1
EXHIBIT 10.13
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH
MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
WARRANT AGREEMENT
To Purchase Shares of the Series Z Preferred Stock of
COMBICHEM, INC.
Dated as of December 20, 1994 (the "Effective Date")
WHEREAS, COMBICHEM, INC., a California corporation (the "Company") has
entered into a Master Lease Agreement dated as of November 16, 1994, Equipment
Schedule No. VL-1, and related Schedules (the "Leases") with COMDISCO, INC., a
Delaware corporation (the "Warrantholder"); and
WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Leases, the right to purchase shares of its Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
The Company hereby grants to the Warrantholder, and the Warrantholder is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe to and purchase, from the Company, that number of fully paid and
assessable shares of the Company's Series Z Preferred Stock ("Preferred Stock")
equal to:
[(A x B) / C] x [1 - ((C - $.50) / C)]
A = 7.5% Warrant Coverage Percentage
B = $450,000 Committed Lease Financing Credit Line
C = $0.75
[(.075 x $450,000) / $0.75 x [$1.00 - (($0.75 - $0.50) / $0.75)]
= 45,000 x [1 - .67] = 30,000
2
The exercise price of the shares of the Series Z Preferred Stock issued
hereunder shall be $0.50 (the "Exercise Price").
The number and purchase price of such shares are subject to adjustment as
provided for in Section 8 hereof.
2. TERM OF THE WARRANT AGREEMENT.
Except as otherwise provided for herein, the term of this Warrant Agreement
and the right to purchase Preferred Stock as granted herein shall commence on
the Effective Date and shall be exercisable for a period of (i) ten (10) years
or (ii) five (5) years from the effective date of the Company's initial public
offering, whichever occurs earlier.
3. EXERCISE OF THE PURCHASE RIGHTS.
The purchase rights set forth in this Warrant Agreement are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time, prior
to the expiration of the term set forth in Section 2 above, by tendering to the
Company at its principal office a notice of exercise in the form attached hereto
as Exhibit I (the "Notice of Exercise"), duly completed and executed. Promptly
upon receipt of the Notice of Exercise and the payment of the purchase price in
accordance with the terms set forth below, and in no event later than twenty-one
(21) days thereafter, the Company shall issue to the Warrantholder a certificate
for the number of shares of Preferred Stock purchased and shall execute the
Notice of Exercise indicating the number of shares which remain subject to
future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election either (i)
by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as
determined below. If the warrantholder elects the Net Issuance method, the
Company will issue Preferred Stock in accordance with the following formula:
x = Y(A-B)
------
A
Where: x = the number of shares of Preferred Stock to be issued to the
Warrantholder.
y = the number of shares of Preferred Stock requested to be exercised
under this Warrant Agreement.
A = the fair market value of one (1) share of Common.
B = the Exercise Price.
-2-
3
As used herein, current fair market value of Common Stock shall mean with
respect to each share of Common Stock:
(i) if the exercise is in connection with an initial public offering, and
if the Company's Registration Statement relating to such public offering
has been declared effective by the SEC, then the initial "Price to Public"
specified in the final prospectus with respect to the offering;
(ii) if this warrant is exercised after, and not in connection with the
Company's initial public offering, the Closing Price on the date of Notice
of Exercise.
(iii) if at any time the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
current fair market value of Common Stock shall be the highest price per
share which the Company could obtain from a willing buyer (not a current
employee or director) for shares of Common Stock sold by the Company, from
authorized but unissued shares, as determined in good faith by its Board of
Directors, unless the Company shall become subject to a merger, acquisition
or other consolidation pursuant to which the Company is not the surviving
party, in which case the fair market value of Common Stock shall be deemed
to be the value received by the holders of the Company's Preferred Stock on
a common equivalent basis pursuant to such merger or acquisition.
Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.
4. RESERVATION OF SHARES.
Authorization and Reservation of Shares. During the term of this Warrant
Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.
5. REGISTRATION RIGHTS
(a) Registration or Listing. The Company shall not have any obligation to
register any of the shares of Preferred Stock at any time. If, at any time after
the Company's Initial Public Offering, the Company proposes to register its
shares of common stock under the Securities Act of 1933, as amended (the
"Securities Act") (other than a registration effected solely to implement an
employee benefit plan, a transaction to which Rule 145 of the
-3-
4
Securities and Exchange Commission, or successor entity, is applicable or any
other form or type of registration in which registrable securities cannot be
included), the Company shall give written notice to the Warrantholder and
permitted assigns of such intention to register shares of common stock. If such
registration is proposed to be on a form which permits inclusion of shares of
common stock issued upon conversion of the preferred stock issued hereunder (the
"Registrable Securities") then held by Warrantholder, upon the written request
of the Warrantholder delivered to the Secretary of the Company within twenty
(20) days after transmittal of notice by the Company to the Warrantholder, the
Company shall, subject to the limits contained in this section and provided
warrantholder accepts the terms of such underwriting between the Company and its
underwriters, use its best efforts to cause all such Registrable Securities to
be registered under the Securities Act and qualified for sale under certain
state blue sky laws; provided, however, that if the underwriter managing such
registration delivers written notification to the Company that market or
economic conditions limit the amount of securities which may reasonably be
expected to be sold, the underwriter may limit or exclude any or all Registrable
Securities from the registration and underwriting. The Company shall so advise
the Warrantholder of any such limit or exclusion. The number of shares that are
entitled to be included in the registration shall be allocated as follows: (i)
to the Company for all securities being sold for its own account; (ii) to all
holders of registrable securities with contractual registration rights for which
registration is requested; and finally (iii) to shareholders without contractual
registration rights. The number of shares of registrable securities that are
included in such registration shall be allocated among all holders with
contractual registration rights in proportion to the amount of registrable
securities initially offered for registration by each holder.
If any person does not agree to the terms of any such underwriting, said
person shall be excluded from the underwriting upon written notice from the
Company or the underwriter. If any shares are excluded from the registration and
if the number of shares of registrable securities to be included in such
registration was previously reduced as a result of marketing factors, the
Company shall then offer to all persons who have retained the right to include
additional securities in the registration, the right to include additional
securities in an aggregate amount equal to the number of shares excluded, with
such shares to be a located among the persons requesting additional inclusion on
a pro rata basis.
(b) Termination of Registration Rights. The right of Warrantholder to
request registration or inclusion in any registration pursuant to Section 4(b)
shall terminate on the closing of the Company's Initial Public Offering,
provided that all shares of Registrable Securities held or entitled to be held
upon converts on by Warrantholder may immediately be sold under Rule 144 during
any 90-day period, or on such date after the closing of the Company's Initial
Public Offering as all shares of "Registrable Securities" held or entitled to be
held upon conversion by Warrantholder may immediately be sold under Rule 144
during any 90-day period. "Registrable Securities," as used herein, shall mean
the shares of common stock issued or issuable upon conversion of the shares of
Series Z Preferred Stock issued upon exercise of this Warrant.
-4-
5
(c) Registration Rights Agreement. In the event the Company so requests,
Warrantholder shall become a signatory to and be bound by the Company's Amended
and Restated Stock Registration Rights Agreement dated November 1, 1994, as
amended provided, however, that Warrantholder shall not have any registration
demand rights set forth in such agreement.
6. NO FRACTIONAL SHARES OR SCRIP.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
7. NO RIGHTS AS SHAREHOLDER.
This Warrant Agreement does not entitle the Warrantholder to any voting,
dividend or other rights as a shareholder of the Company prior to the exercise
of the Warrant.
8. WARRANTHOLDER REGISTRY.
The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) Reservation of Preferred Stock. The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will be
validly issued, fully paid and non-assessable, and will be free of any taxes,
liens, charges or encumbrances of any nature whatsoever; provided, however, that
the Preferred Stock issuable pursuant to this Warrant Agreement may be subject
to restrictions on transfer under state and/or federal securities laws. The
Company has made available to the warrantholder true, correct and complete
copies of its Charter and Bylaws, as amended, and minutes of all Board of
Directors (including all committees of the Board of Directors, if any) and
Shareholder meetings from August 9, 1994 through November 18, 1994. The issuance
of certificates for shares of Preferred Stock upon exercise of the Warrant
Agreement shall be made without charge to the Warrantholder for any issuance tax
in respect thereof, or other cost incurred by the Company in connection with
such exercise and the related issuance of shares of Preferred Stock. The Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved and the issuance and delivery of any certificate in a name
other than that of the warrantholder.
(b) Due Authority. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
shares of Preferred Stock, have been
-5-
6
duly authorized by all necessary corporate action on the part of the Company,
and the Leases and this Warrant Agreement are not inconsistent with the
Company's Charter or Bylaws, do not contravene any law or governmental rule,
regulation or order applicable to it, do not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage, contract
or other instrument to which it is a party or by which it is bound, and the
Leases and this Warrant Agreement constitute legal, valid and binding agreements
of the Company, enforceable in accordance with their respective terms.
(c) Consents and Approvals. No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of any state,
federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the 1933 Act and Section 25102(f) of the California Corporate Securities
Law, which filings will be effective by the time required thereby.
(d) Issued Securities. All issued and outstanding shares of Common Stock,
Preferred Stock or any other securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. All outstanding shares
of Common Stock, Preferred Stock and any other securities were issued in full
compliance with all federal and state securities laws. In addition:
i. The authorized capital stock of the Company consists of 30,000,000
shares of no par value common Stock and 10,000,000 shares of no par value
preferred stock. The first series of preferred stock is comprised of 1,000,000
shares designated "Series A Preferred Stock." The second series of preferred
stock is comprised of 1,500,000 shares designated "Series Z Preferred Stock."
The third series of preferred stock is comprised of 2,226,667 shares designated
"Series B Preferred Stock." There are currently issued and outstanding 1,732,500
shares of the Company's Common Stock, 1,000,000 shares of Series A Preferred
Stock, 200,000 shares of Series Z Preferred Stock and 2,200,000 shares of Series
B Preferred Stock. All issued and outstanding shares of the Company's capital
stock have been duly authorized and validly issued by the Company in compliance
with applicable federal and state securities laws, and are fully paid and
nonassessable.
ii. The Company has reserved no shares of Common Stock for issuance
under its Stock Option Plan, under which no options are outstanding. Other than
400,000 shares of Series Z Preferred Stock reserved for issuance to The Scripps
Research Institute and 26,667 shares of Series B Preferred Stock offered for
sale to Xxxx X. Xxxxxxxx, there are no other options, warrants, conversion
privileges or other rights presently outstanding to purchase or otherwise
acquire any authorized but unissued shares of the Company's capital stock or
other securities of the Company.
-6-
7
iii. Holders of Series A and B Preferred Stock have rights to purchase
additional issuances of stock by the Company to maintain their pro rata
ownership of the Company. No other shareholder of the Company has preemptive
rights to purchase new issuances of the Company's capital stock.
(e) Insurance. The Company has in full force and effect insurance policies,
with extended coverage, insuring the Company and its property and business
against such losses and risks, and in such amounts, as are customary for
corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
(f) Other Commitments to Register Securities. Except as set forth in this
Warrant Agreement, that certain Amended and Restated Stock Registration Rights
Agreement dated November 1, 1994, as amended, and that certain Series Z Stock
Registration Rights Agreement dated October 12, 1994, the Company is not,
pursuant to the terms of any other agreement currently in existence, under any
obligation to register under the 1933 Act any of its presently outstanding
securities or any of its securities which may hereafter be issued.
(g) Exempt Transaction. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act, in reliance upon Section
4(2) thereof, and (ii) the qualification requirements of the California
Corporate Securities Law, in reliance upon Section 25102(f) thereof.
(h) Compliance With Rule 144. At the written request of the Warrantholder,
who proposes to sell Preferred Stock issuable upon the exercise of the Warrant
in compliance with Rule 144 promulgated by the Securities and Exchange
Commission, the Company shall furnish to the Warrantholder, within ten days
after receipt of such request, a written statement confirming the Company's
compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
(a) Investment Purpose. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.
-7-
8
(b) Private Issue. The warrantholder understands (i) that the Preferred
Stock issuable upon exercise of this Warrant is not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.
(c) Disposition of Warrantholder's Rights. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.
(d) Financial Risk. The Warrantholder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
(e) Risk of No Registration. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1933 Act, or file reports pursuant to Section 15(d), of the
Securities Exchange Act of 1934 (the "1934 Act"), or if a registration statement
covering the securities under the 1933 Act is not in effect when it desires to
sell (i) the rights to purchase Preferred Stock pursuant to this
-8-
9
Warrant Agreement, or (ii) the Preferred Stock issuable upon exercise of the
right to purchase, it may be required to hold such securities for an indefinite
period. The warrantholder also understands that any sale of its rights of the
Warrantholder to purchase Preferred Stock or Preferred Stock which might be made
by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.
(f) Market Stand-Off Agreement. Warrantholder hereby agrees that, in
connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company's initial public offering, warrantholder
shall not sell, make any short sale of, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
any securities of the Company held by the Warrantholder without the prior
written consent of the Company and its underwriters. Such limitations shall be
in effect for a period of time as determined by the Company and its managing
underwriter(s) provided that such period of time shall not exceed one hundred
eighty (180) days from and after the effective date of such registration
statement in connection with the Company's initial public offering or ninety
(90) days from and after the effective date of any subsequent underwritten
public offering (the "Market Stand-Off Period"). The limitations of this Section
shall remain in effect for the two-year period immediately following the
effective date of the Company's initial public offering and shall thereafter
terminate and cease to have any force or effect. In order to enforce the
limitations of this Section, the Company may impose stop-transfer instructions
with respect to the securities held by Warrantholder until the end of the Market
Stand-Off Period.
11. TRANSFERS.
Subject to the terms and conditions contained in Section 10 hereof, this
Warrant Agreement and all rights hereunder are transferable in whole or in part
by the warrantholder and any successor transferee, provided, however, in no
event shall the number of transfers of the rights and interests in all of the
Warrants exceed three (3) transfers nor shall any transfer be less than fifty
thousand (50,000) shares. The transfer shall be recorded on the books of the
Company upon receipt by the Company of a notice of transfer in the form attached
hereto as Exhibit II (the "Transfer Notice"), at its principal offices and the
payment to the Company of all transfer taxes and other governmental charges
imposed on such transfer.
12. MISCELLANEOUS.
(a) Effective Date. The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall be
binding upon any successors or assigns of the Company.
(b) Attorneys' Fees. In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to
-9-
10
attorneys' fees and expenses and all costs of proceedings incurred in enforcing
this Warrant Agreement.
(c) Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State of
California.
(d) Counterparts. This Warrant Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, facsimile
transmission (provided that the original is sent by personal delivery or mail as
hereinafter set forth) or seven (7) days after deposit in the United States
mail, by registered or certified mail, addressed (i) to the Warrantholder at
0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, attention: Xxxxx Xxxx, Venture
Leasing Director, cc: Legal Department, (and/or, if by facsimile, (708)
518-5465) and (ii) to the Company at 00000 Xxxxxxxxx Xxxx, #000, Xxx Xxxxx, XX
00000 (and/or if by facsimile, (000) 000-0000 or at such other address as any
such party may subsequently designate by written notice to the other party.
(f) Remedies. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as a
result of any such default, and/or an action for specific performance for any
default where Warrantholder will not have an adequate remedy at law and where
damages will not be readily ascertainable. The Company expressly agrees that it
shall not oppose an application by the Warrantholder or any other person
entitled to the benefit of this Agreement requiring specific performance of any
or all provisions hereof or enjoining the Company from continuing to commit any
such breach of this Agreement.
(g) 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
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholder against impairment.
(h) Survival. The representations, warranties, covenants and conditions of
the respective parties contained herein or made pursuant to this Warrant
Agreement shall survive the execution and delivery of this Warrant Agreement.
(i) Severability. In the event any one or more of the provisions of this
Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or
-10-
11
unenforceable provision shall be replaced by a mutually acceptable valid, legal
and enforceable provision, which comes closest to the intention of the parties
underlying the invalid, illegal or unenforceable provision.
(j) Amendments. Any provision of this Warrant Agreement may be amended by a
written instrument signed by the Company and by the Warrantholder.
(k) Additional Documents. The Company, upon execution of this Warrant
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. If the purchase
price for the Leases referenced in the preamble of this Warrant Agreement
exceeds $1,000,000, the Company will also provide Warrantholder with an opinion
from the Company's counsel with respect to those same representations,
warranties and covenants. The Company shall also supply such other documents as
the Warrantholder may from time to time reasonably request.
-11-
12
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized as of the Effective
Date.
Company:
COMBICHEM, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx, Chief Executive
Officer
Warrantholder:
COMDISCO, INC.,
a Delaware corporation
By: /s/Xxxxx X. Xxxx
--------------------------------
Title: President Venture Lease Division
---------------------------------
13
EXHIBIT I
NOTICE OF EXERCISE
To: COMBICHEM, INC.
(1) The undersigned Warrantholder hereby elects to purchase ______ shares of
CombiChem Inc.'s Series Z Preferred Stock pursuant to the terms of the
Warrant Agreement dated December 15, 1994 (the "Warrant Agreement") between
CombiChem, Inc. (the "Company") and the Warrantholder, and tenders herewith
payment of the purchase price for such shares in full, together with all
applicable transfer taxes, if any.
(2) In exercising its rights to purchase _______ shares of the Company's Series
Z Preferred Stock the Warrantholder hereby confirms and acknowledges the
investment representations and warranties made in Section 10 of the Warrant
Agreement.
(3) Please issue a certificate or certificates representing said shares of
Series Z Preferred Stock in the name of the Warrantholder or in such other
name as is specified below.
----------------------------------
(Name)
----------------------------------
(Address)
Warrantholder:
COMDISCO, INC.,
a Delaware corporation
By:
-------------------------------
Title:
----------------------------
Date:
-----------------------------
14
ACKNOWLEDGEMENT OF EXERCISE
The undersigned officer of CombiChem, Inc. (the "Company") hereby
acknowledges receipt of the "Notice of Exercise" from Comdisco, Inc., to
purchase _______ shares of the Company's Series Z Preferred Stock, pursuant to
the terms of the Warrant Agreement, and further acknowledges that ______ shares
remain subject to purchase under the terms of the Warrant Agreement.
Company:
COMBICHEM, INC.,
a California corporation
By:
--------------------------------
Title:
-----------------------------
Date:
------------------------------
15
EXHIBIT II
TRANSFER NOTICE
(To transfer or assign the foregoing Warrant Agreement execute this form
and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to
----------------------------------
(Please Print)
whose address is
----------------------------------
----------------------------------
----------------------------------
Dated
-----------------------------
Holder's Signature
----------------------------------
Holder's Address
----------------------------------
----------------------------------
Signature Guaranteed:
NOTE: The signature to this Transfer Notice must correspond with the name as
it appears on the face of the Warrant Agreement, without alteration or
enlargement or any change whatever. Officers of corporations and those
acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant
Agreement.
16
AMENDMENT TO THE
SERIES Z PREFERRED STOCK WARRANT
THIS AMENDMENT to that certain Series Z Preferred Stock Warrant issued to
COMDISCO, INC. (the "Warrantholder") by COMBICHEM, INC. (the "Company") dated as
of December 20, 1994, by and among the Company and Warrantholder (the
"Amendment")
RECITALS
A. Pursuant to that certain Master Lease Agreement between the Warrantholder and
the Company dated as of November 16, 1994 and Equipment Schedule VL-1 dated
November 16, 1994, (the "Leases") each Phase I through Phase VI has been made
available and has been utilized by Company.
B. The Company and the Warrantholder have agreed to amend the Warrant to grant
the Warrantholder the right to purchase from the Company, an additional Fifty
Three Thousand Six Hundred Fifty Five Thousand (53,655) shares of the Company's
Series Z Preferred Stock at a purchase price of $0.50 per share.
In consideration of the mutual promises and covenants set forth herein, the
parties hereto agree that the Warrant is amended as follows:
1. INCREASE THE NUMBER OF SHARES GRANTED IN WARRANT.
1.1 Section 1 of the Warrant is hereby amended to read as follows:
"The Company hereby grants to the Warrantholder, and the Warrantholder is
entitled, upon terms and subject to the conditions hereinafter set forth,
to subscribe to and purchase, from the Company, Eighty Three Thousand Six
Hundred and Fifty Five (83,655) fully paid and non-assessable shares of the
Company's Series Z Preferred Stock ("Preferred Stock") at a purchase price
of $0.50 per share (the "Exercise Price"). The number and purchase price of
such shares are subject to adjustment as provided herein."
2. NO OTHER AMENDMENT, ETC.
2.1 Except as set forth herein, all terms of the Warrant shall continue in
full force and effect.
2.2 Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Warrant.
17
2.3 This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall constitute one
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
the Warrant effective as of the date first above written.
THE COMPANY:
COMBICHEM, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------
Title President and CEO
-----------------------------
THE WARRANTHOLDER:
COMDISCO, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------------
Title: Xxxxx X. Xxxx, President
----------------------------
Venture Lease Division
