EXHIBIT 10(vv)
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE
APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on July 12, 2001.
WARRANT TO PURCHASE COMMON STOCK
OF
PALOMAR MEDICAL TECHNOLOGIES, INC.
FOR VALUE RECEIVED, PALOMAR MEDICAL TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), hereby certifies that The Travelers Insurance Company
("Travelers") or its permitted assigns, is entitled to purchase from the
Company, at any time or from time to time commencing 20 days after the date on
which the Registration Statement required to be filed by the Company pursuant to
Section 8 of the Securities Purchase Agreement, dated as of July 12, 1996, by
and between the Company and The Travelers Insurance Company, is first ordered
effective by the Securities and Exchange Commission and prior to 5:00 P.M.,
Eastern Standard Time, on July 12, 2001, a total of 500,000 fully paid and
nonassessable shares of the common stock, par value $.01 per share, of the
Company for an aggregate purchase price of $16.00 per share. (Hereinafter, (i)
said common stock, together with any other equity securities which may be issued
by the Company with respect thereto or in substitution therefor, is referred to
as the "Common Stock", (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares", (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price", (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Exercise Price", (v) this Warrant, and all warrants
hereafter issued in exchange or substitution for this Warrant are referred to as
the "Warrant" and (vi) the holder of this Warrant is referred to as the
"Holder".) The Exercise Price is subject to adjustment as hereinafter provided.
1. Exercise of Warrant. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing 20 days after the date on which
the Registration Statement required to be filed by the Company pursuant to
Section 8 of the Securities Purchase Agreement, dated as of July 12, 1996, by
and between the Company and The Travelers Insurance Company, is first ordered
effective by the Securities and Exchange Commission and prior to 5:00 P.M.,
Eastern Standard Time, on July 12, 2001, by the Holder of this Warrant by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together with
proper payment
of the Aggregate Warrant Price, or the proportionate part thereof if this
Warrant is exercised in part; provided, however, that The Travelers Life
Insurance Company ("Travelers") shall only be entitled to exercise this Warrant
from time to time to extent that Travelers will, through such exercise, obtain
that number of shares of Common Stock (the "Exercisable Shares") that, together
with shares of Common Stock directly or indirectly beneficially owned by
Travelers, its subsidiaries and affiliated persons including persons serving as
exclusive full time advisors of Travelers (each a "Travelers Person" and,
collectively, "Travelers Persons"), would not result in direct and indirect
beneficial ownership by all Travelers Persons that would exceed 10% of the
outstanding shares of Common Stock, as calculated in accordance with Rule
16a-1(a)(1). For purposes of calculating the number of Exercisable Shares,
Travelers shall be entitled to use the outstanding number contained in the
Company's most recent Quarterly Report on Form 10-QSB or Annual Report on Form
10-KSB in accordance with Rule 13D-1(e). For purposes of determining the number
of Exercisable Shares, the Company shall be entitled to rely and shall be fully
protected in relying, on any statement or representation made by Travelers to
the Company without any obligation on the part of the Company to make any
inquiry or investigation or to examine its records or the records of any
transfer agent for the Common Stock to confirm such calculation. Payment for
Warrant Shares shall be made by certified or official bank check payable to the
order of the Company. If this Warrant is exercised in part, this Warrant must be
exercised for a minimum of 50,000 shares of the Common Stock (or such lesser
number of shares of Common Stock as shall remain available for purchase under
the terms of the Warrant), and the Holder is entitled to receive a new Warrant
covering the number of Warrant Shares in respect of which this Warrant has not
been exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such surrender of this Warrant,
the Company will (a) issue a certificate or certificates in the name of the
Holder for the largest number of whole shares of the Common Stock to which the
Holder shall be entitled if this Warrant is exercised in whole and (b) deliver
the proportionate part thereof if this Warrant is exercised in part, pursuant to
the provisions of the Warrant. In lieu of any fractional share of the Common
Stock which would otherwise be issuable in respect to the exercise of the
Warrant, the Company at its option (a) may pay in cash an amount equal to the
product of (i) the daily mean average of the Closing Price of a share of Common
Stock on the ten consecutive trading days before the Conversion Date and (ii)
such fraction of a share or (b) may issue an additional share of Common Stock.
Upon exercise of the Warrant, the Company shall issue and deliver to
the Holder certificates for the Common Stock issuable upon such exercise within
ten business days after such exercise and the person exercising shall be deemed
to be the holder of record of the Common Stock issuable upon such exercise.
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No warrant granted herein shall be exercisable after 5:00 p.m. Eastern
Standard Time on the fifth anniversary of the date of issuance.
2. Consolidations and Mergers. In case of any consolidation or merger
of the Company with any other corporation (other than a wholly-owned subsidiary
of the Company), or in case of any sale or transfer of all or substantially all
of the assets of the Company, or in the case of any share exchange pursuant to
which all of the outstanding shares of Common Stock are converted into other
securities or property, the Company shall make appropriate provision or cause
appropriate provision to be made so that each Holder shall have the right
thereafter to obtain upon exercise of the Warrant the kind and amount of shares
of stock and other securities and property receivable upon such consolidation,
merger, sale, transfer, or share exchange by a holder of the number of shares of
Common Stock for which the Warrant may be exercised prior to the effective date
of such consolidation, merger, sale, transfer, or share exchange. If, in
connection with any such consolidation, merger, sale, transfer, or share
exchange, each holder of shares of Common Stock is entitled to elect to receive
either securities, cash, or other assets upon completion of such transaction,
the Company shall provide or cause to be provided to each Holder the right to
elect the securities, cash, or other assets for which the Warrant may be
exercised by such Holder subject to the same conditions applicable to holders of
the Common Stock (including, without limitation, notice of the right to elect,
limitations on the period in which such election shall be made, and the effect
of failing to exercise the election). The Company shall not effect any such
transaction unless the provisions of this paragraph have been complied with. The
above provisions shall similarly apply to successive consolidations, mergers,
sales, transfers, or share exchanges.
3. Adjustments to the Exercise Price. Notwithstanding anything in this
Section 3 to the contrary, no change in the exercise price shall actually be
made until the cumulative effect of the adjustments called for by this Section 3
since the date of the last change in the Exercise Price would change the
Exercise Price by more than 1%. However, once the cumulative effect would result
in such a change, then the Exercise Price shall actually be changed to reflect
all adjustments called for by this Section 3 and not previously made.
Notwithstanding anything in this Section 3, no change in the Exercise Price
shall be made that would result in an Exercise Price of less than the par value
of the Common Stock to be issued upon exercise of this Warrant.
The "Closing Price" for each day shall be the closing price regular way
on such day as reported on the New York Stock Exchange Composite Tape, or, if
the Common Stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which Common Stock is listed or
admitted to trading, or, if not listed or admitted to trading on any national
securities
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exchange, the closing bid price as reported on the Nasdaq Stock Market (or, if
not so reported, the closing price), or, if not admitted for quotation on the
Nasdaq Stock Market, the average of the high bid and low asked prices on such
day as recorded by the National Association of Securities Dealers, Inc. through
the National Association of Securities Dealers Automated Quotations System
("NASDAQ"), or if the National Association of Securities Dealers, Inc. through
NASDAQ shall not have reported any bid and asked prices for the Common Stock on
such day, the average of the bid and asked prices for such day as furnished by
any New York Stock Exchange member firm selected from time to time by the
Company for such purposes, or, if no such bid and asked prices can be obtained
from any such firm, the fair market value of one share of Common Stock on such
day as determined in good faith by the Board of Directors. Such determination by
the Board of Directors shall be conclusive.
Subject to the provisions of the first paragraph of this Section 3, the
Exercise Price shall be appropriately adjusted from time to time to account for
stock splits, stock dividends, combinations, recapitalizations,
reclassifications and similar events and under certain circumstances as follows:
(i) In case the Company shall issue rights or warrants to all
holders of the Common Stock entitling such holders to subscribe for or purchase
Common Stock on the record date referred to below at a price per share less than
the average daily Closing Prices of the Common Stock for the 30 consecutive
business days commencing 45 business days before the record date (the "Current
Market Price"), then in each such case the Exercise Price in effect on such
record date shall be adjusted in accordance with the formula
EP1 = EP x O + N x P
-----
M
------------
O + N
where
EP1 = the adjusted Exercise Price.
EP = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock issuable
pursuant to the exercise of such rights or warrants.
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P = the offering price per share of the additional shares (which
amount shall include amounts received by the Corporation
in respect of the issuance and the exercise of such
rights or warrants).
M = the Current Market Price per share of Common Stock on the
record date.
Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants. If
any or all such rights or warrants are not so issued or expire or terminate
before being exercised, the Exercise Price then in effect shall be readjusted
appropriately.
(ii) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any warrants or subscription rights
referred to in subparagraph (i) above and any dividend or distribution paid in
cash out of the retained earnings of the Company), then in each such case the
Exercise Price then in effect shall be adjusted in accordance with the formula
EP1 = EP x M-F
-----
M
where
EP1 = the adjusted Exercise Price.
EP = the current Exercise Price.
M = the Current Market Price per share of Common Stock on th
record date mentioned below.
F = the aggregate amount of such cash dividend and/or the fair
market value on the record date of the assets or securities
to be distributed divided by the number of shares of
Common Stock outstanding on the record date. The Board of
Directors shall determine such fair market value, which
determination shall be conclusive.
Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
(iii) If at any time an adjustment to the Exercise Price shall
be made in accordance with subparagraph (i) or (ii) above, the Holder of any
Warrant shall thereafter, on the exercise hereof, be entitled to receive that
number of shares of Common Stock determined by multiplying the number of shares
of Common Stock which would be issuable on such exercise immediately prior to
such issuance by a fraction of which (i) the numerator is the Exercise Price in
effect immediately prior to such issuance and (ii) the denominator is the
Exercise Price in effect on the date of such exercise.
(iv) All calculations hereunder shall be made to the nearest
cent or to the nearest 1/100 of a share, as the case may be.
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(v) If at any time as a result of an adjustment made pursuant
to Section 2, the Holder of any Warrant thereafter exercised shall become
entitled to receive securities, cash, or assets other than Common Stock, the
number or amount of such securities or property so receivable upon exercise
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in subparagraphs (i) to (iv) above.
Except as otherwise provided above in this Section 3, no
adjustment in the Exercise Price shall be made in respect of any conversion for
share distributions or dividends theretofore declared and paid or payable on the
Common Stock.
Whenever the Exercise Price is adjusted, the Company will give
notice by mail to the Holders, which notice shall be made within 45 days after
the effective date of such adjustment and shall state the adjustment and the
Exercise Price. Notwithstanding the foregoing notice provisions, failure by the
Company to give such notice or a defect in such notice shall not affect the
binding nature of such corporate action of the Company.
Whenever the Company shall propose to take any of the actions
specified in Section 2 or in subparagraphs (i) or (ii) of the third paragraph of
this Section 3 which would result in any adjustment in the Exercise Price under
this Section 3, the Company shall cause a notice to be mailed at least 30 days
prior to the date on which the books of the Company will close or on which a
record will be taken for such action, to the Holders. Such notice shall specify
the action proposed to be taken by the Company and the date as of which holders
of record of the Common Stock shall participate in any such actions or be
entitled to exchange their Common Stock for securities or other property, as the
case may be. Failure by the Corporation to mail the notice or any defect in such
notice shall not affect the validity of the transaction.
Notwithstanding any other provision of this Section 3, no
adjustment in the Exercise Price need be made (a) for sales of Common Stock
pursuant to a plan for reinvestment of dividends and interest, provided that the
purchase price in any such sale is at least equal to the fair market value of
the Common Stock at the time of such purchase, or pursuant to any plan adopted
by the Corporation for the benefit of its employees, directors, or consultants;
or (b) after the Common Stock becomes convertible into cash (no interest shall
accrue on the cash).
4. Reservation of Warrant Shares. The Company agrees that, prior to the
expiration of this Warrant, the Company will at all times have authorized and
reserved, and will keep available, solely for issuance or delivery upon the
exercise of this Warrant, the number of shares of the Common Stock as from time
to time shall be receivable upon the exercise of this Warrant.
5. Fully Paid Stock; Taxes. The Company agrees that the shares of the
Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Warrant shall, at the time of such delivery,
be validly issued and outstanding, fully paid and nonassessable, and not subject
to preemptive rights, and the Company will take all such actions as may be
necessary to assure that the par value or stated value, if any, per share of the
Common Stock is at all times equal to or less than the then Exercise Price. The
Company
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further covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes that may be payable in
respect of the issue of any Warrant Share or certificate therefor.
6. Transfer.
(a) Securities Laws. Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or under any state securities laws
and unless so registered may not be transferred, sold, pledged, hypothecated or
otherwise disposed of unless an exemption from such registration is available.
In the event Holder desires to transfer this Warrant or any of the Warrant
Shares issued, the Holder must give the Company prior written notice of such
proposed transfer including the name and address of the proposed transferee.
Such transfer may be made only either (i) upon publication by the Securities and
Exchange Commission (the "Commission") of a ruling, interpretation, opinion or
"no action letter" based upon facts presented to said Commission, or (ii) upon
receipt by the Company of an opinion of counsel to the Company in either case to
the effect that the proposed transfer will not violate the provisions of the
Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or the rules and regulations promulgated under either such act, or in the
case of clause (ii) above, to the effect that the Warrant or Warrant Shares to
be sold or transferred has been registered under the Securities Act and that
there is in effect a registration statement in which is included a prospectus
meeting the requirements of Subsection 10 (a) of the Securities Act, which is
being or will be delivered to the purchaser or transferee at or prior to the
time of delivery of the certificates evidencing the Warrant or Warrant Stock to
be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed transfer, and as
a condition thereto, if such transfer is not made pursuant to an effective
registration statement under the Securities Act, the Holder will, if requested
by the Company, deliver to the Company (i) an investment covenant signed by the
proposed transferee, (ii) an agreement by such transferee to the impression of
the restrictive investment legend set forth herein on the certificate or
certificates representing the securities acquired by such transferee, (iii) an
agreement by such transferee that the Company may place a "stop transfer order"
with its transfer agent or registrar, and (iv) an agreement by the transferee to
indemnify the Company to the same extent as set forth in the next succeeding
paragraph.
(c) Indemnity. The Holder acknowledges that the Holder understands the
meaning and legal consequences of this Section 6, and the Holder hereby agrees
to indemnify and hold harmless the Company, its representatives and each officer
and director thereof from and against any and all loss, damage or liability
(including all attorneys' fees and costs incurred in enforcing this indemnity
provision) due to or arising out of (a) the inaccuracy of any representation or
the breach of any warranty of the Holder contained in, or any other breach of,
this warrant, (b) any transfer of the Warrant or any of the Warrant Shares in
violation of the Securities Act, the Exchange Act or the rules and regulations
promulgated under either of such acts, (c) any transfer of the Warrant or any of
the Warrant Shares not in accordance with this Warrant or (d) any
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untrue statement or omission to state any material fact in connection with the
investment representations or with respect to the facts and representations
supplied by the Holder to counsel to the Company upon which its opinion as to a
proposed transfer shall have been based.
(d) Transfer. Except as restricted hereby, this Warrant and the Warrant
Shares issued may be transferred by the Holder in whole or in part at any time
or from time to time. Upon surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with assignment documentation duly
executed and funds sufficient to pay any transfer tax, and upon compliance with
the foregoing provisions, the Company shall, without charge, execute and deliver
a new Warrant in the name of the assignee named in such instrument of
assignment, and this Warrant shall promptly be canceled. Any assignment,
transfer, pledge, hypothecation or other disposition of this Warrant attempted
contrary to the provisions of this Warrant, or any levy of execution, attachment
or other process attempted upon the Warrant, shall be null and void and without
effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares have
been registered under the Securities Act, upon exercise of any part of the
Warrant and the issuance of any of the Warrant Shares, the Company shall
instruct its transfer agent to enter stop transfer orders with respect to such
shares, and all certificates representing Warrant Shares shall bear on the face
thereof substantially the following legend, insofar as is consistent with
Delaware law:
"The shares of common stock represented by this certificate
have not been registered under the Securities Act of 1933, as
amended, and may not be sold, offered for sale, assigned,
transferred or otherwise disposed of unless registered
pursuant to the provisions of that Act or an opinion of
counsel to the Company is obtained stating that such
disposition is in compliance with an available exemption from
such registration."
7. Loss, etc. of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of an
unsecured indemnity from the Holder reasonably satisfactory to the Company, if
lost, stolen or destroyed, and upon surrender and cancellation of the Warrant,
if mutilated, the Company shall execute and deliver to the Holder a new Warrant
of like date, tenor and denomination.
8. Warrant Holder Not Shareholder. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, prior
to the exercise hereof.
9. Communication. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Company at 00 Xxxxxx Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000, or such other address as the Company has designated in
writing to the Holder, with a copy to
-8-
Xxxxx X. Xxxxxxxx, Xxxxx, Xxxx & Xxxxx LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, or
(b) the Holder at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 or such other address as the Holder has designated in writing to the
Company.
10. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof
11. Applicable Law. This Warrant shall be governed by and construed in
accordance with the law of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, PALOMAR MEDICAL TECHNOLOGIES, INC. has caused this
Warrant to be signed by its President and its corporate seal to be hereunto
affixed and attested by its Assistant Secretary this 12th day of July, 1996.
ATTEST: PALOMAR MEDICAL TECHNOLOGIES, INC.
_________________________________ By: /s/ Xxxxxx Xxxxxxxx
------------------------
Xxxxxx Xxxxxxxx
Chief Executive Officer
[Corporate Seal]
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SUBSCRIPTION
The undersigned, ______________________________________________,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of ____ shares of the Common Stock of PALOMAR MEDICAL
TECHNOLOGIES, INC. covered by said Warrant, and makes payment therefor in full
at the price per share provided by said Warrant.
Dated: _____________________________ Signature: _______________________
Address: _________________________
_________________________
_________________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto ___________________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
________________________________, attorney, to transfer said Warrant on the
books of PALOMAR MEDICAL TECHNOLOGIES, INC.
Dated: _____________________________ Signature: _______________________
Address: _________________________
_________________________
_________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells, assigns and transfers
unto ___________________________ the right to purchase ____ shares of the Common
Stock of PALOMAR MEDICAL TECHNOLOGIES, INC. by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced hereby, and does
irrevocably constitute and appoint __________________________, attorney, to
transfer that part of said Warrant on the books of PALOMAR MEDICAL TECHNOLOGIES,
INC.
Dated: _____________________________ Signature: _______________________
Address: _________________________
_________________________
_________________________
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