EXHIBIT 10.6
THE TRANSFER OF THIS WARRANT IS SUBJECT TO
RESTRICTIONS CONTAINED HEREIN. THIS WARRANT
HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN
ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TOWARD THE RESALE OR OTHER DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR THE SHARES
ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS.
VISTA MEDICAL TECHNOLOGIES, INC.
Common Stock Purchase Warrant
To Purchase February 22, 1997
133,333 Shares of Common Stock of
Vista Medical Technologies, Inc.
THIS CERTIFIES that, for value received, Heartport, Inc., a Delaware
corporation, or its permitted and registered assigns (the "Holder"), is entitled
to subscribe for and purchase from Vista Medical Technologies, Inc., a Delaware
corporation (hereinafter called the "Corporation"), up to 133,333 shares (up to
100,000 shares after the Corporation's 4 for 3 reverse stock split effective
approximately February 25, 1997 (the "Reverse Split") and subject to further
adjustment as hereinafter provided) of fully paid and non-assessable Common
Stock of the Corporation (the "Common Stock"), subject to the provisions and
upon the terms and conditions hereinafter set forth at the per share price equal
to the price per share of such Common Stock offered to the public in the
Corporation's initial public offering of equity securities (such price as from
time to time to be adjusted as provided herein is called the "Warrant Price" but
the Warrant Price will not be adjusted for the Reverse Split), at or prior to
5:00 p.m. Pacific time on March 31, 2001 (the "Exercise Period"). However, this
Warrant shall not be exercisable until the earlier of (i) the closing of the
Company's initial public offering, provided that if such initial public offering
is not consummated prior to June 30, 1997, this Warrant may be exercised at any
time after June 30, 1997 at a Warrant Price (subject to adjustment as provided
herein) of $5.00 per share ($6.67 after the Reverse Split); or (ii) immediately
prior to the closing of an acquisition of all or substantially all of the
Company's outstanding stock or assets by an unrelated entity, by merger or
otherwise, provided that if such closing occurs prior to the closing of the
Company's initial public offering, the Warrant Price (subject to adjustment as
provided herein) shall be $5.00 per share ($6.67 after the Reverse Split).
This Warrant and any Warrant subsequently issued upon exchange or transfer
hereof are hereinafter collectively called the "Warrant."
Section 1. EXERCISE OF WARRANT. Subject to the provisions of the first
paragraph of this Warrant, the rights represented by this Warrant may be
exercised by the Holder,
in whole or in part (but not as to fractional shares) at any time or from time
to time during the Exercise Period by the completion of the purchase form
attached hereto and by the surrender of this Warrant (properly endorsed) at the
office of the Corporation as it may designate by notice in writing to the Holder
hereof at the address of the Holder appearing on the books of the Corporation,
and by payment to the Corporation of the Warrant Price in cash or by certified
or official bank check, or alternatively in accordance with Section 2 below, for
each share being purchased. In the event of any exercise of the rights
represented by this Warrant, a certificate or certificates for the shares of
Common Stock so purchased, registered in the name of the Holder, or its nominee
or other party designated in the purchase form by the Holder hereof, shall be
delivered to the Holder within thirty (30) business days after the date in which
the rights represented by this Warrant shall have been so exercised; and, unless
this Warrant has expired or has been exercised in full, a new Warrant
representing the number of shares (except a remaining fractional share), if any,
with respect to which this Warrant shall not then have been exercised shall also
be issued to the Holder within such time. The person in whose name any
certificate for shares of Common Stock is issued upon exercise of this Warrant
shall for all purposes be deemed to have become the holder of record of such
shares on the date on which this Warrant was surrendered and payment of the
Warrant Price, except that, if the date of such surrender and payment is a date
on which the stock transfer books of the Corporation are closed, such person
shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are open.
No fractional shares shall be issued upon exercise of this Warrant and no
payment or adjustment shall be made upon any exercise on account of any cash
dividends on the Common Stock issued upon such exercise. If any fractional
interest in a share of Common Stock would, except for the provision of this
Section 1, be delivered upon such exercise, the Corporation, in lieu of delivery
of a fractional share thereof, shall pay to the Holder an amount in cash equal
to the current market price of such fractional share as determined in good faith
by the Board of Directors of the Corporation (the "Board").
Section 2. NET ISSUANCE.
(a) RIGHT TO CONVERT. In addition to and without limiting the rights
of the Holder under the terms of this Warrant, the Holder shall have the right
to convert this Warrant or any portion thereof (the "Conversion Right") into
shares of Common Stock as provided in this Section 2 at any time or from time to
time during the Exercise Period. Upon exercise of the Conversion Right with
respect to a particular number of shares subject to the Warrant (the "Converted
Warrant Shares"), the Corporation shall deliver to the Holder (without payment
by the Holder of any exercise price or any cash or other consideration) that
number of shares of fully paid and nonassessable Common Stock computed using the
following formula:
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X = Y (A - B)
---------
A
Where X = the number of shares of Common Stock to be delivered to the
holder
Y = the number of Converted Warrant Shares
A = the fair market value of one share of the Corporation's
Common Stock on the Conversion Date (as defined below)
B = the per share exercise price of the Warrant (as adjusted to
the Conversion Date)
The Conversion Right may only be exercised with respect to a whole number of
shares subject to the Warrant. No fractional shares shall be issuable upon
exercise of the Conversion Right, and if the number of shares to be issued
determined in accordance with the foregoing formula is other than a whole
number, the Corporation shall pay to the Holder an amount in cash equal to the
fair market value of the resulting fractional share on the Conversion Date (as
defined below). Shares issued pursuant to the Conversion Right shall be treated
as if they were issued upon the exercise of the Warrant.
(b) METHOD OF EXERCISE. The Conversion Right may be exercised by the
Holder by the surrender of the Warrant at the principal office of the
Corporation together with a written statement specifying that the Holder thereby
intends to exercise the Conversion Right and indicating the total number of
shares under the Warrant that the Holder is exercising through the Conversion
Right. Such conversion shall be effective upon receipt by the Corporation of
the Warrant together with the aforesaid written statement, or on such later date
as is specified therein (the "Conversion Date"). Certificates for the shares
issuable upon exercise of the Conversion Right and, if applicable, a new warrant
evidencing the balance of the shares remaining subject to the Warrant, shall be
issued as of the Conversion Date and shall be delivered to the Holder promptly
following the Conversion Date.
(c) DETERMINATION OF FAIR MARKET VALUE. For purposes of this Section
2, fair market value of a share of Common Stock on the Conversion Date shall
mean:
(i) If traded on a stock exchange, the fair market value of the
Common Stock shall be deemed to be the average of the closing selling prices of
the Common Stock on the stock exchange determined by the Board to be the primary
market for the Common Stock over the ten (10) trading day period (or such
shorter period immediately following the closing of an initial public offering)
ending on the date prior to the Conversion Date, as such prices are officially
quoted in the composite tape of transactions on such exchange;
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(ii) If traded over-the-counter, the fair market value of the
Common Stock shall be deemed to be the average of the closing bid prices (or, if
such information is available, the closing selling prices) of the Common Stock
over the ten (10) trading day period (or such shorter period immediately
following the closing of an initial public offering) ending on the date prior to
the Conversion Date, as such prices are reported by the National Association of
Securities Dealers through its NASDAQ system or any successor system; and
(iii) If there is no public market for the Common Stock, then the
fair market value shall be determined by mutual agreement of the holder of the
Warrant and the Corporation, and if the Holder and the Corporation are unable to
so agree, by a valuation consultant or an investment banking firm of national
reputation selected by the Corporation and reasonably acceptable to the holder
of the Warrant.
Section 3. STOCK SPLITS, CONSOLIDATION, MERGER AND SALE. In the event
that before the issuance of the shares of Common Stock into which this Warrant
may be exercised the outstanding shares of Common Stock of the Corporation shall
be split, combined or consolidated, by dividend, reclassification or otherwise,
into a greater or lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation and the number of
shares purchasable under this Warrant shall, concurrently with the effectiveness
of such combination or consolidation, be proportionately adjusted. If there
shall be effected any consolidation or merger of the Corporation with another
corporation, or a sale of all or substantially all of the Corporation's assets
to another corporation, and if the holders of Common Stock shall be entitled
pursuant to the terms of any such transaction to receive stock, securities or
assets with respect to or in exchange for Common Stock, then, as a condition of
such consolidation, merger or sale, lawful and adequate provisions shall be made
whereby the Holder of this Warrant shall thereafter have the right to receive,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore receivable upon the exercise
of such Warrant, such shares of stock, securities or assets as may be issuable
or payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of such Common Stock immediately
theretofore so receivable had such consolidation, merger or sale not taken
place, and in any such case appropriate provisions shall be made with respect to
the rights and interests of the Holder to the end that the provisions hereof
shall thereafter be applicable, as nearly as may be, in relation to any shares
of stock, securities or assets thereafter deliverable upon the exercise of this
Warrant.
(a) STOCK TO BE RESERVED. The Corporation will at all times reserve
and keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of this Warrant as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of this
Warrant. The Corporation shall from time to time in accordance with applicable
law increase the authorized amount of its Common Stock if at any time the number
of shares of Common Stock remaining
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unissued and available for issuance shall not be sufficient to permit exercise
of this Warrant. The Corporation covenants that all shares of Common Stock
which shall be so issued shall be duly and validly issued and fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and, without limiting the generality of the foregoing, the
Corporation will take all such action as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any applicable
law or regulation, or of any requirements of any national securities exchange
upon which shares of capital stock of the Corporation may be listed.
(b) ISSUE TAX. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
of this Warrant for any issuance tax in respect thereof provided that the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a
name other than that of the Holder of this Warrant.
(c) CLOSING OF BOOKS. The Corporation will at no time close its
transfer books against the transfer of the shares of Common Stock issued or
issuable upon the exercise of this Warrant in any manner which interferes with
the timely exercise of this Warrant.
Section 4. NOTICES OF RECORD DATES. In the event of:
(a) any taking by the Corporation of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), 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, or
(b) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation or
any transfer of all or substantially all the assets of the Corporation to or
consolidation or merger of the Corporation with or into any other corporation,
or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation,
then and in each such event the Corporation will give notice to the Holder of
this Warrant specifying (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up.
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Such notice shall be given at least ten (10) days and not more than ninety (90)
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") or to a favorable vote of stockholders, if either is required.
Section 5. NO STOCKHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Corporation. No provision hereof, in the absence of affirmative action
by the Holder hereof to purchase shares of Common Stock, and no mere enumeration
hereon of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Warrant Price or as a stockholder of the
Corporation, whether such liability is asserted by the Corporation or by
creditors of the Corporation.
Section 6. REPRESENTATIONS OF HOLDER.
The Holder hereby represents and acknowledges to the Corporation that:
(a) this Warrant, the Common Stock issuable upon exercise of this
Warrant and any securities issued with respect to any of them by way of a stock
dividend or stock split or in connection with a recapitalization, merger,
consolidation or other reorganization will be "restricted securities" as such
term is used in the rules and regulations under the Securities Act and that such
securities have not been and may not be registered under the Securities Act or
any state securities law, and that such securities must be held indefinitely
unless registration is effected or transfer can be made pursuant to appropriate
exemptions;
(b) the Holder has read, and fully understands, the terms of this
Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;
(c) the Holder has either a pre-existing personal or business
relationship with the Corporation or one of its officers, directors or
controlling persons;
(d) the Holder is purchasing for investment for its own account and
not with a view to or for sale in connection with any distribution of this
Warrant or the Common Stock of the Corporation issuable upon exercise of this
Warrant and it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable state
securities laws; provided that nothing contained herein will prevent Holder from
transferring such securities in compliance with the terms of this Warrant and
the applicable federal and state securities laws;
(e) the Holder is an "accredited investor" within the meaning of
paragraph (a) of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission and an "excluded purchaser" within the meaning of Section
25102(f) of the California Corporate Securities Law of 1968; and
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(f) the Corporation may affix the following legend (in addition to any
other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Common Stock (or other
securities) issued upon exercise of this Warrant ("Warrant Shares"):
"These securities have not been registered under the
Securities Act of 1933, or any state securities laws. They
may not be sold, offered for sale, pledged or hypothecated
in the absence of a registration statement in effect with
respect to the securities under all applicable federal and
state securities laws or an opinion of counsel satisfactory
to the Corporation that such registration is not required or
unless sold pursuant to Rule 144 of such Act."
Section 7. NOTICE OF PROPOSED TRANSFERS. This Warrant may not be
transferred, in whole or in part, until December 31, 1999; provided, however,
that this Warrant may be transferred in whole to any successor to substantially
all of the business of the original Holder. The Holder of this Warrant, by
acceptance hereof, agrees to comply in all respects with the provisions of this
Section 7. Prior to any proposed transfer of this Warrant or any Warrant
Shares, unless (i) pursuant to and in compliance with Rule 144 or (ii) there is
in effect a registration statement under the Securities Act covering the
proposed transfer, the Holder of such securities shall give written notice to
the Corporation of such Holder's intention to effect such transfer. Each such
notice shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and shall be accompanied by either (i) a written opinion of
legal counsel who shall be reasonably satisfactory to the Corporation addressed
to the Corporation and reasonably satisfactory in form and substance to the
Corporation's counsel, to the effect that the proposed transfer of the Warrant
and/or Warrant Shares may be effected without registration under the Securities
Act, or (ii) a "no action" letter from the U.S. Securities and Exchange
Commission (the "Commission") to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that enforcement action be taken with respect thereto, whereupon the
Holder of such securities shall be entitled to transfer such securities in
accordance with the terms of the notice delivered by the Holder to the
Corporation. Each new certificate evidencing the Warrant and/or Warrant Shares
so transferred shall bear the appropriate restrictive legends set forth in
Section 6(f) above, except that such certificate shall not bear such restrictive
legend if, in the opinion of counsel for the Corporation, such legend is not
required in order to establish or assist in compliance with any provisions of
the Securities Act or any applicable state securities laws.
Section 8. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated or destroyed, the Corporation may, on such terms as
to indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Corporation,
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whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall
be at any time enforceable by anyone.
Section 9. PRESENTMENT. Prior to due presentment of this Warrant together
with a completed assignment form attached hereto for registration of transfer,
the Corporation may deem and treat the Holder as the absolute owner of the
Warrant, notwithstanding any notation of ownership or other writing thereon, for
the purpose of any exercise thereof and for all other purposes, and the
Corporation shall not be affected by any notice to the contrary.
Section 10. NOTICE. Notice or demand pursuant to this Warrant shall be
sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it shall appear in the records of the Corporation, and if to the
Corporation, at 0000 Xxxxxxx Xxxxxxx, Xxxxx X, Xxxxxxxx, Xxxxxxxxxx 00000,
Attention: Secretary. The Corporation may alter the address to which
communications are to be sent by giving notice of such change of address in
conformity with the provisions of this Section 10 for the giving of notice.
Section 11. GOVERNING LAW. The validity, interpretation and performance
of this Warrant shall be governed by the laws of the State of California without
regard to principles of conflicts of laws.
Section 12. SUCCESSORS, ASSIGNS. Subject to the restrictions on transfer
by Holder set forth in Section 7 hereof, all the terms and provisions of the
Warrant shall be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto.
Section 13. AMENDMENT. This Warrant may be modified, amended or
terminated by a writing signed by the Corporation and the Holder.
Section 14. SEVERABILITY. Should any part but not the whole of this
Warrant for any reason be declared invalid, such decision shall not affect the
validity of any remaining portion, which remaining portion shall remain in force
and effect as if this Warrant had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Warrant without including
therein any such part which may, for any reason, be hereafter declared invalid.
Section 15. INVESTOR RIGHTS. The Company agrees to amend its Amended
and Restated Investors' Rights Agreement dated November 27, 1996 (the
"Investors' Rights Agreement") to include the Converted Warrant Shares within
the definition of Registrable Securities in such agreement.
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly
executed and delivered on and as of the day and year first above written by one
of its officers thereunto duly authorized.
VISTA MEDICAL TECHNOLOGIES, INC.
a Delaware corporation
By: /s/ Xxxx X. Xxxx
------------------------------
Xxxx X. Xxxx, President
The undersigned Holder agrees and accepts this Warrant and
acknowledges that it has read and confirms each of the representations
contained in Section 6.
HEARTPORT, INC., a Delaware corporation
By: /s/ illegible
------------------------------
Its: C.E.O.
------------------------------
Address: 000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
[SIGNATURE PAGE TO COMMON STOCK PURCHASE WARRANT]
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PURCHASE FORM
(To be executed by the Warrant Holder if he desires to exercise the Warrant in
whole or in part)
To: VISTA MEDICAL TECHNOLOGIES, INC.
The undersigned, whose tax identification number is _________________,
hereby irrevocably elects the right of purchase represented by the within
Warrant for, and to purchase thereunder, _______________________________________
_________________________ shares of Common Stock provided for therein and
tenders payment herewith to the order of
VISTA MEDICAL TECHNOLOGIES, INC.
in the amount of
$...............
The undersigned requests that certificates for such shares be issued as follows:
Name: .........................................................
Address: ......................................................
Deliver to: ...................................................
Address: ......................................................
and, if said number of shares shall not be all the shares purchasable hereunder,
that a new Warrant for the balance remaining of the shares purchasable under the
within Warrant be registered in the name of, and delivered to, the undersigned
at the address stated below
Address: .............................
Dated: __________________, _____
Signature................... (Signature must
conform in all respects to the name of the
Warrant Holder as specified on the face of
the Warrant, without alteration, enlargement
or any change whatsoever)
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ASSIGNMENT
(To be executed by the Warrant Holder if it desires to effect a transfer of the
Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________________________________________ whose Social
Security or other tax identification number is............................
[residing/located] at ...................... the attached Warrant, and
appoints............................. residing at
................................................................
................................................................
the undersigned's attorney-in-fact to transfer said Warrant on the books of the
Corporation, with full power of substitution in the premises.
Dated: _________________, ______.
In the presence of:
____________________________ ...................................
(Signature must conform in all respects to the
name of the Warrant Holder as specified on the
face of the Warrant, without alteration,
enlargement or any change whatsoever).
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