THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT ARE TRANSFERABLE ONLY IN ACCORDANCE
WITH PARAGRAPH H HEREOF.
Void after 5:00 P.M., New York Time, on November ____, 2005
Warrant to Purchase
_______ Shares
of Common Stock
WARRANT TO PURCHASE COMMON STOCK
This is to Certify That, FOR VALUE RECEIVED, ________________________________, a
Delaware limited partnership having an office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Holder") is entitled to purchase, subject to the provisions of
this Warrant, from Q-Med, Inc., a Delaware Company, having an office at 000
Xxxxx Xxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxx Xxxxxx 00000 (the "Company"), an
aggregate of ________ shares (the "Warrant Shares") of the Company's Common
Stock, par value $.001 per share ("Common Stock") at a price equal to the
average of the market price for the ten (10) trading days following issuance as
certified by the CFO of the Company (the "Initial Exercise Price") per share (or
such other price computed by applying all adjustments made on or before November
15, 2005, in accordance with Section F. hereof, to $______ as if it had been the
initial Exercise Price per share hereunder) at any time on or after November 16,
1998 until 5:00 P.M. New York Time, on November 15, 2005. The number of shares
of Common Stock to be received upon the exercise of this Warrant and the price
to be paid for a share of Common Stock may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price." The Warrants represented by this agreement
are part of a class of 500,000 Warrants of like tenor issued November ___, 1998
(the "Issue Date").
A. EXERCISE OF WARRANT. Subject to the following conditions precedent and the
provisions of Section G hereof, this Warrant may be exercised in whole or
in part at any time or from time to time on or after November 16, 1998, and
before 5:00 P.M. New York Time on November 15, 2005, or, if either such day
is a day on which banking institutions are authorized by law to close, then
on the next succeeding day which shall not be such a day, by presentation
and surrender hereof to the Company at any office maintained by it in
Xxxxxxxx Harbor, New Jersey, or at the office of its Warrant Agent, if any,
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. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder hereof to purchase the balance
of the shares purchasable hereunder. Upon receipt by the
Company of this Warrant at its office, or by the Warrant Agent of the
Company at its office, in proper form for exercise, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificate representing such shares
of Common Stock shall not then be actually delivered to the Holder.
B. RESERVATION OF SHARES. The Company hereby agrees that at all times there
shall be reserved for issuance and/or delivery upon exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance of delivery upon exercise of this Warrant.
C. FRACTIONAL SHARES. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to
any fraction of a share called for upon exercise hereof, the Company shall
issue to the Holder the next whole share.
D. EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and
surrender hereof to the company or at the office of the Warrant Agent for
other Warrants of different denominations entitling the Holder thereof to
purchase in aggregate the same number of shares of Common Stock purchasable
hereunder. The term Warrant as used herein includes any Warrants into which
this Warrant may be divided or exchanged. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction, or
mutilation of this Warrant, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date. Any such new warrant executed
and delivered shall constitute an additional contractual obligation on the
part of the Company, whether or not this Warrant so lost stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.
E. RIGHTS OF THE HOLDER. The Holder shall not, by virtue here of, be entitled
to any rights of a shareholder in the Company, either at law or equity, and
the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth
herein.
F. STOCK DIVIDENDS, RECLASSIFICATION, REORGANIZATION, ANTI-DILUTION
PROVISIONS, ETC. This Warrant is subject to the following further
provisions:
1. In case the Company shall have at any time or from time to time after
the Issue Date (a) paid a dividend, or made a distribution, on the
outstanding shares of Common Stock in shares of Common Stock, (b)
subdivided the outstanding shares of Common Stock, (c) combined the
outstanding shares of Common Stock into a smaller number of shares or
(d) issued by reclassification of the shares of
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Common Stock any shares of capital stock of the Company, then, and
with respect to each such case, the Exercise Price shall be adjusted
so that the Holder shall be entitled to purchase upon exercise the
number of shares of Common Stock or other securities of the Company
which such Holder would have owned or have been entitled to receive
immediately prior to such events or the record date therefor,
whichever is earlier, assuming the Warrants had been exercised into
Common Stock, it being the intention of the foregoing, to provide the
Holders with the same benefits and securities as such Holder would
have received as a Holder of Common Stock if the Warrant had been
exercised into Common Stock at the Exercise Price on the Issue Date
and such Holder had continued to hold such Common Stock.
2. Except with respect to Excluded Securities, in case the Company shall
have issued shares of Common Stock or any Common Stock Equivalents
after the Issue Date at a price per share (or having a conversion,
exercise or exchange price per share) less than the greater of (a) the
Initial Exercise Price (subject to adjustment for stock dividends,
stock splits, reclassifications and other transactions which would
require adjustment pursuant to Section F(1)) and (b) the Current
Market Price per share of Common Stock as of the date of issuance of
such shares (or, in the case of Common Stock Equivalents, less than
the greater of (a) the Initial Exercise Price (subject to adjustment
for stock dividends, stock splits, reclassifications and other
transactions which would require adjustment pursuant to Section F(1))
and (b) the Current Market Price as of the date of issuance of the
Common Stock Equivalents in respect of which shares of Common Stock
were issued, then and in such event, the Exercise Price in effect on
the day immediately prior to such issue shall be reduced, concurrently
with such issue, to a price (calculated to the nearest cent)
determined by multiplying such Exercise Price by a fraction, the
numerator of which shall be the sum of (i) the number of shares of
Common Stock outstanding immediately prior to such issue plus (ii) the
number of shares of Common Stock purchasable at the greater of (a) the
Initial Exercise Price (subject to adjustment for stock dividends,
stock splits, reclassifications and other transactions which would
require adjustment pursuant to Section F(1)) and (b) the then Current
Market Price per share with the aggregate consideration receivable by
the Company for the total number of shares of Common Stock then being
issued (or into or for which the Common Stock Equivalents then being
issued may be converted or be exercised or exchanged) and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of shares
of Common Stock then being issued (or into or for which the Common
Stock Equivalents then being issued may convert or be exercised or
exchanged). Notwithstanding the foregoing, except for Excluded
Securities, in case the Company shall have issued shares of Common
Stock or any Common Stock Equivalents after the Issue Date at a price
per share (or having a conversion, exercise or exchange price per
share) less than the Initial Exercise Price (subject to adjustment for
stock dividends, stock splits, reclassifications and
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other transactions which would require adjustment pursuant to Section
F(1)) then, and in such event, the Exercise Price in effect on the day
immediately prior to such issue shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) that is equal
to such lower price per share (or conversion, exercise or exchange
price) applicable to such newly issued shares of Common Stock or
Common Stock Equivalents.
3. In case the Company shall have at any time or from time to time after
the Issue Date declared, ordered, paid or made a dividend or other
distribution (including, without limitation, any distribution of stock
or other securities or property or rights or warrants to subscribe for
securities of the Company or any of its subsidiaries by way of
dividend or spin-off), on its Common Stock, other than dividends or
distributions of shares of Common Stock which are referred to in
clause (1) of this Section F, then the Holder shall be entitled to
receive upon exercise hereof their pro rata share of any such dividend
or other distribution on an as exercised basis; provided, however,
that any plan or declaration of a dividend or distribution shall not
have been abandoned or rescinded.
4. For purposes of this Section F, the aggregate consideration receivable
by the Company in connection with the issuance of shares of Common
Stock and/or Common Stock Equivalents shall be deemed to be equal to
the sum of the aggregate offering price (before deduction of
underwriting discounts or commissions and expenses payable to third
parties, if any) of all such Common Stock and/or Common Stock
Equivalents plus the minimum aggregate amount, if any, payable upon
conversion, exchange or exercise of any such Common Stock Equivalents.
If the consideration received by the Company in connection with the
sale or issuance of shares of Common Stock (or Common Stock
Equivalents) consists, in whole or in part, of property other than
cash or its equivalent, the value of such property shall be the Fair
Market Value.
5. For the purposes of this Section F, the number of shares of Common
Stock at any time outstanding shall mean the aggregate of all shares
of Common Stock then outstanding (other than any shares of Common
Stock then owned or held by or for the account of the Company)
treating for purposes of this calculation all Common Stock Equivalents
then outstanding as having been fully converted, exercised or
exchanged to the extent that such Common Stock Equivalents are vested
and could be converted, exchanged or exercised (and for these purposes
all of the Warrants shall be treated as if they had been fully
exercised into shares of Common Stock immediately prior to such
issuance). In no event shall any shares to be issued because of an
issuance described in F (2) as a result of the operation of the
antidilution provision of any securities outstanding prior to the
issuance described in F (2) of this Section F be taken into account in
computing adjustments pursuant to Section F (2) hereof.
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6. Upon the expiration unexercised of any Common Stock Equivalents
for which an adjustment has been made pursuant to this Section F,
the adjustments shall forthwith be reversed to effect such rate
of conversion as would have been in effect at the time of such
expiration or termination had such Common Stock Equivalents, to
the extent outstanding immediately prior to such expiration or
termination, never been issued.
7. If any event occurs as to which, in the opinion of the Board, the
provisions of this Section 7 are not strictly applicable or if
strictly applicable would not fairly protect the rights of the
Holders in accordance with the essential intent and principles of
such provisions, the Board shall make an adjustment in the
application of such provisions, in accordance with such essential
intent and principles, so as to protect such rights of the
Holders.
8. If the Company shall be a party to any transaction including
without limitation, a merger, consolidation, sale of all or
substantially all of the Company's assets or a reorganization,
reclassification or recapitalization of the capital stock of the
Company but excluding any transaction for which provision for
adjustment is otherwise made in this Section F (each of the
foregoing, except as excluded as provided above, being referred
to as a "Transaction"), in each case, as a result of which shares
of Common Stock are converted into the right to receive stock,
securities or other property (including cash or any combination
thereof), each Warrant shall thereafter be entitled to purchase
the number of shares of stock or other securities or property to
which a Holder of the number of shares of Common Stock of the
Company deliverable upon exercise of such Warrant would have been
entitled upon such Transaction; and, in any such case,
appropriate adjustment (as determined by the Board) shall be made
in the application of the provisions set forth in this Section F,
with respect to the rights and interest thereafter of the holders
of the Warrants, to the end that the provisions set forth in this
Section F shall thereafter be applicable, as nearly as reasonably
may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of the Warrants. The
Company shall not effect any Transaction (other than a
consolidation or merger in which the Company is the continuing
Company) unless prior to or simultaneously with the consummation
thereof the Company, or the successor Company or purchaser, as
the case may be, shall provide that each Warrant shall entitle
the Holder to purchase such shares of stock, securities or
property as, in accordance with the foregoing provisions, each
such Holder is entitled to purchase. The provisions of this
paragraph (8) shall similarly apply to successive Transactions.
9. Upon the occurrence of each adjustment or readjustment of the
Conversion Price and the Conversion Ratio pursuant to this
Section F, the Company, at its expense, shall promptly compute
such adjustment or readjustment in accordance with the terms
hereof, and furnish to each Holder of Warrants a certificate
setting forth the
5
amount of such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based.
The Company shall, upon the written request at any time of any
Holder, furnish or cause to be furnished to such Holder a like
certificate setting forth (i) such adjustments and readjustments,
(ii) the Exercise Price at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the exercise of
the Warrants.
10. In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or
other distribution, the Company shall mail to each Holder of
Warrants a notice specifying the date on which any such record is
to be taken for the purpose of such dividend or distribution at
least ten (10) days prior to such record date.
G. REDEMPTION.
1. Subject to the last sentence of this Section G(1) and to the
Holders' right of exercise set forth in Section A, commencing on
the Issue Date, the Company shall have the right upon 30 days
prior written notice, to redeem all (but not less than all) of
the Warrants for $.01 per Warrant, payable in cash.
Notwithstanding the foregoing, the Company shall have the right
to redeem the Warrants pursuant to this Section G(1), only if (a)
the Current Market Price for the Common Stock is equal to or
greater than three times the Exercise Price for at least 10
consecutive Trading Days prior to delivery of the notice of
redemption (and during such period the average weekly trading
volume of Common Stock as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common
Stock is listed or admitted to trading or, if the Common Stock is
not so listed on any national securities exchange, as reported in
the transaction reporting system applicable to securities
designated as a "national market system security" or "small cap
market security" on the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ"), is not less
than 100,000 shares) and (b) the Current Market Price of the
Common Stock is equal to or greater than three times the Exercise
Price on the date and at the time of redemption.
2. Notice by the Company to redeem Warrants pursuant to Section G(1)
shall be given by certified mail, return receipt requested,
postage prepaid, mailed to each Holder of record of the shares to
be redeemed at such Xxxxxx's address as the same appears on the
Company's records; provided that neither the failure to give such
notice nor any defect therein or in the mailing thereof, to any
particular holder, shall affect the sufficiency of the notice or
the validity of the proceedings for redemption with respect to
the other holders. Each such notice shall state: (a
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the exchange or redemption date, (b) that all outstanding
Warrants are being redeemed by the Company, (c) the place or
places where certificates for such Warrants are to be surrendered
for payment of the redemption price. From and after the
redemption date, except as otherwise provided herein, all rights
of the Holders thereof as Holders of the Warrants shall cease
(except the right to receive from the Company the redemption
price without interest thereon, upon surrender and endorsement of
their certificates). Upon surrender in accordance with notice
given pursuant to Section G (1) of the certificates for any
Warrants so redeemed (properly endorsed or assigned for transfer,
if the Board shall so require and the notice shall so state),
such shares shall be redeemed by the Company at the redemption
price aforesaid.
H. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. Neither this Warrant,
the Warrant Shares, nor any other security issued or issuable upon exercise
of this Warrant may be sold or otherwise disposed or except as follows:
1. to a person who, in the opinion of counsel reasonably satisfactory to
the Company, is a person to whom the Warrant or Warrant Shares may
legally be transferred without registration and without the delivery
of a current prospectus under the Securities Act of 1933, as amended
(the "Act") with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section
H. with respect to any resale or other disposition of such securities;
or
2. to any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering
thereof for such sale or disposition.
I. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Holder as follows:
1. The Company is duly organized and, as of the date of the original
issuance hereof, validly existing and in good standing under the laws
of the state of Delaware.
2. The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuing
Warrant Shares upon the exercise of this Warrant, such shares as may
be issuable upon the exercise hereof.
3. Warrant Shares, when issued and paid for in accordance with the terms
of this Warrant, will be fully paid and not assessable.
7
4. This Warrant has been duly authorized and approved by all
required corporate action by the Company and does not violate the
certificate of incorporation or by-laws of the Company.
J. DEFINITIONS. In addition to any other terms defined herein, the following
terms shall have the meanings indicated for purposes of this Warrant.
"Common Stock Equivalent" means securities (including, without
limitation, options, warrants and evidences of indebtedness) that
are outstanding at the time of a determination that are directly
or indirectly convertible into, or exchangeable or exercisable
for, shares of Common Stock.
"Current Market Price" when used with reference to shares of
Common Stock or other securities on any date, shall mean the
closing price per share of Common Stock or such other securities
on such date and, when used with reference to shares of Common
Stock or other securities for any period shall mean the average
of the daily closing prices per share of Common Stock or such
other securities for such period. If the Common Stock or such
other securities are listed or admitted to trading on a national
securities exchange, the closing price shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Common Stock or such other securities are not listed or admitted
to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting systems with respect
to securities listed on the principal national securities
exchange on which the Common Stock or such other securities are
listed or admitted to trading or, if the Common Stock or such
other securities are not so listed on any national securities
exchange, as reported in the transaction reporting system
applicable to securities designated, as a "national market system
security" or "small cap market security" on the NASDAQ. If the
Common Stock or such other securities are not publicly held or so
listed or designated, "Current Market Price" shall mean the Fair
Market Value per share of Common Stock or of such other
securities as determined in good faith by the Board based on an
opinion of an independent investment banking firm with an
established national reputation with respect to the valuation of
securities.
"Excluded Securities" means (i) options issued by the Corporation
to a director, officer or employee of the Corporation pursuant to
any stock option or similar plan (and any shares of Common Stock
issuable thereunder) existing or outstanding as of the Issue Date
or to the extent such arrangements are approved by the Board
after the Issue Date, (ii) shares of Common Stock issuable upon
conversion, exchange or exercise of any Common Stock Equivalent
outstanding as of the Issue Date, (iii) shares of Common Stock
issuable upon exercise of the
8
Warrants, (iv) shares of Common Stock the issuance of which is
approved by the Board after the Issue Date provided the issue
price thereof is not less than the greater of (a) ninety percent
(90%) of the Current Market Price, or (b) the then applicable
Exercise Price, (v) shares of Common Stock consideration issued
for cash in a transaction in which the proceeds are applied to
pay principal or interest on originally issued Notes issued on
December 18, 1997 to Xxxxx Partners III, L.P., a Delaware limited
partnership ("Xxxxx Partners III"), Xxxxx Partners International
III, L.P., a Delaware limited partnership ("Xxxxx International
III") or Xxxxx Employee Fund III, L.P., a Delaware limited
partnership ("Xxxxx Employee Fund"; together with Xxxxx Partners
III and Xxxxx International III, the "Xxxxx Funds") or to
purchase shares of Common Stock issued to the Xxxxx Funds or
other investors pursuant to Option Agreements dated November ___,
1998; or (vi) shares of Common Stock issued to any entity or the
holders of equity interests of any entity in which 10% of such
equity interests are owned in the aggregate beneficially,
directly or indirectly by the Xxxxx Funds or their respective
affiliates.
"Fair Market Value" of the Common Stock or any other property
means the fair market value of such Common Stock or other
property as determined (unless expressly otherwise provided
herein) by mutual agreement between the Corporation and the
holders of not less than 50% of the Warrants or, if the parties
are unable to agree, as determined by a nationally recognized
independent investment banking firm selected by mutual agreement
between the Corporation and the holders of not less than 50% of
the Warrants.
"Trading Day" means a Business Day or, if the Common Stock is
listed or admitted to trading on any national securities
exchange, a day on which such exchange is open for the
transaction of business.
[SIGNATURE PAGE FOLLOWS]
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Q-MED, INC.
[CORPORATE SEAL]
By:____________________________
Xxxxxxx X. Xxx, President
Dated:
ATTEST:
---------------------------------
Xxxxx Xxxxxx, Assistant Secretary
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PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF WARRANTS
TO: Q-Med, Inc.
000 Xxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxxx, XX 00000
The undersigned hereby exercises, according to the terms and conditions
thereof, the right to purchase _____________ Shares of Common Stock, evidenced
by the within Warrant Certificate, and herewith makes payment of the purchase
price in full.
Dated:_____________________________________
Name:______________________________________
Address:___________________________________
Signature:_________________________________
UPON EXERCISE OF THIS WARRANT PAYMENT SHOULD BE MADE TO THE ORDER OF
Q-MED, INC.
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