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EXHIBIT 4.4
THESE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE TRANSFERRED,
UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER
OR, IN THE OPINION OF COUNSEL TO THE ISSUER, AN EXEMPTION FROM REGISTRATION IS
THEN AVAILABLE.
WARRANT
VOID AFTER 5:00 P.M., California Time, on March 27, 2000
WARRANT TO PURCHASE COMMON STOCK
OF
ADVANCED POLYMER SYSTEMS, INC.
This is to certify that subject to the terms and conditions hereof,
FOR VALUE RECEIVED, 1-- (the "Initial Holder") or registered assigns
(collectively referred to as the "Holder") is entitled to purchase 2-- shares
(as such number may be adjusted pursuant hereto) (the "Warrant Shares") of the
Common Stock (the "Common Stock") of Advanced Polymer Systems, Inc., a Delaware
corporation (the "Company"), at any time during the period from November 30,
1995 (the "Commencement Date") to 5:00 P.M., California Time, on March 27,
2000, at which time this Warrant will expire and become void. The exercise
price is $7.00 per share, as such price may be adjusted pursuant hereto (the
"Exercise Price").
This Warrant is issued pursuant to the provisions of the Subordinated
Loan Agreement dated November 27, 1995 (the "Agreement") and shall be subject
to, and the Holder shall be bound by, all terms, conditions and provisions of
the Agreement. Additionally, the following terms shall apply to this Warrant:
1. Exercise of Warrant, Reservation of Shares.
1.1 Subject to the terms and conditions hereof, this
Warrant may be exercised in whole or in part at any time and from time to time
on or after the Commencement Date, and before 5:00 P.M., California Time, on
March 27, 2000, or if such day is a day on which federal or state chartered
bank institutions located in the State of California are authorized by law to
close, then on the next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company at its principal office or at
the office of its warrant transfer agent, if any, with the attached Purchase
Form duly executed and accompanied by payment, in cash or certified or official
bank check payable to the order of the Company, of the Exercise Price for the
number of Warrant Shares specified in such form. If this Warrant should be
exercised in part only, the Company will, upon presentation of this Warrant
upon such exercise, execute and deliver a new warrant, dated the date hereof,
evidencing the
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rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions as herein set forth.
Upon and as of such receipt of this Warrant and the Purchase Form by the
Company at its office, in proper form for exercise and accompanied by payment
as herein provided, the Holder shall be deemed to be the holder of record of
the Warrant Shares issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing the Warrant Shares shall not then be actually delivered to the
Holder. The Company shall promptly take such reasonable steps as it deems
necessary in order to issue the Warrant Shares to be delivered following
exercise of this Warrant.
1.2 The Company shall at all times after the Commencement
Date and until expiration of this Warrant reserve for issuance and delivery
upon exercise of this Warrant the number of Warrant Shares as shall be required
for issuance and delivery upon exercise of this Warrant.
2. Fractional Shares.
No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fractional shares called for upon exercise hereof, the Company will pay to the
Holder an amount in cash equal to such fraction multiplied by the closing sales
price for a share of Common Stock, or the closing bid price if no sales were
reported, as quoted on the Nasdaq National Market.
3. Transfer in Compliance with the Securities Act of 1933;
Exchange, Assignment or Loss of Warrant.
3.1 This Warrant may not be assigned or transferred,
except as provided herein, and in accordance with and subject to the provisions
of the Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder (said Act and such Rules and Regulations being
hereinafter collectively referred to as the "Act"). Any purported transfer or
assignment made other than in accordance with this Section 3 shall be null and
void and of no force and effect.
3.2 This Warrant or the Warrant Shares may not be sold or
otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel
reasonably satisfactory to the Company, is a person to whom this Warrant or the
Warrant Shares may be legally transferred without registration and without the
delivery of a current prospectus under the Act, as well as applicable state
securities laws with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section 3.2 with
respect to any resale or other disposition of such securities unless, in the
opinion of counsel to the Company, such agreement is not required; or
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(b) Upon delivery of a prospectus or offering
circular then meeting the requirements of the Act as well as applicable state
securities laws relating to such securities and the offering thereof for such
sale or disposition.
3.3 Each certificate for Warrant Shares or for any other
security issued or issuable upon exercise of this Warrant shall contain a
legend on the face, in form and substance satisfactory to counsel for the
Company, setting forth the restrictions on transfer contained in Section 3.1,
unless, in the opinion of counsel reasonably satisfactory to the Company, such
legend is not required.
3.4 Each holder of the Warrant, the Warrant Shares and
any other security issued or issuable upon exercise of this Warrant shall
indemnify and hold harmless the Company, its directors and officers, and each
other person, if any, who controls the Company against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director, officer or any such person may become subject under the Act, any
applicable state securities law or any other statute or at common law, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
directly arise out of or are based upon the disposition by such holder of the
Warrant, Warrant Shares or other such securities in violation of the above
representation.
3.5 Subject to the provisions of Sections 3.1 through
3.4, this Warrant is exchangeable, without expense, at the option of the
Holder, for other warrants of different denominations entitling the Holder to
purchase in the aggregate the same number of Warrant Shares purchasable on the
same terms and conditions, upon presentation at the principal office of the
Company or at the office of its warrant transfer agent, if any, together with a
written notice signed by the Holder specifying the names and denominations in
which new warrants are to be issued, and may be divided or combined with other
warrants which carry the same rights, upon presentation at the principal office
of the Company or at the office of its warrant transfer agent, if any, together
with a written notice signed by the Holder specifying the names and
denominations in which new warrants are to be issued.
3.6 Any assignment permitted under this Warrant will be
made by surrender of this Warrant to the Company at its principal office or at
the office of its warrant transfer agent, if any, with the attached Assignment
Form duly executed and accompanied by funds sufficient to pay any transfer tax.
In such event the Company will, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment, and
this Warrant will promptly be canceled.
3.7 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
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and cancellation of this Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date and any such lost, stolen, or
destroyed Warrant shall thereupon become void.
4. Adjustment of Number of Warrant Shares and Exercise Price.
4.1 The number of Warrant Shares for which this Warrant
may be exercised shall be subject to adjustment as follows:
(a) In the event there is a subdivision or
combination of the outstanding shares of Common Stock into a larger or smaller
number of shares, the number of Warrant Shares shall be increased or reduced in
the same proportion as the increase or decrease in the outstanding shares of
Common Stock.
(b) If the Company declares a dividend on Common
Stock payable in Common Stock or securities convertible into Common Stock, the
number of Warrant Shares shall be increased, as of the record date for
determining which holders of Common Stock shall be entitled to receive such
dividend, in proportion to the increase in the number of outstanding shares of
Common Stock as a result of such dividend.
4.2 In the event at any time prior to the expiration of
this Warrant of any reorganization or reclassification of the outstanding
shares of Common Stock (other than a change in par value, or from no par value
to par value, or from par value to no par value, or as a result of a
subdivision or combination) or any consolidation or merger of the Company with
another entity, or sale, lease or transfer of all or substantially all of the
property or assets of the Company, the Holder shall have the right, but not the
obligation, to exercise this Warrant. Upon such exercise, the Holder shall
have the right to receive the same kind and number of shares of capital stock
and other securities, cash or other property as would have been distributed to
the Holder upon such reorganization, reclassification, consolidation or merger
had the Holder exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation or merger. The Holder shall pay upon such
exercise the Exercise Price that otherwise would have been payable pursuant to
the terms of this Warrant. If any such reorganization, reclassification,
consolidation or merger results in a cash distribution in excess of the
Exercise Price provided by this Warrant, the Holder may, at the Holder's
option, exercise this Warrant without making payment of the Exercise Price, and
in such case the Company shall, upon distribution to the Holder, consider the
Exercise Price to have been paid in full, and in making settlement to the
Holder, shall deduct an amount equal to the Exercise Price from the amount
payable to the Holder.
4.3 If the Company shall, at any time prior to the
expiration of this Warrant, dissolve, liquidate or wind up its
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affairs, the Holder shall have the right, but not the obligation, to exercise
this Warrant. Upon such exercise the Holder shall have the right to receive,
in lieu of the shares of Common Stock that the Holder otherwise would have been
entitled to receive, the same kind and amount of assets as would have been
issued, distributed or paid to the Holder upon any such dissolution,
liquidation or winding up with respect to such shares of Common Stock had the
Holder been the holder of record of such shares of Common Stock receivable upon
exercise of this Warrant on the date for determining those entitled to receive
any such distribution. If any such dissolution, liquidation or winding up
results in any cash distribution in excess of the Exercise Price provided for
by this Warrant, the Holder may, at the Holder's option, exercise this Warrant
without making payment of the Exercise Price and, in such case, the Company
shall, upon distribution to the Holder, consider the Exercise Price to have
been paid in full, and in making settlement to the Holder shall deduct an
amount equal to the Exercise Price from the amount payable to the Holder.
4.4 The Company may retain a firm of independent public
accountants of recognized standing (who may be any such firm regularly employed
by the Company) to make any computation required under this Section 4, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of any computation made under this Section.
4.5 Whenever the number of shares of Common Stock
purchasable upon the exercise of this Warrant is adjusted as herein provided,
the Exercise Price shall be adjusted by multiplying the applicable Exercise
Price immediately prior to such adjustment by a fraction, the numerator of
which shall be the number of shares of Common Stock purchasable upon exercise
of this Warrant immediately prior to such adjustment and the denominator of
which shall be the number of shares of Common Stock purchasable immediately
after such adjustment.
4.6 If the Company does not earn net income, determined
in accordance with GAAP, for the fiscal quarter ended December 31, 1996, the
Exercise Price automatically shall be reduced from $7.00 to $5.00 per share.
Determination of whether the Company has earned net income for such fiscal
quarter shall be based on the financial statements for such quarter prepared by
the Company in accordance with GAAP and utilized in the preparation of the
audited financial statements for the fiscal year ended December 31, 1996, as
certified by the Chief Financial Officer of the Company as accurate and
complete in all material respects. If the Exercise Price is reduced pursuant
to the previous sentence and the Company does not report on its Annual Report
on Form 10-K for the fiscal year ended December 31, 1997, net income,
determined in accordance with GAAP, for such fiscal year, the Exercise Price
automatically shall be reduced from $5.00 to $3.00 per share.
4.7 Upon any adjustment of the Exercise Price, then and
in each such case the Company shall give written notice
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thereof, by first class mail, postage prepaid, addressed to the Holder at the
address of such Holder as shown on the books of the Company, which notice shall
state the Exercise Price resulting from such adjustment, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
4.8 The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant.
4.9 The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
thereof for any issuance tax in respect thereof; provided, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder.
5. Rights of Holder.
Except as otherwise provided in Section 1.1 above, this
Warrant does not entitle the Holder to any rights of a stockholder of the
Company either at law or in equity, and the rights of any such Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company, except to the extent set forth herein.
6. Warrant Transfer Agent.
Any reference in this Warrant to the warrant transfer agent
will apply if, and only if, the Company will have advised the Holder that such
an agent has been designated as an agency for the transfer or exercise of this
Warrant.
7. Governing Law.
This Warrant shall be construed in accordance with the laws of
the State of California.
8. Notices.
Any notice required hereunder shall be by writing and shall be
given by personal delivery, or United States mail, certified or registered with
return receipt requested, postage prepaid and shall be deemed to be effective
five (5) business days after mailing or on the date of delivery if delivered
personally, at the following addresses, or such other addresses as one party
may from time to time give the other in writing:
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To the Company: Advanced Polymer Systems, Inc.
3696 Haven Avenue
Redwood City, CA 94063
To Holder: At the address set forth on
Schedule A of the Agreement.
9. Registration Rights.
The Warrant Shares shall be subject to and enjoy the benefits
of the provisions regarding registration under the Act set forth in Section 9
of the Agreement.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
30th day of November, 1995.
ADVANCED POLYMER SYSTEMS, INC.
By: /s/ MICHAEL P. J. O'CONNELL
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Michael P. J. O'Connell
Chief Financial Officer
Initial Holder
Name: 1--
Address: 3--
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PURCHASE FORM
Dated:_______________, 199_
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing __________ shares of Common Stock
and hereby makes payment of $__________ in payment of the actual exercise price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:_______________________________________________________
(Please typewrite or print in block letters)
Address:____________________________________________________
____________________________________________________
____________________________________________________
Signature:_________________________
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________ hereby sells, assigns
and transfers unto
Name:____________________________________________
(Please typewrite or print in block letters)
Address:_________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
_________ shares of Stock and does hereby irrevocably constitute and appoint
____________________, attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Signature:_________________________
Dated:_______________, 199_