Exhibit 10.4

 

FIVE YEAR WARRANT

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH AND SUCH COUNSEL SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.

 

Warrant No.             

 

Number Of Shares:         

Date of Issuance: September 19, 2003

 

(subject to adjustment)

 

FIVE YEAR WARRANT TO PURCHASE SHARES

OF COMMON STOCK OF

 

NANOGEN, INC.

 

This Warrant is issued to                         , or its registered assigns
(“Investor”), pursuant to that certain Securities Purchase Agreement dated as of
September 17, 2003 between Nanogen, Inc., a Delaware corporation (“Nanogen”),
and Investor (the “Purchase Agreement”) and is subject to the terms and
conditions of the Purchase Agreement.

 

1. Exercise of Warrant. Subject to the terms and conditions herein set forth,
upon surrender of this Warrant at the principal office of Nanogen and upon
payment of the Warrant Price (as defined below), Investor is entitled to
purchase from Nanogen, at any time after September 19, 2003 and on or before
September 18, 2008 (the “Expiration Date”), up to              shares (as
adjusted from time to time pursuant to the provisions of this Warrant) of common
stock, par value $0.001 per share (the “Common Stock”), of Nanogen (the “Warrant
Shares”), at a purchase price of $4.75 per share (the “Warrant Price”). Payment
of the Warrant Price may be made (i) by cashiers check drawn on a United States
bank made to the order of Nanogen, (ii) by wire transfer to the account of
Nanogen, or (iii) only if, on the Date of Exercise (as defined below), an Event
under clause (v) of Section 7.1(i) of the Purchase Agreement has occurred and is
continuing such that the Warrant Shares are not then covered by an effective
registration statement or the prospectus included in an effective registration
statement covering the Warrant Shares is not then available for use by the
Investor to resell Warrant Shares, by delivery of this Warrant with instructions
that Nanogen retain as payment of the Warrant Price such number of shares of
Common Stock as shall be determined under the next sentence (a “Cashless
Exercise”). In the event of a Cashless Exercise, the Investor shall receive that
number of shares of Common Stock determined by multiplying the number of shares
of Common Stock for which the Cashless Exercise is made by a fraction, the
numerator of which shall be the positive difference between the then Current
Market Price per share of Common Stock and the Warrant Price, and the
denominator of which shall be the then Current Market Price per share of Common
Stock. The remaining Warrant Shares for which the Cashless Exercise has been
made shall be deemed to have been paid to Nanogen as the Warrant Price. The
“Current Market Value” means, in respect of the Common Stock, on any date herein
specified, the average of the daily closing prices for 5 consecutive trading
days

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during the period commencing on the seventh trading day immediately prior to
such date and ending on the third trading day immediately prior to such date, or
if there shall not then be a public market for the Common Stock, the value per
share of Common Stock as at such date as determined in good faith by Nanogen’s
Board of Directors. The daily closing price for each such trading day shall be
(i) the last reported sales price on such date on The NASDAQ National Market
(“NASDAQ”) or the principal U.S. stock exchange on which the Common Stock is
then listed or admitted to trading, (ii) if no sale takes place on such day on
any such exchange, the average of the last reported closing bid and asked prices
on such day as officially quoted on NASDAQ or any such exchange, (iii) if the
Common Stock is not then listed or admitted to trading on NASDAQ or any stock
exchange, the average of the last reported closing bid and asked prices on such
day in the over-the-counter market, as furnished by the National Association of
Securities Dealers Automatic Quotation System or the National Quotation Bureau,
Inc., (iv) if neither such corporation at the time is engaged in the business of
reporting such prices, as furnished by any similar firm then engaged in such
business, or (v) if there is no such firm, as furnished by any member of the
National Association of Securities Dealers, Inc. selected by Nanogen.

 

2.   Certain Adjustments. So long as this Warrant is outstanding:

 

(a) Mergers or Consolidations. If at any time after the date hereof there shall
be a capital reorganization (other than a combination or subdivision of Warrant
Shares otherwise provided for herein) (a “Reorganization”), or a merger or
consolidation of Nanogen with another corporation (other than a merger with
another corporation in which Nanogen is a continuing corporation and which does
not result in any reclassification or change of outstanding securities issuable
upon exercise of this Warrant or a merger effected exclusively for the purpose
of changing the domicile of Nanogen ) (a “Merger”), then, as a part of such
Reorganization or Merger, lawful provision shall be made so that Investor shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified in this Warrant and upon payment of the Warrant Price, the
number of shares of stock or other securities or property of Nanogen or the
successor corporation resulting from such Reorganization or Merger, to which a
holder of the Common Stock deliverable upon exercise of this Warrant would have
been entitled under the provisions of the agreement in such Reorganization or
Merger if this Warrant had been exercised immediately before that Reorganization
or Merger. In any such case, appropriate adjustment (as determined in good faith
by Nanogen’s Board of Directors) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of Investor
after the Reorganization or Merger to the end that the provisions of this
Warrant (including adjustment of the Warrant Price then in effect and the number
of shares of Warrant Shares) shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.

 

(b) Splits and Subdivisions; Dividends. In the event Nanogen should at any time
or from time to time fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
the holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as the
“Common Stock Equivalents”) without payment of any consideration by such holder
for the additional shares of Common Stock or Common Stock Equivalents (including
the additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such distribution, split
or subdivision if no record date is fixed), the per share Warrant Price shall be
appropriately decreased and the number of shares of Warrant Shares shall be
appropriately increased in proportion to such increase (or potential increase)
of outstanding shares.

 

(c) Combination of Shares. If the number of shares of Common Stock outstanding
at any time after the date hereof is decreased by a combination of the
outstanding shares of Common Stock, the per share Warrant Price shall be
appropriately increased and the number of shares of Warrant Shares shall be
appropriately decreased in proportion to such decrease in outstanding shares.

 

(d) Adjustments for Other Distributions. In the event Nanogen shall declare a
distribution payable in securities of other persons, evidences of indebtedness
issued by Nanogen or other persons, assets (excluding cash dividends paid out of
net profits) or options or rights not referred to in Section 2(b), then,

 

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in each such case for the purpose of this Section 2(d), upon exercise of this
Warrant the holder hereof shall be entitled to a proportionate share of any such
distribution as though such holder was the holder of the number of shares of
Common Stock of Nanogen into which this Warrant may be exercised as of the
record date fixed for the determination of the holders of Common Stock of
Nanogen entitled to receive such distribution.

 

(e) Adjustments for Dilutive Issuances. Except as otherwise provided in Section
2(f) and Section 2(g) hereof, if prior to September 19, 2005, the Company issues
or sells, or in accordance with Section 2(f) is deemed to have issued or sold,
any shares of Common Stock for no consideration (other than a stock split or
stock dividend) or for a consideration per share less than the Warrant Price (as
then in effect) (a “Dilutive Issuance”), then effective immediately upon such
Dilutive Issuance, the adjusted Warrant Price will be equal to the consideration
per share of Common Stock issued or sold or deemed to have been issued or sold
in such Dilutive Issuance, provided that in no event shall the Warrant Price be
adjusted to equal less than $3.20 per share of Common Stock.

 

(f) Effect on Exercise Price of Certain Events. For purposes of determining the
adjusted Warrant Price under Section 2(e), the following will apply:

 

(i) Issuance of Rights, Options or Convertible Securities. Subject to Section
2(f)(ii) below, if, after the date hereof, the Company issues or grants any
warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase Common Stock or other securities exercisable,
convertible into or exchangeable for Common Stock (“Convertible Securities”)
(such warrants, rights and options to purchase Common Stock or Convertible
Securities are hereinafter referred to as “Options”), and the price per share
for which Common Stock is purchasable or issuable upon the exercise of such
Options is less than the Warrant Price (as then in effect) on the date of
issuance of such Option or direct stock grant (collectively, “Below Market
Options”), then the maximum total number of shares of Common Stock issuable upon
the exercise of all such Below Market Options (assuming full exercise,
conversion or exchange of Convertible Securities, if applicable) will, as of the
date of the issuance or grant of such Below Market Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For purposes of the preceding sentence, the price per share for which
Common Stock is issuable upon the exercise of such Below Market Options is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Below Market
Options, plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of all such Below Market Options, plus,
in the case of Convertible Securities issuable upon the exercise of such Below
Market Options, the minimum aggregate amount of additional consideration payable
upon the exercise, conversion or exchange thereof at the time such Convertible
Securities first become exercisable, convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of all
such Below Market Options (assuming full conversion of Convertible Securities,
if applicable). No further adjustment to the Warrant Price will be made upon the
exercise of such Below Market Options or upon the exercise, conversion or
exchange of Convertible Securities issuable upon exercise of such Below Market
Options.

 

(ii) Issuance of Convertible Securities.

 

If the Company issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable
upon such exercise, conversion or exchange (as determined pursuant to Section
2(f)(i) if applicable) is less than the Warrant Price (as then in effect) on the
date of issuance of such Convertible Security, then the maximum total number of
shares of Common Stock issuable upon the exercise, conversion or exchange of all
such Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been issued and
sold by the Company for such price per share. For the purposes of the preceding
sentence, the price per share for which Common Stock is issuable upon such
exercise, conversion or exchange is determined by dividing (i) the total amount,
if any, received or receivable by the Company as consideration for the issuance
or sale

 

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of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise,
conversion or exchange thereof at the time such Convertible Securities first
become exercisable, convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of all such Convertible Securities. No further adjustment to the
Warrant Price will be made upon the actual issuances of such Common Stock upon
exercise, conversion or exchange of such Convertible Securities.

 

(iii) Change in Option Price or Conversion Rate. If there is a change at any
time in (i) the amount of additional consideration payable to the Company upon
the exercise of any Options; (ii) the amount of additional consideration, if
any, payable to the Company upon the exercise, conversion or exchange of any
Convertible Securities, or (iii) the rate at which any Convertible Securities
are convertible into or exchangeable for Common Stock (other than under or by
reason of provisions designed to protect against dilution), the Warrant Price in
effect at such time shall be adjusted to the Warrant Price which would have been
in effect had such Options or Convertible Securities still outstanding provided
for such changed additional consideration or changed conversion rate, as the
case may be, at the time initially granted, issued or sold.

 

(iv) Treatment of Expired Options and Unexercised Convertible Securities. If, in
any case, the total number of shares of Common Stock issuable upon exercise of
any Options or upon exercise, conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option or to
exercise, convert or exchange such Convertible Securities shall have expired or
terminated, the Warrant Price then in effect will be readjusted to the Warrant
Price which would have been in effect at the time of such expiration or
termination had such Options or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination (other than in
respect of the actual number of shares of Common Stock issued upon exercise or
conversion thereof), never been issued.

 

(v) Calculation of Consideration Received. If any Common Stock, Options or
Convertible Securities are issued, granted or sold for cash, the consideration
received therefor for purposes of this Warrant will be the amount received by
the Company therefor, before deduction of reasonable commissions, underwriting
discounts or allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale. In case any Common
Stock, Options or Convertible Securities are issued or sold for a consideration
part or all of which shall be other than cash, the amount of the consideration
other than cash received by the Company will be the fair market value of such
consideration except where such consideration consists of freely-tradable
securities, in which case the amount of consideration received by the Company
will be the market price thereof as of the date of receipt. The fair market
value of any consideration other than cash or securities will be determined in
the good faith reasonable business judgment of the Board of Directors.

 

(g) Exceptions to Adjustment of Exercise Price. No adjustment to the Warrant
Price or the number of Warrant Shares issuable pursuant to this Warrant will be
made under Section 2(e) or 2(f) above as a result of the issuance of any
securities of the Company issued pursuant to (i) the grant or exercise of any
stock or options which may hereafter be granted or exercised under any employee,
consultant, officer or director benefit plan duly adopted by the Company, (ii)
any options, warrants, preferred stock, convertible securities or rights or
agreements to purchase securities of the Company outstanding on the date hereof;
(iii) any firm commitment underwritten public offerings of equity securities;
(iv) any equity securities issued for consideration other than cash pursuant to
a merger, consolidation, acquisition or similar business combination; (v) any
securities issued in connection with the settlement of pending or threatened
litigation or similar proceeding, (vi) shares of Common Stock issued in
connection with any stock split, stock dividend or recapitalization by the
Company; (vii) shares of Common Stock issued upon exercise of the Warrants or
any warrants issued in connection with the Securities Purchase Agreements (as
defined below); (viii) any equity securities issued pursuant to any equipment
leasing arrangement or debt financing from a bank or similar financial
institution whose primary business is lending money and not investing in
securities; (ix) any equity securities issued in connection with strategic
transactions involving the Company and other entities, including (A) joint
ventures, manufacturing, marketing or distribution

 

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arrangements, (B) technology transfer or development arrangements; provided,
that the primary purpose of such transaction is not the raising of capital; (x)
an agreement to issue securities which does not close; and (xi) any securities
issued or issuable (including the Underlying Shares (as such term is defined in
the Securities Purchase Agreements) under the Securities Purchase Agreements
entered into by and between the Company and certain investors (including the
original holder of this Warrant) on September 17, 2003 (collectively, the
“Securities Purchase Agreements”), pursuant to which such investors agreed to
purchase shares of common stock and common stock purchase warrants from the
Company.

 

3. No Fractional Shares. No fractional shares of Warrant Shares will be issued
in connection with any exercise of this Warrant. In lieu of any fractional
shares which would otherwise be issuable, Nanogen shall pay cash equal to the
product of such fraction multiplied by the Fair Market Value of one share of
Warrant Shares. The “Fair Market Value” of a share of Common Stock shall mean
the last reported sale price and, if there are no sales, the last reported bid
price, of the Common Stock on the business day prior to the Date of Exercise (as
defined below) as reported by the NASDAQ or such other principal exchange or
quotation system on which the Common Stock is then traded or, if the Common
Stock is not publicly traded, the price determined in good faith by Nanogen’s
Board of Directors.

 

4. No Stockholder Rights. This Warrant does not entitle Investor to any voting
or other rights as a stockholder of Nanogen (including without limitation the
right to notification of stockholder meetings or the right to receive any notice
or other communication concerning the business and affairs of Nanogen ) prior to
the exercise and payment of the Warrant Price in accordance with the terms of
Sections 1 and 6 hereof.

 

5. Reservation of Stock. Nanogen covenants that during the period this Warrant
is exercisable, Nanogen will reserve from its authorized and unissued shares of
Common Stock a sufficient number of shares of Common Stock (or other securities,
if applicable) to provide for the issuance of Warrant Shares (or other
securities) upon the exercise of this Warrant. Nanogen agrees that its issuance
of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of this Warrant.

 

6.   Mechanics of Exercise.

 

(a) This Warrant may be exercised by the holder hereof, in whole or in part, by
the surrender of this Warrant and the Notice of Exercise attached hereto as
Exhibit A duly completed and executed on behalf of the holder hereof, at the
principal office of Nanogen together with payment in full of the Warrant Price
then in effect with respect to the number of shares of Warrant Shares as to
which the Warrant is being exercised. The date on which the Company receives
this Warrant, duly completed and executed Notice of Exercise and payment in full
of the Warrant Price is referred to herein as the “Date of Exercise”; provided
that if the Company receives such items on a day that is not a business day or
after 2:30 p.m. Pacific Time on a business day, then the Date of Exercise shall
be the next business day. This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Date of Exercise as provided
above, and the person entitled to receive the Warrant Shares issuable upon such
exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date. As promptly as practicable on
or after the Date of Exercise, Nanogen at its expense shall cause to be issued
and delivered to the person or persons entitled to receive the same a
certificate or certificates for the number of full shares of Warrant Shares
issuable upon such exercise, together with cash in lieu of any fraction of a
share as provided above. The shares of Warrant Shares issuable upon exercise
hereof shall, upon their issuance, be validly issued, fully paid and
nonassessable, and free from all preemptive rights, taxes, liens and charges
with respect to the issue thereof. In the event that this Warrant is exercised
in part, Nanogen at its expense will execute and deliver a new Warrant of like
tenor exercisable for the number of shares for which this Warrant may then be
exercised.

 

(b) If by the third business day after the Date of Exercise the Company fails to
deliver the required number of Warrant Shares in the manner required pursuant to
this Section 6, then the Investor will have the right to rescind such exercise.
If by the third business day after the Date of Exercise the Company

 

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fails to deliver the required number of Warrant Shares in the manner required
pursuant to this Section 6, and if after such third business day and prior to
the receipt of such Warrant Shares, the Investor is required by its broker to
purchase in a bona fide open market transaction shares of Common Stock to
deliver in satisfaction of a sale by the Investor of the Warrant Shares which
the Investor anticipated receiving upon such exercise (a “Buy In”), then the
Company shall either (1) pay in cash to the Investor the amount by which (x) the
Investor’s total purchase price (including customary brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Investor in connection with the exercise at issue by (B) the
price at which the sell order giving rise to such purchase obligation was
executed or (2) at the option of the Investor, reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such exercise was not
honored or deliver to the Investor the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Investor purchases in a Buy
In shares of Common Stock having a total purchase price of $11,000 to cover the
sale of shares of Common Stock with an aggregate sale price of $10,000, then the
Company shall be required to pay the Investor $1,000. The Investor shall provide
the Company written notice indicating the amounts payable to the Investor in
respect of the Buy In, together with applicable confirmations and other evidence
reasonably requested by the Company. Nothing herein shall limit an Investor’s
right to pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

 

7. Certificate of Adjustment. Whenever the Warrant Price or number or type of
securities issuable upon exercise of this Warrant is adjusted, as herein
provided, Nanogen shall, at its expense, promptly deliver to the record holder
of this Warrant a certificate of an officer of Nanogen setting forth the nature
of such adjustment and showing in detail the facts upon which such adjustment is
based.

 

8. Representations of Investor. As of the date hereof, Investor hereby confirms
the representations and warranties made by Investor in Section 5 of the Purchase
Agreement.

 

9. Transfer Restrictions. The holder of this Warrant acknowledges that this
Warrant and the Warrant Shares have not been registered under the Securities
Act, and agrees not to offer, sell, pledge, transfer or otherwise dispose of (or
solicit any offers to buy, purchase or otherwise acquire or take a pledge of)
this Warrant or any Warrant Shares issued upon its exercise except in compliance
with the Securities Act, applicable state securities laws and the respective
rules and regulations promulgated thereunder. If, at the time of the surrender
of this Warrant in connection with any transfer of this Warrant or the Warrant
Shares, this Warrant or the Warrant Shares, as applicable, shall not be
registered under the Securities Act and under applicable state securities or
blue sky laws, Nanogen may require, as a condition of allowing such transfer
that the holder or transferee of this Warrant or the Warrant Shares as the case
may be, furnish to Nanogen the Notice of Assignment Form attached hereto as
Exhibit B and a written opinion of counsel that is reasonably acceptable to
Nanogen to the effect that such transfer may be made without registration under
the Securities Act and under applicable state securities or blue sky laws, (ii)
that the holder or transferee execute and deliver to Nanogen an investment
letter in form and substance acceptable to Nanogen and (iii) that the transferee
be an “accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act. Except as otherwise set forth in the Purchase Agreement, each
certificate or other instrument for Warrant Shares issued upon the exercise of
this Warrant shall bear a legend substantially to the foregoing effect. The
holder of this Warrant must obtain the prior written consent of Nanogen in order
to transfer Warrants representing the right to purchase fewer than the lesser of
(x) 1,000 Warrant Shares or (y) the number of Warrant Shares for which this
Warrant is then exercisable.

 

10.   Notices of Record Date. In the event of:

 

(a) any taking by Nanogen 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 payable out of earned surplus of
Nanogen) or other distribution, or any right to subscribe for,

 

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purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or

 

(b) any Reorganization or Merger; or

 

(c) any voluntary or involuntary dissolution, liquidation or winding-up of
Nanogen,

 

then and in each such event Nanogen will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, and
(ii) the date on which any such Reorganization, Merger, dissolution, liquidation
or winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other property
deliverable upon such Reorganization, Merger, dissolution, liquidation or
winding-up. Such notice shall be mailed at least ten (10) business days prior to
the date therein specified.

 

11. Replacement of Warrants. On receipt of evidence reasonably satisfactory to
Nanogen of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
Nanogen or, in the case of any such mutilation, on surrender and cancellation of
such Warrant, Nanogen at its expense will execute and deliver, in lieu thereof,
a new Warrant of like tenor.

 

12. No Impairment. Except to the extent as may be waived by the holder of this
Warrant, Nanogen will not, by amendment of its charter or through a
Reorganization, Merger, dissolution, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against
impairment.

 

13. Saturdays, Sundays, Holidays, Etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday or Sunday or shall be a legal holiday, then such action may
be taken or such right may be exercised on the next succeeding day not a
Saturday, Sunday or legal holiday.

 

14. Miscellaneous. This Warrant shall be governed by the laws of the State of
California without regard to principles of conflicts of law. The headings in
this Warrant are for purposes of convenience and reference only, and shall not
be deemed to constitute a part hereof. Neither this Warrant nor any term hereof
may be changed, waived, discharged or terminated orally but only by an
instrument in writing signed by Nanogen and the Investor. All notices and other
communications from Nanogen to the holder of this Warrant shall be sufficient if
in writing and sent by registered or certified mail, domestic or international
courier, or facsimile, return receipt requested, postage or courier charges
prepaid, to the address furnished to Nanogen in writing by Investor. All such
notices and communications shall be effective if delivered (i) personally, (ii)
by facsimile transmission (receipt verified), (iii) by registered or certified
mail (return receipt requested), postage prepaid, or (iv) sent by express
courier service (receipt verified), and if to Nanogen, with a copy to Richard A.
Silfen, Esq. of Morgan, Lewis & Bockius LLP, 1701 Market St. Philadelphia, PA
19103 (facsimile 215.963.5001). The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provisions.

 

15. Limitation on Exercise. Notwithstanding anything herein to the contrary, in
no event shall the Investor be permitted to exercise this Warrant for Warrant
Shares to the extent that (A) the number of shares of Common Stock beneficially
owned by such Investor, together with any and all affiliates thereof and any
other persons or entities whose beneficial ownership of Common Stock would be
aggregated with the Investor’s for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), (including shares held by
any “group” of which the holder is a member) (other than Warrant Shares issuable
upon exercise of this Warrant) plus (B) the number of Warrant Shares issuable
upon exercise of this Warrant, would be equal to or exceed 4.9999% of the number
of shares of Common

 

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Stock then issued and outstanding, including shares issuable upon exercise of
this Warrant held by such Investor after application of this Section 15. As used
herein, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules promulgated thereunder. To the extent
that the limitation contained in this Section 15 applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned by
the Investor) and of which portion of this Warrant is exercisable shall be in
the sole discretion of such Investor, and the submission of a Notice of Exercise
shall be deemed to be such Investor’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Investor) and of
which portion of this Warrant is exercisable, in each case subject to such
aggregate percentage limitation, based on the most recent public filings by the
Company with the SEC, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. Nothing contained herein shall be
deemed to restrict the right of a Investor to exercise this Warrant into Warrant
Shares at such time as such exercise will not violate the provisions of this
Section 15. The provisions of this Section 15 may be waived by the Investor
upon, at the election of the Investor, not less than 61 days’ prior written,
irrevocable notice to the Company, and the provisions of this Section 15 shall
continue to apply until such 61st day (or such later date, as determined by the
Investor, as may be specified in such notice of waiver). No exercise of this
Warrant in violation of this Section 15 but otherwise in accordance with this
Warrant shall affect the status of the Warrant Shares as validly issued,
fully-paid and nonassessable.

 

8

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IN WITNESS WHEREOF, this Warrant to Purchase Common Stock is issued effective as
of this 19th day of September, 2003.

 

NANOGEN, INC.

By:

 

 

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David Ludvigson

   

Chief Financial Officer

 

SIGNATURE PAGE TO THE WARRANT

TO PURCHASE SHARES OF COMMON STOCK

 

9

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EXHIBIT A

 

NOTICE OF INTENT TO EXERCISE

(To be signed only upon exercise of Warrant)

 

To: NANOGEN, INC.

 

The undersigned, the holder of the attached Warrant, hereby confirms the
representations and warranties set forth in Section 5 of that certain Securities
Purchase Agreement dated as of September 17, 2003 and irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder,                          (                ) shares of Common Stock
of Nanogen, Inc. and herewith makes payment of                                 
Dollars ($                ) therefor and requests that the certificates for such
shares be issued in the name of, and delivered to
                                        , whose address
is _________________________________________________________________

__________________________________________________________________________________________________________.

 

DATED:                                     
                                            

 

(Signature must conform in all respects to name of
Investor as specified on the face of the Warrant)

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(Address)

 

 

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EXHIBIT B

 

NOTICE OF ASSIGNMENT FORM

 

FOR VALUE RECEIVED,                                          (the “Assignor”)
hereby sells, assigns and transfers all of the rights of the undersigned
Assignor under the attached Warrant with respect to the number of shares of
common stock of Nanogen, Inc. (the “Company”) covered thereby set forth below,
to the following “Assignee” and, in connection with such transfer, represents
and warrants to the Company that the transfer is otherwise in compliance with
Section 9 of the Warrant:

 

Name of Assignee

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Address/Fax Number

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No. of Shares

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Dated:                                     
                                            

 

Signature:

   

 

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Witness:

   

 

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ASSIGNEE ACKNOWLEDGEMENT

 

The undersigned Assignee acknowledges that it has reviewed the attached Warrant
and by its signature below it hereby represents and warrants that it is an
“accredited investor” as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933, as amended, and agrees to be bound by the
terms and conditions of the attached Warrant as of the date hereof.

 

Signature:

By:

 

 

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Its:

 

 

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Address:

 

 

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