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Exhibit 99.4
THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE AND THE SHARES OF STOCK
ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY SECURITIES LAWS OF A STATE OR OTHER JURISDICTION AND MAY NOT UNDER
ANY CIRCUMSTANCES BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, OR (II) TO THE EXTENT APPLICABLE,
RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE UNDER THE SECURITIES ACT
RELATING TO THE DISPOSITION OF SECURITIES) TOGETHER WITH AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
APPLICABLE STATE SECURITIES LAWS.
ATRIX LABORATORIES, INC.
WARRANT TO PURCHASE SHARES
OF ATRIX COMMON STOCK
THIS CERTIFIES THAT, for value received, ELAN INTERNATIONAL
SERVICES, LTD., a Bermuda exempted limited liability company, or its permitted
transferees and successors as provided herein (each, a "Holder"), is entitled to
subscribe for and purchase up to 1,000,000 shares, as adjusted pursuant to
Section 4 (the "Shares"), of the fully paid and nonassessable shares of Common
Stock, par value $.001 (the "Atrix Common Stock"), of ATRIX LABORATORIES, INC.,
a Delaware corporation (the "Company"), at the price of U.S.$18.00 per share
(such price, and such other prices that shall result from time to time, from the
adjustments specified in Section 4, the "Warrant Price"), subject to the
provisions and upon the terms and conditions hereinafter set forth.
1. Term. Subject to the limitations set forth in Sections 4
and 5, the purchase right represented by this Warrant is exercisable, in whole
or in part, at any time, and from time to time, from and after the date hereof
and until 5:00 p.m. Eastern Standard Time, July 18, 2005. To the extent not
exercised at 5:00 p.m. Eastern Standard Time on July 18, 2005, this Warrant
shall completely and automatically terminate and expire, and thereafter it shall
be of no force or effect.
2. Method of Exercise; Payment; Issuance of New Warrant. (a)
The purchase right represented by this Warrant may be exercised by the Holder,
in whole or in part and from time to time, by the surrender of this Warrant
(with the notice of exercise form attached hereto as Annex A duly executed) at
the principal office of the Company and by the payment to the Company of an
amount in cash or other immediately available funds of an amount equal to the
Warrant Price multiplied by the number of Shares being purchased pursuant to
such exercise of this Warrant.
(b) Notwithstanding anything to the contrary herein, if at any
time upon exercise of this Warrant, the Holder's ownership would exceed 19.9% of
the issued and outstanding
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shares of Atrix Common Stock on a fully diluted basis, the Holder shall, to the
extent of such excess, receive non-voting securities of the Company.
(c) The persons or entities in whose name(s) any
certificate(s) representing Shares shall be issuable upon exercise of this
Warrant shall be deemed to have become the holder(s) of record of, and shall be
treated for all purposes as the record holder(s) of, the Shares represented
thereby (and such Shares shall be deemed to have been issued) immediately prior
to the close of business on the date or dates upon which this Warrant is
properly exercised and full payment for the Shares acquired pursuant to such
exercise is made. Upon any exercise of the rights represented by this Warrant,
certificates for the Shares purchased shall be delivered to the holder hereof as
soon as possible and in any event within 30 days of receipt of such notice and
payment, and unless this Warrant has been fully exercised or expired, a new
Warrant representing the portion of Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the holder
hereof as soon as possible and in any event within such 30-day period.
3. Stock Fully Paid, Reservation of Shares. All Shares that
may be issued upon the exercise of this Warrant will, upon issuance, be duly and
validly authorized and issued, fully paid and nonassessable, and will be free
from all transfer taxes, liens and charges with respect to the issue thereof and
assuming payment of the Warrant Price for all Shares so purchased, legally and
validly owned by the Holder. During the period within which this Warrant may be
exercised, the Company will at all times have authorized, and reserved for the
purpose of the issue upon the exercise of the purchase rights evidenced by this
Warrant, a sufficient number of shares of the Atrix Common Stock to provide for
the exercise of the rights represented by this Warrant.
4. Adjustment of Warrant Price and Number of Shares. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Warrant Price shall be subject to the adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Etc. In case of (i) any
reclassification, reorganization, change or conversion of 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 (ii) any merger or consolidation of the
Company with or into another entity (other than a merger or consolidation with
another entity in which the Company is the acquiring and the surviving entity
and that does not result in any reclassification or change of outstanding
securities issuable upon exercise of this Warrant), or (iii) any sale or lease
of all or substantially all the assets of the Company, then the Company, or such
successor or purchasing entity, as the case may be, shall duly execute and
deliver to the holder of this Warrant a new Warrant or a supplement hereto (in
form and substance reasonably satisfactory to the holder of this Warrant), so
that the Holder shall have the right to receive, at a total purchase price not
to exceed that payable upon the exercise of the unexercised portion of this
Warrant, and in lieu of the shares of the Atrix Common Stock theretofore
issuable upon the exercise of this Warrant, the kind and amount of shares of
stock and other securities, receivable upon such reclassification,
reorganization, change or conversion by a holder of the number of shares of the
Atrix Common Stock then purchasable under this Warrant. Such new Warrant shall
provide for adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 4. The provisions of this
Section 4(a) shall similarly attach to
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successive reclassifications, reorganizations, changes, conversions, mergers,
consolidations or asset sales.
(b) Split, Subdivision or Combination of Shares. If the
Company at any time during which this Warrant remains outstanding and unexpired
shall split, subdivide or combine its the Atrix Common Stock, (i) in the case of
a split or subdivision, the Warrant Price shall be proportionately decreased and
the number of Shares purchasable hereunder shall be proportionately increased,
and (ii) in the case of a combination, the Warrant Price shall be
proportionately increased and the number of Shares purchasable hereunder shall
be proportionately decreased.
(c) Below Market Issuance; Stock Dividends; Etc. If at any
time prior to the earlier of the exercise or expiration hereof the Company shall
(i) issue or sell any shares of the Atrix Common
Stock at a price below the then-current Fair Market Value per share,
the Warrant Price in effect immediately prior to each such issuance
shall forthwith (except as otherwise provided in this Section 4(c)) be
adjusted to a price equal to a price determined by multiplying such
Warrant Price by a fraction, the numerator of which shall be the sum of
(w) the number of shares of the Atrix Common Stock deemed outstanding
(as defined below) immediately prior to such issuance, and (x) the
number of shares of the Atrix Common Stock that the aggregate
consideration received or to be received by the Company for such
issuance would purchase at such Warrant Price; and the denominator of
which shall be the sum of (y) the number of shares of the Atrix Common
Stock deemed outstanding (as defined below) immediately prior to such
issuance and (z) the number of additional shares of such Atrix Common
Stock so issued or sold. As set forth herein, "Fair Market Value" of
one share of Atrix Common Stock shall mean (x) the average of the
closing prices on the 20 trading days prior to such determination on
the principal national securities exchange on which the Atrix Common
Stock is traded, if any, (y) the average of the last quoted prices on
the 20 trading days prior to such determination if the Atrix Common
Stock is traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, or (z) if the Atrix Common Stock is not listed on a national
securities exchange or traded on the Nasdaq National Market or the
Nasdaq SmallCap Market, then as determined in good faith by the
Company's Board of Directors and reasonably agreed to by the Holder.
For purposes hereof, "Common Stock deemed outstanding" as of a given
date shall be the sum of (A) the number of shares of Atrix Common Stock
actually outstanding, (B) the number of shares of Atrix Common Stock
into which the then outstanding shares of preferred stock could be
converted if fully converted on the day immediately preceding the given
date, and (C) the number of shares of Atrix Common Stock which could be
obtained through the exercise or conversion of all other rights,
options and convertible securities outstanding on the day immediately
preceding the given date. The Company may issue, without triggering the
foregoing provisions of this paragraph (A) shares of Common Stock upon
conversion of its preferred stock; (B) securities or rights or options
issued to employees, consultants or directors in accordance with plans
approved by the Company's Board of Directors, (C) securities or rights
or options under the Atrix Employee Stock Purchase Plan, and (D) shares
of Common Stock upon conversion of 7% Convertible Subordinated Notes
due 2004; or
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(ii) fix a record date for the effectuation of a
split or subdivision of the outstanding shares of Atrix Common Stock or
the determination of holders of Atrix Common Stock entitled to receive
a dividend or other distribution payable in additional shares of Atrix
Common Stock or other securities or property or rights convertible
into, or entitling the holder thereof to receive directly or
indirectly, any of the foregoing (hereinafter referred to as "Common
Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Atrix Common Stock or the Common Stock
Equivalents (including the additional shares of Atrix Common Stock
issuable upon conversion or exercise thereof), then this Warrant shall
be for, in addition to the number of shares of the Atrix Common Stock
otherwise deliverable upon exercise of this Warrant, and without
adjustment to the Warrant Price, the amount of such additional shares
of Atrix Common Stock and any Common Stock Equivalents that the holder
hereof would have received or become entitled to receive on the same
terms and conditions as if such holder had been a holder of record of
such Atrix Common Stock as shall have been deliverable immediately
prior to such record date pursuant to the terms of this Section 4,
unless such record date is fixed and such dividend is not paid or if
such distribution, split or subdivision is not fully made on the date
fixed therefor.
(d) The following provisions shall apply for purposes of this
Section 4:
(i) the aggregate maximum number of shares of Atrix
Common Stock or other securities or property deliverable upon
conversion or exercise of Common Stock Equivalents (assuming the
satisfaction of any conditions to convertibility or exercisability,
including, without limitation, the passage of time, but without taking
into account potential antidilution adjustments) shall be deemed to
have been issued at the time such Common Stock Equivalents were issued;
(ii) in the event of any change in the number of
shares of Atrix Common Stock deliverable or in the consideration
payable to the Company upon conversion or exercise of such Common Stock
Equivalents including, but not limited to, a change resulting from the
antidilution provisions thereof, the Warrant Price, to the extent in
any way affected by or computed using such Common Stock Equivalents,
shall be recomputed to reflect such change, but no further adjustment
shall be made for the actual issuance of Atrix Common Stock or any
payment of such consideration upon the exercise of any such options or
rights or the conversion or exchange of such securities; and
(iii) upon the termination or expiration of the
convertibility or exercisability of any such Common Stock Equivalents,
the Warrant Price, to the extent in any way affected by or computed
using such Common Stock Equivalents, shall be recomputed to reflect the
issuance of only the number of shares of Atrix Common Stock (and Common
Stock Equivalents which remain convertible or exercisable) actually
issued upon the conversion or exercise of such Common Stock
Equivalents.
(e) Other Distributions. In the event the Company shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by the Company or other persons, assets, cash (excluding
cash dividends declared out of retained earnings) or options or rights not
referred to in the previous section (c), then, in each such case for the purpose
of this
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Section (e), the holders of Warrant shall be entitled to a proportionate share
of any such distribution as though they were the holders of the number of shares
of Atrix Common Stock into which their Warrant would be exercisable for as of
the record date fixed for the determination of the holders of Atrix Common Stock
entitled to receive such distribution.
(f) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation, any certificate of designations or bylaws or
through any reorganization, recapitalization, 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 of this Section 4 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.
(g) Notice of Adjustments. Whenever the Warrant Price or the
number of Shares purchasable hereunder shall be adjusted pursuant to this
Section 4, the Company shall prepare a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated. Such certificate shall be signed
by its chief financial officer and shall be delivered to the Holder.
(h) Fractional Shares. No fractional shares of Atrix Common
Stock will be issued in connection with any exercise hereunder, but in lieu of
such fractional shares the Company shall make a cash payment therefor based on
the fair market value of the Atrix Common Stock on the date of exercise as
reasonably determined in good faith by the Company's Board of Directors.
(i) Cumulative Adjustments. No adjustment in the Warrant Price
shall be required under this Section 4 until cumulative adjustments result in a
concomitant change of 1% or more of the Warrant Price or in the number of shares
of Atrix Common Stock purchasable upon exercise of this Warrant as in effect
prior to the last such adjustment; provided, however, that any adjustment that
by reason of this Section 4 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 4 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
5. Compliance with Securities Act; Disposition of Warrant or
Shares of Atrix Common Stock.
(a) The Holder, by acceptance hereof, agrees that this Warrant
and the Shares to be issued upon exercise hereof are being acquired for
investment and that such holder will not offer, sell or otherwise dispose of
this Warrant or any Shares to be issued upon exercise hereof except under
circumstances which will not result in a violation of applicable securities
laws. Upon exercise of this Warrant, unless the Shares being acquired are
registered under the Securities Act of 1933, as amended (the""Act"), or an
exemption from the registration requirements of the Act is available, the Holder
shall confirm in writing, by executing an instrument in form reasonably
satisfactory to the Company, that the Shares so purchased are being acquired for
investment and not with a view toward distribution or resale. This Warrant and
all Shares issued upon exercise of this Warrant (unless registered under the
Act) shall be stamped or imprinted with a legend in substantially the following
form:
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"THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE AND THE SHARES
OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AS AMENDED, OR ANY SECURITIES LAWS OF A
STATE OR OTHER JURISDICTION AND MAY NOT UNDER ANY CIRCUMSTANCES BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, OR (II) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE
UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES)
TOGETHER WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE
SECURITIES LAWS."
(b) (i) This Warrant may be transferred or assigned, in whole
or in part, by EIS to its affiliates and subsidiaries, including any special
purpose financing or similar vehicle affiliate. Other than as set forth in the
preceding sentence, this Warrant may not be transferred or assigned by either
party without the prior written consent of the other. Subject to the foregoing,
this Warrant and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns; provided, however, that the transferor and the Company shall continue
to be liable and obligated for their respective obligations hereunder after any
such assignment.
(ii) With respect to any offer, sale or other disposition of
this Warrant or any Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Shares, the Holder shall give
written notice to the Company prior thereto, describing briefly the
manner thereof, together with a written opinion of such Holder's
counsel, if requested by the Company, to the effect that such offer,
sale or other disposition may be effected without registration or
qualification (under the Act or any other federal or state law then in
effect) of this Warrant or such Shares and indicating whether or not
under the Act certificates for this Warrant or such Shares to be sold
or otherwise disposed of require any restrictive legend as to
applicable restrictions on transferability in order to ensure
compliance with the Act. Promptly upon receiving such written notice
and reasonably satisfactory opinion, if so requested, the Company shall
notify such Holder that such Holder may sell or otherwise dispose of
this Warrant or such Shares, all in accordance with the terms of the
notice delivered to the Company. Each certificate representing this
Warrant or the Shares thus transferred shall bear a legend as to the
applicable restrictions on transferability in order to insure
compliance with the Act, unless in the aforesaid opinion of counsel for
the Holder such legend is not required in order to insure compliance
with the Act. The Company may issue stop transfer instructions to its
transfer agent in connection with such restrictions.
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(iii) The shares of Atrix Common Stock for which this Warrant
is exercisable are entitled to the benefit of certain registration
rights as set forth in a Registration Rights Agreement dated as of the
date hereof between the Company and the initial Holder named herein.
6. Rights as Stockholders. No Holder, as such, shall be
entitled to vote or receive dividends or be deemed the holder of Shares 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, as such, any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant is exercised and the Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.
7. Issue Tax. The issuance of certificates for shares of Atrix
Common Stock upon the exercise of this Warrant shall be made without charge to
Holder for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, 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 Holder.
8. Miscellaneous. (a) This Warrant may not be modified or
amended, or any provisions hereof waived, except by written agreement of the
Company and the Holder.
(b) All notices, demands and requests of any kind to be
delivered to any party in connection with this Note shall be in writing and
shall be deemed to have been duly given if personally or hand delivered or if
sent by an internationally-recognized overnight delivery courier or by
registered or certified mail, return receipt requested and postage prepaid, or
by facsimile transmission addressed as follows:
(i) if to the Company, to:
Atrix Laboratories, Inc.
2579 Midpoint Drive
Fort Collins, Colorado 80525
Attention: Chief Executive Officer
Facsimile: (970) 482-9735
with a copy to:
Morrison & Foerster LLP
370 17th Street, Suite 5200
Denver, Colorado 80202
Attention: Warren L. Troupe, Esq.
Facsimile: (303) 592-1510
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(ii) if to EIS, to:
Elan International Services, Ltd.
102 St. James Court
Flatts, Smiths Parish
Bermuda FL 04
Attention: Chief Executive Officer
Facsimile: (441) 292-2224
with a copy to:
Brock Silverstein LLC
800 Third Avenue
21st Floor
New York, New York 10022
Attention: David Robbins, Esq.
Facsimile: (212) 371-5500
(c) The Company covenants to the Holder that 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 receipt of a bond or indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant, the Company will make and deliver a new Warrant, of like tenor,
in lieu of the lost, stolen, destroyed or mutilated Warrant.
(d) The descriptive headings of the several sections and
paragraphs contained in this Warrant are for reference purposes only and shall
not affect in anyway the meaning or interpretation of this Warrant.
(e) This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to the principles of conflicts of laws. Any dispute under this Warrant
that is not settled by mutual consent shall be finally adjudicated by any
federal or state court sitting in the City, County and State of New York, and
the Company consents to the exclusive jurisdiction of such courts (or any
appellate court therefrom) over any such dispute.
(f) This Warrant may be signed and delivered to the other
party by a facsimile transmission; such transmission shall be deemed a valid
signature.
[Signature page follows]
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IN WITNESS WHEREOF, the Company has executed this Warrant as
of the 18th day of July, 2000.
ATRIX LABORATORIES, INC.
By: /s/ DAVID R. BETHUNE
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Name: David R. Bethune
Title: Chief Executive Officer
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Annex A
NOTICE OF EXERCISE
To: Atrix Laboratories, Inc.
1. The undersigned hereby elects to purchase _____ shares of
Atrix Common Stock of Atrix Laboratories, Inc., a Delaware corporation, pursuant
to the terms of the attached Warrant, and tenders herewith full payment of the
purchase price of such shares, in cash or other immediately available funds.
2. Please issue a certificate or certificates representing
said shares in the name of the undersigned or in such other name or names as are
specified below:
(Name)
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(Address)
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3. The undersigned represents that the aforesaid shares 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,
and that the undersigned will not offer, sell or otherwise dispose of any such
securities except under circumstances that will not result in a violation of
applicable federal and state securities laws.
Signature:
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Name:
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Address:
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Social Security or taxpayer identification number:
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