Exhibit 10.4
NEITHER THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
----------
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
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EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THIS
WARRANT.
No. 1
WARRANT
Dated July 9, 2001
("Effective Date")
to Purchase up to an Aggregate of 22,220,113 Shares of Common Stock
(Subject to Adjustment)
at U.S. $.0575 per share
VOID AFTER 10:00 a.m. (Eastern Time)
on July 9, 2008
THIS IS TO CERTIFY that the ▇. ▇▇▇▇▇ Family Limited Partnership, a Delaware
limited partnership, ("Holder"), or its Permitted Assigns (as defined in Section
10 of this Warrant), is entitled to purchase, subject to the provisions of this
Warrant ("Warrant"), from SpectruMedix Corporation, a Delaware corporation (the
"Company"), in accordance with the provisions set forth below, an aggregate of
up to 22,220,113 (subject to adjustment) (as adjusted, the "Warrant Number")
fully paid and nonassessable shares (as subject to adjustment hereunder, the
"Shares") of the common stock, par value $.00115 per share (the "Common Stock"),
of the Company, at a price of $.0575 per share (as subject to adjustment
hereunder, the "Exercise Price"). The amount and kind of securities purchasable
pursuant to the rights granted hereunder and the Exercise Price for such
securities are subject to adjustment pursuant to the further provisions of this
Warrant.
1. EXERCISE OF WARRANT
1.1 Subject to the provisions hereof, Warrants may be exercised in whole
or in part at any time or from time to time on or after the date
hereof (the "Exercise Date") and until July 9, 2008 (the "Expiration
Date").
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1.2 This Warrant shall be exercised by presentation and surrender hereof
to the Company at the principal office of the Company accompanied by
(a) a written notice of exercise in the form attached as Exhibit A
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hereto ("Election to Purchase"); and
(b) payment to the Company, for the account of the Company, of the
Exercise Price for the number of Shares specified in such notice.
The Exercise Price for the number of Shares specified in the notice
shall be payable in immediately available good funds, at the option of
the Holder, in U.S. dollars, provided, however, that in lieu of making
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cash payment of the Exercise Price to the Company, the Holder may
tender all or any unpaid portion of that certain Secured Note dated
July 9, 2001 issued by the Company to the Holder, and shall treat
indebtedness so tendered as the equivalent of cash payment, at the
rate of $2 of cash payment for each $1 in principal amount of Secured
Note which is so tendered. The Exercise Price shall be subject to
adjustment pursuant to Section 4 hereof.
(c) In lieu of delivering the Exercise Price as set forth in Section
-------
1.2(b), the Holder may instruct the Company in writing ("Notice
------
of Conversion") to deliver to the Holder (without payment by the
Holder of any Exercise Price) that number of shares of Common
Stock equal to the quotient obtained by dividing:
(i) the value of this Warrant at the time the conversion right
is exercised (determined by subtracting the aggregate Exercise Price
in effect immediately prior to the exercise of the conversion right
from the aggregate Current Market Price of the shares of Common Stock
issuable upon exercise of this Warrant immediately prior to the
exercise of the conversion right) by
(ii) the Current Market Price of one share of Common Stock
immediately prior to the exercise of the conversion right.
(d) For purposes hereof, "Current Market Price" shall mean: the
average of the closing prices of any security's sales on all
securities exchanges on which such security may at the time be
listed, or, if there have been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or, if on any day
such security is not so listed, the average of the representative
bid and asked prices quoted on the Nasdaq National Market
("NASDAQ") as of 4:00 P.M., New York time, or, if on any day such
security is not quoted on NASDAQ, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-
counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such
case averaged over a period of twenty-one (21) days consisting of
the day as of which the Current Market Price is being
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determined and the twenty (20) consecutive business days prior to
such day. If at any time such security is not listed on any
securities exchange or quoted on NASDAQ or the over-the counter
market, the "Market Price" shall be the fair value thereof
determined by the Board of Directors of the Corporation.
1.3 Upon such presentation and surrender, the Company shall issue promptly
to the Holder the Shares to which the Holder is entitled hereunder.
The number of Shares purchasable upon the exercise of this Warrant
shall be subject to adjustment pursuant to Section 4 hereof.
1.4 If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the rights of the Holder to purchase the
balance of the Shares purchasable hereunder. Upon receipt by the
Company of this Warrant, in proper form for exercise, the Holder shall
be deemed to be the holder of record of the Shares issuable upon such
exercise, notwithstanding that the share transfer books of the Company
shall then be closed or that certificates representing such Shares
shall not then be actually delivered to the Holder. No fractions of
Shares shall be issued in connection with the exercise of this
Warrant, but in lieu of such fractional shares the Company shall round
down the number of Shares issued to the nearest whole number.
1.5 Mandatory Exercise. In the event that the Company effects a public
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offering of its equity securities in which the gross proceeds to the
Company (before deduction for underwriters' fees and commissions, blue
sky expenses, the fees and expenses of accountants and attorneys or
other related transaction expenses) exceed $20,000,000, then the
Holder shall, upon written notice from the Company, exercise this
Warrant for such number of shares of Common Stock subject hereto as
the Company may specify in such notice.
2. RESERVATION OF SHARES: PRESERVATION OF RIGHTS
The Company hereby agrees that at all times it will maintain and reserve
such number of authorized but unissued Shares so that this Warrant may be
exercised without additional authorization of shares of Common Stock after
giving effect to all other options, warrants, convertible securities and
other rights to acquire shares of Common Stock of the Company. All Shares
issuable pursuant to the terms hereof, when issued upon exercise of this
Warrant in accordance with the terms hereof shall be duly and validly
issued and fully paid and nonassessable, not subject to preemptive rights
and shall be free and clear of all liens, encumbrances, equities and
claims. The Company further agrees that it will not, by charter amendment
or through reorganization, consolidation, merger, dissolution or sale of
assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company.
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3. EXCHANGE OR LOSS OF WARRANT
This Warrant is exchangeable, upon presentation and surrender hereof at the
principal office of the Company, only in connection with a partial exercise
hereof. Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will execute and deliver a new Warrant of like
terms, tenor and date.
4. ADJUSTMENT
The number of Shares purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time or upon
exercise as provided in this Section 4.
4.1 If, during the term of this Warrant, the Company shall distribute a
stock dividend or shares of capital stock to the holders of shares of
Common Stock, the number of Shares purchasable upon exercise of this
Warrant shall be increased by multiplying such number of Shares to be
purchased under this Warrant by a fraction of which the denominator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for the determination of stockholders
entitled to receive such dividend or distribution (the "Original
Outstanding Shares") and the numerator shall be (i) the Original
Outstanding Shares plus (ii) the total number of such shares of Common
----
Stock being issued or distributed. Such increase will become effective
immediately after the opening of business on the date fixed for such
determination, and upon the happening of such an event the Exercise
Price shall be adjusted appropriately as described herein. For
purposes of this Section 4.1, the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of
the Company. The Exercise Price shall be multiplied by a fraction of
which the numerator shall be the Original Outstanding Shares and the
denominator shall be the sum of (i) the Original Outstanding Shares
plus (ii) the total number of shares of Common Stock being issued or
----
distributed.
4.2 If, during the term of this Warrant, the outstanding shares of Common
Stock shall be subdivided into a greater number of shares, the number
of Shares purchasable upon exercise of this Warrant at the opening of
business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased and the Exercise
Price shall be proportionately decreased, as appropriate, and,
conversely, if the outstanding shares of Common Stock shall each be
combined into a smaller number of shares, the number of Shares
purchasable upon exercise of this Warrant at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately decreased and the Exercise Price
shall be proportionately increased, as appropriate.
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4.3 Reorganization, Reclassification, Merger, Consolidation or Disposition
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of Assets
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(a) In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another
corporation or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another
corporation and pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets,
(i) shares of capital stock of the successor or acquiring
corporation or of the Company (if it is the surviving
corporation) or (ii) any cash, shares of stock or other
securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to
or in lieu of capital stock of the successor or acquiring
corporation ("Other Property") are to be received by or
distributed to the holders of shares of Common Stock of the
Company who are holders immediately prior to such transaction,
then suitable lawful and enforceable provisions shall be made as
part of such transaction whereby the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the number
of shares of capital stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation
Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or
disposition of assets by a holder of the number of Shares for
which this Warrant is exercisable immediately prior to such
event.
(b) In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or
acquiring corporation shall expressly assume the due and punctual
observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as
determined by resolution of the Board of Directors of the
Company) in order to provide for adjustments of shares of the
Shares for which this Warrant is exercisable, which modifications
shall be as nearly equivalent as practicable to the adjustments
provided for in this Section 4. The Company shall not consummate
or agree to consummate any such reorganization, reclassification,
merger, consolidation or disposition unless the successor or
acquiring person shall have duly executed a written instrument
providing for the express assumption referred to in the first
sentence of this Section 4.6(b).
(c) The provisions of this Section 4.6 shall similarly apply to
successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
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4.4 Fractional Shares
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The Company shall not be required to issue fractional Shares on the
exercise of Warrants. If any fraction of a Share would, except for the
provisions of this Section 4.8, be issuable on the exercise of this
Warrant (or specified portion thereof), the Company shall pay an
amount in cash equal to the fair market value (as determined in good
faith by the Board of Directors and described in a resolution of the
Board of Directors) for one Share on the business day immediately
preceding the date the Warrant is exercised, multiplied by such
fraction, computed to the nearest whole cent.
5. NOTICE OF CERTAIN EVENTS
The holder of this Warrant shall be entitled to the same rights to receive
notices of corporate actions as any holder of shares of Common Stock as
provided in the Company's Articles of Incorporation, as amended, or
otherwise. Notwithstanding, in case at any time:
5.1 There shall be any merger of the Company with, or any statutory
exchange of the Company's securities with the securities of, or sale
of all or substantially all of its assets to, another corporation; or
5.2 There shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, in any one or more of such cases, the Company shall give written
notice, by first class mail, postage prepaid, addressed to the Holder at
the address of the Holder as shown on the books of the Company, of the date
on which such merger, exchange, sale, dissolution, liquidation or winding
up shall take place, as the case may be. Such notice shall also specify the
date as of which the holders of Shares of record shall be entitled to
exchange their Shares for securities or other property deliverable upon
such merger, exchange, sale, dissolution, liquidation or winding up, as the
case may be. Such written notice shall be given at least thirty (30) days
prior to the action in question.
6. NOTICE OF ADJUSTMENTS
Whenever the number of Shares for which this Warrant is exercisable or the
Exercise Price is adjusted as provided in Section 4 hereof, the Company
shall promptly compute such adjustment and mail to the Holder at the last
address provided to the Company in writing a certificate, signed by the
principal financial officer of the Company, setting forth the number of
Shares for which this Warrant is exercisable and the Exercise Price as a
result of such adjustment, a brief statement of the facts requiring such
adjustment and the detailed computation thereof and when such adjustment
has or will become effective.
7. RIGHTS OF THE HOLDER
7.1 Without limiting the foregoing or any remedies available to the
Holder, the Holder will be entitled to specific performance of the
obligations hereunder, and
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injunctive relief against actual or threatened violations of the
obligations of any person subject to this Warrant.
7.2 This Warrant shall not entitle the Holder to any voting rights or
other rights as a shareholder of the Company whatsoever, except the
rights expressed herein and no dividend or interest shall be payable
or accrue in respect of this Warrant.
8. NOTICE GENERALLY
Any notice, demand, request, consent, approval, declaration, delivery or
communication hereunder to be made pursuant to the provisions of this
Warrant shall be sufficiently given or made if in writing and shall be
deemed to have been validly served, given or delivered (a) when sent after
receipt of confirmation or answer back if sent by telex or telecopy or
other similar facsimile transmission, (b) two (2) business days after
deposit with a reputable international two (2) day courier with all charges
prepaid or (c) when delivered if hand-delivered by messenger, all of which
shall be properly addressed to the party to be notified and sent to the
address or number indicated, to the Holder, or the holder of Shares at its
last known address appearing on the books of the Company maintained for
such purpose, and to the Company at:
SPECTRUMEDIX CORPORATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
or at such other address as may be submitted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice.
9. GOVERNING LAW
THIS WARRANT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW
YORK.
10. SUCCESSORS AND ASSIGNS
The terms and provisions of this Warrant shall inure to the benefit of, and
be binding upon, the Company and the Holder hereof and its respective
successors and permitted assigns (provided that the Company's obligation to
a transferee of this Warrant arises only if such transfer is made in
accordance with the terms of this Warrant).
11. LEGENDS
Each certificate evidencing any Shares issued upon exercise of this Warrant
shall bear a legend in substantially the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
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EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS.
If any Shares are (i) freely tradable pursuant to Rule 144(k) of the
Securities Act or (ii) sold pursuant to an effective registration statement
under the Securities Act, the Company shall, upon written request of the
Holder thereof, issue to such Holder a new certificate evidencing such
Shares without the legend required by this Section 14 endorsed thereon.
12. AMENDMENTS AND WAIVERS
Any waiver or amendment of any term of this Warrant shall be in a writing
signed by both the Company and the Holder and shall be binding upon any
subsequent holder of this Warrant.
DATED: July 9, 2001 SPECTRUMEDIX CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Secretary & Vice President
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EXHIBIT A
FORM OF ELECTION TO PURCHASE
TO: SpectruMedix Corporation (the "Company")
Attention: Corporate Secretary
1. The undersigned hereby elects to purchase __________ Shares of the
Company pursuant to the terms of the attached Warrant.
2. The undersigned elects to exercise the attached Warrant by means of a
cash payment, and tenders herewith payment in full for the purchase price of the
shares being purchased, together with all applicable transfer taxes, if any,
other than stamp or documentary taxes.
3. Please issue a certificate or certificates representing said Shares in
the name of the undersigned or in such other name as is specified below:
_________________________
(Name)
_________________________
_________________________
(Address)
_________________________
(Signature)
Title:___________________
__________________________
(Date)
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EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, _______________________ hereby sells, assigns, and
transfers to each assignee set forth below all of the rights of the undersigned
in and to the number of Warrants (as defined in and evidenced by the foregoing
Warrant) set opposite the name of such assignee below and the shares of Common
Stock issuable upon exercise of said Warrants:
Name of Assignee Address Number of Warrants
---------------- ------- ------------------
If the total of said Warrants shall not be all the Warrants evidenced by
the foregoing Warrant, the undersigned requests that a New Warrant evidencing
the Warrants not so assigned be issued in the name of and delivered to the
undersigned.
Dated:______________________ Name of Holder:
(Print)_________________________
By:_____________________________
Title:__________________________
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