Exhibit 10.28
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
EXEMPTION TO SUCH ACT.
Void after the Tenth Anniversary hereof
WARRANT FOR THE
PURCHASE OF SHARES OF COMMON STOCK
of
T.BREEDERS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT, for value received, ARE-One Innovation Drive, LLC, a
Delaware limited liability company, together with its successors and assigns
(the "Investor"), is entitled to purchase, up to Thirteen Thousand Three
Hundred Thirty-Three (13,333) duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (the "Common Stock") of t.Breeders, Inc.,
a Delaware corporation (the "Company"), at the per share purchase price
described in Section 1.3 below, subject to the provisions and upon the terms and
conditions hereinafter set forth.
1. Exercise of Warrant. The terms and conditions upon which this
Warrant may be exercised, and the Common Stock covered hereby (the "Warrant
Stock") may be purchased, are as follows:
1.1 Term. The purchase right represented by this Warranty may be
exercised in whole or in part at any time and from time to time from and after
the date hereof and on or before the tenth anniversary hereof; provided that,
if the last day on which this Warrant may be exercised is a Sunday or a legal
holiday or a day on which banking institutions doing business in the City of
New York are authorized by law to close, this Warrant may be exercised prior to
5:00 p.m. (New York time) on the next succeeding full business day with the
same force and effect as if exercised on such last day specified herein.
1.2 Number of Shares. This Warrant is initially exercisable for
Thirteen Thousand Three Hundred Thirty-Three (13,333) shares of Common Stock,
subject to adjustment pursuant to Section 2 of this Warrant.
1.3 Purchase Price. The initial per share purchase price for the shares
of Common Stock to be issued upon exercise of this Warrant shall be $3.00,
subject to adjustment as provided herein (the "Warrant Price").
1.4 Method of Exercise. The exercise of the purchase rights evidenced by
this Warrant shall be effected by (a) the surrender of the Warrant, together
with a duly executed copy of the form of a subscription attached hereto, to the
Company at its principal offices and (b) the delivery of the purchase price (i)
by check or bank draft payable to the Company's order or by wire transfer to
the Company's account for the number of shares for which the purchase rights
hereunder are being exercised or any other form of consideration approved by
the Company's Board of Directors or (ii) pursuant to the procedure set forth in
Section 1.5. Any such exercise of this Warrant may be made contingent upon the
closing of a public offering, merger, recapitalization or similar transaction.
Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided herein or at such latter
date as may be specified in the executed form of subscription, and at such time
the person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such exercise as provided
herein shall be deemed to have become the holder or holders of record thereof.
1.5 Cashless Exercise. In addition to and without limiting the rights of
the holder hereof under the terms hereof, at the holder's option this Warrant
may be exercised in whole or in part at any time or from time to time prior to
its expiration for a number of shares of Common Stock having an aggregate fair
market value on the date of such exercise equal to the difference between (a)
the fair market value of the number of shares of Common Stock subject to this
Warrant designated for exercise by the holder hereof on the date of the
exercise and (b) the aggregate Warrant Price for such shares in effect at such
time.
The "fair market value" of a share of Common Stock (for all purposes of
this Warrant) shall be (a) if the Common Stock is then traded on a securities
exchange, the average of the closing prices of the Common Stock on such
exchange over the 20 trading day period ending three (3) trading days prior to
the date of exercise, (b) if the Common Stock is then regularly traded
over-the-counter, the average of the sale prices or secondarily the closing bid
price for the Common Stock over the 20 trading day period ending three (3)
trading days prior to the date of exercise, or (c) if there is no active public
market for the Common Stock, (i) if within 90 days prior to the date of
exercise an arm's-length transaction shall have been consummated between the
Company and a person other than an affiliate of the Company, in which
transaction the fair market value of a share of Common Stock shall have been
determined, such fair market value, or (ii) if no such transaction shall have
been consummated within 90 days prior to the date of exercise, an amount equal
to the value of the Common Stock most recently determined by the Company's
Board of Directors in good faith, increased at the same pro rata rate from the
date of the most recent determination of such fair market value as was realized
during the equivalent time period following the second most recent
determination thereof. If the holder of this Warrant exercises this Warrant
contingent upon the
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closing of a public offering, the "fair market value" of a share of Common Stock
on the date of exercise shall be equal to the initial price to the public
specified in the final prospectus with respect to such public offering. The
following diagram illustrates how many shares would then be issued upon exercise
pursuant to this Section 1.5:
Let FMV = Fair market value per share of Common Stock at date of
exercise.
PSP = Per share Warrant Price at date of exercise.
N = Number of shares of Common Stock desired to be exercised.
X = Number of shares of Common Stock issued upon exercise.
X = (FMV)(N)-(PSP)(N)
-----------------
FMV
No payment of any cash or other consideration to the Company shall be required
from the holder of this Warrant in connection with any exercise of this Warrant
pursuant to this Section 1.5. Such exercise shall be effective upon the date of
receipt by the Company of the original Warrant surrendered for cancellation and
a written request from the holder hereof that the exercise pursuant to this
section be made, or at such later date as may be specified in such request.
1.6 Issuance of Shares. As soon as reasonably practicable after each
exercise of this Warrant, in whole or in part, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the holder hereof or as such holder
(upon payment by such holder of any applicable transfer taxes) may direct, (a)
a certificate or certificates for the number of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock to which such
holder shall be entitled upon such exercise, and (b) in case such exercise
is in part only, a new Warrant or Warrants of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
equal (without giving effect to any adjustment thereof) to the number of such
shares called for on the face of this Warrant minus the number of such shares
designated by the holder upon such exercise as provided herein.
2. Certain Adjustments.
2.1 Mergers, Consolidations or Sale of Assets. If after the date
hereof there shall be a capital reorganization (other than a combination or
subdivision of Common Stock otherwise provided for herein), or spin-off, or a
merger or consolidation of the Company with or into another corporation, or the
sale of all or substantially all of the Company's properties and assets to any
other person, then, as a part of such transaction, lawful provision shall be
made so that the Investor shall thereafter be entitled to receive upon exercise
of this Warrant, during the period specified in this Warrant and upon payment
of the purchase price, the number of shares of stock or other securities, cash
or property of the Company or the successor corporation resulting from such
transaction, to which a holder of the Common Stock deliverable upon exercise of
this Warrant would have been entitled under the provisions of the agreement in
such transaction if this Warrant had been exercised immediately before such
transaction. In any such case, appropriate adjustment (as determined
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reasonably and in good faith the Company's Board of Directors) shall be made in
the application of the provisions of this Warrant with respect to the rights
and interests of the Investor after such transaction to the end that the
provisions of this Warrant (including adjustment of the purchase price then in
effect and the number of shares of Common Stock issuable upon exercise hereof)
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.
2.2 Splits and Subdivisions; Dividends. If the Company should effect or
fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or the determination of the holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or warrants, options or other rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or Common Stock Equivalents (including
the additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such distribution, split
or subdivision if no record date is fixed), the per share purchase price shall
be appropriately decreased and the number of shares of Common Stock issuable
upon exercise hereof shall be appropriately increased in proportion to such
increase of outstanding shares.
2.3 Combination of Shares. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, the per share purchase price shall be
appropriately increased and the number of shares of Common Stock issuable upon
exercise hereof shall be appropriately decreased in proportion to such decrease
in outstanding shares.
2.4 Adjustments for Other Distributions. In the event the Company shall
declare a distribution payable in securities of the Company (other than Common
Stock Equivalents) or other persons, evidences of indebtedness issued by the
Company or other persons, assets (including cash dividends) or options or
rights not referred to in subsection 2.2, then, in each such case for purposes
of this subsection 2.4, upon exercise of this Warrant the holder hereof shall
be entitled to a proportionate share of any such distribution as though such
holder was the holder of the number of shares of Common Stock of the Company
into which this Warrant may be exercised as of the record date fixed for the
determination of the holders of Common Stock of the Company entitled to receive
such distribution.
2.5 Issuance of Additional Common Stock
(a) If, after the date hereof, the Company shall issue or sell
(i) Additional Shares (defined below) without consideration or
for a consideration per share less than the higher of (A) the
Warrant
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Price and (B) the fair market value of a share of Common Stock in
effect immediately prior to such issue or sale, or
(ii) Common Stock Equivalents exercisable for Additional Shares
with a minimum exercise or exchange price less than the higher of
(A) the Warrant Price and (B) the fair market value of a share of
Common Stock,
then, and in each such case, the Warrant Price shall be reduced, concurrently
with such issue or sale, to a price (calculated to the nearest .001 of a cent)
determined by multiplying such Warrant Price by a fraction:
(i) the numerator of which shall be (A) the number of shares of
Common Stock outstanding immediately prior to such issue or sale
plus (B) the number of shares of Common Stock that the aggregate
consideration received by the Company upon such issuance or sale
(or, in the case of Common Stock Equivalents exercisable for
Additional Shares, receivable by the Company upon exercise or
exchange) would purchase at such Warrant Price or fair market
value, as the case may be, and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale
(or, in the case of Common Stock Equivalents exercisable for
Additional Shares, assuming exercise or exchange thereof).
(b) For the purposes of this Section 2.5, the consideration for the
issue or sale of Additional Shares shall, irrespective of the accounting
treatment of such consideration, (i) insofar as it consists of cash, be computed
at the net amount of cash received by the Company, and (ii) insofar as it
consists of property (including securities) other than cash, be computed at the
fair value thereof at the time of such issue or sale. In the event of a dispute
in good faith by the Investor as to the fair market value of the consideration
consisting of property, at the option of the Investor, the Company shall engage
a consulting firm or investment banking firm mutually agreed to by the Investor
and the Company to prepare an independent appraisal of the fair market value of
such property to be distributed. The expenses of such appraisal shall be borne
by the Company.
(c) Notwithstanding anything contained herein to the contrary, the
consideration for any Common Stock Equivalents shall be the total amount of
consideration received by the Company for the issuance of such Common Stock
Equivalents plus the minimum amount of consideration payable to the Company upon
exercise, conversion or exchange of Common Stock Equivalents (the "Net
Consideration") determined as of the date of issuance of such Common Stock
Equivalents. Any obligation, agreement, or understanding to issue Common Stock
Equivalents at any time in the future shall be deemed to be an issuance at the
time such obligation or agreement is made
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or arises. No adjustment of the Warrant Price shall be made under this Section
2.5 upon the issuance of any shares of Common Stock which are issued pursuant
to the exercise, conversion or exchange of any Common Stock Equivalents if any
adjustment shall previously have been made upon the issuance of any such Common
Stock Equivalents.
Should the Net Consideration for any such Common Stock Equivalents be
increased or decreased from time to time, then, upon the effectiveness of such
change, the Warrant Price will be that which would have been obtained (i) had
the adjustments made upon the issuance of such Common Stock Equivalents been
made upon the basis of the actual Net Consideration (as so increased or
decreased) of such Common Stock Equivalents, and (ii) had adjustments to such
Warrant Price since the date of issuance of such Common Stock Equivalents been
made to such Warrant Price as adjusted pursuant to (i) above. Any adjustment of
the Warrant Price with respect to this paragraph which relates to Common Stock
Equivalents shall be disregarded if, as, and when all of such Common Stock
Equivalents expire or are canceled without being exercised, so that the Warrant
Price effective immediately upon cancellation or expiration shall be equal to
the Warrant Price in effect at the time of the issuance of the expired or
canceled Common Stock Equivalents, with such additional adjustments as would
have been made to such Warrant Price had the expired or canceled Common Stock
Equivalents not been issued.
(d) "Additional Shares" means all shares of Common Stock, whether or not
subsequently reacquired or retired by the Company other than (i) shares of
Common Stock issued or to be issued to directors, officers, employees and
consultants of the Company or any subsidiary pursuant to any bona fide qualified
or non-qualified stock option plan or agreement, stock purchase plan or
agreement, stock restriction agreement, or employee stock ownership plan (ESOP)
(but only to the extent that the aggregate number of shares of Common Stock
excluded by this clause (i) shall not exceed 330,000 shares or such higher
number of shares as determined by the Company's Board of Directors in good faith
and in accordance with industry practice); (ii) up to $500,000 of Common Stock
(valued at current fair market value on the date of issuance) issued or to be
issued as payment by the Company for equipment leases or purchases; and (iii)
shares of Common Stock issued or to be issued in connection with strategic
partnering arrangements between the Company and entities not affiliated with the
Company; provided, that the terms of any such strategic partnership arrangement
are determined in good faith by the Company's Board of Directors to be fair to
the Company from a financial point of view.
(e) The number of shares of Common Stock that the holder of this Warrant
shall be entitled to receive upon each exercise hereof after any adjustment
pursuant to this Section 2.5 shall be determined by multiplying (i) the number
of shares of Common Stock that were issuable immediately prior to such
adjustment, by (ii) the fraction of which (A) the numerator is the Warrant
Price immediately prior to such adjustment and (B) the denominator is the
Warrant Price immediately following such adjustment.
2.6 Adjustment for Tender Offer. If the Company consummates a tender
offer for any Common Stock or securities convertible into or exchangeable for
Common Stock and
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purchases shares pursuant to such tender offer for an aggregate consideration
having a fair market value (as determined reasonably and in good faith by the
Board of Directors and described in a board resolution) as of the last time
(the "Expiration Time") that tenders may be made pursuant to such tender offer
(as it shall have been amended) that, together with (i) the aggregate of the
cash plus the fair market value (as determined reasonably and in good faith by
the Board of Directors and described in a board resolution) of the
consideration paid in respect of any other tender offer by the Company for any
Common Stock (or securities convertible into or exchangeable for Common Stock,
as the case may be) consummated within the 12 months preceding the Expiration
Time and in respect of which no adjustment pursuant to this Section 2.6 has
been made previously and (ii) the aggregate amount of any distributions to all
holders of Common Stock (or securities convertible into or exchangeable for
Common Stock, as the case may be) made exclusively in cash within 12 months
preceding the Expiration Time exceeds 5.0% of the product of the fair market
value per share immediately prior to the Expiration Time times the number of
shares of Common Stock (or securities convertible into or exchangeable for
Common Stock, as the case may be) outstanding (including any tendered shares)
at the Expiration Time, the number of shares of Common Stock issuable upon
exercise hereof (the "Warrant Number") shall be adjusted in accordance with the
formula:
W' = W x M x (O-N)
---------
(MxO) - F
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the Expiration Time
M = the "fair market value" per share of Common Stock (or
securities convertible into or exchangeable for Common
Stock, as the case may be) immediately prior to the
Expiration Time.
O = the number of shares of Common Stock (or securities
convertible into or exchangeable for Common Stock, as the
case may be) outstanding (including any tendered shares) at
the Expiration Time
F = the fair market value of the aggregate consideration paid
for all shares of Common Stock (or securities convertible
into or exchangeable for Common Stock, as the case may be)
purchased pursuant to the tender offer.
N = the number of shares of Common Stock (or securities
convertible into or exchangeable for Common Stock, as the
case may be) accepted for payment in such tender offer.
If the number of shares accepted for payment in such tender offer or
the aggregate consideration payable therefor have not been finally determined
by the opening of business on the day following the Expiration Time, the
adjustment required by this Section 2.6 shall, pending such final
determination, be made based upon the preliminary announced results of such
tender offer, and, after such final determination shall have been made, the
adjustment required by this Section 2.6 shall be
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based upon the number of shares accepted for payment in such tender offer and
the aggregate consideration payable therefor as so finally determined.
2.7 Certificate as to Adjustments. In the case of each adjustment or
readjustment of the Warrant Price pursuant to this Section 2, the Company at
its expense will promptly compute such adjustment or readjustment in accordance
with the terms hereof and cause a certificate, signed by the Company's Chief
Financial Officer, setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based to be
delivered to the holder of this Warrant. The Company will furnish or cause to
be furnished to such holder a certificate setting forth (a) such adjustments
and readjustments, (b) the Warrant Price at the time in effect and how it was
calculated and (c) the number of shares of Common Stock issuable upon exercise
hereof and the amount, if any, of other property at the time receivable upon
the exercise of the Warrant.
2.8 Other Dilutive Events. If any event shall occur as to which the
provisions of Section 2 are not strictly applicable but the failure to make any
adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles of such
sections, then, in each such case, the Board of Directors of the Company shall
make such adjustment, if any, on a basis consistent with the essential intent
and principles established in Section 2, necessary to preserve, without
dilution, the purchase rights represented by this Warrant. The Company will
promptly notify the Investor of any such adjustments and shall make the
suggested adjustments.
2.9 No Dilution or Impairment. The Company will not, by amendment of its
certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, 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 of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights
of the holder of this Warrant against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (a) will not
permit the par value of any shares of stock receivable upon the exercise of
this Warrant to exceed the amount payable therefor upon such exercise, (b) will
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
stock on the exercise of the Warrants from time to time outstanding; and (c)
will not take any action which results in any adjustments of the Warrant Price
if the total number of shares of Common Stock issuable after the action upon
the exercise of all of the Warrants would exceed the total number of shares of
Common Stock then authorized by the Company's certificate of incorporation and
available for the purpose of issue upon such exercise.
2.10 Notices of Record Date etc. In the event of:
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(a) any taking by the Company of a record of the holders of any
class of securities of the Company for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend
payable out of earned surplus at the same rate as that of the last such cash
dividend theretofore paid) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right;
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets of the Company to any other
person or any consolidation or merger involving the Company; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will mail to the holder of this Warrant at least thirty (30) days
prior to the earliest date specified below, a notice specifying: (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right; and (ii) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding-up is expected to become effective and the record date for determining
stockholders entitled to vote thereon and the time, if any such time is to be
fixed, as of which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up.
3. Fractional Shares. No fractional shares shall be issued in
connection with any exercise of this Warrant. In lieu of the issuance of such
fractional share, the Company shall make a cash payment equal to the then fair
market value of such fractional share as determined in accordance with Section
1.5 hereof.
4. Representations and Warranties of the Company.
4.1 Authorization. The Company has full power and authority to
enter into this Warrant. This Warrant has been duly authorized, executed and
delivered by the Company and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms.
4.2 Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the exercise of this Warrant, such
number of its shares of Common Stock, free from preemptive rights, as shall
from time to time be sufficient to effect the exercise of this Warrant, and if
at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the exercise of the entire Warrant, in addition to
such other remedies as shall be available to the holder of this Warrant,
the Company will take such action as may be necessary to increase its
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authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes. If any shares of its Common Stock to be
reserved for the purpose of issuance upon exercise of the Warrants require
registration with or approval of any governmental authority under any applicable
law before such shares of Common Stock may be validly issued or delivered, then
it shall secure such registration or approval, as the case may be, and maintain
such registration or approval in effect so long as so required.
4.3 Adjustment in Number of Shares Issuable and Purchase Price. There
has not been nor will there be any adjustment to the number of shares issuable
or the purchase price payable upon the exercise of any securities of the Company
convertible into or exchangeable for shares of Common Stock resulting from the
issuance or exercise of this Warrant.
4.4 Valid Issuance. This Warrant, when issued and delivered in
accordance with the terms hereof will be duly authorized and validly issued, and
the Common Stock issuable upon the exercise hereof, when issued pursuant to the
terms hereof and upon payment of the exercise price, shall, upon such issuance,
be duly authorized, validly issued, fully paid and nonassessable.
5. Privilege of Stock Ownership. Prior to the exercise of this Warrant,
the Investor shall not be entitled, by virtue of holding this Warrant, to any
rights of a stockholder of the Company, including (without limitation) the right
to vote, receive dividends or other distributions, exercise preemptive rights or
be notified of stockholder meetings, and such holder shall not be entitled to
any notice or other communication concerning the business or affairs of the
Company. Nothing in this Section 5, however, shall limit the right of the
Investor to be provided the notices described in Section 2 hereof or to
participate in distributions described in Section 2 hereof if the Investor
ultimately exercises this Warrant.
6. Limitation of Liability. Except as otherwise provided herein, in the
absence of affirmative action by the holder hereof to purchase the Common Stock
in accordance herewith, no mere enumeration herein of the rights or privileges
of the holder hereof shall give rise to an obligation on such holder to purchase
any securities or any liability of such holder for the purchase price or as a
stockholder of the Company, whether such obligation or liability is asserted by
the Company or by creditors of the Company.
7. Representations and Warranties of the Investor. The Investor
represents and warrants to the Company as follows:
7.1 Investment Experience. The Investor represents that it can bear
the economic risk of its investment and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Warrant and the Common Stock issuable upon
exercise hereof. The Investor also represents it has not been organized solely
for the purpose of acquiring the Warrant or the Common Stock issuable upon
exercise hereof.
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7.2 Restricted Securities. The Investor understands that the Warrant
being issued hereunder and the Common Stock issuable upon exercise hereof are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and have not been registered under the Act nor
qualified under applicable state securities laws and that under such laws and
applicable regulations such securities may not be resold without registration
under the Act, except in certain limited circumstances. In this connection, the
Investor represents that it is familiar with Rule 144 promulgated under the Act
("Rule 144"), as presently in effect, and understands the resale limitations
imposed thereby and by the Act.
7.3 Accredited Investor. The Investor is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Act.
7.4 Legends. It is understood that the certificates evidencing the
Common Stock issuable upon exercise hereof may bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN EXEMPTION TO
SUCH ACT"
8. Additional Agreements
8.1 Confidentiality. In handling any confidential information provided
to Investor by the Company, Investor shall exercise the same degree of care
that it exercises with respect to its own proprietary information of the same
type to maintain the confidentiality thereof, except that disclosure of such
information may be made (i) to the subsidiaries or affiliates of Investor in
connection with their present or prospective business relations with the
Company, (ii) to prospective transferees or purchasers of any interest in this
Warrant, provided that they have entered into a comparable confidentiality
agreement in favor of the Company, (iii) as may be required in connection with
the examination, audit or similar investigation of Investor or (iv) if
otherwise required by law. Confidential information hereunder shall mean
non-public proprietary information of the Company identified as such prior to
disclosure to Investor but shall not include information that either; (a) is in
the public domain or in the knowledge or possession of Investor when disclosed
to Investor, or (b) is disclosed to Investor by a third party unless Investor
has actual knowledge that such third party is prohibited from disclosing such
information.
9. Transfers and Exchanges.
9.1 The Investor agrees not to sell, hypothecate, pledge or otherwise
dispose of any interest in the Warrant or the Common Stock issuable upon
exercise hereof in the Xxxxxx Xxxxxx,
00
its territories, possessions or any area subject to its jurisdiction, or to any
person who is a national thereof or resident therein (including any estate of
such person), or any corporation, partnership or other entity created or
organized therein, other than in accordance with the Act.
9.2 Upon presentation to the Company's transfer agent of the form of
Assignment attached hereto, a new Warrant shall be issued to the new holder
hereof. New Warrants issued in connection with transfers or exchanges shall not
require the signature of the new holder hereof and shall be identical in form
and provision to this Warrant except as to the number of shares.
9.3 Each certificate evidencing the shares of Common Stock issued
upon exercise of this Warrant, or upon any transfer of such shares (other than a
transfer registered under the Act or any subsequent transfer of shares so
registered) shall, at the option of the Company, contain a legend, in form and
substance reasonably satisfactory to the Company and its counsel, restricting
the transfer of such shares to sales or other dispositions exempt from the
requirements of the Act.
9.4 Ownership of Warrants. The Company may treat the person in whose
name any Warrant is registered on the register kept at the office of the Company
maintained pursuant to Section 9.5(a) as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary, except that, if and when
any Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer thereof as the owner of such Warrant for all
purposes, notwithstanding any notice to the contrary. A Warrant, if properly
assigned, may be exercised by a new holder without a new Warrant first having
been issued.
9.5 Transfer and Exchange of Warrants.
(a) The Company will serve as transfer agent for purposes of
this Warrant. Notices, presentations and demands in respect of this Warrant may
be made upon the Company at its address specified herein, until such time as
the Company shall notify the holders of the Warrants of the appointment of, or
of any change in, such transfer agent; and
(b) Upon the surrender of any Warrant, properly endorsed, for
registration of transfer or for exchange, the Company at its expense will
execute and deliver to or upon the order of the holder thereof a new Warrant or
Warrants of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
10. Successors and Assigns. The terms and provisions of this Warrant
shall be binding upon the Company and the Investor and their respective
successors and assigns, subject at all times to the restrictions set forth
herein.
11. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant,
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and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will make and deliver a new warrant of
like tenor and dated as of such cancellation, in lieu of this Warrant.
12. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.
13. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investor. Any such amendment or
waiver shall be binding on the parties.
14. Governing Law. The terms and conditions of this Warrant shall be
governed by and construed in accordance with Delaware law, without regard to
conflict of law provisions.
15. Notices. Except as otherwise provided in this Warrant, any requirement
for a notice, demand or request under this Warrant will be satisfied by a
writing (a) hand delivered with receipt; (b) mailed by United States registered
or certified mail or Express Mail, return receipt requested, postage prepaid;
or (c) sent by Federal Express or any other nationally recognized overnight
courier service, and addressed as follows: if to the holder, at its address as
shown on the books of the Company; and if to the Company, at Xxx Xxxxxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attn: Chief Financial Officer, with a
copy to Xxxxxx & Dodge LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000-0000, Attn:
Xxxxxxx Xxxxxx. All notices that are sent in accordance with this Section 15
will be deemed received by the holder or the Company on the earliest of the
following applicable time periods: (i) the date the return receipt is executed;
or (ii) the date delivered as documented by the overnight courier service or
the hand delivery receipt. Either the holder or the Company may designate a
change of address by written notice to the other party.
16. Registration Rights. Subject to the receipt by the Company of the
written approval required by the Registration Rights Agreement, dated as of
November 26, 1997, by and between the Company and the Purchasers named in
Exhibit A thereto:
(a) If at any time the Company proposes to file a registration statement
under the Act with respect to an offering of equity securities by the Company
for its own account or for the account of any securityholders of any class of
its equity securities (other than (i) a registration statement on Form S-4 or
S-8 (or any substitute form that may be adopted by the Securities and Exchange
Commission (the "Commission")) or (ii) a registration statement filed in
connection with an exchange offer or offering of securities solely to the
Company's existing securityholders), then the Company shall give written notice
of such proposed filing to the Investor as soon as practicable (but in no
event less than 20 days before the anticipated filing date), and such notice
shall offer such
13
Investor the opportunity to register such number of shares of Common Stock
issued or issuable upon the exercise of all or a part of this Warrant
("Registrable Securities") as each such Investor may request (which request
shall specify the Registrable Securities intended to be disposed of and the
intended method of distribution thereof) (a "Piggy-Back Registration").
The Company shall use its best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten public offering to permit
the Registrable Securities requested by the Investor thereof to be included in a
Piggy-Back Registration on the same terms and conditions as any similar
securities of the Company or any other securityholder included therein and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. The Investor shall
have the right to withdraw its request for inclusion of its Registrable
Securities in any registration statement pursuant to this Section 16 by giving
written notice to the Company of its request to withdraw. The Company may
withdraw a Piggy-Back Registration at any time prior to the time it becomes
effective; provided that the Company shall reimburse the Investor for all
reasonable out-of-pocket expenses (including counsel fees and expenses) incurred
prior to such withdrawal.
No failure to effect a registration under Section 16(a) and to
complete the sale of Registrable Securities in connection therewith shall
relieve the Company of any other obligation under this Agreement (including,
without limitation, the Company's obligations under Sections 16(c) and 16(d)).
(b) In the case of any Piggy-Back Registration, the Company
will, as expeditiously as possible:
(1) prepare and file with the Commission such amendments
and post-effective amendments to the registration statement as may be necessary
to keep the registration statement effective for as long as such registration
is required to remain effective pursuant to the terms hereof, cause the
prospectus to be supplemented by any required prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the Act;
(2) furnish to the Investor at least one signed copy of
the registration statement and any post-effective amendment thereto, as soon as
such documents become available to the Company, and such number of conformed
copies thereof and such number of copies of the prospectus (including each
preliminary prospectus) and any amendments or supplements thereto, and any
documents incorporated by reference therein, as the Investor may reasonably
request as soon as such documents become available to the Company;
(3) on or prior to the date on which the registration
statement is declared effective, register or qualify such Registrable
Securities requested to be included under such other securities or blue sky
laws of such jurisdictions as the Investor requests and
14
do any and all other acts and things which may be reasonably necessary or
advisable to enable the Investor to consummate the disposition in such
jurisdictions of such Registrable Securities; provided, that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify, (ii) subject itself to
general taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction;
(4) notify the Investor at any time when a prospectus relating to
such Registrable Securities is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(5) notify the Investor of any stop order or other suspension of
effectiveness of the registration statement; and obtain the withdrawal of any
order suspending the effectiveness of the registration statement at the
earliest possible time;
(6) enter into such agreements (including an underwriting agreement
in form, scope and substance as is customary in underwritten offerings) and
take all such other actions in connection therewith (including those requested
by the managing underwriters, if any, or the Investor) in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (i) make such
representations and warranties to the Investor and the underwriters, if any,
with respect to the business of the Company and its subsidiaries, the
registration statement, prospectus and documents incorporated by reference or
deemed incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same if and when requested; (ii) obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions in form,
scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Investor addressed to the Investor and each of
the underwriters, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such holders and underwriters, including without limitation the
matters referred to clause (i) above; (iii) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the
Company (and, if necessary, any other certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data is, or is required to be, included in
the registration statement), addressed to the Investor and each of the
underwriters, if any, such letters to be in customary form and covering matters
of the type
15
customarily covered in "cold comfort" letters in connection with underwritten
offerings; and (iv) deliver such documents and certificates as may be requested
by the Investor, its counsel and the managing underwriters, if any, to evidence
the continued validity of the representations and warranties of the Company and
its subsidiaries made pursuant to clause (i) above and to evidence compliance
with any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company; and notify the Investor promptly of the
receipt by the Company of any notification with respect to the suspension of
the qualification of the Warrant and/or Common Stock for sale in any
jurisdiction; and
(7) take all other steps reasonably necessary to effect the registration
of the Registrable Securities contemplated hereby.
(8) The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(9) The Company will use its best efforts (i) to cause any class of
Registrable Securities to be listed on a national securities exchange (if such
shares are not already so listed) and on each additional national securities
exchange on which similar securities issued by the Company are then listed (if
any), if the listing of such Registrable Securities is then permitted under the
rules of such exchange or (ii) to secure designation of all such Registrable
Securities covered by such registration statement as a NASDAQ "national market
system security" within the meaning of Rule 11Aa2-1 of the Commission or,
failing that, to secure NASDAQ authorization for such Registrable Securities.
(c) The Company shall keep effective and maintain any registration,
qualification, approval or listing specified in this Section 16 for such period
as may be necessary for the Investor to dispose of Registrable Securities in
accordance with their intended method or methods of distribution, and from time
to time shall amend or supplement the prospectus used in connection therewith
to the extent necessary in order to comply with applicable law. All expenses,
disbursements and fees in connection with any action to be taken hereunder
(including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws, printing expenses and
fees and expenses of counsel for the Company and its independent certified
public accountants and all fees and expenses of the Investor and such
Investor's counsel (all such expenses being herein called "Registration
Expenses") will be borne by the Company; provided that in no event shall
Registration Expenses include any underwriting discounts, sales commissions or
similar fees attributable to the sale of Registrable Securities.
(d) The Company hereby indemnifies, to the fullest extent permitted by
law, the Investor or each person, if any, who controls Investor within the
meaning of Section 15 of the Act, and the directors, officers, employees,
agents and representatives of each of them, against
16
all losses, claims, damages, liabilities, costs and expenses (including,
without limitation, fees and expenses of counsel), as incurred, arising out of,
relating to, or caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement, prospectus or
preliminary prospectus (or any amendment or supplement thereto) or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are caused by
any untrue statement contained in, or omission from, information furnished in
writing to the Company by Investor expressly for use therein. In connection
with any registration statement in which Investor is participating, Investor
will furnish to the Company in writing such information as shall reasonably be
requested by the Company for use in any such registration statement or
prospectus and will indemnify, to the extent permitted by law, the Company, its
directors and officers and each person, if any, who controls the Company within
the meaning of the Act against any losses, claims, damages, liabilities and
expenses resulting from any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required
to be stated in the registration statement or prospectus or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement of a material fact is contained in, or such material fact is omitted
from, information so furnished in writing by such Investor expressly for use
therein.
(e) For purposes of this Section 16, the Investor shall include any
transferee of the Investor if such transfer is made in accordance herewith.
17. Remedies. The Company acknowledges and agrees that irreparable harm,
for which there may be no adequate remedy at law and for which the
ascertainment of damages would be difficult, would occur in the event any of
the provisions of this Warrant were not performed in accordance with its
specific terms or were otherwise breached. The Company accordingly agrees that
the holders shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Warrant and to enforce specifically the
terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, in each instance without being required to post
bond or other security and in addition to, and without having to prove the
inadequacy of other remedies at law.
18. Securities Matters
Whether or not the Company is subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
order to make available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the shares of Common Stock
issuable upon exercise of the Warrant to the public without registration, the
Company agrees to deliver to the Investor all such reports, information and
other documents as it would be required to file with the Commission if it were
subject to the requirements of Section 13 or 15(d) of the Exchange Act within
15-days after the date it would have been required to file such reports with
the Commission. From and after the time the Company files a registration
statement with the Commission with respect to the Warrants or the shares of
Common Stock issuable thereunder, the Company shall file such information with
the Commission; provided, that the Company shall not be
17
in default of the provisions of this Section 18 for any failure to file reports
with the Commission solely by refusal by the Commission to accept the same for
filing.
18
[Warrant for the Purchase of Shares of Common Stock of t.Breeders, Inc.]
T.BREEDERS, INC.
By: /s/ Xxxxx Xxxxx
---------------------
Name: Xxxxx Xxxxx
Title: President
Dated: __, 2000
ACCEPTED AND AGREED:
ARE-ONE INNOVATION DRIVE, LLC
By: AREE-HOLDINGS, L.P., a
Delaware limited partnership,
managing member
By: ARE-GP HOLDINGS QRS CORP.,
a Delaware corporation, general partner
By: /s/ Signature on File
------------------------
Name:
Title:
Dated: February 24, 2000
19
SUBSCRIPTION
t.Breeders, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, ______________________, hereby elects to purchase,
pursuant to the provisions of the Warrant, dated: ___________, 2000, held by
the undersigned, __________ shares of the Common Stock of t.Breeders, Inc., a
Delaware corporation, and tenders herewith payment of the purchase price of
such shares in full.
In exercising its rights to purchase such Common Stock, the undersigned
hereby confirms the investment representations made in Section 7 and the
agreements made in Section 8 of such Warrant.
Dated: _____________ 20__.
_______________________________________
By ____________________________________
Address: _______________________________________
_______________________________________
20
[FORM OF ASSIGNMENT]
The undersigned hereby assigns this Warrant to
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
_________________________
and irrevocably appoints _________________________ as agent to transfer this
Warrant on the books of the Company. The agent may substitute another to act
for him or it.
Dated: ___________________ Signed: ___________________
_______________________________________________________________________________
(Sign exactly as name appears on the front of this Warrant)
Dated: ___________________ Signed: ___________________
Name: _____________________
Title: ____________________
21
