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STOCK PURCHASE WARRANT EXHIBIT 10.15
THIS WARRANT AND THE SHARES OF STOCK WHICH MAY BE PURCHASED PURSUANT TO THE
EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND
OF ANY APPLICABLE STATE SECURITIES LAWS UNLESS SOLD PURSUANT TO RULE 144 OF THE
ACT.
No. C-_ COMBICHEM, INC.
WARRANT TO PURCHASE SHARES OF STOCK
THIS CERTIFIES THAT, for value received, ________________ (the "Holder")
is entitled to subscribe for and purchase _______________________________
(_____) shares (the "Shares") of Series C Preferred Stock of CombiChem, Inc.
Subject to the provisions and upon the terms and conditions hereinafter set
forth, Shares purchased under this Warrant shall be subject to purchase at $0.62
per share, as adjusted pursuant to Section 3 hereof (the "Exercise Price").
1. Method of Exercise; Payment.
(a) Cash Exercise. The purchase rights represented by this Warrant
may be exercised by the Holder in whole or in part, by the surrender of this
Warrant (with the Notice of Exercise form attached hereto as Exhibit B-I duly
executed) at the principal office of the Company, and by the payment to the
Company, by certified, cashier's, or other check acceptable to the Company, of
an amount equal to the aggregate Exercise Price of the shares being purchased.
(b) Net Issue Exercise.
(i) In lieu of exercising this Warrant pursuant to Section
l(a) hereof, the Holder may elect to receive a number of Shares equal to the
value (as determined below) of this Warrant (or the portion thereof being
cancelled) by surrender of this Warrant at the principal office of the Company
together with the Notice of Exercise in which
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alternative No. 1 is initialed by the Holder. In such event, the Company shall
issue to the Holder a number of Shares computed using the following formula:
X: Y (A-B)
-------
A
Where X = the number of Shares to be issued to the Holder.
Y = the number of Shares subject to this Warrant.
A = the fair market value of one Share.
B = the Exercise Price (as adjusted to the date of such calculation).
(ii) Automatic Exercise. This Warrant shall automatically be
exercised pursuant to Section l(b) hereof immediately before its expiration
pursuant to Section 10 hereof, unless Holder notifies the Company in writing to
the contrary before such termination.
(c) Fair Market Value. For purposes of this Warrant, the fair
market value of the security issuable upon exercise of the Warrant shall mean:
(i) The average of the closing bid and asked prices of the
Company's Common Stock quoted in the Over-The-Counter Market Summary or the
closing price quoted on any exchange on which the Common Stock is listed,
whichever is applicable, as published in the Western Edition of The Wall Street
Journal for the ten trading days prior to the date of determination of fair
market value;
(ii) If the Company's Common Stock is not traded
Over-The-Counter or on an exchange, the per share fair market value of the
security issuable upon exercise of the Warrant shall be determined in good faith
by the Company's Board of Directors.
(d) Stock Certificates. In the event of any exercise of the rights
represented by this Warrant, certificates for the Shares so purchased shall be
delivered to the Holder within five business days and, unless this Warrant has
been fully exercised or has expired, a new Warrant representing the shares with
respect to which this Warrant shall not have been exercised shall also be issued
to the Holder within such time. The holder of this Warrant may make any exercise
of this Warrant contingent upon the consummation of a public offering of the
Common Stock registered under the Securities Act of 1933, as amended.
(e) Exercise into Common Stock. Upon any exercise of this Warrant,
at the election of the Holder so exercising, this Warrant may be exercised into
the number of shares of Common Stock into which the Shares issuable upon such
exercise are then convertible.
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2. Stock Fully Paid; Reservation of Shares. All of the Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all stock transfer 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 shall at all times have authorized and reserved
for issuance sufficient Shares to provide for the exercise of the rights
represented by this Warrant and sufficient shares of Common Stock to provide for
the conversion of such Shares.
3. Adjustment of Exercise Price and Number of Shares. Subject to the
provisions of Section 11 hereof, the number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price therefor shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) Reclassification, Consolidation or Merger. In case of any
reclassification or change of the Shares, the Company shall execute a new
Warrant, providing that the holder of this Warrant shall have the right to
exercise such new Warrant, and procure upon such exercise and payment of the
same aggregate Exercise Price, in lieu of the Shares theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of an equivalent number of shares of Shares. Such new Warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 3. The provisions of
this subsection (a), subject to Section 11 hereof, shall similarly apply to
successive reclassifications or changes.
(b) Stock Splits, Dividends and Combinations. In the event that
the Company shall at any time subdivide the outstanding Shares, or shall issue a
stock dividend on its outstanding Shares, the number of Shares issuable upon
exercise of this Warrant immediately prior to such subdivision or to the
issuance of such stock dividend shall be proportionately increased, and the
Exercise Price shall be proportionately decreased, and in the event that the
Company shall at any time combine the outstanding Shares, the number of Shares
issuable upon exercise of this Warrant immediately prior to such combination
shall be proportionately decreased, and the Exercise Price shall be
proportionately increased, effective at the close of business on the date of
such subdivision, stock dividend or combination, as the case may be.
4. Notice of Adjustments. Whenever the number of Shares purchasable
hereunder or the Exercise Price thereof shall be adjusted pursuant to Section 3
hereof, the Company shall provide notice by first class mail to the holder of
this Warrant 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 number of Shares which may be purchased and the Exercise
Price therefor after giving effect to such adjustment.
5. Fractional Shares. No fractional Shares may be issued in connection
with any exercise hereunder. In lieu of such fractional shares, the Company
shall make a cash payment therefor based upon the fair market value of the
Shares.
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6. Representations and Warranties by the Holder. The Holder represents
and warrants to the Company as follows:
(a) This Warrant and the Shares issuable upon exercise thereof are
being acquired for their own accounts, for investment and not with a view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the "Act"). Upon
exercise of this Warrant, the Holder shall, if so requested by the Company,
confirm in writing, in a form satisfactory to the Company, that the securities
issuable upon exercise of this Warrant are being acquired for investment and not
with a view toward distribution or resale.
(b) The Holder understands that the Warrant and the Shares have
not been registered under the Act by reason of their issuance in a transaction
exempt from the registration and prospectus delivery requirements of the Act
pursuant to Section 4(2) thereof, and that they must be held by the Holder
indefinitely, and that the Holder must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered
under the Act or is exempted from such registration. The Holder further
understands that the Shares have not been qualified under the California
Securities Law of 1968 (the "California Law") by reason of their issuance in a
transaction exempt from the qualification requirements of the California Law
pursuant to Section 25102(f) thereof, which exemption depends upon, among other
things, the bona fide nature of the Holder's investment intent expressed above.
(c) The Holder has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
purchase of this Warrant and the Shares purchasable pursuant to the terms of
this Warrant and of protecting its interests in connection therewith.
(d) The Holder is able to bear the economic risk of the purchase
of the Shares pursuant to the terms of this Warrant.
7. Restrictive Legend.
The Shares issuable upon exercise of this Warrant (unless registered
under the Act or transferable under Rule 144(k)) shall be stamped or imprinted
with a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD,
OFFERED FOR SALE OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE, OFFER OR TRANSFER IS EXEMPT
FROM THE
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REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND
RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF
THE CORPORATION.
8. Restrictions Upon Transfer and Removal of Legend.
(a) This Warrant is not transferrable except in compliance with
applicable securities law. The Company need not register a transfer of Shares
bearing the restrictive legend set forth in Section 7 hereof, unless the
conditions specified in such legend are satisfied. The Company may also instruct
its transfer agent not to register the transfer of the Shares, unless one of the
conditions specified in the legend referred to in Section 7 hereof is satisfied.
(b) Notwithstanding the provisions of paragraph (a) above, no
opinion of counsel or "no-action" letter shall be necessary for a transfer
without consideration by any holder (i) to an affiliate of the holder, (ii) if
such holder is a partnership, to a partner or retired partner of such
partnership who retires after the date hereof or to the estate of any such
partner or retired partner, (iii) if such holder is a corporation, to a
shareholder of such corporation, or (iv) by gift, will, or intestate succession
of any individual holder to his spouse or siblings, or to the lineal descendants
or ancestors of such holder or his spouse, if the transferee agrees in writing
to be subject to the terms hereof to the same extent as if such transferee were
the original holder hereunder.
9. Rights of Shareholders. No holder of this Warrant shall be entitled,
as a Warrant holder, to vote or receive dividends or be deemed the holder of
Shares 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 give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the Shares purchasable upon the exercise
hereof shall have become deliverable, as provided herein.
10. Expiration of Warrant. This Warrant shall expire and shall no longer
be exercisable as of 5:00 p.m., California local time, on the fifth anniversary
of the date of issuance.
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11. Amendment. This Warrant and any provision hereof may be amended,
waived or terminated only by an instrument in writing signed by the Company and
the Holder of this Warrant.
12. Notices, Etc.. All notices and other communications from the Company
to the Holder shall be mailed by first class registered or certified mail,
postage prepaid, at such address as may have been furnished to the Company in
writing by the Holder.
13. Governing Law, Headings. This Warrant is being delivered in the
State of California and shall be construed and enforced in accordance with and
governed by the laws of such State. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof.
Issued this ____ day of ______, 19__.
COMBICHEM, INC.
By: _____________________________________
Title: __________________________________
WARRANT HOLDER:
By: ________________________
Title: _____________________
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EXHIBIT B-1
NOTICE OF EXERCISE
TO: COMBICHEM, INC.
Attention: President
1. In lieu of exercising the attached Warrant for cash, check or
cancellation of indebtedness, the undersigned hereby elects to effect the net
issuance provision of Section l(b) of the attached Warrant and receive
_________________ (leave blank if you choose Alternative No. 2 below) Shares of
CombiChem, Inc. pursuant to the terms of the attached Warrant. (Initial here if
the undersigned elects this alternative) ________________.
2. The undersigned elects to purchase _____________ (leave blank if you
choose Alternative No. 1 above) Shares of CombiChem, Inc. pursuant to the terms
of the attached Warrant, and tenders herewith payment of the purchase price for
such Shares in full, together with all applicable transfer taxes, if any.
3. Please issue a certificate or certificates representing said Shares
in the name of the undersigned or in such other name as is specified below:
-----------------------------
(Name)
-----------------------------
-----------------------------
(Address)
4. The undersigned hereby represents and warrants that the aforesaid
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 in
violation of applicable law, and that the undersigned has no present intention
of distributing or reselling such shares in violation of applicable law and all
representations and warranties of the undersigned set forth in Section 6 of the
attached Warrant are true and correct as of the date hereof. In support thereof,
the undersigned agrees to execute an Investment Representation Statement in a
form substantially similar to the form attached to the Warrant as Exhibit B-2.
--------------------------------
(Signature)
Title:___________________________
------------------
(Date)
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EXHIBIT B-2
INVESTMENT REPRESENTATION STATEMENT
PURCHASER : _________________________________________________
SELLER : COMBICHEM, INC.
COMPANY : COMBICHEM, INC.
SECURITY : SHARES OF STOCK, identified in the STOCK PURCHASE WARRANT
ISSUED ON ______________, 199__, a copy of which is attached
hereto.
AMOUNT : ____________________________ SHARES
DATE : ________________, 199__
In connection with the purchase of the above-listed Securities, the undersigned
represents to the Seller and to the Company the following:
(a) The undersigned is aware of the Company's business affairs and
financial condition, and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities. The
undersigned is purchasing these Securities for his/her own account for
investment purposes only and not with a view to, or for the resale in connection
with, any "distribution" thereof for purposes of the Securities Act of 1933, as
amended (the "Securities Act").
(b) The undersigned understands that the Securities have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of his/her investment intent as expressed herein. In this connection, the
undersigned understands that, in the view of the Securities and Exchange
Commission (the "SEC"), the statutory basis for such exemption may be
unavailable if this representation was predicated solely upon a present
intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future.
(c) The undersigned further understands that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, the undersigned
understands that the Company is under no obligation to register the Securities.
In addition, the undersigned understands that the certificate evidencing the
Securities will be imprinted with a legend
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which prohibits the transfer of the Securities unless they are registered or
such registration is not required in the opinion of counsel for the Company or
Rule 144(k) is available.
(d) The undersigned is familiar with the provisions of Rule 144,
promulgated under the Securities Act, which, in substance, permits limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions.
The Securities may be resold in certain limited circumstances subject to
the provisions of Rule 144, which requires among other things: (1) the
availability of certain public information about the Company, (2) the resale
occurring not less than two years after the party has purchased, and made full
payment for, within the meaning of Rule 144, the securities to be sold; and, in
the case of an affiliate, or of a non-affiliate who has held the securities less
than three years, (3) the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934) and the amount of
securities being sold during any three-month period not exceeding the specified
limitations stated therein, if applicable.
(e) The undersigned agrees, in connection with the Company's initial
underwritten public offering of the Company's securities, (1) not to sell, make
short sale of, loan, grant any options for the purchase of, or otherwise dispose
of any Shares of the Company held by the undersigned (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 (2) the undersigned further agrees to execute any
agreement reflecting (1) above as may be requested by the underwriters at the
time of the public offering; provided however that the officers and directors of
the Company who own the stock of the Company also agree to such restrictions.
(f) The undersigned further understands that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
-----------------------------------------
By:______________________________________
Title:___________________________________
Date:_______________________, 19___
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SCHEDULE A
Warrantholders
Sequoia Capital VI
Sequoia Technology Partners VI
Sequoia XXIV
Xxxxx Xxxxxx Incorporated as Custodian of the
Xxxxxxx Xxxxxxxx Rollover IRA
North American Trust Company, Trustee FBO SK
Int'l SEC E/M Xxxxxx
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