Exhibit 10.23
NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID
SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED OR
(iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS -NOT
REQUIRED.
WARRANT TO PURCHASE
SHARES OF SERIES D CONVERTIBLE PREFERRED STOCK
Expires May 29, 2006
THIS CERTIFIES THAT, for value received, ___________, is entitled to
subscribe for and purchase ____________ shares (as adjusted pursuant to
provisions hereof, the "Shares") of the fully paid and nonassessable Series D
Convertible Preferred Stock of Metasyn, Inc., a Delaware corporation (the
"Company"), at an initial purchase price per share of $3.00. The purchase price
of each share, as it may be adjusted from time to time as specified herein, is
herein referred to as the "Warrant Price.". As used herein, the term "Preferred
Stock" shall mean the Company's presently authorized Series D Convertible
Preferred Stock, and any stock into or for which such Series D Convertible
Preferred Stock may hereafter be converted or exchanged pursuant to the Restated
Certificate of Incorporation of the Company as from time to time amended as
provided by law and in such Certificate, and the term "Grant Date" shall mean
May 29, 1996.
1. Term. The purchase right represented by this Warrant is exercisable,
in whole or in part, at any time and from time to time from and after the Grant
Date and prior to the earlier of the tenth anniversary date of the Grant Date or
the fifth anniversary of the consummation of the Company's first public offering
of its Common Stock in which the price per share sold to the public exceeds
$6.00 (subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization) and the gross
proceeds received by the Company equal at least $15,000,000.
2. Method of Exercise; Net Issue Exercise.
2.1. Method of Exercise; Payment; Issuance of New Warrant. The
purchase right represented by this Warrant may be exercised by the holder
hereof, in whole or in part and from time to time, by either, at the election of
the holder hereof, (a) the surrender of this Warrant (with the notice of
exercise form attached hereto as Exhibit A duly executed) at the principal
office of the Company and by the payment to the Company, by check, of an amount
equal to the then applicable Warrant Price per share multiplied by the number of
Shares then being purchased or (b) if in connection with a registered public
offering of the Company's securities, the surrender of this Warrant (with the
notice of exercise form attached hereto as Exhibit A-1 duly executed) at the
principal office of the Company together with notice of arrangements reasonably
satisfactory to the Company for payment to the Company either by check or from
the proceeds of the sale of shares to be sold by the holder in such public
offering of an amount equal to the then applicable Warrant Price per share
multiplied by the number of Shares then being purchased. The person or persons
in whose name(s) any certificate(s) representing shares of Preferred Stock shall
be issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the shares represented thereby (and such shares shall be deemed to
have been issued) immediately prior to the close of business on the date or
dates upon which this Warrant is exercised. In the event of any exercise of the
rights represented by this Warrant, certificates for the shares of stock so
purchased shall be delivered to the holder hereof as soon as possible and in any
event within thirty days of receipt of such notice 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 as soon as possible and in
any event within such thirty-day period.
2.2. Net Issue Exercise.
(a) In lieu of exercising this Warrant for cash
pursuant to Section 2.1, holder may elect to receive shares equal to the value
of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with notice of such
election, in which event the Company shall issue to the holder a number of
shares of the Company's Preferred Stock computed using the following formula:
X= Y(A - B)
-----------
A
Where X = the number of shares of Preferred Stock to be issued to
the holder
Y = the number of shares of Preferred Stock purchasable
under this Warrant
A = the fair market value of one share of the Company's
Preferred Stock
B = Warrant Price (as adjusted to the date of such
calculations)
(b) For purposes of this Section 2.2, fair market
value of the Company's Preferred Stock shall mean the average of the closing bid
and asked prices of the Company's Preferred Stock quoted in the Over-The-Counter
Market Summary or the closing price quoted on any exchange on which the
Preferred Stock is listed, whichever is applicable, as published in the Western
Edition of The Wall Street Journal for the ten trading days prior to the date of
determination of fair market value. If the Preferred Stock is not traded
Over-The-Counter or on an exchange, the fair market value shall be the price per
share which the Company could obtain from a willing buyer for shares sold by the
Company from authorized but unissued shares, as such price shall be agreed by
the Company and the holder.
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3. Stock Fully Paid; Reservation of Shares. All Shares that may be
issued upon the exercise of the rights represented by this Warrant and Common
Stock issuable upon conversion of the Preferred Stock 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 the Warrant may be exercised, the Company will at all times have
authorized and reserved for the purpose of issuance upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of shares of its
Preferred Stock (and Common Stock issuable upon conversion thereof) to provide
for the exercise of the right represented by this Warrant.
4. Adjustment of Warrant Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of the Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) Reclassification or Merger. In case of any
reclassification, change or conversion of 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 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 (in form and substance satisfactory to the holder of this
Warrant) providing that the holder of this Warrant shall have the right to
exercise such new Warrant and upon such exercise to receive, in lieu of each
share of Preferred 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 or merger by a holder of one share
of Preferred Stock. Such new Warrant shall provide for adjustments that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Section 4. The provisions of this subparagraph (a) shall similarly apply to
successive reclassifications, changes, mergers and transfers.
(b) Subdivisions or Combination of Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Preferred Stock, the Warrant Price and the number of Shares issuable
upon exercise hereof shall be proportionately adjusted.
(c) Stock Dividends. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend payable in shares of
Preferred Stock (except any distribution specifically provided for in the
foregoing subparagraphs (a) and (b)), 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
Preferred Stock outstanding immediately prior to such dividend or distribution,
and (b) the denominator of which shall be the total number of shares of
Preferred Stock outstanding immediately after such dividend or distribution and
the number of Shares subject to this Warrant shall be proportionately adjusted.
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(d) No Impairment. The Company will not, by amendment of its
Restated Certificate of Incorporation or through any reorganization,
recapitalization, 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
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against impairment.
(e) Notices of Record Date. In the event of any taking by the
Company of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining shareholders who
are entitled to vote in connection with any proposed merger or consolidation of
the Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, the Company
shall mail to the holder of the Warrant, at least twenty (20) days prior to the
date specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.
5. Notice of Adjustments. Whenever the number and kind of securities
purchasable upon exercise of the Warrant and/or the Warrant Price shall be
adjusted pursuant to the provisions hereof, the Company shall within thirty (30)
days of such adjustment deliver a certificate signed by its chief financial
officer to the registered holder(s) hereof setting forth, in reasonable detail,
the event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Warrant Price after giving effect
to such adjustment.
6. Fractional Shares. No fractional shares of Preferred 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.
7. Compliance with Securities Act; Disposition of Warrant or Shares of
Preferred Stock.
(a) Compliance with Securities Act. The holder of this
Warrant, by acceptance hereof, agrees that this Warrant, the shares of Preferred
Stock to be issued upon exercise hereof and the Common Stock to be issued upon
conversion of such Preferred Stock are being acquired for investment and that
such holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Preferred Stock to be issued upon exercise hereof (or Common Stock
issued upon conversion of the Preferred Stock) except under circumstances which
will not result in a violation of the Securities Act of 1933, as amended (the
"Act"). This Warrant and all shares of Preferred Stock issued upon exercise of
this Warrant (unless registered under the Act) shall be stamped or imprinted
with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
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ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
(i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN
OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED OR (iii) RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE
EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
(b) Disposition of Warrant and Shares. With respect to any
offer, sale or other disposition of this Warrant or any shares of Preferred
Stock acquired pursuant to the exercise of this Warrant (or Common Stock issued
upon conversion of such Preferred Stock) prior to registration of such shares,
the holder hereof and each subsequent holder of the Warrant agrees to give
written notice to the Company prior thereto, describing briefly the manner
thereof, together with a written opinion of such holder's counsel, if reasonably
requested by the Company, to the effect that such offer, sale or other
disposition may be effected without registration or qualification (under the Act
as then in effect or any federal or state law then in effect) of this Warrant or
such shares of Preferred Stock or Common Stock and indicating whether or not
under the Act certificates for this Warrant or such shares of Preferred Stock or
Common Stock to be sold or otherwise disposed of require any restrictive legend
as to applicable restrictions on transferability in order to insure compliance
with the Act. Each certificate representing this Warrant or the shares of
Preferred Stock or Common Stock thus transferred (except a transfer pursuant to
Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Act, unless in the
aforesaid opinion of counsel for the holder, such legend is not required in
order to insure compliance with the Act. Nothing herein shall restrict the
transfer of this Warrant or any portion hereof by the initial holder hereof to
any partnership affiliated with the initial holder, or to any partner of any
such partnership provided such transfer may be made in compliance with
applicable federal and state securities laws. The Company may issue stop
transfer instructions to its transfer agent in connection with the foregoing
restrictions.
8. Rights as Shareholders: Information.
8.1. Shareholder Rights. No holder of the Warrant, as such,
shall be entitled to vote or receive dividends or be deemed the holder of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise thereof 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 receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised
and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
8.2. Financial Statements and Information. The Company shall
deliver to the registered holder hereof (i) within 90 days after the end of the
fiscal year of the Company, a consolidated balance sheet of the Company as of
the end of such year and a consolidated statement of income, retained earnings
and cash flows for such year, which year-end financial
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reports shall be in reasonable detail and certified by independent public
accountants of nationally recognized standing selected by the Company, and (ii)
within 20 days after the end of each fiscal quarter other than the last fiscal
quarter, unaudited consolidated statements of income, retained earnings and cash
flows for such quarter and a consolidated balance sheet as of the end of such
quarter. In addition, the Company shall deliver to the registered holder hereof
any other information or data provided to the shareholders of the Company. The
holders' rights under this Section 8.2 shall terminate and be of no further
force or effect upon the consummation of the Company's first public offering of
its Common Stock in which the price per share sold to the public exceeds $6.00
(subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization) and the gross proceeds
received by the Company equal at least $15,000,000.
9. Additional Rights.
9.1. Secondary Sales. The Company agrees to assist the holder
of this Warrant in obtaining liquidity if opportunities to make secondary sales
of the Company's securities become available. To this end, the Company will
promptly provide the holder of this Warrant with notice of any offer to acquire
from the Company's security holders more than five percent (5%) of the total
voting power of the Company and will cooperate with the holder in arranging the
sale of this Warrant to the person or persons making such offer.
9.2. Mergers. Unless the Company provides the holder of this
Warrant with at least 30 days' notice of the terms and conditions of the
proposed transaction, the Company will not (i) sell, lease, exchange, convey or
otherwise dispose of all or substantially all of its property or business, or
(ii) merge into or consolidate with any other corporation (other than a
wholly-owned subsidiary of the Company), or effect any transaction (including a
merger or other reorganization) or series of related transactions, in which more
than 50% of the voting power of the Company is disposed of. The Company will
cooperate with the holder in arranging the sale of this Warrant in connection
with any such transaction.
10. Representations and Warranties. This Warrant is issued and
delivered on the basis of the following:
(a) This Warrant has been duly authorized and executed by the
Company and when delivered will be the valid and binding obligation of the
Company enforceable in accordance with its terms;
(b) The Shares have been duly authorized and reserved for
issuance by the Company and, when issued in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable;
(c) The rights, preferences, privileges and restrictions
granted to or imposed upon the shares of Preferred Stock and the holders thereof
are as set forth in the Company's Restated Certificate of Incorporation, as
amended, a true and complete copy of which has been delivered to the original
Warrantholder;
(d) The shares of Common Stock issuable upon conversion of the
Shares have
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been duly authorized and reserved and, when issued in accordance with the terms
of the Company's Restated Certificate of Incorporation, as amended, will be
validly issued, fully paid and nonassessable; and
(e) The execution and delivery of this Warrant are not, and
the issuance of the Shares upon exercise of this Warrant in accordance with the
terms hereof (and the shares of Common Stock issuable upon conversion of the
Shares) will not be, inconsistent with the Company's Restated Certificate of
Incorporation or by-laws, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to the Company, and do not and
will not contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound or require the consent or approval of, the giving
of notice to, the registration with or the taking of any action in respect of or
by, any Federal, state or local government authority or agency or other person.
11. Amendment of Conversion Rights. During the term of this Warrant,
the Company agrees that it shall not amend its Restated Certificate of
Incorporation without the prior written consent of holders of not less than 66
2/3% of the Preferred Stock (including, for this purpose, Shares subject to this
Warrant) if as a result of such amendment any of the conversion rights,
including without limitation the conversion price or antidilution protection
privileges, of the Preferred Stock would be adversely affected.
12. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
13. 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
each such holder at its address as shown on the books of the Company or to the
Company at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
14. Binding Effect on Successors. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets, and all of the obligations
of the Company relating to the Preferred Stock issuable upon the exercise of
this Warrant shall survive the exercise and termination of this Warrant and all
of the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof. The Company will, at the time of
the exercise of this Warrant, in whole or in part, upon request of the holder
hereof but at the Company's expense, acknowledge in writing its continuing
obligation to the holder hereof in respect of any rights (including, without
limitation, any right to registration of the shares of Registrable Securities)
to which the holder hereof shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the holder hereof to
make any such request shall not affect the continuing obligation of the Company
to the holder hereof in respect of such rights.
15. Lost Warrants or Stock Certificates. The Company covenants to the
holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft,
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destruction, or mutilation of this Warrant or any stock certificate and, in the
case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant or stock certificate, the
Company will make and deliver a new Warrant or stock certificate, or like tenor,
in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.
16. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
17. Governing Law. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS.
METASYN, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
Date: May 29, 1996
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EXHIBIT A
Notice of Exercise
To:
1. The undersigned hereby elects to purchase ____ shares of Series ___
Preferred Stock of ____________ pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name or names as are specified
below:
(Name)
(Address)
3. The undersigned represents that the aforesaid shares 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.
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(Signature)
----------------------
(Date)
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EXHIBIT A-1
Notice of Exercise
To:
1. Contingent upon and effective immediately prior to the closing (the
"Closing") of the Company's public offering contemplated by the Registration
Statement on Form S-______, filed __________________, 19__, the undersigned
hereby elects to purchase ________ shares of Series D Convertible Preferred
Stock of the Company (or such lesser number of shares as may be sold on behalf
of the undersigned at the Closing) pursuant to the terms of the attached
Warrant.
2. Please deliver to the custodian for the selling shareholders a stock
certificate representing such _________ shares.
3. The undersigned has instructed the custodian for the selling
shareholders to deliver to the Company $_______________ or, if less, the net
proceeds due the undersigned from the sale of shares in the aforesaid public
offering. If such net proceeds are less than the purchase price for such shares,
the undersigned agrees to deliver the difference to the Company prior to the
Closing.
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(Signature)
---------------------
Date
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