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EXHIBIT 4.2
NO. PW-____
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT TO PURCHASE __________ SHARES
OF SERIES B PREFERRED STOCK OF
DNA SCIENCES, INC.
(VOID AFTER APRIL __, 2004)
This certifies that ______________ or its assigns (the "Holder"), for
value received, is entitled to purchase from DNA Sciences, Inc., a Delaware
corporation (the "Company"), having a place of business at 2375 Garcia Avenue,
Mountain View, CA 94043, a maximum of __________ fully paid and nonassessable
shares of the Company's Series B Preferred Stock (the "Series B Preferred") for
cash at a price of _________ per share (the "Exercise Price") at any time or
from time to time up to and including 5:00 p.m. (Pacific time) four (4) years
from the date of this Warrant, such day being referred to herein as the
"Expiration Date," upon surrender to the Company at its principal office (or at
such other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with the Form of Subscription attached hereto duly
filled in and signed and, if applicable, upon payment in cash or by check of the
aggregate Exercise Price for the number of shares for which this Warrant is
being exercised determined in accordance with the provisions hereof. The
Exercise Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Section 3 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the
holder of record hereof, at any time or from time to time, up to the Expiration
Date for all or any part of the shares of Series B Preferred (but not for a
fraction of a share) which may be purchased hereunder. The Company agrees that
the shares of Series B Preferred purchased under this Warrant shall be and are
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription
delivered and payment made for such shares. Certificates for the shares of
Series B Preferred so purchased, together with any other securities or property
to which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. In
case of a purchase of less than all the shares which may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new
Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof
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within a reasonable time. Each Series B Preferred certificate so delivered shall
be in such denominations of Series B Preferred as may be requested by the Holder
hereof and shall be registered in the name of such Holder.
1.2 NET ISSUE EXERCISE. Notwithstanding any provisions herein to
the contrary, if the fair market value of one share of Series B Preferred is
greater than the Exercise Price (at the date of calculation as set forth below)
in lieu of exercising this Warrant for 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 notice of such election, in which event the Company
shall issue to the Holder a number of shares of Series B Preferred computed
using the following formula:
X = Y (A - B)
---------
A
Where X = the number of shares of Series B
Preferred to be issued to the Holder
Y = the number of shares of Series
B Preferred purchasable under the Warrant
or, if only a portion of the Warrant is
being exercised, the number of shares of
Series B Preferred purchased under the
Warrant being canceled (at the date of such
calculation)
A = the fair market value of one
share of the Company's Series B Preferred
Stock (at the date of such calculation, as
provided below)
B = Exercise Price (as adjusted to
the date of such calculation)
For purposes of the above calculation, the fair market value of one
share of Series B Preferred shall be determined by the Company's Board of
Directors in good faith; PROVIDED, HOWEVER, that where there is a public market
for the Company's Common Stock and the Company's Series B Preferred Stock has
converted into such Common Stock, the fair market value per share shall be the
product of (i) the average of the closing prices (or bid prices if there are no
such closing prices) of the Company's Common Stock quoted in the
Over-The-Counter Market Summary or the closing price quoted on The Nasdaq
National Market System or on the primary national securities exchange on which
the Common Stock is then listed, whichever is applicable, as published in the
Western Edition of the Wall Street Journal (or, if not so reported, as otherwise
reported by The Nasdaq System) for the ten (10) trading days prior to the date
of determination of fair market value and (ii) the number of shares of Common
Stock into which each share of Series B Preferred is convertible at the time of
such exercise.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Series B Preferred which may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any shareholder and free of all
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taxes, liens and charges with respect to the issue thereof. The Company further
covenants and agrees that, during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized
and reserved, for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares of
authorized but unissued Series B Preferred, or other securities and property,
when and as required to provide for the exercise of the rights represented by
this Warrant. The Company will take all such action as may be necessary to
assure that such shares of Series B Preferred may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
any domestic securities exchange upon which the Series B Preferred may be
listed; provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action which would result in any
adjustment of the Exercise Price (as set forth in Section 3 hereof) (i) if the
total number of shares of Series B Preferred issuable after such action upon
exercise of all outstanding warrants, together with all shares of Series B
Preferred then outstanding and all shares of Series B Preferred then issuable
upon exercise of all options and upon the conversion of all convertible
securities then outstanding, would exceed the total number of shares of Series B
Preferred then authorized by the Company's Restated Certificate of
Incorporation, or (ii) if the total number of shares of Series B Preferred
issuable after such action upon the conversion of all such shares of Series B
Preferred, together with all shares of Common Series B Preferred then issuable
upon exercise of all options and upon the conversion of all such shares of
Series B Preferred, together with all shares of Common stock then outstanding
and all shares of Common Stock then issuable upon exercise of all options and
upon the conversion of all convertible securities then outstanding would exceed
the total number of shares of Common Stock then authorized by the Company's
Restated Certificate of Incorporation.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 3. Upon each adjustment of the Exercise Price,
the Holder of this Warrant shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF SERIES B PREFERRED. In case the
Company shall at any time subdivide its outstanding shares of Series B Preferred
into a greater number of shares, the Exercise Price in effect immediately prior
to such subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Series B Preferred of the Company shall be combined
into a smaller number of shares, the Exercise Price in effect immediately prior
to such combination shall be proportionately increased.
3.2 DIVIDENDS IN SERIES B PREFERRED, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the Holders of Series B
Preferred (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received or become entitled to
receive, without payment therefor,
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(a) Series B Preferred or any shares of stock or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Series B Preferred, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution,
(b) any cash paid or payable otherwise than as a cash
dividend, or
(c) Series B Preferred or additional stock or other securities
or property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Series B Preferred issued as a stock split or adjustments in respect of which
shall be covered by the terms of Section 3.1 above), then and in each such case,
the Holder hereof shall, upon the exercise of this Warrant, be entitled to
receive, in addition to the number of shares of Series B Preferred receivable
thereupon, and without payment of any additional consideration therefor, the
amount of stock and other securities and property (including cash in the cases
referred to in clause (b) above and this clause (c)) which such Holder would
hold on the date of such exercise had he been the holder of record of such
Series B Preferred as of the date on which holders of Series B Preferred
received or became entitled to receive such shares or all other additional stock
and other securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets or other
transaction shall be effected in such a way that holders of Series B Preferred
shall be entitled to receive Series B Preferred, securities, or other assets or
property (an "Organic Change"), then, as a condition of such Organic Change,
lawful and adequate provisions shall be made by the Company whereby the Holder
hereof shall thereafter have the right to purchase and receive (in lieu of the
shares of the Series B Preferred of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby)
such shares of stock, securities or other assets or property as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Series B Preferred equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby; provided, however, that in the event the value of the stock,
securities or other assets or property (determined in good faith by the Board of
Directors of the Company) issuable or payable with respect to one share of the
Series B Preferred of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby is in excess of
the Exercise Price hereof effective at the time of a merger and securities
received in such reorganization, if any, are publicly traded, then this Warrant
shall expire unless exercised prior to such Organic Change. In the event of any
Organic Change, appropriate provision shall be made by the Company with respect
to the rights and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Exercise Price and of the number of shares purchasable and receivable upon
the exercise of this Warrant) shall thereafter be applicable, in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise
hereof. The Company will not effect any such consolidation, merger or sale
unless, prior to the consummation thereof, the successor corporation (if other
than the Company) resulting from such consolidation or the corporation
purchasing such assets shall assume, by written instrument reasonably
satisfactory in form and substance to the Holder, the obligation to deliver to
the
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Holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to purchase.
3.4 CERTAIN EVENTS. If any change in the outstanding Series B
Preferred of the Company or any other event occurs as to which the other
provisions of this Section 3 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Holder of the
Warrant in accordance with such provisions, then the Board of Directors of the
Company shall make an adjustment in the number and class of shares available
under the Warrant, the Exercise Price or the application of such provisions, so
as to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of the Warrant upon exercise for the same aggregate
Exercise Price the total number, class and kind of shares as he would have owned
had the Warrant been exercised prior to the event and had he continued to hold
such shares until after the event requiring adjustment.
3.5 NOTICES OF CHANGE.
(a) Immediately upon any adjustment in the number or class of
shares subject to this Warrant and of the Exercise Price, the Company shall give
written notice thereof to the Holder, setting forth in reasonable detail and
certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at
least 10 business days prior to the date on which the Company closes its books
or takes a record for determining rights to receive any dividends or
distributions.
(c) The Company shall also give written notice to the Holder
at least 30 business days prior to the date on which an Organic Change shall
take place.
4. ISSUE TAX. The issuance of certificates for shares of Series B
Preferred upon the exercise of the Warrant shall be made without charge to the
Holder of the Warrant for any issue tax (other than any applicable income taxes)
in respect thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Series B Preferred
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Series B Preferred, and no mere enumeration herein
of the rights or privileges of the holder hereof, shall give rise to any
liability of such Holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by its creditors.
5.
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7. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed negotiable,
and that the holder hereof, when this Warrant shall have been so endorsed, may
be treated by the Company, at the Company's option, and all other persons
dealing with this Warrant as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented by this Warrant, or to
the transfer hereof on the books of the Company any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes.
8. MARKET STAND-OFF AGREEMENT. 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 Holder, for a
period of time specified by the managing underwriter(s) (not to exceed one
hundred eighty (180) days following the effective date of a registration
statement of the Company filed under the Securities Act of 1933. 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.
9. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Series B Preferred issued upon exercise of this Warrant, shall survive
the exercise of this Warrant.
10. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant or such
other address as either may from time to time provide to the other.
12. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Series B Preferred issuable upon the exercise of
this Warrant shall survive the exercise and termination of this Warrant. All of
the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
13. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not
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constitute a part of this Warrant. This Warrant shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the laws
of the State of California.
14. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
15. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Exercise Price.
16. REGISTRATION RIGHTS. The shares issued upon exercise of this
Warrant shall be included as "Registrable Securities" under the terms of the
Company's Amended and Restated Investor Rights Agreement, dated
_________________ ( the "Investor Rights Agreement") and the holder of such
shares shall entitled to those rights specified in such Investor Rights
Agreement in accordance with the terms therein.
[THIS SPACE INTENTIONALLY LEFT BLANK]
7.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this ______ day of
_________, 2000.
DNA SCIENCES, INC.
a Delaware corporation
By:
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ATTEST:
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EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, 20 ___
DNA Sciences, Inc.
2375 Garcia Avenue
Mountain View, CA 94043
Attn: Chief Executive Officer
Ladies and Gentlemen:
/ / The undersigned hereby elects to exercise the warrant issued to it by
DNA Sciences, Inc. (the "Company") and dated ___________, 2000 Warrant
No. PW-___ (the "Warrant") and to purchase thereunder
__________________________________ shares of the Series B Stock of the
Company (the "Shares") at a purchase price of __________ ($____) per
Share or an aggregate purchase price of
__________________________________ Dollars ($__________) (the "Purchase
Price").
/ / The undersigned hereby elects to convert _______________________
percent (____%) of the value of the Warrant pursuant to the provisions
of Section 1.2 of the Warrant.
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
Very truly yours,
By:
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Title:
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