Exhibit 10.4
NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE; TRANSFER
OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL
FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION
IS NOT REQUIRED OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT
REQUIRED.
Shares Issuable Upon Exercise:_______
WARRANT TO PURCHASE
SHARES OF SERIES A PREFERRED STOCK
Expires December 21, 2002
THIS CERTIFIES THAT, for value received, __________________________, is
entitled to subscribe for and purchase _____ shares (as adjusted pursuant to
provisions hereof, the "Shares") of the fully paid and nonassessable Series A
Preferred Stock of Metasyn, Inc., a Delaware corporation (the "Company"), at a
price per share of $11.21 (such price and such other price as shall result, from
time to time, from adjustments specified herein is herein referred to as the
"Warrant Price"), subject to the provisions and upon the terms and conditions
hereafter set forth. As used herein, the term "Preferred Stock" shall mean the
Company's presently authorized Series A Preferred Stock, and any stock into or
for which such Series A Preferred Stock may hereafter be converted or exchanged
pursuant to the Certificate of Incorporation of the Company as from time to time
amended as provided by law and in such Certificate, and the term "Grant Date"
shall mean December 21, l992.
1. Term. The purchase right represented by this Warrant is exercisable, in
whole or in part, at any time and from time to time from and after the Grant
Date and prior to the earlier of the tenth annual anniversary date of the Grant
Date or the fifth annual anniversary of the consummation of the Company's
initial public offering of its Common Stock, the aggregate gross proceeds from
which exceed $5,000,000.
2. Method of Exercise; Net Issue Exercise.
2.1. Method of Exercise; Payment; Issuance of New Warrant. The
purchase right represented by this Warrant may be exercised by the holder
hereof, in whole or in part and from time to time, by either, at the election of
the holder hereof, (a) the surrender of this Warrant with the notice of exercise
form attached hereto as Exhibit A duly executed) at the
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principal office of the Company and by the payment to the Company, by check, of
an amount equal to the then applicable Warrant Price per share multiplied by the
number of Shares then being purchased or (b) if in connection with a registered
public offering of the Company's securities, the surrender of this Warrant (with
the notice of exercise form attached hereto as Exhibit A-1 duly executed) at the
principal office of the Company together with notice of arrangements reasonably
satisfactory to the Company for payment to the Company either by check or from
the proceeds of the sale of shares to be sold by the holder in such public
offering of an amount equal to the then applicable Warrant Price per share
multiplied by the number of Shares then being purchased. The person or persons
in whose name(s) any certificate(s) representing shares of Preferred Stock shall
be issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the shares represented thereby (and such shares shall be deemed to
have been issued) immediately prior to the close of business on the date or
dates upon which this Warrant is exercised. In the event of any exercise of the
rights represented by this Warrant, certificates for the shares of stock so
purchased shall be delivered to the holder hereof as soon as possible and in any
event within thirty days of receipt of such notice and, unless this Warrant has
been fully exercised or expired, a new Warrant representing the portion of the
Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the holder hereof as soon as possible and in
any event within such thirty-day period.
2.2. Net Issue Exercise.
(a) In lieu of exercising this Warrant, holder may elect to
receive shares equal to the value of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with notice of such election in which event the Company shall issue to
Holder a number of shares of the Company's Preferred Stock computed using the
following formula:
X=Y(A-B)
A
Where X - The number of shares of Preferred Stock to be issued to Holder.
Y - the number of shares of Preferred Stock purchasable under
this Warrant.
A - the fair market value of one share of the Company's
Preferred Stock.
B - Warrant price (as adjusted to the date of such
calculations).
(b) For purposes of this Section, fair market value of the
Company's Preferred Stock shall mean the average of the closing bid and asked
prices of the Company's Preferred Stock quoted in the Over-The-Counter Market
Summary or the closing price quoted on any exchange on which the Preferred Stock
is listed, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the ten trading days prior to the date of
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determination of fair market value. If the Preferred Stock is not traded
Over-The-Counter or on an exchange, the fair market value shall be the price per
share which the Company could obtain from a willing buyer for shares sold by the
Company from authorized but unissued shares, as such price shall be agreed by
the Company and the Holder.
3. Stock Fully Paid: Reservation of Shares. All Shares that may be issued
upon the exercise of the rights represented by this Warrant and Common Stock
issuable upon conversion of the Preferred Stock will, upon issuance, be fully
paid and nonassessable, and free from all taxes, liens and charges with respect
to the issue thereof. During the period within which the rights represented by
the Warrant may be exercised, the Company will at all times have authorized and
reserved for the purpose of issuance upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Preferred Stock
(and Common Stock issuable upon conversion thereof) to provide for the exercise
of the right represented by this Warrant.
4. Adjustment of Warrant Price and Number of Shares. The number and kind of
securities purchasable upon the exercise of the Warrant and the Warrant Price
shall be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
(a) Reclassification or Merger. In case of any reclassification,
change or conversion of securities of the class issuable upon exercise of this
Warrant (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination),
or in case of any merger of the Company with or into another corporation (other
than a merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant), or in case of
any sale of all or substantially all of the assets of the Company, the Company,
or such successor or purchasing corporation, as the case may be, shall execute a
new Warrant (in form and substance satisfactory to the holder of this Warrant)
providing that the holder of this Warrant shall have the right to exercise such
new Warrant and upon such exercise to receive, in lieu of each share of
Preferred Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification, change or merger by a holder of one share of Preferred
Stock. Such new Warrant shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Paragraph 4. The provisions of this subparagraph (a) shall similarly apply to
successive reclassifications, changes, mergers and transfers.
(b) Subdivisions or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Preferred Stock, the Warrant Price and the number of Shares issuable
upon exercise hereof shall be proportionately adjusted.
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(c) Stock Dividends. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend payable in shares of
Preferred Stock (except any distribution specifically provided for in the
foregoing subparagraphs (a) and (b)), then the Warrant Price shall be adjusted,
from and after the date of determination of shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Warrant Price in effect immediately prior to such date of determination by a
fraction (a) the numerator of which shall be the total number of shares of
Preferred Stock outstanding immediately prior to such dividend or distribution,
and (b) the denominator of which shall be the total number of shares of
Preferred Stock outstanding immediately after such dividend or distribution and
the number of Shares subject to this Warrant shall be proportionately adjusted.
(d) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Paragraph 4 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.
(e) Notices of Record Date. In the event of any taking by the
Company of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining shareholders who
are entitled to vote in connection with any proposed merger or consolidation of
the Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, the Company
shall mail to the holder of the Warrant, at least twenty (20) days prior to the
date specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.
5. Notice of Adjustments. Whenever the Warrant Price shall be adjusted
pursuant to the provisions hereof, the Company shall within thirty (30) days of
such adjustment deliver a certificate signed by its chief financial officer to
the registered holder(s) hereof setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Warrant Price after giving effect to such
adjustment.
6. Fractional Shares. No fractional shares of Preferred Stock will be
issued in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor upon the basis of the
Warrant Price then in effect.
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7. Compliance with Securities Act; Disposition of Warrant or Shares of
Preferred Stock.
(a) Compliance with Securities Act. The holder of this Warrant,
by acceptance hereof, agrees that this Warrant, the shares of Preferred Stock to
be issued upon exercise hereof and the Common Stock to be issued upon conversion
of such Preferred Stock are being acquired for investment and that such holder
will not offer, sell or otherwise dispose of this Warrant or any shares of
Preferred Stock to be issued upon exercise hereof (or Common Stock issued upon
conversion of the Preferred Stock) except under circumstances which will not
result in a violation of the Securities Act of 1933, as amended (the "Act").
This Warrant and all shares of Preferred Stock issued upon exercise of this
Warrant (unless registered under the Act) shall be stamped or imprinted with a
legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION
OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED OR (iii) RECEIPT OF A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT
REGISTRATION UNDER THE ACT IS NOT REQUIRED.
(b) Disposition of Warrant and Shares. With respect to any offer,
sale or other disposition of this Warrant or any shares of Preferred Stock
acquired pursuant to the exercise of this Warrant (or Common Stock issued upon
conversion of such Preferred Stock) prior to registration of such shares, the
holder hereof and each subsequent holder of the Warrant agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof,
together with a written opinion of such holder's counsel, if reasonably
requested by the Company, to the effect that such offer, sale or other
disposition may be effected without registration or qualification (under the Act
as then in effect or any federal or state law then in effect) of this Warrant or
such shares of Preferred Stock or Common Stock and indicating whether or not
under the Act certificates for this Warrant or such shares of Preferred Stock or
Common Stock to be sold or otherwise disposed of require any restrictive legend
as to applicable restrictions on transferability in order to insure compliance
with the Act. Each certificate representing this Warrant or the shares of
Preferred Stock or Common Stock thus transferred (except a transfer pursuant to
Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Act, unless in the
aforesaid opinion of counsel for the holder, such legend is not required in
order to insure compliance with the Act. Nothing herein shall restrict the
transfer of this Warrant or any portion hereof by the initial holder hereof to
any partnership affiliated with the initial holder, or to any partner of any
such partnership provided such transfer may be made in compliance with
applicable federal and state securities laws. The Company may issue stop
transfer instructions to its transfer agent in
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connection with the foregoing restrictions.
8. Rights as Shareholders; Information.
8.1. Shareholder Rights. No holder of the Warrant, as such, shall be
entitled to vote or receive dividends or be deemed the holder of Preferred Stock
or any other securities of the Company which may at any time be issuable on the
exercise thereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to receive notice of meetings, or to receive dividends or subscription rights
or otherwise until this Warrant shall have been exercised and the Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.
8.2. Financial Statements and Information. The Company shall deliver
to the registered holder hereof (i) within 120 days after the end of the fiscal
year of the Company, a consolidated balance sheet of the Company as of the end
of such year and a consolidated statement of income, retained earnings and cash
flows for such year, which year-end financial reports shall be in reasonable
detail and certified by independent public accountants of nationally recognized
standing selected by the Company, and (ii) within 45 days after the end of each
fiscal quarter other than the last fiscal quarter, unaudited consolidated
statements of income, retained earnings and cash flows for such quarter and a
consolidated balance sheet as of the end of such quarter. In addition, the
Company shall deliver to the registered holder hereof any other information or
data provided to the shareholders of the Company.
9. Registration Rights. The Company covenants and agrees as follows:
9.1. Grant of Rights. The Company hereby agrees to amend that certain
Series A Convertible Preferred Stock Purchase Agreement, dated as of March 25,
1992, between the Company and certain holders of its securities, a copy of which
is attached hereto as Exhibit B (the "Stock Purchase Agreement") to provide that
the holder of this Warrant shall be entitled to the benefit of the Provisions of
Section 8 and 10 thereof and to seek the consent of the other parties to such
Stock Purchase Agreement. Such amendment shall be in the form attached hereto as
shall Exhibit C, and shall provide that the holder of this Warrant be deemed a
"Stockholder" as defined in Section 8 of the Stock Purchase Agreement, and that
the Common Stock of the Company issued upon conversion of the Shares shall be
deemed to be "Registrable Shares" as defined in Section 8 of the Stock Purchase
Agreement. Furthermore, the amendment shall allow for the transfer of the rights
granted to the holder hereof to affiliated limited partnerships of the holder
hereof.
10. Additional Rights.
10.1. Secondary Sales. The Company agrees to assist the holder of this
Warrant in obtaining liquidity if opportunities to make secondary sales of the
Company's securities
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become available. To this end, the Company will promptly provide the holder of
this Warrant with notice of any offer to acquire from the Company's security
holders more than five percent (5%) of the total voting power of the Company and
will cooperate with the holder in arranging the sale of this Warrant to the
person or persons making such offer.
10.2. Mergers. Unless the Company provides the holder of this Warrant
with at least 30 days' notice of the terms and conditions of the proposed
transaction, the Company will not (i) sell, lease, exchange, convey or otherwise
dispose of all or substantially all of its property or business, or (ii) merge
into or consolidate with any other corporation (other than a wholly-owned
subsidiary of the Company), or effect any transaction (including a merger or
other reorganization) or series of related transactions, in which more than 50%
of the voting power of the Company is disposed of. The Company will cooperate
with the holder in arranging the sale of this Warrant in connection with any
such transaction.
11. Representations and Warranties. This Warrant is issued and delivered on
the basis of the following:
(a) This Warrant has been duly authorized and executed by the
Company and when delivered will be the valid and binding obligation of the
Company enforceable in accordance with its terms;
(b) The Shares have been duly authorized and reserved for
issuance by the Company and, when issued in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable;
(c) The rights, preferences, privileges and restrictions granted
to or imposed upon the shares of Preferred Stock and the holders thereof are as
set forth in the Company's Certificate of Incorporation, as amended, a true and
complete copy of which has been delivered to the original Warrantholder;
(d) The shares of Common Stock issuable upon conversion of the
Shares have been duly authorized and reserved and, when issued in accordance
with the terms of the Company's Certificate of Incorporation, as amended, will
be validly issued, fully paid and nonassessable; and
(e) The execution and delivery of this Warrant are not, and the
issuance of the Shares upon exercise of this Warrant in accordance with the
terms hereof will not be, inconsistent with the Company's Certificate of
Incorporation or by-laws, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to the Company, and do not and
will not contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound or require the consent or approval of, the giving
of notice to, the registration with or the taking of any action in respect of or
by, any Federal, state or local government authority or agency or other person.
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12. Amendment of Conversion Rights. During the term of this Warrant, the
Company agrees that it shall not amend its Certificate of Incorporation without
the prior written consent of the holder or holders entitled to purchase a
majority of the Shares upon exercise of this Warrant if as a result of such
amendment any of the conversion rights, including without limitation the
conversion price or antidilution protection privileges, of the Preferred Stock
would be adversely affected.
13. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
14. Notices. Any notice, request or other document required or permitted to
be given or delivered to the holder hereof or the Company shall be delivered, or
shall be sent by certified or registered mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefore on the signature page of this Warrant.
15. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Preferred Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant and all of
the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof. The Company will, at the time of
the exercise of this Warrant, in whole or in part, upon request of the holder
hereof but at the Company's expense, acknowledge in writing its continuing
obligation to the holder hereof in respect of any rights (including, without
limitation, any right to registration of the shares of Registrable Securities)
to which the holder hereof shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the holder hereof to
make any such request shall not affect the continuing obligation of the Company
to the holder hereof in respect of such rights.
16. Lost Warrants or Stock Certificates. The Company covenants to the
holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant or any
stock certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate, or like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.
17. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
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18. Governing Law. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS.
METASYN, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: CEO
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Address: Metasyn, Inc.
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00 Xxxxxx Xxxxxx
--------------------------
Xxxxxxxxx, XX 00000
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Date: Dec. 21, 1992
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EXHIBIT A
Notice of Exercise
To:
1. The undersigned hereby elects to purchase shares of Series Preferred
Stock of Corporation pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below:
(Name)
(Address)
3. The undersigned represents that the aforesaid shares being acquired for
the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares.
________________________________
(Signature)
______________________________
(Date)
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EXHIBIT A-1
Notice of Exercise
To:
1. Contingent upon and effective immediately prior to the closing (the
"Closing") of the Company's public offering contemplated by the Registration
Statement of Form S-__________, filed ____________, 19__, the undersigned hereby
elects to purchase shares of Series ___ Preferred Stock of the Company (or such
lesser nether of shares as may be sold on behalf of the undersigned at the
Closing) pursuant to the terms of the attached Warrant.
2. Please deliver to the custodian for the selling shareholders a stock
certificate representing such _________ shares.
3. The undersigned has instructed the custodian for the selling
shareholders to deliver to the Company $____________ or, if less, the net
proceeds due the undersigned from the sale of shares in the aforesaid public
offering. If such net proceeds are less than the purchase price for such shares,
the undersigned agrees to deliver the difference to the Company prior to the
Closing.
____________________________
(Signature)
______________________________
Date
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