REGEN BIOLOGICS, INC. Warrant to Purchase Common Stock Date of Issue: October 1, 2003
EXHIBIT
4.24
THIS
WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE
SECURITIES LAWS. THIS WARRANT AND SUCH SHARES MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
AND ANY APPLICABLE STATE SECURITIES LAW OR PURSUANT TO RULE 144 OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
REGEN
BIOLOGICS, INC.
Warrant
to Purchase
Common
Stock
Date of
Issue: October 1, 2003
REGEN
BIOLOGICS, INC., a Delaware corporation (the “Company”), and
_________ (the “Holder”), hereby
agree that, for value received, the Holder is entitled to purchase from the
Company, subject to the terms and conditions set forth below, at any time after
the date hereof (the “Determination Date”)
and on or before the Expiration Date (as defined in Section 2.5 hereof),
_______ shares of fully paid and non-assessable Common Stock, par value $0.01
per share (the “Common
Stock”) of the Company (the “Shares”), at a
purchase price per Share specified in Section 1.2 hereof (the “Warrant
Price”). The number of Shares subject to this Warrant and the
Warrant Price shall be subject to adjustment from time to time after the
Determination Date pursuant to the terms and conditions in Section 3
hereof.
1.
Number of
Shares and Warrant Price.
1.1. Number of
Shares. The number of Shares shall be ________.
1.2. Warrant
Price. The Warrant Price shall be equal to $0.45 per share,
which price has been determined by the Board of Directors of the Company in good
faith.
2.
Exercise
of Warrant.
2.1. Mechanics
of Exercise. The Holder may exercise this Warrant after the
Determination Date in whole or in part by surrendering this Warrant and a duly
executed Notice of Exercise in substantially the form attached hereto as Exhibit A at the
principal executive offices of the Company. The Holder shall also
deliver to the Company simultaneously with the Holder’s Notice of Exercise
payment of the aggregate Warrant Price for the Shares being
purchased. The consideration for the exercise of this Warrant may be
in the form of a bank cashier’s or certified check payable to the order of the
Company, or by wire transfer to an account designated in writing by the
Company. In the event that the Holder elects to exercise less than
the full number of Shares recorded above, the Company will execute and deliver
to the Holder a Warrant of like tenor in the number of Shares granted by the
Company less the number of Shares exercised.
2.2. Net
Exercise. In lieu of exercising this Warrant as specified in
Section 2.1, the Holder may from time to time after the Determination Date
elect to receive, without the payment by the Holder of any additional
consideration, Shares equal to the value of this Warrant (or the portion thereof
being exercised) by surrendering this Warrant and a duly executed Notice of
Exercise in substantially the form attached hereto as Exhibit A at the principal
executive offices of the Company, in which event the Company shall issue to the
Holder a number of Shares determined using the following
formula:
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Y
(A - B)
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X =
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-----------------------
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A
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Where:
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X
=
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The
number of Shares to be issued to the Holder pursuant to this net exercise
election
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Y
=
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The
number of Shares in respect of which the net exercise election is
made
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A
=
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The
fair market value of one share of Common Stock of the Company at the time
the net exercise election is made
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B
=
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The
Warrant Price (as adjusted to the date of the net exercise
election).
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If the
Common Stock of the Company is traded regularly in a public market, the fair
market value of a share of Common Stock of the Company shall be equal to the
average closing price of a share of Common Stock of the Company reported for the
twenty (20) day trading period ending on the date immediately prior to the date
on which the Holder delivers its Notice of Exercise to the
Company. If the Common Stock of the Company is not regularly traded
in a public market, the Board of Directors of the Company shall determine, in
its reasonable good faith judgment, the fair market value of a share of Common
Stock of the Company as of the date immediately prior to the date on which the
Holder delivers its Notice of Exercise to the Company. In the event
that the Holder elects to exercise less than the full number of Shares recorded
above, the Company will execute and deliver to the Holder a Warrant of like
tenor in the number of Shares granted by the Company less the number of Shares
exercised.
2.3. When
Exercise Effective. The exercise of this Warrant shall be
deemed to have been effective for the Holder immediately prior to the close of
business on the business day on which this Warrant is surrendered to the Company
as provided in Section 2.1 or Section 2.2, and at such time the person
or persons in whose name or names any certificate or certificates for Shares
shall be issuable upon such exercise as provided in Section 2.4 shall be deemed
to have become the holder or holders of record thereof.
2.4. Delivery
of Stock Certificates, Etc. As soon as practicable after the
surrender of this Warrant, the Company will cause to be issued in the name of,
and delivered to, the Holder a certificate or certificates for the number
of fully paid and non-assessable Shares which the Holder has
purchased.
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2.5. Expiration
Date. This Warrant shall expire on the fifth anniversary of the date of
issuance.
3. Adjustments.
3.1. Adjustment
for Certain Dividends and Distributions. If the Company at any
time or from time to time after the Determination Date makes, or fixes a record
date for the determination of holders of shares of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of the
Company’s equity securities, then, and in each such event, the number of Shares
theretofore receivable upon the exercise of this Warrant shall be
proportionately increased as of the time of such issuance or, in the event such
record date is fixed, as of the close of business on such record date; provided, however, that if such record
date is fixed and such dividend is not fully paid or if such distribution is not
fully made on the date fixed therefor, the number of Shares theretofore
receivable upon exercise of this Warrant shall be recomputed accordingly as of
the close of business on such record date, and thereafter the number of Shares
theretofore receivable upon exercise of this Warrant shall be adjusted pursuant
to this Section 3.1 as of the time of actual payment of such dividends or
distributions.
3.2. Stock
Split and Reverse Stock Split. If the Company at any time or
from time to time after the Determination Date effects a stock split or
subdivision of the outstanding Common Stock, the number of Shares theretofore
receivable upon the exercise of this Warrant shall be proportionately
increased. If the Company at any time or from time to time after the
Determination Date effects a reverse stock split or combines the outstanding
shares of Common Stock into a smaller number of shares, the number of Shares
theretofore receivable upon the exercise of this Warrant shall be
proportionately decreased. Appropriate
adjustments shall also be made to the Warrant Price, but the aggregate Warrant
Price shall remain the same. Each adjustment under this Section 3.2
shall become effective at the close of business on the date the stock split,
subdivision, reverse stock split or combination becomes effective.
3.3. Merger,
Sale of Assets, Etc. If after the Determination Date and at
any time while this Warrant, or any portion thereof, is outstanding and
unexpired there shall be (i) a reorganization (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), (ii) a merger or consolidation of the Company with or into another
corporation in which the Company is not the surviving entity, or a reverse
triangular merger in which the Company is the surviving entity but the shares of
the Company’s capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property (whether in the form of
securities, cash or otherwise), or (iii) a sale or transfer of the Company’s
properties and assets as, or substantially as, an entirety to any other person,
this Warrant shall thereafter represent the right to acquire for the Aggregate
Warrant Price (as defined below) the number of shares of stock or other
securities which the Holder of this Warrant would have owned immediately after
the consummation of such reorganization, merger, consolidation, sale or
transfer, if the Holder of this Warrant had exercised this Warrant immediately
before the effective date of the reorganization, merger, consolidation, sale or
transfer. In each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities receivable upon exercise
of this Warrant after such consummation. For purposes of this Section
3.3, the “Aggregate Warrant Price” shall mean the aggregate consideration
obtained by multiplying (x) the Warrant Price by (y) the maximum number of
Shares of Common Stock for which this Warrant was exercisable immediately prior
to such conversion or redemption.
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4. Transferability
of Warrant.
4.1. Transferability
Generally. This Warrant and the Shares 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
reasonable satisfactory to the Company).
4.2. Ownership. Until
this Warrant is transferred on the books of the Company (with the Company’s
consent), the Company may treat the person in whose name this Warrant is issued
as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.
5.
Exchange
of Warrant. Upon the surrender by the Holder of this Warrant,
properly endorsed, to the Company, the Company, subject to the provisions of
Section 4 hereof, will issue and deliver to or upon the order of the Holder a
new Warrant or Warrants of like tenor, in the name of the Holder or as the
Holder (upon payment by the Holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for the number of
Shares called
for on the face or faces of the Warrant or Warrants so
surrendered.
6.
Replacement
of Warrant. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft, or destruction, upon delivery of an
indemnity bond (or, in the case of any institutional holder, an indemnity
agreement) reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like tenor.
7.
Legends. The
certificate(s) representing the Shares shall be imprinted with a legend in
substantially the following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES
LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL (1) REGISTERED
UNDER THE ACT AND SUCH STATE SECURITIES
LAWS OR (2) THE CORPORATION
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
8.
Representations
and Covenants.
8.1. Representation
and Warranty of the Company. The Company hereby represents and
warrants to the Holder that the Shares which may be issued upon exercise of this
Warrant 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
law.
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8.2. Representation
and Warranty of Holder. The Holder hereby
represents and warrants to the Company that the Holder is an “accredited
investor” within the meaning of Regulation D promulgated under the Act, and
acknowledges that the Company is relying upon this representation and warranty
in the issuance of this Warrant to the Holder.
9. Notices. All
notices, consents and other communications under this Warrant shall be in
writing and shall be deemed given when delivered personally or when mailed by
registered mail, return receipt requested, or reputable overnight delivery
service, to a party at its principal executive offices (or such other address as
a party may designate by notice given to the other parties pursuant to this
Section 9).
10. Miscellaneous.
10.1. Termination. Neither
this Warrant nor any term hereof may be amended, modified, waived, discharged or
terminated orally.
10.2. Applicable
Law. This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware without
regarding to provisions thereof relating to choice of law or conflicts of
law.
10.3. Headings. The
headings in this Warrant are for convenience of reference only and shall not
limit or otherwise affect the meaning of any provision of this
Warrant.
10.4. No
Fractional Shares. No fractional shares of Common Stock shall
be issued in connection with the exercise of this Warrant. In lieu of
any fractional shares which would otherwise be issuable, the Company shall pay
cash equal to the product of such fraction multiplied by the fair market value
of one Share as determined in accordance with the valuation provisions set forth
in Section 2.2.
10.5. No Rights
as Stockholder. Until the exercise of this Warrant, the Holder
shall not have or exercise any rights as a stockholder of the Company by virtue
of this Warrant.
11. Expiration. The
right to exercise this Warrant shall expire at 5:00 p.m., Eastern time, on the
Expiration Date.
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REGEN BIOLOGICS,
INC.,
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a
Delaware corporation
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By:
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Name:
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Title:
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EXHIBIT
A
NOTICE
OF EXERCISE
[To be
signed only upon exercise of Warrant]
TO: REGEN
BIOLOGICS, INC.
The undersigned, the holder of the
within Warrant, hereby (check one box):
q surrenders
[NUMBER OF SHARES] shares of such Warrant to purchase an equivalent number of
shares of Common Stock of REGEN BIOLOGICS, INC. and herewith makes
payment of $[DOLLAR AMOUNT] therefor pursuant to Section 2.1 of such Warrant,
or
q surrenders
[NUMBER OF SHARES] shares of such Warrant to purchase that number of shares of
Common Stock of REGEN BIOLOGICS, INC. determined by the terms of the net
exercise provision set forth in Section 2.2 of such Warrant,
and requests that the certificates for
such shares be issued in the name of, and delivered to, [NAME], whose address is
[ADDRESS].
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Dated:
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(Signature
must conform in all respects to name of holder as specified on the face of
the Warrant)
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Address
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Signed
in the presence of:
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A-1
EXHIBIT
B
FORM
OF ASSIGNMENT
[To be
signed only upon transfer of Warrant after approval by the Company]
For value
received, the undersigned hereby sells, assigns and transfers unto [NAME] the
right represented by the within Warrant to purchase [NUMBER OF SHARES] shares of
Common Stock of REGEN BIOLOGICS, INC. (the “Company”) to which the within
Warrant relates, and appoints the Secretary of the Company as attorney to
transfer such right on the books of the Company, with full power of substitution
in the premises.
Dated:
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(Signature
must conform in all respects to name of holder as specified on the face of
the Warrant)
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Address
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Signed
in the presence of:
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B-1