EXHIBIT 10.6
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
No. CSPW-E02
Void after 5:00 p.m. New York Time, on July 20, 2003
(subject to certain exceptions)
Warrant to Purchase Eighty Thousand (80,000) Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
EXOGEN, INC.
This certifies that, for value received, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the
"Holder"), is entitled, subject to the terms set forth below, to purchase from
Exogen, Inc., a Delaware corporation (the "Company"), Eighty Thousand (80,000)
fully paid, validly issued and nonassessable shares of the Company's common
stock, $.0001 par value per share (the "Common Stock"), upon surrender hereof,
at the principal office of the Company referred to below, with the Notice of
Exercise annexed hereto duly executed, and simultaneous payment therefor in
lawful money of the United States or otherwise as hereinafter provided, at
$3.12, the Average Closing Sale Price of Exogen's Common Stock between June 16,
1998 and July 16, 1998, as quoted on the Nasdaq National Market (the "Exercise
Price"). The number, character and Exercise Price of such shares of Common Stock
are subject to adjustment as provided below. The term "Warrant" as used herein
shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
1. Term of Warrant. Subject to the terms and conditions set
forth herein, this Warrant shall be exercisable, in whole or in part, at any
time or from time to time on or after the date the Settlement Agreement entered
into in conjunction herewith is executed and ending at 5:00 p.m., New York Time,
on July 20, 2003 and shall be void thereafter.
2. Exercise of Warrant.
(a) The purchase rights represented by this Warrant
are exercisable by the Holder in whole or in part, at any time or from time to
time, during the term hereof as described in Section 1 above, by the surrender
of this Warrant and the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
Holder at the address of the Holder appearing on the books of the Company), upon
payment in cash or by check acceptable to the Company.
In lieu of paying the purchase price in cash or by check, the
Holder may elect to receive shares of Common Stock equal to the value of this
Warrant (or the portion thereof being exercised), in which event the Company
shall issue to the 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 subject to this
Warrant to be issued to the Holder;
Y - the number of shares of Common Stock subject to
this Warrant otherwise purchasable under this Warrant
(at the date of such calculation);
A - the Market Price of one share of the Company's
Common Stock (at the date of such calculation); and
B - Exercise Price (as adjusted to the date of such
calculation).
For purposes of the foregoing calculation, "Market Price"
shall mean the last reported sales prices regular way, or in case no such sales
take place on such day, the average of the closing bid and ask prices regular
way, of the Company's Common Stock in each case on the principal national
securities exchange on which the security is listed or admitted to trading, or,
if not listed or admitted to trading on any national securities exchange, on the
Nasdaq National Market or, if the Company's Common Stock is not listed or
admitted to trading on any national securities exchange and is not quoted on the
Nasdaq National Market, the average of the closing bid and ask prices as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors of the Company for such purpose.
(b) This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and the person entitled to receive the
shares of Common Stock issuable upon such exercise shall be treated for all
purposes as the holder of record of such shares as of the close of business on
such date. As promptly as practicable on or after such date, and in any event
within ten (10) days thereafter, the Company at its expense, shall issue and
deliver to the person or persons entitled to receive the same, a certificate or
certificates for the number of shares issuable upon such exercise. In the event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.
3. Reservation of Shares. The Company covenants that during
the term this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the exercise of this Warrant. The Company
further convents that all shares that may be issued upon the exercise of the
rights represented by this Warrant and payment of the Exercise Price, all as set
forth herein, will be free from all taxes, liens, and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers, who
are charged with duty of executing stock certificates, to execute and issue the
necessary certificates for shares of Common Stock upon the exercise of this
Warrant.
4. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
5. Rights of Stockholders. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.
6. Adjustments. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:
(a) Reclassification, etc. If the Company at any time
while this Warrant, or any portion thereof, remains outstanding and unexpired
shall, by reclassification of securities or otherwise, change any of the
securities as to which purchase rights under this Warrant exist into the same or
a different number of securities of any other class or classes, this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities which were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 6.
(b) Split, Subdivision or Combination of Shares. If
the Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the number of securities issuable upon the
exercise hereof and the Exercise Price for such securities shall be
appropriately adjusted.
(c) Adjustments for Dividends in Stock or Other
Securities or Property. If while this Warrant, or any portion hereof, remains
outstanding and unexpired the holder of the securities as to which purchase
rights under this Warrant exist at the time shall have received, or, on or after
the record date fixed for the determination of eligible stockholders, shall have
become entitled to receive, without payment therefor, other or additional stock
or other securities or property (other than cash) of the Company by way of
dividend, then and in each case, this Warrant shall represent the right to
acquire, in addition to the number of shares of the security receivable upon
exercise of this Warrant, and without payment of any additional consideration
therefor, the amount of such other or additional stock or other securities or
property (other than cash) of the Company which such holder would hold on the
date of such exercise had it been the holder of record of the security
receivable upon exercise of this Warrant on the date hereof and had thereafter,
during the period from the date hereof to and including the date of such
exercise, retained such shares and/or all other additional stock available by it
as aforesaid during such period, giving effect to all adjustments called for
during such period by the provisions of this Section 6.
(d) Change of Control. If at any time while this
Warrant, or any portion thereof, remains outstanding and unexercised there
occurs (i) a reorganization of the Company (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein); (ii) a merger, consolidation or other corporate combination 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 such number and kind of securities as would have been issuable
as the result of any such transaction with respect to the shares of Common Stock
subject to this Warrant immediately prior to such transaction and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 6.
(e) Certificate as to Adjustments. Upon the
occurrence of each adjustment or readjustment pursuant to this Section 6, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to Holder a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of the Holder, furnish or cause to be furnished to the
Holder a like certificate setting forth; (i) such adjustments and readjustments;
(ii) the Exercise Price at the time in effect; and (iii) the number of shares
and the amount, if any, of other property which at the time would be received
upon the exercise of the Warrant.
(f) No Impairment. The Company will not, by any
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 of this
Section 6 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against impairment.
7. Exchange, Transfer or Loss of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its appointed transfer
agent, if any, for other warrants of different denominations entitling the
Holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its appointed transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
8. Compliance with Securities Law.
(a) This Warrant may not be transferred or assigned
in whole or in part without compliance with all applicable federal and state
securities laws by the transferor and the transferee (including the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the "Securities Act"), title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery.
(b) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant, and the shares of Common Stock to be issued upon
exercise hereof, are being acquired solely for the Holder's own account and not
as a nominee for any other party, and for investment, and that the Holder 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 that will not
result in a violation of the Securities Act or any state securities laws. Upon
exercise of this Warrant, the Holder shall, if requested by the Company, confirm
in writing, in a form satisfactory to the Company, that the shares of Common
Stock so purchased are being acquired solely for the Holder's own account and
not as a nominee for any other party, for investment, and not with a view toward
distribution or resale.
(c) This Warrant and all shares of Common Stock
issued upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES AND ANY SECURITIES OR
SHARES ISSUED HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT
COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY
OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY.
9. Notices. In case (i) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant) for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right; (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation; or
(iii) of any voluntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
fifteen (15) days prior to the date therein specified. All such notices, advices
and communications shall be deemed to have been received (i) in the case of
personal delivery, on the date of such delivery and (ii) in the case of mailing,
on the third business day following the date of such mailing.
10. Amendments. Any term of this Warrant may be amended with
the written consent of the Company and the Holder.
IN WITNESS WHEREOF, EXOGEN, INC. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: September 30, 1998
EXOGEN, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice-President and Chief
Financial Officer
HOLDER: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
NOTICE OF EXERCISE
To: EXOGEN, INC.
(1) The undersigned hereby elects to purchase [ ] shares of
Common Stock of Exogen, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price for such shares in full.
(2) In exercising this Warrant, the undersigned hereby
confirms and acknowledges that the shares of Common Stock to be issued upon
exercise hereof are being acquired solely for the account of the undersigned and
not as a nominee for any other party, and for investment, and that the
undersigned will not offer, sell, or otherwise dispose of any such shares of
Common Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) 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]
________________________
[Name]
(4) Please issue a new Warrant for the unexercised portion of
the attached Warrant in the name of the undersigned or in such other name as is
specified below:
________________________
[Name]
________________________
_________________ ________________________
[Date] [Signature]