the Series Preferred into Common Stock. 

        5.    Adjustment of Warrant Price and Number of Shares.    The number and kind of securities purchasable upon the
exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 

        (a)    Reclassification or Merger.    In case of any reclassification or change 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 the acquiring and the surviving corporation and which does not result
in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case 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 duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this
Warrant), or the Company shall make appropriate provision without the issuance of a new Warrant, so that the holder of this Warrant shall have the right to receive upon exercise of this Warrant, at a
total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the shares of Series Preferred 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, merger or sale by a holder of the number of shares of Series
Preferred then purchasable under this Warrant, or in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or
purchasing corporation, at the option of the Holder 

2

 

of
this Warrant, the securities of the successor or purchasing corporation having a value at the time of the transaction equivalent to the value of the Series Preferred purchasable upon exercise of
this Warrant at the time of the transaction. Any new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this
Section 5. The provisions of this subparagraph (a) shall similarly apply to successive reclassifications, changes, mergers and transfers. 

        (b)    Subdivision or Combination of Shares.    If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its outstanding shares of Series Preferred, the Warrant Price shall be proportionately decreased and the number of Shares issuable hereunder shall be
proportionately increased in the case of a subdivision and the Warrant Price shall be proportionately increased and the number of Shares issuable hereunder shall be proportionately decreased in the
case of a combination. 

        (c)    Stock Dividends and Other Distributions.    If the Company at any time while this Warrant is outstanding and
unexpired shall (i) pay a dividend with respect to Series Preferred payable in Series Preferred, then the Warrant Price shall be adjusted, from and after the date of determination of
shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant 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 Series Preferred outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall
be the total number of shares of Series Preferred outstanding immediately after such dividend or distribution; or (ii) make any other distribution with respect to Series Preferred (except any
distribution specifically provided for in Sections 5(a) and 5(b)), then, in each such case, provision shall be made by the Company such that the holder of this Warrant shall receive upon exercise of
this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Series Preferred (or Common Stock issuable upon conversion thereof) as of the record date
fixed for the determination of the shareholders of the Company entitled to receive such dividend or distribution. 

        (d)    Adjustment of Number of Shares.    Upon each adjustment in the Warrant Price, the number of Shares of Series
Preferred purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the
Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter. 

        (e)    Antidilution Rights.    The other antidilution rights applicable to the Shares of Series Preferred purchasable
hereunder are set forth in the Company's Certificate of Incorporation, as amended through the Date of Grant, a true and complete copy of which is attached hereto as Exhibit B (the "Charter").
Such antidilution rights shall not be restated, amended, modified or waived in any manner that is adversely affects the holder hereof differently from the other holders of the Company's
Series C Preferred Stock without the prior written consent of the holder herof. The Company shall promptly provide the holder hereof with any restatement, amendment, modification or waiver of
the Charter promptly after the same has been made. 

        6.    Notice of Adjustments.    Whenever the Warrant Price or the number of Shares purchasable hereunder shall be
adjusted pursuant to Section 5 hereof, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall
cause copies of such certificate to be mailed (by first class or certified mail, postage prepaid, or overnight courier) to the holder of this Warrant. In addition, whenever the conversion price or
conversion ratio 

3

 

of
the Series Preferred shall be adjusted, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Series Preferred after giving effect to such adjustment, and shall cause copies
of such certificate to be (by first class or certified mail, postage prepaid, or overnight courier) to the holder of this Warrant. 

        7.    Fractional Shares.    No fractional shares of Series Preferred will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value of the Series Preferred on the date of exercise as reasonably determined
in good faith by the Company's Board of Directors. 

        8.    Compliance with Act; Disposition of Warrant or Shares of Series Preferred.    

        (a)    Compliance with Act.    The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the
shares of Series Preferred to be issued upon exercise hereof and any Common Stock issued upon
conversion thereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant, or any shares of Series Preferred to be issued upon exercise hereof
or any Common Stock issued upon conversion thereof except under circumstances which will not result in a violation of the Act or any applicable state securities laws. Upon exercise of this Warrant,
unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing
that the shares of Series Preferred so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in
violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Company. This Warrant and all shares of Series Preferred issued upon exercise of this
Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with legends in
substantially the following form: 

"THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
(i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED,
(iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 8 OF THE WARRANT UNDER WHICH
THESE SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY." 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO MARKET STAND-OFF RESTRICTION PURSUANT TO AN AGREEMENT EXECUTED BY THE HOLDER OF THE SHARES, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE ISSUER. THE HOLDER OF THESE SHARES HAS CONSENTED TO THE ENTRY OF STOP TRANSFER INSTRUCTIONS WITH THE ISSUER'S TRANSFER AGENT AGAINST THE TRANSFER OF THESE SHARES IN ORDER TO
ENFORCE THE PROVISIONS OF SUCH AGREEMENT. AS A RESULT OF THIS MARKET STAND-OFF RESTRICTION, THESE SHARES MAY NOT BE TRANSFERRED DURING THE PERIOD ENDING 180 DAYS AFTER THE DATE OF THE
FINAL PROSPECTUS RELATING TO THE PUBLIC OFFERING OF THE ISSUER." 

4

 

        Any
legend referred to in Section 8 (a) hereof stamped on a certificate evidencing the Securities and the stock transfer instructions and record notations with respect to
the Securities shall be removed, and the Company shall issue a certificate without such legend to the Holder of the Securities if the Securities are registered under the Securities Act, or if such
Holder provides the Company with an opinion of counsel (which may be counsel for the Company) reasonably satisfactory to the Company to the effect that a public sale or transfer of such security may
be made without registration under the Securities Act or such Holder provides the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel (which may
be counsel for the Company) reasonably satisfactory to the Company, that such security can be sold pursuant to paragraph (k) of Rule 144 (or
any successor provision) under the Securities Act. In addition, in connection with the issuance of this Warrant, the holder specifically represents to the Company by acceptance of this Warrant as
follows: 

        (1)   The
holder is aware of the Company's business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and
knowledgeable decision to acquire this Warrant. The holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act. 

        (2)   The
holder understands that this Warrant has not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of the holder's investment intent as expressed herein. 

        (3)   The
holder further understands that this Warrant must be held indefinitely unless subsequently registered under the Act and qualified under any applicable state
securities laws, or unless exemptions from registration and qualification are otherwise available. The holder is aware of the provisions of Rule 144, promulgated under the Act. 

        (4)   The
holder is an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated under the Act. 

        (5)   The
holder understands that no public market now exists for any of the securities issued by the Company, and that the Company has made no assurances that a public market
will ever exist for the Shares. 

        (b)    Disposition of Warrant or Shares.    With respect to any offer, sale or other disposition of this Warrant or
any shares of Series Preferred acquired pursuant to the exercise of this Warrant prior to registration of such Warrant or shares, the holder hereof agrees to give written notice to the Company prior
thereto, describing briefly the manner thereof, together with a written opinion of such holder's counsel, or other evidence, if reasonably satisfactory to the Company, to the effect that such offer,
sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Warrant or such shares
of Series Preferred or Common Stock and indicating whether or not under the Act certificates for this Warrant or such shares of Series Preferred to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory opinion or other
evidence, the Company, as promptly as practicable but no later than fifteen (15) days after receipt of the written notice, shall notify such holder that such holder may sell or otherwise
dispose of this Warrant or such shares of Series Preferred or Common Stock, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this
Section 8(b) that the opinion of counsel for the holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the holder promptly with details thereof
after such determination has been made. Notwithstanding the foregoing, this Warrant or such shares of Series Preferred or Common Stock may, as to such federal laws, be 

5

 

offered,
sold or otherwise disposed of in accordance with Rule 144 or 144A under the Act, provided that the Company shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 or 144A have been satisfied. Each certificate representing this Warrant or the shares of Series Preferred thus
transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the
aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions. 

        (c)    Applicability of Restrictions.    Neither any restrictions of any legend described in this Warrant nor the
requirements of Section 8(b) above shall apply to any transfer of, or grant of a security interest in, this Warrant (or the Series Preferred or Common Stock obtainable upon exercise thereof) or
any part hereof (i) to a partner of the holder if the holder is a partnership or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of which
the holder is a partner or to a limited liability company of which the holder is a member, or (iii) to any affiliate of the holder if the holder is a corporation;  provided, however, in any such transfer, if applicable, the transferee shall on the Company's request
agree in writing to be bound by the terms of this Warrant as if an original holder hereof. 

        9.    Rights as Shareholders; Information.    No holder of this Warrant, as such, shall be entitled to vote or receive
dividends or be deemed the holder of Series Preferred or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the
Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. Notwithstanding the foregoing, the Company will transmit to the holder of this Warrant such
information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Company concurrently with the distribution thereof to the shareholders. 

        10.    Registration Rights/Lock-Up.    The Company grants registration rights to the holder of this
Warrant for any Common Stock of the Company obtained upon conversion of the Shares, comparable to the registration rights granted to the investors in that certain Amended and Restated Investors'
Rights Agreement, dated as of July 18, 2000, (the "Investors' Rights Agreement"), with the following exceptions and clarifications: 

        (1)   The
holder will have no demand registration rights. 

        (2)   The
holder will be subject to the same provisions regarding indemnification as contained in the Investors' Rights Agreement. 

        (3)   The
registration rights are freely assignable by the holder of this Warrant in connection with a permitted transfer of this Warrant or all of the Shares. 

The
Purchaser agrees, in connection with the Company's initial public offering of the Company's securities, (i) not to sell, make short sales of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock of the Company held by the Purchaser (other than those shares included in the registration) without the prior written consent of the Company or the
underwriters managing such initial underwritten public offering of the Company's securities for one hundred eighty (180) days from the effective date of such registration and
(ii) further agrees to execute any agreement reflecting (i) above as may be requested by the underwriters at the time of the public offering; provided, however that the agreements set
forth it items (i) and (ii) herein shall only apply if all officers, directors, and key employees of the Company, all five percent security holders, and all other persons with
registration rights enter into similar agreements with such underwriters. 

6

   
        11.    Additional Rights.    

        11.1    Acquisition Transactions.    The Company shall provide the holder of this Warrant with at least twenty
(20) days' written notice prior to closing thereof of the terms and conditions of any of the following transactions (to the extent the Company has notice thereof): (i) the sale, lease,
exchange, conveyance or other disposition of all or substantially all of the Company's property or business, or (ii) its merger into or consolidation with any other corporation (other than a
wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is
disposed of. 

        11.2    Right to Convert Warrant into Stock: Net Issuance.    

        (a)    Right to Convert.    In addition to and without limiting the rights of the holder under the terms of this
Warrant, the holder shall have the right to convert this Warrant or any portion thereof (the "Conversion Right") into shares of Series Preferred (or Common Stock if the Series Preferred has been
automatically converted into Common Stock) as provided in this Section 11.2 at any time or from time to time during the term of this Warrant. Upon exercise of the Conversion Right with respect
to a particular number of shares subject to this Warrant (the "Converted Warrant Shares"), the Company shall deliver to the holder (without payment by the holder of any exercise price or any cash or
other consideration) that number of shares of fully paid and nonassessable Series Preferred (or Common Stock if the Series Preferred has been automatically converted into Common Stock) as is
determined according to the following formula: 

	 	X  =	 	B  -  A
	 	 
	 	 	 	Y

	 	 

	

 	

Where:	
 	

X  =	
 	

the number of shares of Series Preferred (or Common Stock if the Series Preferred has been automatically converted to Common Stock) that shall be issued to holder
	

 	

 	
 	

Y  =	
 	

the fair market value of one share of Series Preferred (or Common Stock if the Series Preferred has been automatically converted to Common Stock)
	

 	

 	
 	

A  =	
 	

the aggregate Warrant Price of the specified number of Converted Warrant Shares immediately prior to the exercise of the Conversion Right (i.e., the number of Converted Warrant Shares multiplied by the Warrant Price)
	

 	

 	
 	

B  =	
 	

the aggregate fair market value of the specified number of Converted Warrant Shares (i.e., the number of Converted Warrant Shares multiplied by the fair
market value of one Converted Warrant Share)

        No
fractional shares shall be issuable upon exercise of the Conversion Right, and, if the number of shares to be issued determined in accordance with the foregoing formula is other than
a whole number, the Company shall pay to the holder an amount in cash equal to the fair market value of the resulting fractional share on the Conversion Date (as hereinafter defined). For purposes of
Section 10 of this Warrant, shares issued pursuant to the Conversion Right shall be treated as if they were issued upon the exercise of this Warrant. 

        (b)    Method of Exercise.    The Conversion Right may be exercised by the holder by the surrender of this Warrant at
the principal office of the Company together with a written statement (which may be in the form of Exhibit A-1 or Exhibit A-2 hereto) specifying that the holder
thereby intends to exercise the Conversion Right and indicating the number of shares subject to this Warrant which are being surrendered (referred to in Section 11.2(a) hereof as the Converted
Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement, or on such later date
as is specified therein (the "Conversion Date"), and, at the election of the holder 

7

 

hereof,
may be made contingent upon the closing of the sale of the Company's Common Stock to the public in a public offering pursuant to a Registration Statement under the Act (a "Public Offering").
Certificates for the shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant evidencing the balance of the shares remaining subject to this Warrant, shall be issued as
of the Conversion Date and shall be delivered to the holder within thirty (30) days following the Conversion Date. 

        (c)    Determination of Fair Market Value.    For purposes of this Section 11.2, "fair market value" of a share
of Series Preferred (or Common Stock if the Series Preferred has been automatically converted into Common Stock) as of a particular date (the "Determination Date") shall mean: 

          (i)  If
the Conversion Right is exercised in connection with and contingent upon a Public Offering, and if the Company's Registration Statement relating to such Public
Offering ("Registration Statement") has been declared effective by the Securities and Exchange Commission, then the initial "Price to Public" specified in the final prospectus with respect to such
offering. 

         (ii)  If
the Conversion Right is not exercised in connection with and contingent upon a Public Offering, then as follows: 

        (A)  If
traded on a securities exchange, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock on such
exchange over the five trading days immediately prior to the Determination Date, and the fair market value of the Series Preferred shall be deemed to be such fair market value of the Common Stock
multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible; 

        (B)  If
traded on the Nasdaq Stock Market or other over-the-counter system, the fair market value of the Common Stock shall be deemed to be the
average of the closing bid prices of the Common Stock over the five trading days immediately prior to the Determination Date, and the fair market value of the Series Preferred shall be deemed to be
such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible; and 

        (C)  If
there is no public market for the Common Stock, then fair market value shall be determined by the Board of Directors of the Company. 

In
making a determination under clauses (A) or (B) above, if on the Determination Date, five trading days had not passed since the IPO, then the fair market value of the Common Stock
shall be the average closing prices or closing bid prices, as applicable, for the shorter period beginning on and including the date of the IPO and ending on the trading day prior to the Determination
Date (or if such period includes only one trading day the closing price or closing bid price, as applicable, for such trading day). If closing prices or closing bid prices are no longer reported by a
securities exchange or other trading system, the closing price or closing bid price shall be that which is reported by such securities exchange or other trading system at 4:00 p.m. New York
City time on the applicable trading day. 

        11.3    Exercise Prior to Expiration.    To the extent this Warrant is not previously exercised as to all of the
Shares subject hereto, and if the fair market value of one share of the Series Preferred is greater than the Warrant Price then in effect, this Warrant shall be deemed automatically exercised pursuant
to Section 11.2 above (even if not surrendered) immediately before its expiration. For purposes of such automatic exercise, the fair market value of one share of the Series Preferred upon such
expiration shall be determined pursuant to Section 11.2(c). To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 11.3, the Company
agrees to promptly notify 

8

 

the
holder hereof of the number of Shares, if any, the holder hereof is to receive by reason of such automatic exercise. 

        12.    Representations and Warranties.    The Company represents and warrants to the holder of this Warrant as
follows: 

        (a)   This
Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law or principles at equity governing specific performance, injunctive relief and other
equitable remedies; 

        (b)   The
Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid
and non-assessable; 

        (c)   The
rights, preferences, privileges and restrictions granted to or imposed upon the Series Preferred and the holders thereof are as set forth in the Charter, and on the
Date of Grant, each share of the Series Preferred represented by this Warrant is convertible into one share of Common Stock; 

        (d)   The
shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with
the terms of the Charter will be validly issued, fully paid and nonassessable; 

        (e)   The
execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company's Charter or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and do not and
will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the registration or filing with or the taking of any action in respect of or by, any Federal, state or local government authority or agency
or other person, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby; 

        (f)    There
are no actions, suits, audits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company in any court or before any
governmental commission, board or authority which, if adversely determined, will have a material adverse effect on the ability of the Company to perform its obligations under this Warrant; and 

        (g)   The
number of shares of Common Stock of the Company outstanding on the date hereof, on a fully diluted basis (assuming the conversion of all outstanding convertible
securities and the exercise of all outstanding options and warrants), does not exceed 45,632,782 shares. 

        13.    Modification and Waiver.    This Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 

        14.    Notices.    Subject to Section 5 herein, any notice, request, communication or other document required
or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, or overnight courier to each such
holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant. 

9

 

        15.    Binding Effect on Successors.    This Warrant shall be binding upon any corporation succeeding the Company by
merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Series Preferred issuable upon the exercise or
conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors
and assigns of the holder hereof. 

        16.    Lost Warrants or Stock Certificates.    The Company covenants to the holder hereof that, upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 

        17.    Descriptive Headings.    The descriptive headings of the several paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant. 

        18.    Governing Law.    This Warrant shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California. 

        19.    Survival of Representations, Warranties and Agreements.    All representations and warranties of the Company
and the holder hereof contained herein shall survive the Date of Grant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder. All
agreements of the Company and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative. 

        20.    Remedies.    In case any one or more of the covenants and agreements contained in this Warrant shall have been
breached, the holders hereof (in the case of a breach by the Company), or the Company (in the case of a breach by a holder), may proceed to protect and enforce their or its rights either by suit in
equity and/or by action at law, including, but not limited to, an action for damages as a result of any such breach and/or an action for specific performance of any such covenant or agreement
contained in this Warrant. 

        21.    No Impairment of Rights.    The Company will not, by amendment of its Charter 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
action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment. 

        22.    Severability.    The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall
not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect. 

        23.    Recovery of Litigation Costs.    If any legal action or other proceeding is brought for the enforcement of this
Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled. 

        24.    Entire Agreement; Modification.    This Warrant constitutes the entire agreement between the parties pertaining
to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject
matter. 

10

 

        The
Company has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above. 

	 	 	METABASIS THERAPEUTICS, INC
	

 	
 	
By	

/s/  JOHN W. BECK      

	

 	
 	

Title	

VP of Finance & CFO

	

 	
 	

Address:	

 

Agreed and Accepted: 

	Name:	GATX VENTURES, INC.

	

By:	

	

Title:	

11

EXHIBIT A-1 

NOTICE
OF EXERCISE 

To:    [Metabasis
Therapeutics] (the "Company") 

        1.     The
undersigned hereby: 

	o
	elects
to purchase             shares of [Series C Preferred Stock] [Common
Stock] of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, or

	o
	elects
to exercise its net issuance rights pursuant to Section 11.2 of the attached Warrant with respect to
             Shares of [Series C Preferred Stock] [Common Stock]. 

        2.     Please
issue a certificate or certificates representing            shares in the name of the undersigned or in such other name or names as are specified below: 

	 	 	    
 (Name)	 	 
	

 	
 	

    
    
 (Address)

	
 	

 

        3.     The
undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in
connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with securities laws applicable to the
Company and the Company's shareholders. 

	 	 	 	    
 (Signature)
	

    
 (Date)	
 	

 	

 

EXHIBIT A-2 

NOTICE
OF EXERCISE 

To:    [Metabasis
Therapeutics] (the "Company") 

        1.     Contingent
upon and effective immediately prior to the closing (the "Closing") of the Company's public offering contemplated by the Registration Statement on
Form S     , filed                        , 20    , the undersigned hereby:

	o
	elects
to purchase             shares of [Series C Preferred Stock] [Common
Stock] of the Company (or such lesser number of shares as may be sold on behalf of the undersigned at the Closing) pursuant to the terms of the attached Warrant, or

	o
	elects
to exercise its net issuance rights pursuant to Section 11.2 of the attached Warrant with respect to
             Shares of [Series C Preferred Stock] [Common Stock]. 

        2.     Please
deliver to the custodian for the selling shareholders a stock certificate representing such             shares. 

        3.     The
undersigned has instructed the custodian for the selling shareholders to deliver to the Company $            or, if less, the net proceeds due the undersigned
from the sale of shares in the aforesaid public offering. If such net proceeds are less than the purchase price for such shares, the undersigned agrees to deliver the difference to the Company prior
to the Closing. 

	 	 	 	    
 (Signature)
	

    
 (Date)	
 	

 	

 

EXHIBIT B 

CHARTER

QuickLinks

Exhibit 4.3

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