EXHIBIT 10.55
WARRANT TO PURCHASE STOCK
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE
OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION.
WARRANT TO PURCHASE STOCK
Company: Lynx Therapeutics, Inc., a Delaware corporation
Number of Shares: 95,541, subject to adjustment
Class of Stock: Common Stock, $0.01 par value per share
Warrant Price: $3.140 per share, subject to adjustment
Issue Date: December 28, 2004
Expiration Date: December 27, 2007
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK ("Holder") is
entitled to purchase the number of fully paid and nonassessable shares of the
common stock, $0.01 par value per share (the "Shares") of Lynx Therapeutics,
Inc., a Delaware corporation (the "Company") at the Warrant Price, all as set
forth above and as adjusted pursuant to Article 2 of this Warrant, subject to
the provisions and upon the terms and conditions set forth in this Warrant.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Article 1.2, Holder shall also
deliver to the Company a check, wire transfer (to an account designated by the
Company), or other form of payment acceptable to the Company for the aggregate
Warrant Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as
specified in Article 1.1, Holder may from time to time convert this Warrant, in
whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Article 1.3.
1.3 Fair Market Value. If the Company's common stock is traded in a
public market and the shares are common stock, the fair market value of each
Share shall be the closing price of a Share reported for the business day
immediately before Holder delivers its Notice of Exercise to the Company. If the
Company's common stock is not traded in a public market, the Board of Directors
of the Company shall determine fair market value in its reasonable good faith
judgment.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant and, if applicable, the Company receives
payment of the aggregate Warrant Price, the Company shall deliver to Holder
certificate(s) for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.5 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company shall execute and deliver, in lieu of this Warrant, a new warrant of
like tenor.
1.6 Treatment of Warrant Upon Acquisition of Company.
1.6.1 "Acquisition". For the purpose of this Warrant,
"Acquisition" means any sale, exclusive license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than a majority of the
outstanding voting securities of the surviving entity after the transaction;
provided, that the transactions contemplated by that certain Acquisition
Agreement dated as of September 28, 2004 by and between the Company and Solexa
Limited, a company registered in England and Wales, shall not constitute an
"Acquisition" for purposes of this Warrant, provided that the Company is the
surviving entity following consummation of such transactions.
1.6.2 Treatment of Warrant at Acquisition.
A) Upon the written request of the Company, Holder agrees that, in the event of
an Acquisition in which the sole consideration is cash, either (a) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise
will be deemed effective immediately prior to the consummation of such
Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant
will expire upon the consummation of such Acquisition. The Company shall provide
the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in
connection with such contemplated Acquisition giving rise to such notice), which
is to be delivered to Holder not less than ten (10) days prior to the closing of
the proposed Acquisition.
B) Upon the written request of the Company, Holder agrees that, in the event of
an Acquisition that is an "arms length" sale of all or substantially all of the
Company's assets (and only its assets) to a third party that is not an Affiliate
(as defined below) of the Company (a "True Asset Sale"), either (a) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise
will be deemed effective
immediately prior to the consummation of such Acquisition or (b) if Holder
elects not to exercise the Warrant, this Warrant will continue until the
Expiration Date if the Company continues as a going concern following the
closing of any such True Asset Sale. The Company shall provide the Holder with
written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered
to Holder not less than ten (10) days prior to the closing of the proposed
Acquisition.
C) Upon the closing of any Acquisition other than those particularly described
in subsections (A) and (B) above, the successor entity shall assume the
obligations of this Warrant, and this Warrant shall be exercisable for the same
securities, cash, and property as would be payable for the Shares issuable upon
exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The
Warrant Price and/or number of Shares shall be adjusted accordingly.
As used herein "Affiliate" shall mean, with respect to any person or entity, any
other person or entity controlling, controlled by or under common control with
such person or entity.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on the Shares payable in common stock, or other securities, then upon
exercise of this Warrant, for each Share acquired, Holder shall receive, without
cost to Holder, the total number and kind of securities to which Holder would
have been entitled had Holder owned the Shares of record as of the date the
dividend occurred. If the Company subdivides the Shares by reclassification or
otherwise into a greater number of shares or takes any other action which
increase the amount of stock into which the Shares are convertible, the number
of shares purchasable hereunder shall be proportionately increased and the
Warrant Price shall be proportionately decreased. If the outstanding shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased and the number
of Shares shall be proportionately decreased.
2.2 Reclassification, Exchange, Combinations or Substitution. Upon
any reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. The Company or its successor shall promptly issue to Holder an
amendment or supplement to this Warrant setting forth the number and kind of
such new securities or other property issuable upon exercise or conversion of
this Warrant as a result of such reclassification, exchange, substitution or
other event that results in a change of the number and/or class of securities
issuable upon exercise or conversion of this Warrant. The amendment or
supplement to this Warrant shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article 2 including, without limitation, adjustments to the Warrant Price and to
the number of securities or property issuable upon exercise of the
new Warrant. The provisions of this Article 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 Anti-Dilution. In the event that the Company at any time and
from time to time sells or issues (a "Dilutive Issuance") additional shares of
its Common Stock, or options, warrants, convertible securities, instruments or
other rights to purchase or acquire shares of its Common Stock, at a purchase,
exercise, conversion or other acquisition price per Common Stock share less than
both (a) the then-effective Warrant Price, and (b) the average closing price of
a share of the Company's Common Stock on the national securities exchange,
national inter-dealer quotation system or over-the-counter market on which the
Company's Common Stock is then listed or quoted for trading over the five (5)
trading days immediately preceding the date of such sale or issuance (the
"Dilutive Price"), then upon such issuance, the Warrant Price shall
automatically be reduced to such Dilutive Price, and the number of shares of
Common Stock for which this Warrant shall thereafter be exercisable shall be
increased to equal the quotient obtained by dividing (i) the product resulting
from multiplying (A) the number of Shares issuable upon exercise of the Warrant
and (B) the Warrant Price, in each case as in effect immediately before such
Dilutive Issuance, by (ii) such Dilutive Price.
2.4 No Impairment. The Company shall not, by amendment of its
Articles or Certificate (as applicable) of Incorporation or through a
reorganization, transfer of assets, consolidation, merger, dissolution, issue,
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Warrant by the Company, but shall at all times in good faith assist in
carrying out of all the provisions of this Article 2 and in taking all such
action as may be necessary or appropriate to protect Holder's rights under this
Article against impairment.
2.5 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder the amount computed by
multiplying the fractional interest by the fair market value of a full Share.
2.6 Certificate as to Adjustments. Upon each adjustment of the
Warrant Price, the Company shall promptly notify Holder in writing, and, at the
Company's expense, promptly compute such adjustment, and furnish Holder with a
certificate of its Chief Financial Officer setting forth such adjustment and the
facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the Warrant Price in effect
upon the date thereof and the series of adjustments leading to such Warrant
Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company represents and
warrants to the Holder as follows:
(a) All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any, issuable
upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 Notice of Certain Events. Copies of all notices and other
communications by the Company to its stockholders generally shall be provided by
the Company to Holder as and when the Company provides same to its stockholders.
3.3 Registration Under Securities Act of 1933, as amended. In the
event that the Company at any time determines or agrees to effect a registration
under the Act (or any successor statute) of shares of its Common Stock for the
account of any person or entity (other than a registration in which the Company
registers shares solely for its own account, including that certain registration
statement on Form S-4 filed by the Company on October 29, 2004, as amended), the
Company shall provide at least twenty (20) days prior written notice thereof to
Holder and shall permit the Holder to include Shares in such registration pari
passu with each other person and entity participating therein, on the same terms
and conditions applicable to such other persons and/or entities.
3.4 No Shareholder Rights. Except as provided in this Warrant, the
Holder will not have any rights as a shareholder of the Company until the
exercise of this Warrant.
ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and
warrants to the Company as follows:
4.1 Purchase for Own Account. This Warrant and the securities to be
acquired upon exercise of this Warrant by the Holder will be acquired for
investment for the Holder's account, not as a nominee or agent, and not with a
view to the public resale or distribution within the meaning of the Act. Holder
also represents that the Holder has not been formed for the specific purpose of
acquiring this Warrant or the Shares.
4.2 Disclosure of Information. The Holder has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the acquisition of this Warrant
and its underlying securities. The Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the
Holder has access.
4.3 Investment Experience. The Holder understands that the purchase
of this Warrant and its underlying securities involves substantial risk. The
Holder has experience as an investor in securities of companies in the
development stage and acknowledges that the Holder can bear the economic risk of
such Holder's investment in this Warrant and its underlying securities and has
such knowledge and experience in financial or business matters that the Holder
is capable of evaluating the merits and risks of its investment in this Warrant
and its underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables the Holder
to be aware of the character, business acumen and financial circumstances of
such persons.
4.4 Accredited Investor Status. The Holder is an "accredited
investor" within the meaning of Regulation D promulgated under the Act.
4.5 The Act. The Holder understands that this Warrant and the Shares
issuable upon exercise or conversion hereof have 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. The Holder understands that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held indefinitely unless
subsequently registered under the Act and qualified under applicable state
securities laws, or unless exemption from such registration and qualification
are otherwise available.
ARTICLE 5. MISCELLANEOUS.
5.1 Term: This Warrant is exercisable in whole or in part at any
time and from time to time on or before the Expiration Date.
5.2 Legends. This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE ACT, OR THE SECURITIES LAWS OF ANY STATE AND,
EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 OF THAT CERTAIN
WARRANT TO PURCHASE STOCK ISSUED BY THE COMPANY TO SILICON VALLEY
BANK DATED AS OF DECEMBER 28, 2004, MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.
5.3 Compliance with Securities Laws on Transfer. This Warrant and
the Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to Silicon Valley Bancshares (Holder's
parent company) or any other affiliate of Holder, provided that each such
transferee is an "accredited investor" as defined in Regulation D promulgated
under the Act.
5.4 Transfer Procedure. Upon receipt by Holder of the executed
Warrant, Holder will transfer all of this Warrant to Silicon Valley Bancshares,
Holder's parent company, by execution of an Assignment substantially in the form
of Appendix 2. Subject to the provisions of Article 5.3 and upon providing the
Company with written notice, Silicon Valley Bancshares and any subsequent Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the Shares issuable directly or indirectly, upon conversion of
the Shares, if any) to any transferee, provided, however, in connection with any
such transfer, Silicon Valley Bancshares or any subsequent Holder will give the
Company notice of the portion of the Warrant being transferred with the name,
address and taxpayer identification number of the transferee and Holder will
surrender this Warrant to the Company for reissuance to the transferee(s) (and
Holder if applicable).
5.5 Notices. All notices and other communications from the Company
to the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may (or on the first business day after transmission by
facsimile) be, in writing by the Company or such holder from time to time.
Effective upon receipt of the fully executed Warrant and the initial transfer
described in Article 5.4 above, all notices to the Holder shall be addressed as
follows until the Company receives notice of a change of address in connection
with a transfer or otherwise:
Silicon Valley Bancshares
Attn: Treasury Department
0000 Xxxxxx Xxxxx, XX 000
Xxxxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice to the Company shall be addressed as follows until the Holder
receives notice of a change in address:
Lynx Therapeutics, Inc.
Attn: Chief Executive Officer
00000 Xxxxxxxxxx Xxxx.
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
5.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
5.7 Attorney's Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorney's fees.
5.8 Automatic Conversion upon Expiration. In the event that, upon
the Expiration Date, the fair market value of one Share (or other security
issuable upon the exercise hereof) as determined in accordance with Section 1.3
above is greater than the Exercise Price in effect on such date, then this
Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Section 1.2 above as to all Shares (or such other securities) for
which it shall not previously have been exercised or converted, and the Company
shall promptly deliver a certificate representing the Shares (or such other
securities) issued upon such conversion to the Holder.
5.9 Counterparts. This Warrant may be executed in counterparts, all
of which together shall constitute one and the same agreement.
5.10 Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
"COMPANY"
LYNX THERAPEUTICS, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxx
(Print)
Title: Acting Chief Executive Officer
"HOLDER"
SILICON VALLEY BANK
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
(Print)
Title: Senior Vice President Life Sciences
APPENDIX 1
NOTICE OF EXERCISE
1. Holder elects to purchase ___________ shares of the Common Stock of
Lynx Therapeutics, Inc. pursuant to the terms of the attached Warrant, and
tenders payment of the purchase price of the shares in full.
[or]
1. Holder elects to convert the attached Warrant into Shares/cash [strike
one] in the manner specified in the Warrant. This conversion is exercised for
_____________________ of the Shares covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing the shares in
the name specified below:
___________________________________________
Holders Name
___________________________________________
___________________________________________
(Address)
3. By its execution below and for the benefit of the Company, Holder
hereby restates each of the representations and warranties in Article 4 of the
Warrant as the date hereof.
HOLDER:
________________________
By:_____________________
Name:___________________
Title:__________________
(Date):_________________
APPENDIX 2
ASSIGNMENT
FOR VALUE RECEIVED, SILICON VALLEY BANK HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO
NAME: SILICON VALLEY BANCSHARES
ADDRESS: 0000 XXXXXX XXXXX (XX-000)
XXXXX XXXXX, XX 00000
TAX ID: 00-0000000
THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY LYNX THERAPEUTICS, INC.
(THE "COMPANY"), ON [INSERT ISSUE DATE] (THE "WARRANT") TOGETHER WITH ALL
RIGHTS, TITLE AND INTEREST THEREIN.
SILICON VALLEY BANK
By:________________________________
Name:______________________________
Title:_____________________________
Date: [insert Issue Date]____________________
By its execution below, and for the benefit of the Company, Silicon Valley
Bancshares makes each of the representations and warranties set forth in Article
4 of the Warrant as of the date hereof.
SILICON VALLEY BANCSHARES
By:________________________________
Name:______________________________
Title: ____________________________
