EXHIBIT 4.1
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THE COMPANY
RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES
(CONCURRED IN BY LEGAL COUNSEL FOR THE COMPANY) STATING THAT SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION, OR (C) THE COMPANY OTHERWISE SATISFIES ITSELF THAT
SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
No. 1999-1 WARRANT TO PURCHASE
ISSUED: June 1, 1999 UP TO 100,000 SHARES OF
VOID AFTER: March 22, 2002 COMMON STOCK, BASED ON
A VESTING SCHEDULE
OSTEX INTERNATIONAL, INC.
COMMON STOCK PURCHASE WARRANT
THIS IS TO CERTIFY that, for value received, Xxxxxx & Co. Securities
Inc., or registered assigns (the "Holder"), is entitled, at any time or from
time to time not later than 5:00 p.m., Pacific Standard Time on March 22, 2002
(the "Expiration Date"), subject to the provisions hereof, to purchase up to One
Hundred Thousand (100,000) fully paid and nonassessable shares of the Common
Stock, par value of $.01 per share (the "Warrant Stock"), of Ostex
International, Inc., a Washington corporation (the "Company"), at the exercise
price of $2.00 per share (the "Exercise Price") (such number of shares and the
Exercise Price being subject to adjustment as provided herein); provided,
however, that Holder may only purchase that number of Warrant Stock in which
Holder has vested, based on the vesting schedule described in Section 1.1.
This Warrant is subject to the following additional terms and
conditions:
1. METHOD OF EXERCISE
1.1 VESTING SCHEDULE
This Warrant will vest and become exercisable in twelve (12) equal
monthly installments on the twenty-second (22nd) day of each calendar month
during the "Vesting Term," i.e., the vesting is at the rate of 8333-1/3 Warrant
Shares per month. The Vesting Term begins March 23, 1999 and ends March 22,
2000; provided, however, that in order to vest, Holder must be providing
services to the Company pursuant to the Letter Agreement between Holder and the
Company, dated March 24, 1999 (the "Letter Agreement"). If the Company
terminates Holder's services under the Letter Agreement other than because of a
material breach or nonperformance by Holder, Holder will vest in the entire
remaining Warrant Shares effective as of the date of termination.
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1.2 CASH EXERCISE RIGHT
To the extent vested, this Warrant may be exercised in whole or in part
by delivering to the Company at its principal place of business (a) this Warrant
certificate, (b) the form of Election to Purchase attached hereto as Exhibit A
duly completed and executed by the Holder, and (c) a bank check payable to the
Company, in the amount of the Exercise Price multiplied by the number of shares
for which this Warrant is being exercised (the "Purchase Price").
2. DELIVERY OF STOCK CERTIFICATE
Within twenty (20) days after the exercise of this Warrant (in full or
in part), the Company shall issue in the name of and deliver to the Holder (a) a
certificate or certificates for the number of fully paid and nonassessable
shares of Warrant Stock to which the Holder shall be entitled upon such exercise
and (b) a new Warrant of like tenor to purchase up to that number of shares of
Warrant Stock, if any, not previously purchased by the Holder. The Holder shall
for all purposes be deemed to have become the holder of record of such shares of
Warrant Stock on the date on which this Warrant was properly exercised in
accordance with Section 1, irrespective of the date of delivery of the
certificate or certificates representing the Warrant Stock; provided that, if
the date of such exercise is a date when the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of record of
such shares of Warrant Stock at the close of business on the next succeeding
date on which the stock transfer books are open.
3. RESERVATION OF WARRANT STOCK
The Company covenants and agrees that the Company will at all times
have authorized and reserved a sufficient number of shares of Common Stock of
the Company to provide for the exercise of the rights represented by this
Warrant.
4. EXPIRATION
The Warrant evidenced hereby shall be void and of no effect and all
rights hereunder shall cease after 5:00 p.m. Pacific Standard Time on the
Expiration Date. All restrictions set forth herein on the shares of stock issued
upon exercise of any rights hereunder shall survive such exercise and expiration
of the rights granted hereunder.
5. ADJUSTMENTS TO WARRANT
5.1 ADJUSTMENT FOR STOCK SPLIT, ETC.
In case the Company shall issue any shares of its Common Stock as a
stock dividend or subdivide the number of outstanding shares of Common Stock
into a greater number of shares, then, in either of such cases, the Exercise
Price in effect at the time of such action shall be proportionately reduced and
the number of shares of Warrant Stock at that time purchasable pursuant to this
Warrant shall be proportionately increased; and, conversely, in the event the
Company shall contract the number of outstanding shares of Common Stock by
combining such shares into a smaller number of shares, then, in such case, the
Exercise Price in effect at the time of such action shall be proportionately
increased and the number of shares of Warrant Stock at that time purchasable
pursuant to this Warrant shall be proportionately decreased. Any dividend paid
or distributed on the Common Stock in stock of any other class of securities
convertible into shares of Common Stock shall be treated as a dividend paid in
Common Stock to the extent that shares of Common Stock are issuable upon the
conversion thereof.
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5.2 ADJUSTMENT TO NUMBER OF SHARES
Upon each adjustment in the Exercise Price pursuant to this Section 5,
the number of shares of Warrant Stock purchasable hereunder shall be adjusted,
to the nearest whole share, to the product obtained by multiplying such number
of shares purchasable immediately prior to such adjustment in the Exercise Price
by a fraction, the numerator of which shall be the Exercise Price immediately
prior to such adjustment and the denominator of which shall be the Exercise
Price immediately thereafter.
6. REORGANIZATION
Upon a Reorganization (as defined below) of the Company before the
Expiration Date, as a result of which the shareholders of the Company receive
cash, stock or other property in exchange for their shares of Common Stock, all
Warrant Shares shall vest and become immediately exercisable and a lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive, upon exercise of this Warrant at any time through the Expiration Date,
the kind and amount of stock, other securities or assets receivable upon such
Reorganization to which a holder of the Warrant Stock issuable upon exercise of
this Warrant would have been entitled in such Reorganization if this Warrant had
been exercised immediately prior to such Reorganization. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interest of the Holder after the Reorganization
to the end that the provisions of this Warrant (including adjustments of the
Exercise Price and the number and type of securities purchasable pursuant to the
terms of this Warrant) shall be applicable after that event, as near as
reasonably may be, in relation to any shares deliverable after that event upon
the exercise of this Warrant. For purposes of this Section 6, Reorganization
means either of the following: (a) When any "person," as such term is used in
sections 13(d) and 14(d) of the Exchange Act (other than a shareholder of the
Company on the date of this Warrant, the Company, a Subsidiary or an employee
benefit plan of the Company, including any trustee of such plan acting as
trustee) becomes, after the date of this Warrant, the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities; or (ii) the
occurrence of a transaction requiring shareholder approval, and involving the
sale of all or substantially all of the assets of the Company or the merger of
the Company with or into another corporation.
7. RESTRICTIONS ON TRANSFER
This Warrant and the Common Stock issuable upon exercise hereof have
not been registered under the Securities Act of 1933, as amended, or any
applicable state law, and no interest therein may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (a) there is an
effective registration statement under such Act and applicable state securities
laws covering any such transaction involving said securities, (b) the Company
receives an opinion of legal counsel for the holder of these securities
(concurred in by legal counsel for the Company) stating that such transaction is
exempt from registration, or (c) the Company otherwise satisfies itself that
such transaction is exempt from registration.
8. LEGEND
A legend setting forth or referring to the restrictions stated in
Section 7 shall be placed on this Warrant, any replacement hereof and any
certificates representing Common Stock issued pursuant to the exercise of this
Warrant, and a stop transfer restriction or order shall be placed on the books
of the Company and with any transfer agents against this Warrant and shares of
Common Stock until they may be legally sold or otherwise transferred.
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9. FRACTIONAL SHARES
No fractional shares shall be issued upon the exercise of the Warrant.
In lieu of fractional shares, the Company shall pay the Holder a sum in cash
equal to the fair market value of the fractional shares (as determined by the
Company's Board of Directors) on the date of exercise. For purposes of this
Section 9,the fair market value of a share of Warrant Stock shall be deemed to
be equal to the average of the closing bid and asked prices of the Common Stock
as quoted in the Over-the-Counter Market Summary or the last reported sale price
of the Common Stock or the closing price quoted on the Nasdaq National Market
System or on any exchange on which the Common Stock is then listed, whichever is
applicable, for the five (5) trading days prior to the date of exercise of this
Warrant; provided, however, that if there is no public market for the Common
Stock at the time of exercise, then such fair market value shall be determined
in good faith by the Board of Directors.
10. HOLDER AS OWNER
The Company may deem and treat the Holder at all times as the absolute
owner of the Warrant evidenced hereby for all purposes regardless of any notice
to the contrary.
11. NO SHAREHOLDER RIGHT
This Warrant shall not entitle the Holder hereof to any voting rights
or any other rights as a shareholder of the Company, or to any other rights
whatsoever except the rights stated herein; and no dividend or interest shall be
payable or shall accrue in respect of this Warrant or the shares purchasable
hereunder unless, and until, and except to the extent that, this Warrant shall
be exercised.
12. APPLICABLE LAW
The validity, interpretation and performance of this Warrant shall be
governed by the laws of the State of Washington.
13. DESTRUCTION OF WARRANT
The Company represents and warrants to the Holder hereof that upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon receipt of an affidavit and indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company at its expense will make
and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Warrant.
14. NOTICES
Any notice, request or other document required or permitted to be given
or delivered to the Holder hereof or the Company shall be delivered or shall be
sent by certified or registered mail, postage prepaid, to the Holder at its
address as shown on the books of the Company or to the Company at its principal
place of business.
15. INVESTMENT INTENT
By accepting this Warrant, the Holder represents that it is acquiring
this Warrant for investment and not with a view to, or for sale in connection
with, any distribution thereof.
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16. REGISTRATION RIGHTS
The Holder is not entitled to registration rights with respect to this
Warrant or the Warrant Stock.
WITNESS, the signatures of the Company's duly authorized officer.
Date of Issue: June 1, 1999.
OSTEX INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Chairman, President and Chief Executive
Officer
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