EXHIBIT 4.2
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION. THIS WARRANT AND SUCH UNDERLYING SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED, RENOUNCED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH
APPLICABLE LAWS OF ANY FOREIGN JURISDICTION, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IN NOT REQUIRED AND SUCH
FOREIGN JURISDICTION LAWS HAVE BEEN SATISFIED.
SALIX HOLDINGS, LTD.
COMMON STOCK PURCHASE WARRANT
1. Number and Price of Shares Subject to Warrant. Subject to the terms
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and conditions herein set forth, __________(the "HOLDER"), is entitled to
purchase from SALIX HOLDINGS, LTD, a British Virgin Islands corporation (the
"COMPANY"), at any time on or before the earliest to occur of the following: (i)
January 17, 2000, or (ii) the closing of the Company's sale of all or
substantially all of its assets or the acquisition of the Company by another
entity by means of merger or other transaction as a result of which shareholders
of the Company immediately prior to such acquisition possess a minority of the
voting power of the acquiring entity immediately following such acquisition (the
"ACQUISITION"), _________ shares (which number of shares is subject to
adjustment as described below) of fully paid and nonassessable Common Stock of
the Company (the "SHARES") upon surrender hereof at the principal office of the
Company, and upon payment of the purchase price at said office in cash, by
check, by wire transfer or by cancellation of indebtedness. The Company shall
give notice to the Holder of an Acquisition at least thirty (30) days prior to
the closing of such Acquisition. Subject to adjustment as hereinafter provided,
the exercise price for one share of Common Stock (or such securities as may be
substituted for one share of Common Stock pursuant to the provisions hereinafter
set forth) shall be $3.00. The exercise price for one share of Common Stock (or
such securities as may be substituted for one share of Common Stock pursuant to
the provisions hereinafter set forth) payable from time to time upon the
exercise of this Warrant (whether such price be the price specified above or an
adjusted price determined as hereinafter provided) is referred to herein as the
"WARRANT PRICE."
2. Adjustment of Warrant Price and Number of Shares. The number and kind
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of securities issuable upon the exercise of this Warrant shall be subject to
adjustment from time to time and the
Company agrees to provide notice upon the happening of certain events as
follows:
(a) Adjustment for Dividends in Stock. In case at any time or from
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time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received, or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional securities or
other property of the Company by way of dividend or distribution, then and in
each case, the holder of this Warrant shall, upon the exercise hereof, be
entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of such other or additional securities or other property of
the Company which such holder would hold on the date of such exercise had it
been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional securities or
other property receivable by it as aforesaid during such period, giving effect
to all adjustments called for during such period by this paragraph (a) and
paragraphs (b) and (c) of this paragraph 2.
(b) Adjustment for Reclassification or Reorganization. In case of
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any reclassification or change of the outstanding securities of the Company or
of any reorganization of the Company (or any other corporation the stock or
securities of which are at the time receivable upon the exercise of this
Warrant) on or after the date hereof, then and in each such case the Company
shall give the holder of this Warrant at least thirty (30) days notice of the
proposed effective date of such transaction, and the holder of this Warrant,
upon the exercise hereof at any time after the consummation of such
reclassification, change or reorganization, shall be entitled to receive, in
lieu of the stock or other securities and property receivable upon the exercise
hereof prior to such consummation, the stock or other securities or property to
which such holder would have been entitled upon such consummation if such holder
had exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in paragraphs (a) and (c).
(c) Stock Splits and Reverse Stock Splits. If at any time on or
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after the date hereof the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of this Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number Of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such
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combination shall thereby be proportionately increased and the number of shares
receivable upon exercise of this Warrant shall thereby be proportionately
decreased.
3. No Fractional Shares. No fractional shares of Common Stock will be
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issued in connection with any subscription hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common Stock on the date of exercise, as determined in good faith by the
Company's Board of Directors.
4. No Stockholder Rights. This Warrant as such shall not entitle its
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holder to any of the rights of a stockholder of the company until the holder has
exercised this Warrant in accordance with Section 6 or Section 7 hereof.
5. Reservation of Stock. The Company covenants that during the period
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this Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Common Stock upon the exercise of this Warrant, The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon the exercise of this
Warrant.
6. Exercise of Warrant.
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(a) This Warrant may be exercised by Holder by the surrender of this
Warrant at the principal office of the Company, accompanied by payment in full
of the purchase price of the Shares purchased thereby, as described above. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the Shares or other securities issuable upon such
exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date. As promptly as practicable, the
Company shall issue and deliver to the person or persons entitled to receive the
same a certificate or certificates for the number of full shares of Common Stock
issuable upon such exercise, together with cash in lieu of any fraction of a
share as provided above.
7. Right to Convert Warrant for Common Stock.
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(a) Right to Convert. In addition to and without limiting the rights
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of the Holder under the terms of this Warrant, the Holder shall have the right
to convert this Warrant or any portion hereof (the "CONVERSION RIGHT") into
shares of Common Stock as provided in this Section 7 immediately prior to its
expiration after the Company has given the Holder notice pursuant to Section 1
of an Acquisition, subject to the
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restrictions set forth in subsection (c) hereof. Upon exercise of the Conversion
Rightwith respect to a particular number of shares subject to this Warrant (the
"CONVERTED WARRANT SHARES"), the Company shall deliver to the Holder (without
payment by the Holder of any cash or other consideration) that number of shares
of Common stock equal to the quotient obtained by dividing (x) the value of this
Warrant (or the specified portion hereof) on the Conversion Date (as defined in
subsection (b) hereof ), which value shall be determined by subtracting (A) the
aggregate Warrant Price of the Converted Warrant Shares immediately prior to the
exercise of the Conversion Right from (B) the aggregate fair market value of the
Converted Warrant Shares issuable upon exercise of this Warrant (or the
specified portion hereof) on the Conversion Date (as herein defined) by (y) the
fair market value of one share of Common Stock on the Conversion Date (as herein
defined). 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 Company 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 herein defined).
(b) Method of Exercise. The Conversion Right may be exercised by the
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Holder by the surrender of this Warrant prior to its expiration and after the
Company shall have given the Holder notice pursuant to Section 1 of an
Acquisition, at the principal office of the Company together with a written
statement specifying that the Holder thereby intends to exercise the Conversion
Right immediately prior to the expiration of this Warrant and indicating the
number of shares subject to this Warrant which are being surrendered (referred
to in subsection (a) hereof as the Converted Warrant Shares) in exercise of the
Conversion Right. Such conversion shall be effective immediately prior to the
expiration of this Warrant (the "CONVERSION DATE"). Certificates for the shares
of Common Stock issuable upon exercise of the Conversion Right (or any other
securities deliverable in lieu thereof under Section 2 (b)) shall be issued as
of the Conversion Date and shall be delivered to the Holder immediately
following the Conversion Date.
(c) Restrictions on Conversion Right. In the event that the
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Conversion Right contained herein would, at any time this Warrant remains
outstanding, be deemed by the Company's independent certified public accountants
to trigger a charge to the Company's earnings for financial reporting purposes,
then the Conversion Right shall automatically terminate upon the Company's
written notice to the Holder of such adverse accounting treatment.
(d) Determination of Fair Market Value. For purposes of this Section
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7, fair market value of a share of Common Stock as of a particular date (the
"DETERMINATION DATE") shall mean the effective per share consideration to be
received in an Acquisition by holders of the Common Stock, which price shall be
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as specified in the agreement entered into with respect to such Acquisition and
determined assuming receipt of the aggregate exercise price of all outstanding
warrants to purchase Common Stock (the "OUTSTANDING WARRANTS"), or if no such
price is set forth in the agreement concerning the Acquisition, then as
determined in good faith by the Company's Board of Directors upon a review of
relevant factors, including the aggregate exercise price of all Outstanding
Warrants.
8. Certificate of Adjustment. Whenever the Warrant Price or number or
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type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, the Company shall promptly deliver to the record holder of this
Warrant a certificate of an officer of the Company setting forth the nature of
such adjustment and a brief statement of the facts requiring such adjustment.
9. Notice of Proposed Transfers. Prior to any proposed transfer of this
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Warrant or the shares of Common Stock received on the exercise of this Warrant
(the "SECURITIES"), unless there is in effect a registration statement under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), covering the proposed
transfer, the Holder thereof shall give written notice to the Company 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, if the Company so requests, be accompanied (except in transactions in
compliance with Rule 144) by either (i) an unqualified written opinion of legal
counsel who shall be reasonably satisfactory to the Company addressed to the
Company and reasonably satisfactory in form and substance to the Company's
counsel, to the effect that the proposed transfer of the Securities may be
effected without registration under the Securities Act, or (ii) a "no action"
letter from the Securities 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 action be taken with respect
thereto, whereupon the Holder of the Securities shall be entitled to transfer
the Securities in accordance with the terms of the notice delivered by the
Holder to the Company; provided, however, no such registration statement or
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opinion of counsel shall be necessary for a transfer by a Holder to any
affiliate of such Holder, or a transfer by a Holder which is a partnership to a
partner of such partnership or a retired partner of such partnership who retires
after the date hereof, or to the estate of any such partner or retired partner
or the transfer by gift, will or intestate succession of any partner to his
spouse or lineal descendants or ancestors, if the transferee agrees in writing
to be subject to the terms hereof to the same extent as if such transferee were
the original Holder hereunder. Each certificate evidencing the Securities
transferred as above provided shall bear the appropriate restrictive legend set
forth above, except that such certificate shall not bear such restrictive legend
if in the opinion of counsel for the Company
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such legend is not required in order to establish compliance with any provisions
of the Securities Act.
10. Miscellaneous. This Warrant is issued under, and is subject to the
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terms of, that certain Note and Warrant Purchase Agreement dated January 17,
1995 between the Company and Purchasers described therein, as amended (the
"AGREEMENT"). This Warrant shall be governed by the laws of the State of
California. The headings in this Warrant are for purposes of convenience of
reference only, and shall not be deemed to constitute a part hereof. All notices
and other communications from the Company to the holder of this Warrant shall be
delivered personally or mailed by first class mail, postage prepaid, to the
address furnished to the Company in writing by the last holder of this warrant
who shall have furnished an address to the Company in writing, and if mailed
shall be deemed given three days after deposit in the U.S. Mail.
11. Taxes. The Company shall pay all taxes and other governmental charges
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that may be imposed in respect of the issuance or delivery of the Shares or any
portion thereof.
12. Amendment. Any term of this Warrant may be amended with the written
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consent of the Company and the holders of warrants representing not less than
seventy-five percent (75%) of the shares of Common Stock issuable upon exercise
of any and all outstanding warrants issued pursuant to the Agreement (the
"BRIDGE WARRANTS"), even without the consent of the holder hereof. Any amendment
effected in accordance with this Section 12 shall be binding upon each holder of
any Bridge Warrant, each future holder of all such Bridge Warrants, and the
Company; provided, however, that no special consideration or inducement may be
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given to any such holder in connection with such consent that is not given
ratably to all such holders, and that such amendment must apply to all such
holders ratably in accordance with the number of shares of Common Stock issuable
upon exercise of their outstanding Bridge Warrants. The Company shall promptly
give notice to all holders of outstanding Bridge Warrants of any amendment
effected in accordance with this Section 12.
ISSUED this ______ day of ___________, 1995.
SALIX HOLDINGS, LTD.,
a British Virgin Islands corporation
By:_________________________________
Xxxxx X. Xxxxxxxx, President
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