Exhibit 10.14
WARRANT
THIS WARRANT AND THE SHARES OF PREFERRED STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND WITHOUT A VIEW TO
RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE TRANSFERRED OR DISPOSED OF
WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER OR
DISPOSITION DOES NOT VIOLATE THE 1933 ACT, AND THE RULES AND REGULATIONS
THEREUNDER.
NO. B-8 Warrant to Purchase 20,017
Shares of Convertible Preferred Stock
WARRANT TO PURCHASE CONVERTIBLE PREFERRED STOCK
OF
ORTHOVITA, INC.
This Warrant certifies that, for value received, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or
registered assigns (the "Holder"), is entitled, at or before 5:00 p.m., Eastern
Daylight Time, on May 9, 2000 to purchase, subject to the provisions of this
Warrant, from Orthovita, Inc., a Pennsylvania corporation (the "Company"), up to
Twenty Thousand Seventeen (20,017) shares of the Company's Class B Convertible
Preferred Stock, par value $.01 per share (the "Preferred Stock"), subject to
adjustment as provided in Section (h), at an exercise price ("Exercise Price")
of $1.75 per share of Preferred Stock.
This Warrant has been issued by the Company pursuant to the Purchase
Agreement executed on even date herewith (the "Purchase Agreement") among the
Company, the Holder, and certain other purchasers of Warrants.
(a) EXERCISE OF WARRANT. This Warrant may be exercised, in whole or
in part, by presentation and surrender of this Warrant to the Company at its
principal office, with the Purchase Form annexed hereto duly executed and
accompanied by payment of the Exercise Price for the number of shares specified
in such form. Payment of the Exercise Price may be made by certified check, wire
transfer of immediately available funds or bank treasurer's or cashier's check,
in each case payable in United States currency, to the order of the Company.
Upon receipt by the Company of this Warrant at its principal office, in proper
form for exercise, including proper payment of the Exercise Price for the number
of shares of Preferred Stock as to which this Warrant is then being exercised,
the Holder shall be deemed to be the holder of record of the shares of Preferred
Stock issuable upon such exercise (the
"Warrant Shares") for all purposes. The Company shall issue certificates
representing the Warrant Shares as to which this Warrant has been properly
exercised as promptly as practicable after such exercise. If this Warrant shall
have been exercised in part, the Company, at the time of delivery of the
certificate or certificates representing the Warrant Shares issuable upon such
exercise, shall deliver to the Holder a new Warrant evidencing the rights to
purchase the number of shares of Preferred Stock as to which this Warrant has
not been exercised, which new Warrant in all other respects shall be identical
with this Warrant.
(b) RESERVATION OF SHARES. The Company shall at all times reserve and
keep available, for issuance and/or delivery upon exercise of this Warrant, such
number of shares of Preferred Stock as shall be required for issuance and
delivery upon exercise in full of this Warrant.
(c) STATUS OF SHARES. All shares of Preferred Stock which shall be
issued upon the exercise of this Warrant shall be validly issued, fully paid and
nonassessable.
(d) FRACTIONAL SHARES. The Company shall not be required to issue
fractions of shares on the exercise of this Warrant. If any fraction of a share
would, except for the provisions of this Section (d), be issuable on the
exercise of this Warrant, the Company shall (1) if the fraction of a share
otherwise issuable is equal to or less than one-half, round down and issue to
the Holder only the largest whole number of shares of Preferred Stock to which
the Holder is otherwise entitled, or (2) if the fraction of a share otherwise
issuable is greater than one-half, round up and issue to the Holder one
additional share of Preferred Stock in addition to the largest whole number of
shares of Preferred Stock to which the Holder is otherwise entitled.
(e) REPLACEMENT OF WARRANT. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
(and in the case of loss, theft or destruction, proof of ownership), and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date. The Company may
condition the replacement of a Warrant reported by the Holder as lost, stolen,
destroyed or mutilated upon receipt by the Company from the Holder of an
indemnity or security reasonably satisfactory to the Company.
(f) RIGHTS OF THE HOLDER. The Holder shall not, by virtue of this
Warrant, be entitled to any rights of a shareholder of the Company, either at
law or equity, and the rights of the Holder are limited to those expressed in
this Warrant and the Purchase Agreement executed as of even date herewith among
the Company, the Holder and the other purchasers of the Warrant (the "Purchase
Agreement").
(g) TRANSFER; DIVISION; COMBINATION. Subject to the provisions of the
Shareholders' Agreement, the transfer of this Warrant is registrable on the
books of the Company to be maintained for such purpose, upon surrender of this
Warrant at the principal office of the Company, together with the Assignment
Form annexed hereto duly executed by
the Holder or his or her agent or attorney and funds sufficient to pay any stock
transfer tax payable upon such transfer. Upon such surrender and payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument of
assignment, and this Warrant promptly shall be cancelled. This Warrant may be
divided upon presentation hereof at the principal office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the then Holder or such Holder's agent
or attorney. Subject to the provisions of this Section (g) and the legend on the
cover page of the Warrant as to any transfer that may be involved in such
division, the Company shall execute and deliver a new Warrant or Warrants in
exchange for this Warrant in accordance with such notice. The Company shall
maintain, at its principal office, books for the registration and the
registration of transfer of this Warrant.
(h) ADJUSTMENTS.
(1) If at any time or from time to time the Company shall (i)
take a record of the holders of the Preferred Stock for the purpose of entitling
them to receive a dividend payable in, or other distribution of, shares of
Preferred Stock, (ii) subdivide the outstanding shares of Preferred Stock into a
larger number of shares of Preferred Stock or (iii) combine the outstanding
shares of Preferred Stock into a smaller number of shares of Preferred Stock,
then the number of shares of Preferred Stock thereafter issuable upon exercise
of this Warrant shall be adjusted so as to consist of the same number of shares
that a record holder of the number of shares of Preferred Stock issuable upon
exercise of this Warrant immediately prior to the happening of such event would
own or be entitled to receive after the happening of such event and the Exercise
Price shall be adjusted to equal the Exercise Price in effect immediately prior
to the adjustment, multiplied by the number of shares of Preferred Stock for
which this Warrant is exercisable immediately prior to the adjustment divided by
the number of shares for which this Warrant is exercisable immediately after
such adjustment. Any adjustments required by this Section (l) shall be made
whenever and as often as any specified event requiring an adjustment shall
occur. If the Company shall take a record of the holders of the Preferred Stock
for the purpose of effecting such distribution, subdivision or combination and
shall, thereafter and before such distribution, subdivision, or combination,
abandon its plan to pay or deliver such distribution or effect such subdivision
or combination, then thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(2) If the Company shall reorganize its capital, reclassify its
capital stock, or merge or consolidate with another corporation, and, pursuant
to the terms of such reorganization, reclassification, merger or consolidation,
the Company is the surviving corporation, then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, such securities or other
property receivable, upon or as a result of such reorganization,
reclassification, merger or consolidation, by a holder of the number of shares
of Preferred Stock issuable upon exercise of this Warrant immediately prior to
such event. If the Company shall merge or consolidate into another corporation,
or sell, transfer or otherwise
dispose of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such merger, consolidation or
disposition of assets, securities of the successor or acquiring corporation or
other property are to be received by or distributed to the holders of shares of
Preferred Stock, then prior to the time such reorganization, reclassification,
merger, consolidation or disposition of assets becomes effective, the Company
shall have the right to require the Holder to, at the Holder's option, either
exercise or surrender this Warrant. However, if (i) the Company does require the
Holder to exercise or surrender this Warrant, (ii) the Holder elects to exercise
rather than surrender this Warrant and (iii) the fair market value per share of
Preferred Stock is less than the Exercise Price at the effective time of such
merger, consolidation or disposition of assets, the Holder shall be entitled to
exercise this Warrant at the Fair Market Value (as hereinafter defined). If the
Company does not require the Holder to exercise this Warrant as provided in this
subparagraph, then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, such securities or other property receivable, upon or
as a result of such reorganization, reclassification, merger, consolidation or
disposition of assets, by a holder of the number of shares of Preferred Stock
issuable upon exercise of this Warrant immediately prior to such event.
For purposes of this subparagraph (2), the Fair Market Value per share
of Preferred Stock shall be the value agreed upon by the Company and RAF
Ventures, Inc. ("RAF"). If the Company and RAF are unable to agree on the Fair
Market Value then (i) the Company shall select a representative of a nationally
recognized accounting firm experienced with the valuation of private companies,
(ii) RAF shall select a representative of a second nationally recognized
accounting firm experienced with the valuation of a private companies, (iii)
each party shall provide the other party with notice of the representative so
selected by it within five days of such selection, (iv) the two representatives
so selected shall together choose a representative of a third nationally
recognized accounting firm experienced in the valuation of private companies and
(v) the three representatives together shall, within a reasonable period of
time, decide the Fair Market Value. If one party fails to select a
representative within 15 days after the above notice was sent, the other party's
representative shall determine the Fair Market Value. If the two representatives
fail to select a third representative within 15 days after notice of the
selection of the second representative, either party may cause the
representative of the third firm to be selected by the American Arbitration
Association in Philadelphia, Pennsylvania. If any representative becomes
unavailable, his or her successor shall be chosen by the accounting firm of
which he or she is a representative. The Fair Market Value shall be determined
by the majority of the representatives of the three nationally recognized
accounting firms. If the representatives are unable to reach a majority, then
each representative shall specify a Fair Market Value and the Fair Market Value
binding upon the parties shall equal one-half of the sum of the two Fair Market
Values that are closest in amount to each other; and provided further that, if
the highest and lowest Fair Market Values are equidistant in amount from the
middle Fair Market Value, the middle Fair Market Value shall be binding on the
parties. The Fair Market Value rendered pursuant to this subparagraph (2) shall
be final and binding on the parties hereto. The Company and all holders (the
"Contesting Holders") who have elected to exercise this Warrant (other than
holders that have agreed to accept, in lieu of all rights under this subsection
(h)(2), an amount per share equal to
the value calculated by the Company) shall each bear the fees and expenses of
the representative selected by it, and the fees and expenses of the
representative of the third nationally recognized accounting firm shall be
shared equally by the Company and the Contesting Holders. Each Contesting Holder
shall share such fees and expenses in the proportion that the number of Warrant
Shares issuable upon exercise of such holder's Warrants bears to the number of
Warrant Shares issuable upon exercise of all Warrants held by the Contesting
Holders.
(3) In order to ensure that the antidilution provisions of the
Section 6(c) of the Certificate of Designations, Preferences and Rights of Class
B Convertible Preferred Stock of the Company (the "Designations") are applied to
the Warrant Shares issuable hereunder, the Conversion Factor (as defined in
Section 6(c) of the Designations) applicable to the Warrant Shares issuable
hereunder and the number of shares of Common Stock issuable upon conversion of
each Warrant Share issuable hereunder shall be determined and adjusted from time
to time in accordance with such Section 6(c) as if all such Warrant Shares were
issued and outstanding from the date of this Warrant through the date of such
conversion; provided, however, that if the provisions of Section 9.1 of the
Purchase Agreement ("Section 9.1") become applicable, the adjustments authorized
by this subsection (h)(3) shall be recalculated on the same basis as adjustments
to outstanding convertible Preferred Stock then held by the Purchasers (as
defined in the Purchase Agreement) would be recalculated in accordance with
Section 9.1.
(4) On or after January 1, 1996, in case the Company shall issue
shares of its Common Stock (excluding shares issued (i) in any of the
transactions described in subsections (h)(1), (h)(2), (h)(5), or (h)(7), (ii)
upon exercise of options granted to the Company's employees under a plan or
plans adopted by the Company's Board of Directors, (iii) upon exercise of
options outstanding at May 9, 1995, (iv) upon exercise of this Warrant, (v)
pursuant to the exercise or conversion of securities issued in transactions
described in subsection (h)(5), (vi) upon conversion of the Preferred Stock of
the Company outstanding on May 9, 1995 and (vii) pursuant to Section 7.1 and/or
7.2 of the Purchase Agreement or pursuant to the "Prior Agreement" as defined
therein) for a consideration per share (the "Offering Price") less than the
Exercise Price, the Exercise Price shall be adjusted immediately thereafter so
that it shall equal the Offering Price.
(5) In case the Company shall issue any securities convertible
into or exchangeable for its Common Stock (excluding shares issued pursuant to
Section 7.1 and/or 7.2 of the Purchase Agreement or pursuant to the Prior
Agreement) for a consideration per share of Common Stock (the "Conversion
Price") initially deliverable upon conversion or exchange of such securities
(determined as provided in Section (h)(6) below) less than the Exercise Price
per share in effect immediately prior to the issuance of such securities, the
Exercise Price shall be adjusted immediately thereafter so that it shall equal
the Conversion Price; provided, that if any such securities are not so converted
--------
or exchanged prior to their expiration or termination, the Exercise Price shall
be readjusted to the Exercise Price which would then be in effect had the
adjustments made upon the issuance of such securities been made upon the basis
of the number of shares of Common Stock actually delivered upon
conversion or exchange of such securities. Such adjustment shall be made
successively whenever such an issuance is made.
(6) For purposes of any computation respecting consideration
received pursuant to subsection (h)(4) and (h)(5) above, the following shall
apply:
(A) in the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(B) in the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors of
the Company (irrespective of the accounting treatment thereof),
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the Company for
any underwriting of the issue or otherwise in connection therewith;
and
(C) in the case of the issuance of securities convertible
into or exchangeable for shares of Common Stock, the Conversion Price
shall be deemed to be the consideration received by the Company for
the issuance of such securities plus the additional consideration, if
any, to be received by the Company upon the conversion or exchange
thereof (the consideration in each case to be determined in the same
manner as provided in clauses (A) and (B) of this Section (h)(6)).
(7) If, pursuant to Section 7.1 and/or 7.2 of the Purchase
Agreement, the Purchasers shall be entitled to receive an additional number of
shares of Preferred Stock, the number of Warrant Shares issuable pursuant to
this Warrant shall be increased by the number of shares issuable, pursuant to
such Sections 7.1 and/or 7.2, to a holder of the number of shares of Preferred
Stock issuable upon exercise of this Warrant immediately prior to the occurrence
of the events resulting in the issuance of additional Preferred Stock pursuant
to such Sections 7.1 and 7.2, and the Exercise Price shall be adjusted to equal
the Exercise Price in effect immediately prior to such adjustment multiplied by
the number of shares of Preferred Stock for which this Warrant is exercisable
immediately prior to such adjustment divided by the number of shares for which
this Warrant is exercisable immediately after such adjustment.
(8) {INTENTIONALLY OMITTED}
(9) Upon adjustment to the Exercise Price pursuant to
subsections (h)(4) or (h)(5), the number of shares into which this Warrant may
be converted shall be
adjusted to the product obtained by multiplying the number of shares subject to
the exercise of this Warrant immediately prior to the adjustment in the Exercise
Price by a fraction, the numerator of which shall be the Exercise Price
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price immediately thereafter.
(10) Each adjustment in the Exercise Price pursuant to this
Section (h) shall be calculated to the nearest tenth of a cent. Each adjustment
to the number of shares issuable pursuant to this Warrant shall be calculated to
the nearest hundredth of a share.
(11) Whenever there is an adjustment in the number or kind of
securities to which the Holder is entitled upon exercise of this Warrant, as
provided in this Section (h), the Company shall (i) promptly file in the custody
of its Secretary a certificate signed by the Chairman of the Board or the
President or a Vice President of the Company, showing in detail the facts
requiring such adjustment and the number and kind of securities issuable upon
exercise of this Warrant after such adjustment, and (ii) cause a copy of such
calculation of the adjustment and a notice stating that such adjustment has been
effected and stating the number and kind of securities issuable upon exercise of
this Warrant to be sent to the Holder.
(i) NOTICE OF CORPORATE ACTION.
If at any time:
(1) the Company shall take a record of the holders of its
Preferred Stock for the purpose of entitling them to receive a dividend (other
than a cash dividend payable out of earnings or earned surplus legally available
for the payment of dividends under the laws of the jurisdiction of incorporation
of the Company) or other distribution, or any right to subscribe for or purchase
any evidences of if its indebtedness, any shares or stock of any class or any
other securities or property, or to receive any other similar right, or
(2) there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(3) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the company;
then, the Company shall give to the Holder at least 30 days'
prior written notice of the date on which a record date shall be selected for
such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up. Such notice
in accordance with the foregoing clause shall also specify (i) the date on which
it is proposed that any such record is to be taken for the purpose
of such dividend, distribution or right, the date on which the holders of
Preferred Stock shall be entitled to any such dividend, distribution or right,
and the amount and character thereof, or (ii) the date on which it is proposed
that any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time has been fixed, as of which the holders of
Preferred Stock shall be entitled to exchange their shares of Preferred Stock
for securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to the Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
(j).
Failure to mail any notice, or the existence of any defect in any
notice, pursuant to this subparagraph (3), shall not affect the legality or
validity of any corporate action taken.
(j) NOTICE GENERALLY. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given, made and received only when delivered (personally, by courier
service such as Federal Express or by other messenger) or when deposited in the
United States mails, certified or registered mail, return receipt requested,
postage prepaid, addressed to the Holder at the address provided to the Company
by such Holder or to the Company at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as shall have been furnished in
writing to the party giving or making such notice, demand or delivery.
(k) GOVERNING LAW. This Warrant shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company, intending to be legally bound, has
caused this Warrant to be executed by a duly authorized officer as an instrument
under seal on this 11th day of April, 1997.
ORTHOVITA, INC.
By: \s\▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
President
PURCHASE FORM
-------------
Dated_________________, 19__
The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing ________ shares of Preferred Stock and hereby makes payment
of $__________________ in payment of the Warrant Exercise Price thereof.
_______________________
INSTRUCTIONS FOR REGISTRATION OF PREFERRED STOCK
------------------------------------------------
Name____________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________
________________________________________________________
________________________________________________________
Social Security Number
or other
Tax Identification Number_______________________________
Signature_______________________________________________
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Preferred Stock set forth below:
Name and Address of Assignee No. of Shares of Preferred Stock
---------------------------- --------------------------------
and does irrevocably constitute and appoint _______________ Attorney to register
such transfer on the books of Orthovita, Inc. maintained for such purpose, with
full power of substitution in the premises.
Dated: _____________, 199_
Signature: _______________________
Witness: _______________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
