EXHIBIT 4.1
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT
AND SUCH LAWS OR (1) REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED
TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
PHYTERA, INC.
WARRANT TO PURCHASE COMMON STOCK
This certifies that, for value received, _____________________ (the
"Holder") is entitled to subscribe for and purchase up the number of shares of
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fully paid and nonassessable Common Stock of PHYTERA, INC., a Delaware
corporation (the "Company"), as calculated pursuant to pursuant to the
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provisions of Section 5 hereof and subject to adjustments pursuant to Section 6
hereof, at the Warrant Price (as defined in Section 2 hereof), 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 Common
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Stock, $.01 par value per share, and any stock into or for which such Common
Stock may hereafter be converted or exchanged.
1. Term of Warrant. The purchase right represented by this Warrant is
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exercisable, in whole or in part, at any time during the period beginning on the
on the closing date of the Next Round (as defined in the Convertible Term Note
pursuant to which this Warrant was issued (the "Note")) and ending on the
earlier of (i) the third anniversary of the Next Round or (ii) the effective
date of an initial public offering which would cause the automatic conversion of
the preferred stock issued in the Next Round.
2. Warrant Price. The initial exercise price of this Warrant (the
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"Warrant Price") shall equal the price per share at which shares of Preferred
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Stock (as defined in the Note) are offered and sold by the Company.
3. Method of Exercise; Payment; Issuance of New Warrant.
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Subject to Section 1 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 the notice of exercise form attached hereto as
Exhibit 1 duly executed) at the principal office of the Company and by the
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payment to the Company, by check or wire transfer, of an amount equal to the
then applicable Warrant Price per share multiplied by the number of shares then
being purchased. The Company agrees that the shares so purchased shall be deemed
to be issued to the holder hereof as the record owner of such shares as of the
close of business on the date on which
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this Warrant shall have been surrendered and payment made for such shares as
aforesaid. In the event of any exercise of this Warrant, certificates for the
shares of stock so purchased shall be delivered to the holder hereof within 15
days thereafter 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 within such 15 day period.
4. Stock Fully Paid; Reservation of Shares. All Common Stock which may be
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issued upon the exercise of this Warrant will, upon issuance, be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. Subject to the letter agreement dated the date hereof between
the Company and the Warrantholder, 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 the purpose of the 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.
5. Number of Warrant Shares. The number of shares of Common Stock as to
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which this Warrant is initially exercisable (the "Warrant Shares") shall equal
the quotient of ___________ divided by the initial Warrant Price (the Base
Warrant Shares") plus an additional number of shares of Common Stock equal to
the Base Warrant Shares multiplied by the number of monthly anniversaries of the
date of issuance of this Warrant which shall have passed prior to the earlier of
(i) the date on which the principal and accrued interest on this Note shall have
been repaid in full or (ii) the conversion of the Note in the Next Round.
6. Adjustment of Warrant Price and Number of Shares. The kind of
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securities purchasable upon the exercise of this Warrant, the Warrant Price and
the number of shares purchasable upon exercise of this Warrant shall be subject
to adjustment from time to time upon the occurrence of certain events as
follows:
(a) Adjustments to Warrant Price for Diluting Issues:
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(i) Special Definitions. For purposes of this Section 6(a), the
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following definitions shall apply:
(1) "Option" shall mean rights, options or warrants to
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subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.
(2) "Original Issue Date" shall mean the date on which this
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Warrant shall first become exercisable.
(3) "Convertible Securities" shall mean any evidences of
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indebtedness, shares (other than the Company's Common Stock, Series A
Convertible Preferred, Series B Convertible Preferred and Series BB Convertible
Preferred (collectively, the "Preferred Stock")) or other securities directly or
indirectly convertible into or exchangeable for Common Stock.
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(4) "Additional Shares of Common Stock" shall mean all
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shares of Common Stock issued (or, pursuant to Section 6(a)(iii), deemed to be
issued) by the Company after the Original Issue Date, other than shares of
Common Stock issued or issuable:
(A) upon conversion of shares of Preferred Stock or
by way of dividend or distribution on shares of Preferred Stock; and
(B) to officers, directors or employees of, or
consultants to, the Company pursuant to action by the Board of Directors prior
to the Original Issue Date, pursuant to the Company's Stock Option Plan in
existence as of the Original Issue Date or pursuant to any other stock purchase
or option plan or other employee or director stock incentive or compensation
program (collectively, the "Plans") approved by a majority of the members of the
Board of Directors designated by the holders of Preferred Stock.
(ii) No Adjustment of Warrant Price. No adjustment in the number
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of shares of Common Stock into which this Warrant is exercisable shall be made
by adjustment in the Warrant Price in respect of the issuance of Additional
Shares of Common Stock or otherwise, unless the consideration per share for such
Additional Shares of Common Stock issued or deemed to be issued by the Company
is less than the Warrant Price in effect on the date of, and immediately prior
to, the issue of such Additional Shares.
(iii) Issue of Securities Deemed Issue of Additional Shares of
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Common Stock.
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(1) Options and Convertible Securities. In the event the
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Company at any time or from time to time after the Original Issue Date shall
issue any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been fixed, as
of the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section 6(a)(v)) of such Additional Shares of
Common Stock would be less than the Warrant Price in effect on the date of and
immediately prior to such issue, or such record date, as the case may be, and
provided further that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(A) no further adjustment in the Warrant Price shall
be made upon the subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Company, or decrease in the number of shares of
Common Stock issuable, upon the exercise,
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conversion or exchange thereof, the Warrant Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or exchange under
such Convertible Securities;
(C) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Warrant Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto) and any
subsequent adjustments based thereon shall, upon such expiration, be recomputed
as if:
(I) in the case of Convertible Securities or
Options for Common Stock, the only Additional Shares of Common Stock issued were
the shares of Common Stock, if any, actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
corporation for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the Company upon such exercise, or for
the issue of all such Convertible Securities which were actually converted or
exchanged, plus the additional consideration, if any, actually received by the
corporation upon such conversion or exchange, and
(II) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the Company for the Additional Shares of Common Stock
deemed to have been then issued was the consideration actually received by the
Company for the issue of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Company (determined pursuant
to Section 6(a)(v)) upon the issue of the Convertible Securities with respect to
which such Options were actually exercised;
(D) no readjustment pursuant to clause (B) or (C) above
shall have the effect of increasing the Warrant Price to an amount which exceeds
the lower of (i) the Warrant Price on the original adjustment date, or (ii) the
Warrant Price that would have resulted from any issuance of Additional Shares of
Common Stock between the original adjustment date and such readjustment date;
(E) in the case of any Options which expire by their
terms not more than thirty (30) days after the date of issue thereof, no
adjustment of the Warrant Price shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made in the same manner
provided in clause (C) above; and
(F) if such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date fixed therefor, the
adjustment previously made in the Warrant Price which became effective on such
record date shall be cancelled as of the close of business on such record date,
and thereafter the Warrant Price shall be adjusted pursuant to this Section
6(a)(iii) as of the actual date of their issuance.
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(2) Stock Dividends, Stock Distributions and Subdivisions.
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In the event the Company at any time or from time to time after the Original
Issue Date shall declare or pay any dividend or make any other distribution on
the Common Stock payable in Common Stock, or effect a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock), then and in any such event, Additional
Shares of Common Stock shall not be deemed to have been issued, but the Warrant
Price shall be adjusted in accordance with Sections 6(b), (c) and (d).
(iv) Adjustment of Warrant Price Upon Issuance of Additional
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Shares of Common Stock.
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In the event the Company shall issue Additional Shares of Common
Stock (including Additional Shares of Common Stock deemed to be issued pursuant
to Section 6(a)(iii)) without consideration or for a consideration per share
less than the Warrant Price in effect on the date of and immediately prior to
such issue, then and in such event, such Warrant Price shall be reduced,
concurrently with such issue in order to increase the number of shares of Common
Stock into which this Warrant is exercisable, to a price (calculated to the
nearest cent) determined by multiplying such Warrant Price by a fraction (x) the
numerator of which shall be (A) the number of shares of Common Stock outstanding
immediately prior to such issue (including shares of Common Stock issuable upon
conversion of any outstanding Preferred Stock or Convertible Securities), plus
(B) the number of shares of Common Stock which the aggregate consideration
received by the Company for the total number of Additional Shares of Common
Stock so issued would purchase at such Warrant Price, and (y) the denominator of
which shall be (A) the number of shares of Common Stock outstanding immediately
prior to such issue (including shares of Common Stock issuable upon conversion
of any outstanding Preferred Stock or Convertible Securities), plus (B) the
number of such Additional Shares of Common Stock so issued, provided that the
Warrant Price shall not be so reduced at such time if the amount of such
reduction would be an amount less than $0.05, but any such amount shall be
carried forward and reduction with respect thereto made at the time of and
together with any subsequent reduction which, together with such amount and any
other amount or amounts so carried forward, shall aggregate $0.05 or more.
(v) Determination of Consideration. For purposes of this Section
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6(a), the consideration received by the corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(1) Cash and Property: Such consideration shall:
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(A) insofar as it consists of cash, be computed at
the aggregate amount of cash received by the corporation excluding amounts paid
or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and
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(C) in the event Additional Shares of Common Stock
are issued together with other shares or securities or other assets of the
corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B) above, as
determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration
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per share received by the Company for Additional Shares of Common Stock deemed
to have been issued pursuant to Section 6(a)(iii)(1), relating to Options and
Convertible Securities, shall be determined by dividing (x) the total amount, if
any, received or receivable by the corporation as consideration for the issue of
such Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration until such subsequent adjustment occurs) payable to the
corporation upon the exercise of such Options or the conversion or exchange of
such Convertible Securities or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, by (y) the maximum number
of shares of Common Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such number until such subsequent adjustment occurs) issuable upon the exercise
of such Options or the conversion or exchange of such Convertible Securities.
(b) Stock Dividends, Distributions or Subdivisions. In the event the
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Company at any time or from time to time shall declare or pay any dividend or
make any other distribution on the Common Stock payable in Common Stock, or
effect a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock),
the Warrant Price in effect immediately prior to such stock dividend, stock
distribution or subdivision shall, concurrently with the effectiveness of such
stock dividend, stock distribution or subdivision, be proportionately decreased.
(c) Combinations or Consolidations. In the event the outstanding
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shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
(d) Reclassification, Consolidation or Merger. In case of any
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reclassification or change of outstanding 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 consolidation or 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, providing that the holder of this
Warrant shall have the right to exercise such new Warrant and procure upon such
exercise, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable
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upon such reclassification, change, consolidation, or merger by a holder of one
share of Common Stock. Such new Warrant shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 6. The provisions of this subsection (d) shall similarly
apply to successive reclassification, changes, consolidations, mergers and
transfers.
(e) Adjustment of Number of Shares. Upon each adjustment in the
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Warrant Price pursuant to any of Sections 6 (a) through (d), the number of
shares of Common Stock 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.
7. Notice of Adjustments. Whenever any Warrant Price shall be adjusted
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pursuant to Section 6 hereof, the Company shall prepare a certificate signed by
its chief financial officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, the Warrant Price after giving effect to such
adjustment and the number of shares then purchasable upon exercise of this
Warrant, and shall cause copies of such certificate to be mailed (by first class
mail, postage prepaid) to the holder of this Warrant at the address specified in
Section 11(d) hereof, or at such other address as may be provided to the Company
in writing by the holder of this Warrant.
8. Fractional Shares. No fractional shares of Common Stock will be issued
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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.
9. Compliance with the Act. The holder of this Warrant, by acceptance
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hereof, agrees that this Warrant and the shares of Common Stock to be issued
upon exercise hereof are being acquired for investment and that it will not
offer, sell or otherwise dispose of this Warrant or any shares of Common Stock
to be issued upon exercise hereof except under circumstances which will not
result in a violation of the Act.
10. Transfer and Exchange of Warrant.
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(a) Transfer. This Warrant may be transferred or succeeded to by any
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person; provided, however, that the Company is given written notice by the
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transferee at the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which such rights are
being assigned.
(b) Exchange. Subject to compliance with the terms hereof, this
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Warrant and all rights hereunder are transferable, in whole or in part, at the
office of the Company by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant,
when endorsed in blank, shall be deemed negotiable; provided, that the last
holder of this Warrant as registered on the books of the Company may be treated
by the Company and all persons dealing with this Warrant as the absolute owner
hereof for any
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purposes and as the person entitled to exercise the rights represented by this
Warrant or to transfer hereof on the books of the Company, any notice to the
contrary notwithstanding, unless and until such holder seeks to transfer
registered ownership of this Warrant on the books of the Company and such
transfer is effected.
11. Miscellaneous.
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(a) No Rights as Shareholder. Except as provided in the Agreement, no
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holder of the Warrant or Warrants shall be entitled to vote or receive dividends
or be deemed the holder of Common Stock or any other securities of the Company
which may at any time be issuable on the exercise hereof 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 give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant or Warrants shall have been exercised and the shares purchasable upon
the exercise hereof shall have become deliverable, as provided herein.
(b) Replacement. On receipt of evidence reasonably satisfactory to
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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, or bond 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, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor.
(c) Notice of Capital Changes. In case:
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(i) the Company shall declare any dividend or distribution
payable to the holders of its Common Stock;
(ii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation or business organization; or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give the holder
of this Warrant written notice, in the manner set forth in subparagraph (d)
below, of the date on which a record shall be taken for such dividend, or
distribution or for determining shareholders entitled to vote upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up and of the date when any such transaction shall take
place, as the case may be. Such written notice shall be given at least 30 days
prior to the transaction in question and not less than 20 days prior to the
record date in respect thereof.
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(d) Notice. Any notice given to either party under this Warrant shall
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be in writing, and any notice hereunder shall be deemed to have been given upon
the earlier of delivery thereof by hand delivery, by courier, or by standard
form of telecommunication or three (3) business days after the mailing thereof
if sent registered mail with postage prepaid, addressed to the Company at its
principal executive offices and to the holder at its address set forth in the
Company's books and records or at such other address as the holder may have
provided to the Company in writing.
(e) No Impairment. The Company will not, by amendment of its Restated
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Certificate of Incorporation or through any 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 hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions in the
Warrant.
(f) Governing Law. This Warrant shall be governed by and construed
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under the laws of the State of Delaware.
IN WITNESS WHEREOF, this Warrant is executed as of this ______ day of
September, 1995.
PHYTERA, INC.
By: _____________
Title:
9
EXHIBIT 1
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NOTICE OF EXERCISE
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TO: PHYTERA, INC.
1. The undersigned hereby elects to purchase _________ shares of Common
Stock of PHYTERA, INC. 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 of
Common Stock in the name of the undersigned or in such other name as is
specified below:
_______________________________________________
(Name)
_______________________________________________
_______________________________________________
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock
are 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.
______________________________
Signature
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WARRANT HOLDERS:
BankBoston Ventures, Inc.
Commonwealth BioVentures V Limited Partnership
Concord Partners II, L.P.
CR Management Capital Partners I L.P.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Trustee (▇▇▇▇▇▇ ▇▇▇▇▇)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Trustee (▇▇▇▇▇▇ ▇▇▇▇▇)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Read & Co., Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ Ventures
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