Exhibit 4.7
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR
DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION.
WARRANT TO PURCHASE 1231 SHARES OF COMMON STOCK
October 28, 2002
THIS CERTIFIES THAT, for value received, GENERAL ELECTRIC CAPITAL CORPORATION
("Holder") is entitled to subscribe for and purchase One Thousand Two Hundred
Thirty One (1,231) shares of the fully paid and nonassessable Common Stock (the
"Shares") of Altus Biologics, Inc., a Massachusetts corporation (the "Company"),
at the Warrant Price (as hereinafter defined), 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, and
any stock into which such Common Stock may hereafter be converted or exchanged.
1. Warrant Price. The Warrant Price shall initially be Four and 27/100 dollars
($4.27) per share, subject to adjustment as provided in Section 7 below.
2. Conditions to Exercise. The purchase right represented by this Warrant may be
exercised at any time, or from time to time, in whole or in part during the term
commencing on the date hereof and ending at 5:00 P.M. Eastern time on the
seventh anniversary of the date of this Warrant.
3. Method of Exercise; Payment; Issuance of Shares; Issuance of New Warrant.
(a) Cash Exercise. Subject to Section 2 hereof, the purchase right
represented by this Warrant may be exercised by the Holder hereof, in whole or
in part, by the surrender of this Warrant (with a duly executed Notice of
Exercise in the form attached hereto) at the principal office of the Company (as
set forth in Section 17 below) and by 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. In the event of any exercise of the
rights represented by this Warrant, certificates for the shares of stock so
purchased shall be in the name of, and delivered to, the Holder hereof, or as
such Holder may direct (subject to the terms of transfer contained herein and
upon payment by such Holder hereof of any applicable transfer taxes). Such
delivery shall be made within 30 days after exercise of the Warrant and at the
Company's expense and, unless this Warrant has been fully exercised or expired,
a new Warrant having terms and conditions substantially identical to this
Warrant and representing the portion of the Shares, if any, with respect to
which this Warrant shall not have been exercised, shall also be issued to the
Holder hereof within 30 days after exercise of the Warrant.
(b) Net Issue Exercise. In lieu of exercising this Warrant pursuant to
Section 3(a), Holder may elect to receive shares equal to the value of this
Warrant (or of any portion thereof remaining unexercised) 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 Holder the number of shares
of the Company's Common Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to Holder
Y = the number of shares of Common Stock purchasable under this Warrant
(at the date of such calculation).
A = the Fair Market Value of one share of the Company's Common Stock (at
the date of such calculation).
B = Warrant Price (as adjusted to the date of such calculation).
(c) Fair Market Value. For purposes of this Section 3, Fair Market Value of
one share of the Company's Common Stock shall mean:
(i) In the event of an exercise in connection with an Initial Public
Offering, the per share Fair Market Value for the Common Stock shall be the
Offering Price at which the underwriters initially sell Common Stock to the
public; or
(ii) The average of the closing bid and asked prices of Common Stock
quoted in the Over-The-Counter Market Summary, or the last reported sale
price of the Common Stock quoted on the Nasdaq National Market ("NNM") or
on any exchange on which the Common Stock is listed, whichever is
applicable, as published in the Wall Street Journal for the ten (10)
trading days prior to the date of determination of Fair Market Value; or
(iii) In the event of an exercise in connection with a merger,
acquisition or other consolidation in which the Company is not the
surviving entity, the per share Fair Market Value for the Common Stock
shall be the value to be received per share of Common Stock by all holders
of the Common Stock in such transaction as determined by the Board of
Directors; or
(iv) In any other instance, the per share Fair Market Value for the
Common Stock shall be as determined in good faith by the Company's Board of
Directors.
In the event of 3(c)(iii) or 3(c)(iv), above, the Company's Board of
Directors shall prepare a certificate, to be signed by an authorized
officer of the Company, setting forth in reasonable detail the basis for
and method of determination of the per share Fair Market Value of the
Common Stock. The Board will also certify to the Holder that this per share
Fair Market Value will be applicable to all holders of the Company's Common
Stock. Such certification must be made to Holder at least thirty (30)
business days prior
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to the proposed effective date of the merger, consolidation, sale, or other
triggering event as defined in 3(c)(iii) or 3(c)(iv).
(d) Automatic Exercise. To the extent this Warrant is not previously
exercised, it shall be automatically exercised in accordance with Sections 3(b)
and 3(c) hereof (even if not surrendered) immediately before its expiration.
4. Representations and Warranties of Holder and Restrictions on Transfer Imposed
by the Securities Act of 1933.
(a) Representations and Warranties by Xxxxxx. The Holder represents and
warrants to the Company with respect to this purchase as follows:
(i) The Holder has substantial experience in evaluating and investing
in private placement transactions of securities of companies similar to the
Company so that the Holder is capable of evaluating the merits and risks of
its investment in the Company and has the capacity to protect its
interests.
(ii) The Holder is acquiring the Warrant and the Shares of Common
Stock issuable upon exercise of the Warrant (collectively the "Securities")
for investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof. The Holder understands that the
Securities have not been registered under the Securities Act of 1933, as
amended (the "Act") by reason of a specific exemption from the registration
provisions of the Act which depends upon, among other things, the bona fide
nature of the investment intent as expressed herein. In this connection,
the Holder understands that, in the view of the Securities and Exchange
Commission (the "SEC"), the statutory basis for such exemption may be
unavailable if this representation was predicated solely upon a present
intention to hold the Securities for the minimum capital gains period
specked under tax statutes, for a deferred sale, for or until an increase
or decrease in the market price of the Securities or for a period of one
year or any other fixed period in the future.
(iii) The Holder acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or an exemption
from such registration is available. The Holder is aware of the provisions
of Rule 144 promulgated under the Act ("Rule 144") which permits limited
resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, in case the securities have
been held for more than one but less than two years, the existence of a
public market for the shares, the availability of certain public
information about the Company, the resale occurring not less than one year
after a party has purchased and paid for the security to be sold, the sale
being through a "broker's transaction" or in a transaction directly with a
"market maker (as provided by Rule 144(f,)) and the number of shares or
other securities being sold during any three-month period not exceeding
specified limitations.
(iv) The Holder further understands that at the time the Holder wishes
to sell the Securities there may be no public market upon which such a sale
may be effected, and that even if such a public market exists, the Company
may not be satisfying the current
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public information requirements of Rule 144, and that in such event, the
Holder may be precluded from selling the Securities under Rule 144 unless
(a) a one-year minimum holding period has been satisfied and (b) the Holder
was not at the time of the sale nor at any time during the three-month
period prior to such sale an affiliate of the Company.
(v) The Holder has had an opportunity to discuss the Company's
business, management and financial affairs with its management and an
opportunity to review the Company's facilities. The Holder understands that
such discussions, as well as the written information issued by the Company,
were intended to describe the aspects of the Company's business and
prospects which it believes to be material but were not necessarily a
thorough or exhaustive description.
(b) Legends. Each certificate representing the Securities shall be endorsed
with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, A
TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND
EXCHANGE COMMISSION, OR (IF REASONABLY REQUIRED BY THE COMPANY) AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
The Company need not enter into its stock records a transfer of Securities
unless the conditions specified in the foregoing legend are satisfied. The
Company may also instruct its transfer agent not to allow the transfer of any of
the Shares unless the conditions specified in the foregoing legend are
satisfied.
(c) Removal of Legend and Transfer Restrictions. The legend relating to the
Act endorsed on a certificate pursuant to paragraph 4(b) of this Warrant shall
be removed and the Company shall issue a certificate without such legend to the
Holder of the Securities if (i) the Securities are registered under the Act and
a prospectus meeting the requirements of Section 10 of the Act is available or
(ii) the Holder provides to the Company an opinion of counsel for the Holder
reasonably satisfactory to the Company, a no-action letter or interpretive
opinion of the staff of the SEC reasonably satisfactory to the Company or other
evidence reasonably satisfactory to the Company, to the effect that public sale,
transfer or assignment of the Securities may be made without registration and
without compliance with any restriction such as Rule 144.
5. Condition of Transfer or Exercise of Warrant. It shall be a condition to any
transfer or exercise of this Warrant that at the time of such transfer or
exercise, the Holder shall provide the Company with a representation in writing
that the Holder or transferee is acquiring this Warrant and the shares of Common
Stock to be issued upon exercise for investment purposes only and
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not with a view to any sale or distribution, or will provide the Company with a
statement of pertinent facts covering any proposed distribution. As a further
condition to any transfer of this Warrant or any or all of the shares of Common
Stock issuable upon exercise of this Warrant, other than a transfer registered
under the Act, the Company may request a legal opinion, in form and substance
satisfactory to the Company and its counsel, reciting the pertinent
circumstances surrounding the proposed transfer and stating that such transfer
is exempt from the registration and prospectus delivery requirements of the Act.
Each certificate evidencing the shares issued upon exercise of the Warrant or
upon any transfer of the shares (other than a transfer registered under the Act
or any subsequent transfer of shares so registered) shall, at the Company's
option, if the Shares are not freely saleable under Rule 144(k) under the Act,
contain a legend in form and substance satisfactory to the Company and its
counsel, restricting the transfer of the shares to sales or other dispositions
exempt from the requirements of the Act.
As further condition to each transfer, at the request of the Company, the
Holder shall surrender this Warrant to the Company and the transferee shall
receive and accept a Warrant, of like tenor and date, executed by the Company.
6. Stock Fully Paid; Reservation of Shares. All Shares which may be issued upon
the exercise of the rights represented by 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 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.
7. Adjustment for Certain Events. The number and kind of securities purchasable
upon the exercise of this 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 or change
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 the acquiring and the surviving
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 duly
execute and deliver to the Holder a new Warrant (in form and substance
satisfactory to the Holder of this Warrant), or the Company shall make
appropriate provision without the issuance of a new Warrant, so that the Holder
shall have the right to receive, at a total purchase price not to exceed that
payable upon the exercise of the unexercised portion of this Warrant, and in
lieu of the shares 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, merger or sale by a
Holder of the number of shares of Common Stock then purchasable under this
Warrant, or in the case of such a merger or sale in which the consideration paid
consists all or in part of assets other than securities of the successor or
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purchasing corporation, at the option of the Holder, the securities of the
successor or purchasing corporation having a value at the time of the
transaction equivalent to the value of the Common Stock purchasable upon
exercise of this Warrant at the time of the transaction. Any new Warrant shall
provide for adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 7. The provisions of this
subparagraph (a) shall similarly apply to successive reclassifications, changes,
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
outstanding shares of Common Stock, the Warrant Price shall be proportionately
decreased and the number of Shares issuable hereunder shall be proportionately
increased in the case of a subdivision and the Warrant Price shall be
proportionately increased and the number of Shares issuable hereunder shall be
proportionately decreased in the case of a combination.
(c) Stock Dividends and Other Distributions. If the Company at any time
while this Warrant is outstanding and unexpired shall (i) pay a dividend with
respect to Common Stock payable in 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; or (ii) make any
other distribution with respect to Common Stock (except any distribution
specifically provided for in Sections 7(a) and 7(b)), then, in each such case,
provision shall be made by the Company such that the Holder of this Warrant
shall receive upon exercise of this Warrant a proportionate share of any such
dividend or distribution as though it were the Holder of the Common Stock (or
Common Stock issuable upon conversion thereof) as of the record date fixed for
the determination of the shareholders of the Company entitled to receive such
dividend or distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in the Warrant
Price, the number of Shares 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.
8. Notice of Adjustments. Whenever any Warrant Price or the kind or number of
securities issuable under this Warrant shall be adjusted pursuant to Section 7
hereof, the Company shall prepare a certificate signed by an officer of the
Company 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 and number or kind of shares issuable upon
exercise of the Warrant after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by certified or registered mail, return
receipt required, postage prepaid) within thirty (30) days of such adjustment to
the Holder of this Warrant as set forth in Section 17 hereof.
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9. Transferability of Warrant. This Warrant is transferable on the books of the
Company at its principal office by the registered Holder hereof upon surrender
of this Warrant properly endorsed, subject to compliance with Section 5 and
applicable federal and state securities laws. The Company shall issue and
deliver to the transferee a new Warrant representing the Warrant so transferred.
Upon any partial transfer, the Company will issue and deliver to Holder a new
Warrant with respect to the Warrant not so transferred. Holder shall not have
any right to transfer any portion of this Warrant to any direct competitor of
the Company.
10. No Fractional Shares. No fractional share of Common Stock will be issued in
connection with any exercise hereunder, but in lieu of such fractional share the
Company shall make a cash payment therefor upon the basis of the Warrant Price
then in effect.
11. Charges, Taxes and Expenses. Issuance of certificates for shares of Common
Stock upon the exercise of this Warrant shall be made without charge to the
Holder for any United States or state of the United States documentary stamp tax
or other incidental expense with respect to the issuance of such certificate,
all of which taxes and expenses shall be paid by the Company, and such
certificates shall be issued in the name of the Holder.
12. No Shareholder Rights Until Exercise. This Warrant does not entitle the
Holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof.
13. Registry of Warrant. The Company shall maintain a registry showing the name
and address of the registered Holder of this Warrant. This Warrant may be
surrendered for exchange or exercise, in accordance with its terms, at such
office or agency of the Company, and the Company and Holder shall be entitled to
rely in all respects, prior to written notice to the contrary, upon such
registry.
14. Loss Theft Destruction or Mutilation of Warrant. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft, or destruction, of
indemnity reasonably satisfactory to it, and, if mutilated, upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new
Warrant, having terms and conditions substantially identical to this Warrant, in
lieu hereof.
15. Miscellaneous.
(a) Issue Date. The provisions of this Warrant shall be construed and shall
be given effect in all respect as if it had been issued and delivered by the
Company on the date hereof.
(b) Successors. This Warrant shall be binding upon any successors or
assigns of the Company.
(c) Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Connecticut.
(d) Headings. The headings used in this Warrant are used for convenience
only and are not to be considered in construing or interpreting this Warrant.
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(e) Saturdays, Sundays, Holidays. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday or a Sunday or shall be a legal holiday in the State of
Connecticut, then such action may be taken or such right may be exercised on the
next succeeding day not a legal holiday.
16. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation 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 hereof against impairment.
17. Addresses. Any notice required or permitted hereunder shall be in writing
and shall be mailed by overnight courier, registered or certified mail, return
receipt required, and postage prepaid, or otherwise delivered by hand or by
messenger, addressed as set forth below, or at such other address as the Company
or the Holder hereof shall have furnished to the other party.
If to the Company: ALTUS BIOLOGICS, INC.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
If to the Holder: GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxxxxx 0, Xxxxx 00
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
IN WITNESS WHEREOF, ALTUS BIOLOGICS, INC. has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated as of October 28, 2002
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President and CEO
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