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EXHIBIT 4.2
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION
UNDER APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED AND (2) AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO
THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT
REQUIRED.
AUTOCYTE, INC.
WARRANT TO PURCHASE COMMON STOCK
This certifies that, for value received, ________________________ (the
"Holder") is entitled to subscribe for and purchase up to
___________________________ (_________) shares (subject to adjustment from time
to time pursuant to the provisions of Section 5 hereof) of fully paid and
nonassessable Common Stock of AutoCyte, Inc., a Delaware corporation (the
"Company"), at the Warrant Price (as defined in Section 2 hereof), subject to
the provisions and upon the terms and conditions hereinafter set forth.
As used herein, the term "Common Stock" shall mean the Company's
presently authorized Common Stock, $.01 par value per share, and any stock into
or for which such Common Stock may hereafter be converted or exchanged.
1. Term of Warrant. The purchase or conversion right represented by
this warrant (hereinafter the "Warrant") is exercisable, in whole or in part, at
any time during the period commencing on June 24, 1997 and continuing until June
24, 2007, provided, that, the term of this Warrant may, upon notification of the
Company to the holder hereof, expire upon an earlier closing of an initial
public offering of the Company's Common Stock.
2. Warrant Price. The initial exercise price of this Warrant is $1.00
per share, subject to adjustment from time to time pursuant to the provisions of
Section 5 hereof (the "Warrant Price").
3. Method of Exercise or Conversion; Payment; Issuance of New Warrant.
(a) Exercise. Subject to Section 1 hereof, the purchase right
represented by this Warrant may be exercised by the holder hereof during the
term of this Warrant, in whole or in part, by the surrender of this Warrant
(with the notice of exercise form attached hereto as Exhibit 1 duly executed) at
the principal office of the Company and by the payment to the Company, by check
or wire transfer, of an amount equal to the then applicable Warrant Price per
share multiplied by the number of shares then being purchased. The Company
agrees that the shares so purchased shall be deemed to be issued to the holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares as aforesaid. In the event of any exercise of this Warrant, certificates
for the shares of stock so purchased
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shall be delivered to the holder hereof within 15 days thereafter and, unless
this Warrant has been fully exercised or expired, a new Warrant representing the
portion of the shares, if any, with respect to which this Warrant shall not then
have been exercised, shall also be issued to the holder hereof within such 15
day period.
(b) Conversion. Subject to Section 1 hereof, the Holder may convert
this Warrant (the "Conversion Right"), in whole or in part, into the number of
shares of Common Stock of the Company calculated pursuant to the following
formula by surrendering this Warrant (with the notice of exercise form attached
hereto as Exhibit 1 duly executed) at the principal office of the Company
specifying the number of shares of Common Stock of the Company, the rights to
purchase which the Holder desires to convert:
Y (A - B)
X = ---------
A
where: X = the number of shares of Common Stock to be issued to the
Holder;
Y = the number of shares of Common Stock subject to this
Warrant for which the Conversion Right is being
exercised;
A = the fair market value of one share of Common Stock;
B = the Warrant Price.
As used herein, the fair market value of a share of Common Stock shall
mean with respect to each share of Common Stock the closing price per share of
the Company's Common Stock on the principal national securities exchange on
which the Common Stock is then listed or admitted to trading or, if not then
listed or admitted to trading on any such exchange, on the NASDAQ National
Market System, or if not then listed or traded on any such exchange or system,
the bid price per share on NASDAQ Small-Cap Market or in the sole discretion of
the Board of Directors of the Company, any other over-the-counter market,
including the OTC Bulletin Board, which reports bid, asked and last sale prices
and volume of sales (approval of which will not be unreasonably withheld by such
directors), averaged over the 10 trading days consisting of the day as of which
the current fair market value of Common Stock is being determined and the nine
consecutive business days prior to such day. If at any time such quotations are
not available, the current fair market value of a share of Common Stock shall be
the highest price per share which the Company could obtain from a willing buyer
(not a current employee or director) for shares of Common Stock sold by the
Company, from authorized but unissued shares, as determined in good faith by the
Board of Directors of the Company, unless (i) the Company shall become subject
to a merger, acquisition or other consolidation pursuant to which the Company is
not the surviving party, in which case the current fair market value of a share
of Common Stock shall be deemed to be the value received by the holders of the
Company's Common Stock for each share of
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Common Stock pursuant to the Company's acquisition; or (ii) the Holder shall
exercise its Conversion Right to purchase such shares within 15 days prior to
the closing date of the initial underwritten public offering of the Company's
Common Stock pursuant to a registration statement filed under the Act, in which
case, the fair market value of a share of Common Stock shall be the price per
share at which all registered shares are sold to the public in such offering.
The Company agrees that the shares so converted shall be deemed to be issued to
the holder hereof as the record owner of such shares as of the close of business
on the date on which this Warrant shall have been surrendered as aforesaid. In
the event of any conversion of this Warrant, certificates for the shares of
stock so converted shall be delivered to the holder hereof within 15 days
thereafter and, unless this Warrant has been fully converted or expired, a new
Warrant representing the portion of the shares, if any, with respect to which
this Warrant shall not then have been converted, shall also be issued to the
holder hereof within such 15 day period.
4. Stock Fully Paid; Reservation of Shares. All Common Stock which may
be issued upon the exercise or conversion of this Warrant will, upon issuance,
be fully paid and nonassessable, and free from all taxes, liens and charges with
respect to the issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of the issuance upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by this
Warrant.
5. Adjustment of Purchase Price and Number of Shares. The kind of
securities purchasable upon the exercise of this Warrant, the Warrant Price and
the number of shares purchasable upon exercise of this Warrant shall be subject
to adjustment from time to time upon the occurrence of certain events as
follows:
(a) Reclassification, Consolidation or Merger. In case of any
reclassification or change of outstanding securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with
or into another corporation, other than a merger with another corporation in
which the Company is a continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant, or in case of any sale of all or substantially all of the assets
of the Company, the Company, or such successor or purchasing corporation, as the
case may be, shall execute a new Warrant, providing that the holder of this
Warrant shall have the right to exercise such new Warrant and procure upon such
exercise, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification, change,
consolidation, or merger by a holder of one share of Common Stock. Such new
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 5. No
consolidation or merger of the Company with or into another corporation referred
to in the first sentence of this paragraph (b) shall be
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consummated unless the successor or purchasing corporation referred to above
shall have agreed to issue a new Warrant as provided in this Section 5. The
provisions of this subsection (b) shall similarly apply to successive
reclassification, changes, consolidations, mergers and transfers.
(b) Subdivision or Combination of Shares. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Common Stock, the Warrant Price shall be proportionately decreased in the
case of a subdivision or increased in the case of a combination.
(c) Stock Dividends. If the Company at any time while this Warrant
is outstanding and unexpired shall pay a dividend with respect to Common Stock
payable in, or make any other distribution with respect to Common Stock (except
any distribution specifically provided for in the foregoing subparagraphs (b) or
(c)) of, Common Stock, then the Warrant Price shall be adjusted, from and after
the date of determination of shareholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Warrant Price in
effect immediately prior to such date of determination by a fraction (a) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in the
Warrant Price pursuant to any of Sections 5 (a) through (c), the number of
shares of Common Stock purchasable hereunder shall be adjusted, to the nearest
whole share, to the product obtained by multiplying the number of shares
purchasable immediately prior to such adjustment in the Warrant Price by a
fraction, the numerator of which shall be the Warrant Price immediately prior to
such adjustment and the denominator of which shall be the Warrant Price
immediately thereafter.
6. Notice of Adjustments. Whenever any Warrant Price shall be adjusted
pursuant to Section 5 hereof, the Company shall prepare a certificate signed by
its chief financial officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, the Warrant Price after giving effect to such
adjustment and the number of shares then purchasable upon exercise of this
Warrant, and shall cause copies of such certificate to be mailed (by first class
mail, postage prepaid) to the holder of this Warrant at the address specified in
Section 11(d) hereof, or at such other address as may be provided to the Company
in writing by the holder of this Warrant.
7. Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor upon the basis of the
Warrant Price then in effect.
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8. Compliance with the Act.
(a) Compliance with the Act. The holder of this Warrant, by
acceptance hereof, agrees that this Warrant and the shares of Common Stock to be
issued upon exercise hereof are being acquired for investment for such holder's
own account and not with a view toward distribution thereof, and that it will
not offer, sell or otherwise dispose of this Warrant or any shares of Common
Stock to be issued upon exercise hereof unless this Warrant has been registered
under the Act and applicable state securities laws or (i) registration under
applicable state securities laws is not required and (ii) an opinion of counsel
satisfactory to the Company is furnished to the Company to the effect that
registration under the Act is not required.
9. Transfer and Exchange of Warrant.
(a) Transfer. This Warrant may be transferred or succeeded to by an
person; provided however, that the Company is given written notice by the
transferee at the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which such rights are
being assigned.
(b) Exchange. Subject to compliance with the terms hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, at the
office of the Company by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees that
this Warrant, when endorsed in blank, shall be deemed negotiable; provided, that
the last holder of this Warrant as registered on the books of the Company may be
treated by the Company and all persons dealing with this Warrant as the absolute
owner hereof for any purposes and as the person entitled to exercise the rights
represented by this Warrant or to transfer hereof on the books of the Company,
any notice to the contrary notwithstanding, unless and until such holder seeks
to transfer registered ownership of this Warrant on the books of the Company and
such transfer is effected.
10. Miscellaneous.
(a) No Rights as Shareholder. Except as provided in the Agreement,
no holder of the Warrant or Warrants shall be entitled to vote or receive
dividends or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon the
holder of this Warrant, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant or Warrants shall have been exercised and
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the shares purchasable upon the exercise hereof shall have become deliverable,
as provided herein.
(b) Replacement. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of an indemnity
agreement, or bond reasonably satisfactory in form and amount to the Company or,
in the case of mutilation, on surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor.
(c) Notice of Capital Changes. In case:
(i) the Company shall declare any dividend or distribution
payable to the holders of its Common Stock;
(ii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation or business organization; or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give the
holder of this Warrant written notice, in the manner set forth in subparagraph
(d) below, of the date on which a record shall be taken for such dividend, or
distribution or for determining shareholders entitled to vote upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up and of the date when any such transaction shall take
place, as the case may be. Such written notice shall be given at least 30 days
prior to the transaction in question and not less than 20 days prior to the
record date in respect thereof.
(d) Notice. Any notice given to either party under this Warrant
shall be in writing, and any notice hereunder shall be deemed to have been given
upon the earlier of delivery thereof by hand delivery, by courier, or by
standard form of telecommunication or three (3) business days after the mailing
thereof if sent registered mail with postage prepaid, addressed to the Company
at its principal executive offices and to the holder at its address set forth in
the Company's books and records or at such other address as the holder may have
provided to the Company in writing.
(e) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed
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hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions in the Warrant.
(f) Governing Law. This Warrant shall be governed by and construed
under the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, this Warrant is executed as of this ___ day of
_______, 199___.
AUTOCYTE, INC.
By: _____________________________
Title: President
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EXHIBIT 1
NOTICE OF EXERCISE
TO: AUTOCYTE, INC.
1. Check Box that Applies:
/ / The undersigned hereby elects to purchase _____ shares of Common Stock
of AUTOCYTE, INC. pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price of such shares in full.
/ / The undersigned hereby elects to convert the attached warrant into
_________ shares of Common Stock of AUTOCYTE, INC. pursuant to the terms of the
attached Warrant.
2. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
__________________________________
(Name)
__________________________________
__________________________________
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares.
_________________________________________
Signature