Document:

Exhibit 4.20

 

THE WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATES. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT UNDER THE AFORESAID FEDERAL AND STATE SECURITIES LAWS.

 

LUCID, INC.

 

(WARRANT TO PURCHASE SHARES OF COMMON STOCK)

 

FOR VALUE RECEIVED, LUCID, INC., a New York corporation with an office at 2320 Brighton-Henrietta Town Line Road, Rochester, New York 14623 (the “Company”) grants the following rights to (the “Holder”):

 

1.                                       Issuance and Definitions.  This Warrant is issued in accordance with the terms hereinafter set forth and has been issued in connection with the issuance and delivery by the Company to the Holder of a promissory note of even date herewith (the “Note”). Capitalized Terms not otherwise defined herein shall have the meanings ascribed to them in the Note. The term “Qualified Equity Round” shall mean the issuance by the Company of equity interests (or debt interests convertible into equity interests) to investors in one or a series of related transactions in which the Company receives gross proceeds of at least $3 million. There shall be excluded from the definition of Qualified Equity Round any of the following: the issuance of equity securities upon the exercise of currently outstanding options, warrants or convertible securities; the issuance of equity securities pursuant to the exercise of equity incentives granted by the Company; or securities issued in a public offering of securities.

 

2.                                       Purchase of Common Stock.  Subject to the terms and conditions hereinafter set forth, the Holder of this Warrant is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder in writing), to purchase from the Company 2,381 shares of fully paid and non-assessable shares of Common Stock of the Company (the “Common Stock”). [The  number of shares will be the quotient obtained by dividing 15% of the principal amount of the Note by $3.15]

 

3.                                       Reservation of Common Stock.  The Company shall at all times reserve and hold available sufficient shares of Common Stock to satisfy all conversion and purchase rights represented by outstanding convertible securities, options and warrants, including this Warrant. The Company covenants and agrees that all shares of Common Stock that may be issued upon the exercise of this Warrant shall, upon issuance, be  duly and validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the purchase and the  issuance of the shares.

 

4.                                       Exercise Price.  The Exercise Price of this Warrant, or the price at which a share of Common Stock purchasable upon exercise of this Warrant may be purchased, will be the price per share paid for a common stock equivalent in the Qualified Equity Round, provided, however, that, if no Qualified Equity Round has closed on or before January 1, 2010, then the exercise price shall be $3.15 per share.

 

5.                                       Exercise Period.  The Holder may exercise the purchase rights evidenced hereby commencing upon the earlier of January 1, 2010 or the date of closing of the next “Qualified

 

 

Equity Round,” provided that this Warrant may only be exercised on or before September 1, 2013 (“Exercise Period”). If not exercised during this period, this Warrant and all rights granted under this Warrant shall expire and lapse.

 

6.                                       Exercise.

 

(a) The exercise of this Warrant may be accomplished by actual delivery of this Warrant and  the Exercise  Price in cash, certified check, or official bank draft in lawful money of the United States of America, or such other tender acceptable to the Company. The payment must be delivered, personally or by mail, to the Company at the address first set forth above or such other address as may hereafter be specified by the Company in a written notice to the Holder.

 

(b) Notwithstanding any provision herein to the contrary, if the Fair Market Value of one share of Common Stock 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 by surrender of this Warrant at the principal office of the Company together with a properly executed notice of such election, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

 

	
 
    	
X =
    	
Y (A-B)
    	
 
    
	
 
    	
 
    	
      A
    	
 
    

 

	
Where
    	
X = the number of shares of Common Stock to be   issued to the Holder
    
	
 
    	
 
    
	
 
    	
Y = the  number of shares of Common Stock   issuable under the Warrant
    
	
 
    	
 
    
	
 
    	
A = the fair market value of one share of Common   Stock (at the date of calculation)
    
	
 
    	
 
    
	
 
    	
B = the Exercise Price of the Warrant (at the date   of calculation)
    

 

(c) For the purpose of the calculation in subparagraph (b) above, the Fair Market Value of one share of Common Stock shall be determined by the Company’s Board of Directors in good faith; provided, however, that where there exists a public market for the Company’s Common Stock at the time of such exercise, the fair market value per share shall be the average of the closing bid and asked prices of the Common Stock as quoted in the Over-the-Counter Market Summary or the last reported sale price of the Common Stock or the closing price quoted on the Nasdaq Global Market or on any exchange on which the Common Stock is listed, whichever is applicable, for the five (5) trading days prior to the date of determination. Notwithstanding the foregoing, if the Warrant is exercised in connection with the Company’s initial public offering of 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.

 

7.                                       Certificates for Common Stock.  Upon the exercise of the purchase rights evidenced by this Warrant, a certificate for the shares of Common Stock so purchased shall be issued as soon as practicable thereafter, and in any event within thirty (30) days of the delivery of this Warrant and the Exercise Price.

 

8.                                       Anti-Dilution.  If  this Warrant shall be exercised subsequent to any stock dividend, split-up, recapitalization, or reorganization of the Company occurring after the date hereof, as a result of which shares of any class shall be issued in respect of outstanding shares of Common Stock or shares of Common Stock shall be changed into the same or a different number shares of the same or another class or classes, the Holder shall receive, for the

 

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aggregate price paid upon such exercise, the aggregate number and class of shares which such Holder would have received if this Warrant had been exercised immediately prior to such stock-dividend, split-up, recapitalization, or reorganization.

 

9.                                       Pre-Exercise Rights.  Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Common Stock, including (without limitation) the right to receive dividends or other distributions thereon, or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.

 

10.                                 Restricted Securities.  The Holder understands that this Warrant and the Common Stock purchasable hereunder constitute “restricted securities” under the federal securities laws inasmuch as they are, or will be, acquired from the Company in transactions not involving a public offering and accordingly may not, under such laws and applicable regulations, be resold or transferred without registration under the Securities Act of 1933 or applicable state securities laws, or an applicable exemption from registration. The Holder further acknowledges that the Common Stock and any other securities issued upon exercise of this Warrant shall bear a legend substantially in the form of the legend appearing on the face hereof.

 

11.                                 Certification of Investment Purpose.  Unless a current registration statement under the Securities Act of 1933 shall be in effect with respect to the securities to be issued upon the exercise of this Warrant, the Holder hereof, by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, such Holder will deliver to the Company a written certification that the securities acquired by the Holder upon exercise hereof are for the account of the Holder and acquired for investment purposes only and that such securities are not acquired with a view to, or for sale in connection with, any public distribution thereof.

 

IN WITNESS WHEREOF, the Company has signed this Warrant by its duly authorized officers this 28th day of August, 2008.

 

 

	
 
    	
 
    	
LUCID, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jay M. Eastman
    
	
 
    	
Name:
    	
Jay   M. Eastman
    
	
 
    	
Title:
    	
Chief   Executive Officer
    

 

3Exhibit 4.21

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH APPLICABLE LAW.

 

WARRANT TO PURCHASE STOCK

 

	
 
    	
Corporation:
    	
Lucid,   Inc.
    
	
 
    	
Number   of Shares:
    	
19,523
    
	
 
    	
Class   of Stock:
    	
Common
    
	
 
    	
Initial   Exercise Price:
    	
$4.61per   share
    
	
 
    	
Issue   Date:
    	
July   20, 2011
    
	
 
    	
Expiration   Date:
    	
July   20, 2016
    
	
 
    	
 
    	
 
    

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, the receipt of which is hereby acknowledged, SQUARE 1 BANK or its assignee (“Holder”) is entitled to purchase the number of fully paid and nonassessable shares of the class of securities (the “Shares”) of the corporation (the “Company”) at the initial exercise price per Share (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 this warrant and 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 Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased.

 

1.2                               Conversion Right.  In lieu of exercising this warrant as specified in Section 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 Section 1.3.

 

1.3                               Fair Market Value.  If the Shares are traded regularly in a public market, the fair market value of the Shares shall be the closing price of the Shares (or the closing price of the Company’s stock into which the Shares are convertible) reported for the business day immediately before Holder delivers its Notice of Exercise to the Company.  If the Shares are not regularly 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, the Company shall deliver to Holder certificates for the Shares acquired or 

 

 

make appropriate book-entries therefore 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, on surrender and cancellation of this warrant, the Company at its expense shall execute and deliver, in lieu of this warrant, a new warrant of like tenor.

 

1.6                               Repurchase on Sale, Merger, or Consolidation of the Company.

 

1.6.1                     “Acquisition.”  For the purpose of this warrant, “Acquisition” means (a) any sale, license, or other disposition of all or substantially all of the assets (including intellectual property) of the Company, or (b) any reorganization, consolidation, merger or sale of the voting securities of the Company or any other transaction where the holders of the Company’s securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction.

 

1.6.2                     Assumption of Warrant.  If upon the closing of any Acquisition the successor entity assumes the obligations of this warrant, then 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 shall be adjusted accordingly.  The Company shall use reasonable efforts to cause the surviving corporation to assume the obligations of this warrant.

 

1.6.3                     Nonassumption.  If upon the closing of any Acquisition the successor entity does not assume the obligations of this warrant and Holder has not otherwise exercised this warrant in full, then Holder shall have the option either to (a) deem this warrant to have been automatically converted pursuant to Section 1.2 and thereafter Holder shall participate in the Acquisition on the same terms as other holders of the same class of securities of the Company; or (b) require the Company to purchase this warrant for cash upon the closing of the Acquisition for an amount per Share equal to three (3) times the Warrant Price.

 

ARTICLE 2

 

ADJUSTMENTS TO THE SHARES

 

2.1                               Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend on its common stock payable in common stock, or other securities, or subdivides the outstanding common stock into a greater amount of common stock, 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 or subdivision occurred.

 

2.2                               Reclassification, Exchange or Substitution.  Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the 

 

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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.  Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Company’s Articles of Incorporation upon the closing of a registered public offering of the Company’s common stock.  The Company or its successor shall promptly issue to Holder a new warrant for such new securities or other property.  The new 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 Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.

 

2.3                               Adjustments for Combinations, Etc.  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.  If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a greater number of shares, the Warrant Price shall be proportionately decreased.

 

2.4                               Adjustments for Diluting Issuances.  In the event of the issuance (a “Diluting Issuance”) by the Company after the Issue Date of securities at a price per share less than the Warrant Price, then the number of shares of common stock issuable upon conversion of the Shares shall be adjusted in accordance with those provisions of the Company’s Articles (Certificate) of Incorporation that apply to Diluting Issuances.

 

2.5                               Certificate as to Adjustments.  Upon each adjustment of the Warrant Price, the Company at its expense shall 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.

 

2.6                               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 amount computed by multiplying the fractional interest by the fair market value of a full Share.

 

ARTICLE 3

 

REPRESENTATIONS AND COVENANTS OF THE COMPANY

 

3.1                               Representations and Warranties.  The Company hereby represents and warrants to the Holder as follows:

 

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(a)                                  The initial Warrant Price referenced on the first page of this warrant is not greater than the fair market value of the Shares as of the date of this warrant.

 

(b)                                  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.

 

(c)                                  The Company’s capitalization, as described in its Registration Statement on Form S-1 (No. 333-17355), as filed with the United States Securities and Exchange Commission (the “SEC”) on April 15, 2011, as amended by Amendment No. 1 to Registration Statement on Form S-1 (No. 333-17355), as filed with the SEC on June 27, 2011  (as amended, the “Registration Statement”), is true and complete as of the Issue Date.

 

3.2                               Notice of Certain Events.  The Company shall provide Holder with not less than 10 days prior written notice, including a description of the material facts surrounding, any of the following events:  (a) declaration of any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) offering for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of any class or series or other rights; (c) effecting any reclassification or recapitalization of common stock; or (d) the merger or consolidation with or into any other corporation, or sale, lease, license, or conveyance of all or substantially all of its assets, or liquidation, dissolution or winding up.

 

3.3                               Information Rights.  If the Company is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, then so long as the Holder holds this warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all communiques to the shareholders of the Company, (b) within one hundred fifty (150) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company’s quarterly, unaudited financial statements.

 

3.4                               Registration Under Securities Act of 1933, as amended.  The Company agrees to use commercially reasonable efforts to cause the registration of the shares issuable upon the exercise of this warrant to be declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, within thirty (30) days of the expiration of the 90-day lock-up period described in the Registration Statement.

 

ARTICLE 4

 

MISCELLANEOUS

 

4.1                               Term: Exercise Upon Expiration.  This warrant is exercisable in whole or in part, at any time and from time to time on or before the Expiration Date set forth above; provided, however, that if the Company completes its initial public offering within the three-year 

 

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period immediately prior to the Expiration Date, the Expiration Date shall automatically be extended until the third anniversary of the effective date of the Company’s initial public offering.  If this warrant has not been exercised prior to the Expiration Date, this warrant shall be deemed to have been automatically exercised on the Expiration Date by “cashless” conversion pursuant to Section 1.2.

 

4.2                               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 SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH APPLICABLE LAW.

 

4.3                               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.  The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder or if there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144 (d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holder’s notice of proposed sale.

 

4.4                               Transfer Procedure.  Subject to the provisions of Section 4.3, Holder may transfer all or part of this warrant or the Shares issuable upon exercise of this warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company notice of the portion of the warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this warrant to the Company for reissuance to the transferee(s) (and Holder, if applicable).  No surrender or reissuance shall be required if the transfer is to an affiliate of Holder.

 

4.5                               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 be, in writing by the Company or such Holder from time to time.  All notices to the Holder shall be addressed as follows:

 

Square 1 Bank

Attn:  Warrant Administrator

406 Blackwell Street, Suite 240

Crowe Building

Durham, NC 27701

 

4.6                               Amendments.  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.

 

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4.7                               Attorneys’ 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 attorneys’ fees.

 

4.8                               Governing Law.  This warrant shall be governed by and construed in accordance with the laws of the State of North Carolina, without giving effect to its principles regarding conflicts of law.

 

 

	
 
    	
LUCID,   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jay M. Eastman
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Jay   M. Eastman
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief   Executive Officer
    

 

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APPENDIX 1

 

NOTICE OF EXERCISE

 

1.                                      The undersigned hereby elects to purchase                              shares of common stock of LUCID, INC. pursuant to the terms of the attached warrant, and tenders herewith payment of the purchase price of such shares in full.

 

1.                                      The undersigned hereby elects to convert the attached warrant into shares in the manner specified in the warrant.  This conversion is exercised with respect to                              of the shares covered by the warrant.

 

[Strike paragraph that does not apply.]

 

2.                                      Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:

 

Square 1 Bank

Attn:  Warrant Administrator

406 Blackwell Street, Suite 240

Fowler Building

Durham, NC 27701

 

3.                                      The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.

 

 

	
SQUARE   1 BANK or Registered Assignee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Signature)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Date)

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