1
Exhibit 10.14
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH WARRANT IS REGISTERED
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON PURCHASE OF THIS
WARRANT ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN
SECTIONS 4 AND 11 OF THIS WARRANT
Warrant No. F- Number of Shares:____
(subject to adjustment)
Date of Issuance: February __, 1997
ASCENT PEDIATRICS, INC.
Common Stock Purchase Warrant
(Void after February , 2002)
Ascent Pediatrics, Inc., a Delaware corporation (the "Company"), for
value received, hereby certifies that Chestnut Partners, Inc., or its registered
assigns (the "Registered Holder"), is entitled, subject to the terms set forth
below, upon exercise of this Warrant to purchase from the Company, at any time
or from time to time on or after the first to occur of (x) March 1, 1997 and (y)
the occurrence of a Change in Control of the Company (as defined below) and on
or before February ___, 2002 at not later than 5:00 p.m. (Boston, Massachusetts
time), _____________________ shares of the Company's common stock, $.00004 par
value per share (the "Common Stock"), at a purchase price of $6.50 per share.
The shares purchasable upon exercise of this Warrant, and the purchase price per
share, each as adjusted from time to time pursuant to the provisions of this
Warrant, are hereinafter referred to as the "Warrant Shares" and the "Purchase
Price," respectively.
This Warrant is one of a series of warrants comprising the Company's
Series F Common Warrants (as defined in a certain Series F Convertible Preferred
Stock and Warrant Purchase Agreement, dated June 28, 1996, among the Company and
the Purchasers named therein, as amended, (the "Purchase Agreement")).
2
For purposes of this Warrant, the following events shall be deemed to
be a Change in Control of the Company:
(a) the date on which any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company, any corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportion as
their ownership of stock of the Company, or the Registered Holder or
any of its affiliates), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing more than 50% of the combined
voting power of the Company's then outstanding securities;
(b) the closing of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; and
(c) a complete liquidation of the Company or the sale or
disposition by the Company of all or substantially all of the Company's
assets.
1. Purchase.
(a) This Warrant may be exercised by the Registered Holder, in
whole or in part, by surrendering this Warrant, with the purchase form
appended hereto as Exhibit I duly executed by such Registered Holder or
by such Registered Holder's duly authorized attorney, at the principal
office of the Company, or at such other office or agency as the Company
may designate, accompanied by payment in full, in lawful currency of
the United States, of the Purchase Price payable in respect of the
number of shares of Warrant Shares purchased upon such exercise.
(b) The Registered Holder may, at its option, elect to pay
some or all of the Purchase Price payable upon an exercise of this
Warrant by cancelling a portion of this Warrant exercisable for such
number of Warrant Shares as is determined by dividing (i) the total
Purchase Price payable in respect of the number of Warrant Shares being
purchased upon such exercise by (ii) the excess of the Fair Market
Value per share of Common Stock as of the effective
- 2 -
3
date of exercise, as determined pursuant to Subsection 1(c) below (the "Exercise
Date") over the Purchase Price per share. The Fair Market Value per share of
Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities exchange,
the Nasdaq National Market, the Nasdaq system, or another nationally recognized
exchange or trading system as of the Exercise Date, the Fair Market Value per
share of Common Stock shall be deemed to be the last reported sale price per
share of Common Stock thereon on the Exercise Date; or, if no such price is
reported on such date, such price on the next preceding business day (provided
that if no such price is reported on the next preceding business day, the Fair
Market Value per share of Common Stock shall be determined pursuant to clause
(ii)).
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq National Market, the Nasdaq system or another nationally
recognized exchange or trading system as of the Exercise Date, the Fair Market
Value per share of Common Stock shall be deemed to be the amount most recently
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company); and, upon request of the Registered
Holder, the Board of Directors (or a representative thereof) shall promptly
notify the Registered Holder of the Fair Market Value per share of Common Stock.
Notwithstanding the foregoing, if the Board of Directors has not made such a
determination within the three-month period prior to the Exercise Date, then (A)
the Fair Market Value per share of Common Stock shall be the amount next
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company), (B) the Board of Directors shall make
such a determination within 15 days of a request by the Registered Holder that
it do so, and (C) the exercise of this Warrant pursuant to this Subsection 1(b)
shall be delayed until such determination is made.
(c) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in Subsection 1(a) above.
At such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in Subsection
1(d) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such
- 3 -
4
certificates.
(d) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Registered Holder (upon payment by such Registered
Holder of any applicable transfer taxes) may direct:
(i) certificate or certificates for the number of full Warrant
Shares to which such Registered Holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which such Registered Holder would
otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the number of such shares purchased by the Registered
Holder upon such exercise as provided in Subsection 1(a) above.
2. Adjustments.
(a) If the outstanding shares of the Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of the Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend be proportionately reduced. If outstanding
shares of the Company's Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased.
(b) In the event that the Company consummates an underwritten
public offering of Common Stock pursuant to a registration statement filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, covering the initial offer and sale of Common Stock to the public in
which gross proceeds to the Company from such sale (before deducting
underwriting discounts and expenses of sale) are not less than $10,000,000 (a
"Qualifying Initial Public Offering"), then the Purchase Price in effect
immediately prior to the consummation of such Qualifying Initial Public Offering
(without regard to the operation of this
- 4 -
5
Subsection 2(b)) (the "Pre-IPO Purchase Price") shall be adjusted to be equal to
the per share price to the public in the Qualifying Initial Public Offering (the
"IPO Price") if the IPO Price exceeds the Pre-IPO Price (in which event, the IPO
Price shall then become the Purchase Price and shall thereafter be subject to
further adjustment as provided herein, other than pursuant to this Section
2(b)).
(c) When any adjustment is required to be made in the Purchase
Price as a result of the operation of Subsection 2(a) or 2(b), the number of
Warrant Shares purchasable upon the exercise of this Warrant shall be changed to
the number determined by dividing (i) an amount equal to the number of shares
issuable upon the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Purchase Price in effect immediately prior to such adjustment,
by (ii) the Purchase Price in effect immediately after such adjustment.
(d) If there shall occur any capital reorganization or
reclassification of or other change in the Common Stock (other than a change in
par value or a subdivision or combination as provided for in Subsection 2(a)
above), or a transfer of all or substantially all of the assets of the Company
then, as part of any such reorganization, reclassification, as the case may be,
lawful provision shall be made so that the Registered Holder of this Warrant
shall receive upon the exercise hereof the kind and amount of shares of stock or
other securities or property which such Registered Holder would have been
entitled to receive if, immediately prior to any such reorganization,
reclassification, as the case may be, such Registered Holder had held the number
of shares of Common Stock which were then purchasable upon the exercise of this
Warrant. In any such case, appropriate adjustment (as reasonably determined in
good faith by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the Registered Holder of this Warrant, such that the
provisions set forth in this Section 2 (including provisions with respect to
adjustment of the Purchase Price) shall thereafter be applicable, as nearly as
is reasonably practicable, in relation to any shares of stock or other
securities or property thereafter deliverable upon the exercise of this Warrant.
3. Fractional Shares. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares (as determined on an
aggregate basis for each exercise pursuant to this Warrant), but shall make an
adjustment therefor in cash on the basis of the Fair Market Value per share of
Common Stock, as determined pursuant to Subsection 1(b) above.
- 5 -
6
4. Requirements for Transfer.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company (which opinion may be rendered by (x) staff counsel to the holder of
the Warrant or (y) a law firm then designated by the holder as its special
counsel) to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
(b) Each certificate representing Warrant Shares shall bear a
legend substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
offered, sold or otherwise transferred, pledged or hypothecated unless
and until such securities are registered under such Act or an opinion
of counsel satisfactory to the Company (which opinion may be rendered
by (x) staff counsel to the holder of the Warrant or (y) a law firm
then designated by the holder as its special counsel) is obtained to
the effect that such registration is not required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
5. No Impairment. The Company will not, by amendment of its Certificate
of Incorporation or through reorganization, consolidation, merger, dissolution,
sale of assets or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms 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.
6. Liquidating Dividends. If the Company pays a dividend or makes a
distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a
"Liquidating Dividend"), then the Company will pay or distribute to the
Registered Holder of this Warrant, upon the exercise hereof,
- 6 -
7
in addition to the Warrant Shares purchased upon such exercise, the Liquidating
Dividend which would have been paid to such Registered Holder if it had been the
owner of record of such Warrant Shares immediately prior to the date on which a
record is taken for such Liquidating Dividend or, if no record is taken, the
date as of which the record holders of Common Stock entitled to such dividends
or distribution are to be determined.
7. Notices of Record Date, etc. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time deliverable upon the
exercise of this Warrant) for the purpose of entitling or enabling them to
receive any dividend or other distribution, or to receive any right to subscribe
for or purchase any shares of stock of any class or any other securities, or to
receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
then, and in each such case, the Company will send or cause to be sent to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a 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, (ii) the date on which such conversion was effective, or
(iii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, 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 (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be given at least ten (10) days, or if such advance notice is not
practicable, then such shorter period as may be practicable, prior to the record
date or effective date for an event specified in Subsection 7(a), (b) or (c).
Such notice shall be given no later than ten (10) days after the effective date
of an event specified in Subsection 7(b).
- 7 -
8
8. Reservation of Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant
such number of Warrant Shares and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.
9. Exchange of Warrants. Upon the surrender by the Registered Holder of
any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Holder, at the Company's
expense, a new Warrant or Warrants of like tenor, in the name of such Registered
Holder or as such Registered Holder (upon payment by such Registered Holder of
any applicable transfer taxes) may direct, calling in the aggregate on the face
or faces thereof for the number of shares of Common Stock called for on the face
or faces of the Warrant or Warrants so surrendered.
10. Replacement of Warrants. Upon 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) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company (provided that, for purposes of this Section 10, a
letter of indemnity from an entity having total assets of at least $100,000,000
shall be deemed sufficient indemnity), or (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.
11. Transfers, etc.
(a) The Company will maintain a register containing the names
and addresses of the Registered Holders of this Warrant. Any Registered Holder
may change its or his address as shown on the warrant register by written notice
to the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant with a properly executed assignment (in the form of
Exhibit II hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
- 8 -
9
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
(d) Overseas Holders. If such Registered Holder's principal
address is a location outside of the United States of America and its
territories, such Registered Holder (an "Overseas Holder"):
(i) is not a U.S. person (as defined in Securities
Act Rule 902(o) and is not acquiring this Warrant or any Warrant Shares
purchased hereunder for the account or benefit of any U.S. person;
(ii) will transfer this Warrant or any Warrant Shares
purchased pursuant to any exercise hereunder only (x) in accordance with the
provisions of Regulation S promulgated under the Securities Act ("Regulation
S"), (y) pursuant to an effective registration statement under the Securities
Act, or (z) pursuant to an available exemption from registration under the
Securities Act; and
(iii) will not offer or sell this Warrant or any
Warrant Shares purchased hereunder to a U.S. person or to or for the account or
benefit of a U.S. person prior to the expiration of the one-year period after
the date of this Warrant, with respect to a transfer of this Warrant, or one
year after the exercise of this Warrant, with respect to any Warrant Shares
purchased hereunder.
12. Giving of Notices, etc. All notices and other communications from
the Company to the Registered Holder of this Warrant shall be in writing and
shall be deemed effective (i) upon delivery by hand, (ii) two business days
after deposit with an express courier service for delivery no later than two
business days after such deposit, addressed to the Registered Holder at the
address set forth on the warrant register maintained by the Company (or at such
other address as may have been last furnished to the Company in writing by the
holder), or (iii) upon confirmation of transmittal by telecopy to the Registered
Holder, with a hard copy sent in accordance with the preceding clause (ii),
- 9 -
10
to the telecopy number set forth on the warrant register maintained by the
Company (or to such telecopy number as may have been last furnished to the
Company in writing by the holder). All notices and other communications from the
Registered Holder of this Warrant to the Company shall be in writing and shall
be deemed effective (i) upon delivery by hand, (ii) two business days after
deposit with an express courier service for delivery no later than two business
days after such deposit, addressed to the Company at its principal office set
forth below, or (iii) upon confirmation of transmittal by telecopy, with a hard
copy sent in accordance with the preceding clause (ii), to the telecopy number
of the Company set forth below. If the Company should at any time change the
location of its principal office to a place other than as set forth below or
change its telecopy number to a number other than as set forth below, it shall
give prompt written notice to the Registered Holder of this Warrant in the
manner prescribed herein, and thereafter all references in this Warrant to the
location of its principal office or telecopy number at the particular time shall
be as so specified in such notice.
13. No Rights as Stockholder. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
14. Change or Waiver. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the holders of at least a majority of the Series F
Common Warrants (as defined in the Series F Convertible Preferred Stock and
Warrant Purchase Agreement, dated June 28, 1996, among the Company and the
Purchasers named therein).
15. Headings. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
16. Governing Law. This Warrant will be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
- 10 -
11
17. Termination. This Warrant, and the rights to purchase shares of
Common Stock hereunder, shall terminate immediately upon exercise of the Series
F Put Option (as defined in Section 7.4(c) of the Purchase Agreement) in
accordance with the terms of the Purchase Agreement.
ASCENT PEDIATRICS, INC.
[Corporate Seal] By: ________________________________
ATTEST: Title: _____________________________
Address: 000 Xxxxxxxxxxx Xxxxxx
Xxxxx X000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
ACCEPTED:
By:_______________________
Name:_____________________
- 11 -
12
EXHIBIT I
PURCHASE FORM
To:________________ Dated:_____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase shares of the Common
Stock covered by such Warrant and herewith makes payment of $___________,
representing the full purchase price for such shares at the price per share
provided for in such Warrant.
Signature:
Address: ______________________
______________________
13
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED,______________ hereby sells, assigns and transfers
all of the rights of the undersigned under the attached Warrant (No. __) with
respect to the number of shares of Common Stock covered thereby set forth below,
unto:
Name of Assignee Address No. of Shares
---------------- ------- -------------
Dated:__________________________ Signature:__________________________
Dated:__________________________ Signature:__________________________
