EXHIBIT 10.30
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND/OR LAWS
OR PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933. AS AMENDED, OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL,
THAT SUCH REGISTRATION AND/OR QUALIFICATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Issuer: Athena Healthcare Incorporated, a Delaware corporation
Number of Shares: 28,571, subject to adjustment
Class of Stock: Series C Convertible Preferred Stock, $0.01 par value per share
Exercise Price: $1.40 per share, subject to adjustment
Issue Date: March 31, 2000
Expiration Date: March 31, 2010
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK ("Holder") is
entitled to purchase from Athena Healthcare Incorporated, a Delaware corporation
(the "Company"), up to Twenty Eight Thousand Five Hundred Seventy One (28,571)
fully paid and nonassessable shares (the "Shares") of the Company's Series C
Convertible Preferred Stock, $0.01 par value per share, at a purchase price per
share of One Dollar and Forty Cents ($1.40) (the "Exercise Price"). This Warrant
may be exercised in whole or in part at any time and from time to time until
5:00 PM, Eastern time, on the Expiration Date and shall be void thereafter.
Until such time as this Warrant is exercised in full or expires, the Exercise
Price and the Shares are subject to adjustment as hereinafter provided.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by delivering
a duly executed Notice of Exercise in substantially the form attached as
Appendix 1 to the principal office of the Company. Unless Holder is exercising
the conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Exercise Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as specified
in Section 1.1, Holder may from time to time convert this Warrant, in whole or
in part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Exercise Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Section 1.4.
1.3 Intentionally Omitted.
1.4 Fair Market Value. If the Shares are traded in a public market,
the fair market value of the Shares shall be the closing price of the Shares
(or the closing price of the Company's stock into which the Shares are
convertible) reported for the business day immediately before Holder delivers
its Notice of Exercise to the Company. If the Shares are not traded in a public
market, the Board of Directors of the Company shall determine fair market value
in its reasonable good faith judgment. The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a reputable
investment banking firm to undertake such valuation. If the valuation of such
investment banking firm is greater than that determined by the Board of
Directors by five percent (5%) or more, then all fees and expenses of such
investment banking firm shall be paid by the Company. In all other
circumstances, such fees and expenses shall be paid by Holder, but in all events
the determination of the investment banking firm as to fair market value shall
apply for purposes of Section 1.2 above.
1.5 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.6 Replacement of Warrant. On 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, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.7 Repurchase on Sale, Merger, or Consolidation of the Company.
1.7.1. "Acquisition". For the purpose of this Warrant,
"Acquisition" means any sale, transfer, license, or other disposition of all or
substantially a11 of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
1.7.2. Assumption of Warrant. Upon the closing of any Acquisition
the successor entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing. The Exercise Price shall be adjusted
accordingly.
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1.7.3 Purchase Right. Notwithstanding the foregoing, at the
election of Holder, the Company shall purchase the unexercised portion of this
Warrant for cash upon the closing of any Acquisition in which the consideration
is cash or cash equivalents for an amount equal to (a) the fair market value of
any consideration that would have been received by Holder in consideration of
the Shares had Holder exercised the unexercised portion of this Warrant
immediately before the record date for determining the shareholders entitled to
participate in the proceeds of the Acquisition, less (b) the aggregate Exercise
Price of the Shares, but in no event less than zero.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on the outstanding shares of the same class or series as the Shares,
payable in Common Stock or other securities, or subdivides the outstanding
Common Stock into a greater amount of Common Stock, or, if the Shares are
securities other than Common Stock, subdivides the Shares in a transaction that
increases the amount of Common Stock into which the Shares are convertible, then
upon exercise of this Warrant, for each Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to which Holder
would have been entitled had Holder owned the Shares of record as of the date
the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the Company's outstanding securities of
the same class or series as the Shares, Holder shall be entitled to receive,
upon exercise or conversion of this Warrant, the number and kind of securities
and property that Holder would have received for the Shares if this Warrant had
been exercised immediately before such reclassification, exchange, substitution,
or other event. Such an event shall include any automatic conversion of all
(but not less than all) of the outstanding securities of the Company of the same
class or series as the Shares to Common Stock pursuant to the terms of the
Company's Amended and Restated Certificate of Incorporation, as amended
(including without limitation any and all applicable Certificates of
Designation) ("Certificate of Incorporation") upon the closing of a registered
public offering of the Company's Common Stock. The Company or its successor
shall promptly issue to Holder a new Warrant for such new securities or other
property. The new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
2 including, without limitation, adjustments to the Exercise Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding shares of
the class or series of securities issuable upon exercise or conversion of this
Warrant are combined or consolidated, by reclassification or otherwise, into a
lesser number of shares, the Exercise Price shall be proportionately increased
and the number of Shares for which this Warrant is exercisable shall be
proportionately decreased.
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2.4 Adjustments for Dilutive Issuances. In the event of the issuance
(a "Dilutive Issuance") by the Company, after the Issue Date of the Warrant, of
securities of the same class or series as the Shares at a price per share less
than the Exercise Price, or securities which are convertible into or exercisable
or exchangeable for Common Stock at a Common Stock per share exercise or
conversion price or exchange rate that is less than the Exercise Price in effect
at such date, then the number of shares of Common Stock issuable upon conversion
of the Shares shall be adjusted in accordance with the provisions (the
"Provisions") of the Certificate of Stock Designation of Series C Convertible
Preferred Stock of the Company as filed with the Delaware Secretary of State and
in effect on the Issue Date of this Warrant. The Company agrees that the
Provisions shall be deemed to remain in full force and effect as to the Holder
during the term of the Warrant notwithstanding any subsequent amendment, waiver
or termination thereof by the Company's shareholders, except if and to the
extent that the Holder agrees in writing to any such subsequent amendment,
waiver or termination. Under no circumstances shall the aggregate Exercise Price
payable by the Holder upon exercise of the Warrant increase as a result of any
adjustment arising from a Dilutive Issuance.
2.5 No Impairment. The Company shall not, by amendment of its
Certificate of Incorporation or the Provisions or through a reorganization,
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 under this
Warrant by the Company, but shall at all times in good faith assist in carrying
out of all the provisions of this Article 2 and in taking all such action as may
be necessary or appropriate to protect Holder's rights under this Article
against impairment.
2.6 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder an amount computed by
multiplying the fractional interest by the fair market value of a full Share.
2.7 Certificate as to Adjustments. Upon each adjustment as provided in
this Warrant of the number of Shares, the Exercise Price or the number of shares
of Common Stock into which the Shares are convertible, the Company at its
expense shall promptly compute such adjustment, and furnish Holder with a
certificate of its Chief Financial Officer setting forth such adjustment and the
facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the number of Shares, the
Exercise Price and/or the ratio by which the Shares may be converted into shares
of Common Stock in effect upon the date thereof and the series of adjustments
leading to such number of Shares, Exercise Price and/or ratio by which the
Shares may be converted into shares of Common Stock.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
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3.1 Representations and Warranties. The Company hereby represents and
warrant to the Holder as follows:
(a) All Shares which may be issued upon the exercise of this
Warrant, and all shares of Common Stock or other securities, if any, issuable
upon conversion of the Shares, shall upon issuance, be duly authorized, validly
issued, fully paid and nonassessable and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
(b) The authorized capital stock of the Company consists of
35,000,000 shares, consisting of 20,000,000 shares of common stock, $.01 par
value (the "Common Stock"), and 15,000,000 shares of Preferred Stock, $.01 par
value of which 1,600,000 shares have been designated Series A-1 Convertible
Preferred Stock, 1,045,015 shares have been designated Series A-2 Convertible
Preferred Stock, 1,250,000 shares have been designated Series B-1 Convertible
Preferred Stock, 127,605 shares have been designated Series B-2 Convertible
Preferred Stock, and 8,000,000 shares have been designated Series C Convertible
Preferred Stock. Schedule 3.1(b) sets forth all of the outstanding shares of
Common Stock and Preferred Stock and outstanding options, warrants, convertible
securities, convertible debentures, and rights to acquire, subscribe for, and/or
purchase any Common Stock, Preferred Stock and/or other capital stock of the
Company or any securities or debentures convertible into or exchangeable for
Common Stock, Preferred Stock and/or other capital stock of the Company.
(c) The Exercise Price is equal to the lowest issuance price per
share of Series C Convertible Preferred Stock issued by the Company.
(d) The Conversion Price (as defined in the Provisions) per share
of the Series C Convertible Preferred Stock in effect on the Issue Date of this
Warrant is $1.40.
(e) The Company covenants that it shall at all times cause to be
reserved and kept available out of its authorized and unissued shares such
number of shares of Series C Convertible Preferred Stock and shares of Common
Stock and other securities as will be sufficient to permit the exercise in full
of this Warrant and the conversion of the Shares into shares of Common Stock or
such other securities.
3.2 Notice of Certain Events. If the Company proposes at any time (a)
to declare any dividend or distribution upon any of its capital stock, whether
in cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of any of
its securities; (d) to merge or consolidate with or into any other corporation,
or sell, lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company's
securities for cash, then, in connection with each such event, the Company shall
give Holder (1) at least 20 days prior
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written notice of the date on which a record will be taken for such dividend,
distribution, or subscription rights (and specifying the date on which the
holders of securities of the Company) or for determining rights to vote, if any,
in respect of the matters referred to in (c) and (d) above; (2) in the case of
the matters referred to in (c) and (d) above at least 20 days prior written
notice of the date when the same will take place (and specifying the date on
which the holders of securities of the Company will be entitled to exchange
their securities of the Company for securities or other property deliverable
upon the occurrence of such event); and (3) in the case of the matter referred
to in (e) above, the same notice as is given to the holders of such registration
rights.
3.3 Information Rights. So long as the Holder holds this Warrant and
or any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within one hundred and twenty (120) days after
the end of each fiscal year of the Company, the annual audited financial
statements of the Company certified by independent public accountants of
recognized standing and (c) such other financial statements required under and
in accordance with any loan documents between Holder and the Company or if there
are no such requirements (or if the subject loan(s) no longer are outstanding),
then within forty-five (45) days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
3.4 Registration Under Securities Act of 1933, as amended. The shares
of Common Stock into which the Shares are convertible (or, if at any time the
Shares shall be shares of Common Stock, the Shares) shall have certain
registration rights pursuant to an Amendment No. 1 of even date herewith to that
certain Registration Rights Agreement between the Company and Holder dated as of
March 31, 1999. The Company represents and warrants to Holder that the Company's
execution, delivery and performance of the aforesaid Amendment No. 1 to
Registration Rights Agreement (a) has been duly authorized by all necessary
corporate action of the Company's Board of Directors and shareholders, (b) will
not violate the Company's Certificate of Incorporation or By-laws, each as
amended, (c) will not violate or cause a breach or default (or an event which
with the passage of time or the giving of notice or both, would constitute a
breach or default) under any agreement, instrument, mortgage, deed of trust or
other arrangement to which the Company is a party or by which it or any of its
assets is subject or bound, and (d) does not require the approval, consent or
waiver of or by any third party which approval, consent or waiver has not been
obtained as of the Issue Date of this Warrant.
ARTICLE 4. MISCELLANEOUS.
4.1 Term; Notice of Expiration. This Warrant is exercisable, in whole
or in part, at any time and from time to time on or before the Expiration Date
set forth above. The Company shall give Holder written notice of Holder's right
to exercise this Warrant in the form attached as Appendix 2 not more than 90
days and not less than 30 days before the Expiration Date. If the notice is not
so given, the Expiration Date shall automatically be extended until 30 days
after the date the Company delivers the notice to Holder.
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4.2 Legends. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES OR "BLUE
SKY" LAWS, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND/OR LAWS OR PURSUANT TO
RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT
SUCH REGISTRATION AND/OR QUALIFICATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holder's notice of
proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.3
Holder may transfer all or part of this Warrant and/or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) at any time to Silicon Valley Bancshares
or The Silicon Valley Bank Foundation, or, to any other transferee by giving the
Company notice of the portion of the Warrant being transferred setting forth the
name, address and taxpayer identification number of the transferee and
surrendering this Warrant to the Company for reissuance to the transferee(s)
(and Holder if applicable).
4.5 Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or sent by express overnight courier service, or mailed by
first-class registered or certified mail, postage prepaid, or by electronic
facsimile transmission with prompt confirmation by one of the foregoing means,
at such address as may have been furnished to the Company or the Holder, as the
case may be, in writing by the Company or such holder from time to time, but in
all cases, unless instructed in writing otherwise, the Company shall deliver a
copy of all notices to Holder to Silicon Valley Bank, Treasury Department, 3003
Tasman Drive, MS NC 821, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
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4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, without giving
effect to its principles regarding conflicts of law.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as
an instrument under seal by its duly authorized representative as of the date
first above written.
ATTEST: "COMPANY"
ATHENA HEALTHCARE INCORPORATED
By: /s/ Xxx X. Xxxxxx BY: /s/ Xxxx Xxxxx
--------------------------------- ------------------------------------
Name: Xxx X. Xxxxxx Name: Xxxx Xxxxx
Title: VP of People & Process Title: CFO, Treasurer
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ___________ shares of
the ________________ stock of Athena Healthcare Incorporated pursuant to Section
1.1 of the attached Warrant and tenders herewith payment of the purchase price
of such shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in Section 1.2 of the attached Warrant. This
conversion is exercised with respect to _________________ of shares of the
_____________________________________ Stock of Athena Healthcare Incorporated.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
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(Name)
----------------------------------------
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(Address)
3. The undersigned represents it is acquiring the shares solely for its own
account and not as a nominee for any other party and not with a view toward the
resale or distribution thereof except in compliance with applicable securities
laws.
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(Signature)
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(Date)
APPENDIX 2
Notice that Warrant Is About to Expire
___________, ____
(Name of Holder)
(Address of Holder)
Attn: Chief Financial Officer
Dear : _______________
This is to advise you that the Warrant issued to you described below will
expire on _____________, 20__.
Issuer: ___________________________________________________________________
Issue Date: _______________________________________________________________
Class of Security Issuable: _______________________________________________
Exercise Price per Share: _________________________________________________
Number of Shares Issuable: ________________________________________________
Procedure for Exercise: ___________________________________________________
Please contact [name of contact person at (phone number)] with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
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(Name of Issuer)
By:
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Its:
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Schedule 3.1(b) - Capitalization
Outstanding Capital Stock:
Common Stock 1,962,600 shares
Series A-1 Convertible Preferred Stock 1,600,000 shares
Series A-2 Convertible Preferred Stock 889,173
Series B-1 Convertible Preferred Stock 627,000
Series B-2 Convertible Preferred Stock 58,184
Series C Convertible Preferred Stock [7,214,289] shares
Outstanding options, warrants, convertible securities, convertible debentures,
and rights to acquire, subscribe for, and/or purchase any Common Stock and/or
other capital stock of the Company or any securities or debentures convertible
into or exchangeable for Common Stock and/or other capital stock of the Company:
Options 1,356,704 of Common Stock
Warrants 31,481 shares of Common Stock
Convertible debentures none
Rights none
