EXHIBIT 4.2
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
STRUCTURAL GENOMIX, INC.
WARRANT TO PURCHASE COMMON STOCK
NO. CW-[__] JULY [___], 2005
VOID AFTER JULY [__], 2010
THIS CERTIFIES THAT, for value received, ________________, or ____ assigns
(the "HOLDER"), is entitled to subscribe for and purchase from STRUCTURAL
GENOMIX, INC., a Delaware corporation, with its principal office at 10505
Roselle Street, San Diego, CA 92121 (the "COMPANY") __________ Exercise Shares
at the Exercise Price (each subject to adjustment as provided herein).
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
(a) "EXERCISE PERIOD" shall mean the period commencing on the date
hereof and ending five (5) years later, unless sooner terminated as provided
below.
(b) "EXERCISE PRICE" shall mean $0.50 per Exercise Share subject to
adjustment pursuant to Sections 5 below.
(c) "EXERCISE SHARES" shall mean shares of the Company's Common
Stock issuable upon exercise of this Warrant, subject to adjustment pursuant to
Section 5 below.
2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Company at its address set forth above (or at
such other address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached hereto;
(b) If applicable, payment of the Exercise Price in cash or by
check; and
(c) This Warrant.
Upon the exercise of the rights represented by this Warrant, a certificate
or certificates for the Exercise Shares so purchased, registered in the name of
the Holder or persons affiliated with the Holder, if the Holder so designates,
shall be issued and delivered to the Holder within a reasonable time after the
rights represented by this Warrant shall have been so exercised. In the event
that this Warrant is being exercised for less than all of the then-current
number of Exercise Shares purchasable hereunder, the Company shall, promptly
following the issuance by the
1.
Company of the number of Exercise Shares for which this Warrant is then being
exercised, issue a new Warrant exercisable for the remaining number of Exercise
Shares purchasable hereunder.
The person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
2.1 NET EXERCISE. Notwithstanding any provisions herein to the contrary,
if the fair market value of one Exercise Share is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant by payment of cash, the Holder may elect to receive shares equal to
the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise in which event the
Company shall issue to the Holder a number of Exercise Shares computed using the
following formula:
X = Y (A-B)
-------
A
Where X = the number of Exercise Shares to be issued to the Holder
Y = the number of Exercise Shares purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, that portion of the Warrant being canceled
(at the date of such calculation)
A = the fair market value of one Exercise Share (at the date
of such calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, the fair market value of one
Exercise Share shall be determined by the Company's Board of Directors in good
faith; provided, however, that in the event that this Warrant is exercised
pursuant to this Section 2.1 in connection with the Company's initial public
offering of its Common Stock, the fair market value per share shall be the per
share offering price to the public of the Company's initial public offering.
3. COVENANTS OF THE COMPANY.
3.1 COVENANTS AS TO EXERCISE SHARES. The Company covenants and
agrees that all Exercise Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued and
outstanding, fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof. The Company further covenants and
agrees that the Company will at all times during the Exercise Period, have
authorized and reserved, free from preemptive rights, a sufficient number of
shares of the series of equity securities comprising the Exercise Shares to
provide for the exercise of the rights
2.
represented by this Warrant. If at any time during the Exercise Period the
number of authorized but unissued shares of such series of the Company's equity
securities shall not be sufficient to permit exercise of this Warrant, the
Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of such series of
the Company's equity securities to such number of shares as shall be sufficient
for such purposes.
3.2 NOTICES OF RECORD DATE. In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the Company shall mail to the Holder, at least
ten (10) days prior to the date specified herein, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend or
distribution.
4. REPRESENTATIONS OF HOLDER.
4.1 ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The Holder
represents and warrants that it is acquiring the Warrant and the Exercise Shares
solely for its account for investment and not with a view to or for sale or
distribution of said Warrant or Exercise Shares or any part thereof. The Holder
also represents that the entire legal and beneficial interests of the Warrant
and Exercise Shares the Holder is acquiring is being acquired for, and will be
held for, its account only.
4.2 SECURITIES ARE NOT REGISTERED.
(a) The Holder understands that the Warrant and the Exercise
Shares have not been registered under the Securities Act of 1933, as amended
(the "ACT") on the basis that no distribution or public offering of the stock of
the Company is to be effected. The Holder realizes that the basis for the
exemption may not be present if, notwithstanding its representations, the Holder
has a present intention of acquiring the securities for a fixed or determinable
period in the future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the securities. The
Holder has no such present intention.
(b) The Holder recognizes that the Warrant and the Exercise
Shares must be held indefinitely unless they are subsequently registered under
the Act or an exemption from such registration is available. The Holder
recognizes that except as set forth in the Investor Rights Agreement, the
Company has no obligation to register the Warrant or the Exercise Shares of the
Company, or to comply with any exemption from such registration.
(c) The Holder is aware that neither the Warrant nor the
Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless
certain conditions are met, including, among other things, the existence of a
public market for the shares, the availability of certain current public
information about the Company, the resale following the required holding period
under Rule 144 and the number of shares being sold during any three month period
not exceeding specified limitations. Holder is aware that the conditions for
resale
3.
set forth in Rule 144 have not been satisfied and that the Company presently has
no plans to satisfy these conditions in the foreseeable future.
4.3 DISPOSITION OF WARRANT AND EXERCISE SHARES.
(a) The Holder further agrees not to make any disposition of
all or any part of the Warrant or Exercise Shares in any event unless and until:
(i) The Company shall have received a letter secured by
the Holder from the Securities and Exchange Commission stating that no action
will be recommended to the Commission with respect to the proposed disposition;
(ii) There is then in effect a registration statement
under the Act covering such proposed disposition and such disposition is made in
accordance with said registration statement; or
(iii) The Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and if
reasonably requested by the Company, the Holder shall have furnished the Company
with an opinion of counsel, reasonably satisfactory to the Company, for the
Holder to the effect that such disposition will not require registration of such
Warrant or Exercise Shares under the Act or any applicable state securities
laws. The Company agrees that it will not require an opinion of counsel with
respect to transactions under Rule 144 of the Securities Act of 1933, as
amended, except in unusual circumstances.
(b) Notwithstanding the provisions of subsection (a) above, no
such restriction shall apply to a transfer by the Holder to the Holder's family
member or trust for the benefit of the Holder; provided that in each case the
transferee will agree in writing to be subject to the terms of this Warrant to
the same extent as if ____ were an original Holder hereunder.
(c) The Holder understands and agrees that all certificates
evidencing the shares to be issued to the Holder may bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
4.4 ACCREDITED INVESTOR STATUS. The Holder is an "accredited
investor" as defined in Regulation D promulgated under the Act.
4.
5. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF EXERCISE SHARES.
5.1 CHANGES IN SECURITIES. In the event of changes in the
outstanding Common Stock of the Company by reason of stock dividends, splits,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like, the number and class of
Exercise Shares available under the Warrant in the aggregate and the Aggregate
Exercise Price (as defined below) shall be correspondingly adjusted to give the
Holder of the Warrant, on exercise for the same Aggregate Exercise Price, the
total number, class, and kind of shares as the Holder would have owned had the
Warrant been exercised prior to the event and had the Holder continued to hold
such shares until after the event requiring adjustment. For purposes of this
Section 5.1, the "AGGREGATE EXERCISE PRICE" shall mean the aggregate Exercise
Price payable in connection with the exercise in full of this Warrant. The form
of this Warrant need not be changed because of any adjustment in the number of
Exercise Shares subject to this Warrant.
6. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) to be issued upon exercise of this Warrant
shall be aggregated for purposes of determining whether the exercise would
result in the issuance of any fractional share. If, after aggregation, the
exercise would result in the issuance of a fractional share, the Company shall,
in lieu of issuance of any fractional share, pay the Holder otherwise entitled
to such fraction a sum in cash equal to the product resulting from multiplying
the then current fair market value of one Exercise Share by such fraction.
7. EARLY TERMINATION. In the event of, at any time during the Exercise
Period, an Acquisition or Asset Transfer (each as defined in the Company's
Amended and Restated Certificate of Incorporation, as such may be amended from
time to time), the Company shall provide to the Holder ten (10) days advance
written notice of such Acquisition or Asset Transfer, and this Warrant shall be
deemed exercised pursuant to Section 2.1 immediately prior to the date of
closing of such Acquisition or Asset Transfer.
8. MARKET STAND-OFF AGREEMENT. Each Holder hereby agrees that such Holder
shall not sell, dispose of, transfer, make any short sale of, grant any option
for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, any Common Stock (or other securities) of the
Company held by such Holder (other than those included in the registration) for
a period specified by the representative of the underwriters of Common Stock (or
other securities) of the Company not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act. Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the managing
underwriter(s) which are consistent with the foregoing or which are necessary to
give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to such Common Stock
(or other securities) until the end of such period. The underwriters of the
Company's stock are intended third party beneficiaries of this Section 8 and
shall have the right, power and authority to enforce the provisions hereof as
though they were a party hereto.
5.
9. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle
the Holder to any voting rights or other rights as a stockholder of the Company.
10. TRANSFER OF WARRANT. Subject to applicable laws and the restriction on
transfer set forth on the first page of this Warrant and in Section 4.3 hereof,
this Warrant and all rights hereunder are transferable, by the Holder in person
or by duly authorized attorney, upon delivery of this Warrant and the form of
assignment attached hereto to any transferee designated by Holder. The
transferee shall sign an investment letter in form and substance satisfactory to
the Company.
11. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
12. AMENDMENT. Any term of this Warrant may be amended or waived with the
written consent of the Company and the Holder.
13. NOTICES, ETC. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address listed on the signature page and to Holder at
[___________________________] or at such other address as the Company or Holder
may designate by ten (10) days advance written notice to the other parties
hereto.
14. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.
15. ADDITIONAL TERMS/ACKNOWLEDGEMENTS. The Holder acknowledges receipt of,
and understands and agrees to, this Warrant. The Holder further acknowledges
that as of the date hereof, this Warrant sets forth the entire understanding
between the Holder and the Company regarding the acquisition of stock or options
or warrants to acquire stock in the Company and supersedes all prior oral and
written agreements on that subject, including without limitation any equity
compensation or stock options described or referenced in that certain letter
agreement dated ___________________, and the undersigned Holder further
acknowledges and agrees that this Warrant is in lieu of and represents
satisfaction in full of any equity compensation or stock options set forth in
such letter agreement or other prior oral or written agreement, with the
exception of (i) vested options previously granted and delivered to the Holder
in the amount of _________________, and (ii) __________ outstanding shares of
the Company's Common Stock previously issued to Holder.
6.
16. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents, made
and to be performed entirely within the State of California without giving
effect to conflicts of laws principles.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
7.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer as of July ___, 2005.
STRUCTURAL GENOMIX, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
ACKNOWLEDGED AND ACCEPTED:
__________________________________
[SIGNATURE PAGE]
NOTICE OF EXERCISE
TO: STRUCTURAL GENOMIX, INC.
(1) [ ] The undersigned hereby elects to purchase ________ shares of
Common Stock (the "EXERCISE SHARES") of STRUCTURAL GENOMIX, INC. (the "COMPANY")
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
[ ] The undersigned hereby elects to purchase ________ shares of
Common Stock (the "EXERCISE SHARES") of STRUCTURAL GENOMIX, INC. (the "COMPANY")
pursuant to the terms of the net exercise provisions set forth in Section 2.1 of
the attached Warrant, and tenders herewith payment of all applicable transfer
taxes, if any.
(2) Please issue a certificate or certificates representing said Exercise
Shares in the name of the undersigned or in such other name as is specified
below:
_____________________________
(Name)
_____________________________
_____________________________
(Address)
(3) The undersigned represents that (i) the aforesaid Exercise 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;
(ii) 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 regarding its investment in the Company;
(iii) the undersigned is experienced in making investments of this type and has
such knowledge and background in financial and business matters that the
undersigned is capable of evaluating the merits and risks of this investment and
protecting the undersigned's own interests; (iv) the undersigned understands
that Exercise Shares issuable upon exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
by reason of a specific exemption from the registration provisions of the
Securities Act, which exemption depends upon, among other things, the bona fide
nature of the investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act, they must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available; (v) the undersigned is aware that
the aforesaid Exercise Shares may not be sold pursuant to Rule 144 adopted under
the Securities Act unless certain conditions are met and until the undersigned
has held the shares for the number of years prescribed by Rule 144, that among
the conditions for use of the Rule is the availability of current information to
the public about the Company and the Company has not made such information
available and has no present plans to do so; and (vi) the undersigned agrees not
to make any disposition of all or any part of the aforesaid shares of Exercise
Shares unless and until there is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with said registration statement, or, if
1.
reasonably requested by the Company, the undersigned has provided the Company
with an opinion of counsel satisfactory to the Company, stating that such
registration is not required, or as otherwise permitted by Section 4.3 of the
Warrant
______________________________________ ______________________________________
(Date) (Signature)
______________________________________
(Print name)
2.
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
Name: __________________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
(Please Print)
Dated: __________, 20__
Holder's
Signature: _______________________________________
Holder's
Address: _________________________________________
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. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
3.