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Exhibit 4.3
THIS WARRANT AND THE SECURITIES ISSUABLE
UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD
PURSUANT TO AN EXEMPTION TO SUCH ACT.
THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA OR ANY
OTHER STATE AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR
TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SUCH
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 2511, 25102 OR
25105 OF THE CALIFORNIA CORPORATIONS CODE OR SUCH PROVISIONS OF THE
CORPORATIONS CODE OF ANY SUCH OTHER STATE. THE RIGHTS OF THE HOLDER
OF THIS WARRANT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION
BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
Void after
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WARRANT TO PURCHASE
SHARES
OF PREFERRED STOCK
of
SKINMEDICA, INC.
INCORPORATED UNDER THE
LAWS OF THE STATE OF CALIFORNIA
THIS CERTIFIES THAT, for
value received,
, together with its permitted successors and assigns (“
Holder ”) is entitled, subject to the terms set
forth below, to subscribe for and purchase shares of a series of
Preferred Stock (the “ Preferred Stock ”)
of S KIN M EDICA , I
NC . , a California corporation (the “
Company ”), subject to adjustment as provided
herein. This warrant and any warrant subsequently issued upon
exchange or transfer hereof are hereinafter referred to
collectively as the “ Warrant
.”
This Warrant is subject to
the following terms and conditions:
1. Convertible Promissory
Note and Warrant Purchase Agreement . This Warrant is issued in
connection with and subject to the terms and conditions of that
certain Convertible Promissory Note and Warrant Purchase Agreement
dated June 21, 2002 (the “ Purchase Agreement
”) by and among the Company, Holder and the other parties
thereto. Pursuant to the Purchase Agreement, the Company has also
issued to Holder a convertible promissory note and
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may from time to time issue additional
promissory notes (each a “ Note ” and
collectively, the “ Notes ”). All
capitalized terms used but not defined in this Warrant shall have
the meanings ascribed thereto in the Purchase Agreement.
2. Exercise of Warrant
. The terms and conditions upon which this Warrant may be
exercised, and the shares covered hereby may be purchased, are as
follows:
2.1 Term . Subject to
the terms hereof, this Warrant may be exercised at any time after
the date hereof, or from time to time, in whole or in part;
provided, however, that in no event may this Warrant be exercised
(the “ Exercise Date ”) later than 5:00
p.m. (Pacific Time) on the earlier of (a) the close of business on
June 21, 2009, or (b) (i) the closing of the acquisition of the
Company by another entity by means of a transaction or series of
related transactions or (ii) the closing of the sale of all or
substantially all of the assets of the Company, unless the
Company’s shareholders of record prior to such acquisition or
sale shall hold at least fifty percent (50%) of the voting power of
the acquiring or surviving entity immediately after such
acquisition or sale (the “ Exercise Period
”). At least ten (10) days prior to the occurrence of an
event specified in (b) of this Section 2.1, the Company shall send
to Holder notice of such event and that Holder’s rights under
this Warrant shall terminate upon the occurrence of such event;
provided, that if the Company sends such notice less than ten (10)
days prior to the occurrence of such event, Holder’s right to
exercise this Warrant shall be extended for a period of five (5)
days after the date of the notice, after which time Holder’s
rights under this Warrant shall terminate.
2.2 Number of New Equity
Shares . This Warrant may be exercised for a number of New
Equity Shares as set forth below:
2.2.1 Qualified Equity
Financing . In the event the Company completes a Qualified
Equity Financing, as defined below, the number of New Equity
Shares, as defined below, subject to this Warrant will be equal to
the following:
Where:
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A
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The
number of New Equity Shares that may be purchased by Holder
pursuant to this Warrant. |
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B
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= |
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The
original principal amount of all Notes held by Holder and issued
pursuant the Purchase Agreement. |
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C
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The
Exercise Price (as defined below) for the New Equity
Shares. |
The “ Qualified
Equity Financing ” shall mean the next equity
financing after the date hereof, in which the Company raises at
least $5 million in gross proceeds, including conversion of the
Notes issued pursuant to the Purchase Agreement, and in which
investors purchase shares of a series of the Company’s
Preferred Stock.
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The “ New Equity
Shares ” shall mean the shares of the series of the
Company’s Preferred Stock sold by the Company in the
Qualified Equity Financing; provided , that in the
event a Qualified Equity Financing has not occurred by December 21,
2003, the “New Equity Shares” shall mean the
Company’s Series A Preferred Stock.
2.3 Exercise Price .
The “ Exercise Price ” shall be equal to
the per share purchase price for the New Equity Shares sold by the
Company, subject to adjustment as provided herein.
2.4 Method of Exercise
. Subject to the terms and conditions contained herein and while
this Warrant remains outstanding and exercisable, this Warrant is
exercisable with respect to any or all of the New Equity Shares, at
the option of Holder, upon surrender of this Warrant to the Company
together with (a) a duly completed (i) Notice of Exercise, in the
form attached hereto as Exhibit A , or (ii) Net Issue
Election Notice, in the form attached hereto as Exhibit B
and (b) payment of an amount equal to the Exercise Price multiplied
by the number of New Equity Shares with respect to which this
Warrant is being exercised as provided in Section 2.5 below. If
Holder exercises this Warrant with respect to less than all of the
New Equity Shares represented by this Warrant, the Company shall
cancel this Warrant upon the surrender thereof and shall execute
and deliver to Holder a new Warrant for the balance of such New
Equity Shares.
2.5 Payment . Payment
of the Exercise Price for the New Equity Shares with respect to
which this Warrant is being exercised by Holder shall be made, at
the option of Holder, (a) by delivery of cash payable by wire
transfer of immediately available funds, (b) by the delivery of a
cashier’s check or certified check, (c) by net issue election
as set forth in Section 2.6 below, or (d) by any combination of (a)
– (c).
2.6 Net Issue Election
The Holder may elect to receive, without payment by the Holder of
any additional consideration, New Equity Shares equal to the value
of the “spread” on the New Equity Shares or any portion
thereof by the surrender of the Warrant to the Company, together
with a duly completed Net Issue Election Notice, in the form
attached hereto as Exhibit B , at the principal office of
the Company, in which event the Company shall issue to the Holder
such number of New Equity Shares as is computed using the following
formula:
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Where:
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X = |
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The
number of New Equity Shares to be issued to Holder pursuant to the
net issue election; |
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Y = |
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The
number of New Equity Shares in respect of which the net issue
election is made; |
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A = |
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The fair
market value (as determined below) of one New Equity Share at the
time the net issue election is made; |
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B = |
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The
Exercise Price in effect under this Warrant as of the date of the
net issue election. |
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For purposes of this Section 2.6, the
fair market value of one New Equity Share as of a particular date
shall be as determined in good faith by the Board of Directors of
the Company.
3. Limit on Rights of the
Holder upon Exercise . Holder acknowledges and agrees that upon
the exercise of this Warrant in full or in part, the following
provisions shall apply to the rights of Holder as a holder of New
Equity Shares and of Common Stock of the Company (“
Common Stock ”) that such New Equity Shares are
convertible into.
3.1 Market Stand-Off
Agreement . During the period of duration (not to exceed 180
days) specified by the Company and an underwriter of Common Stock
or other securities of the Company, following the effective date of
a registration statement of the Company filed under the Act, Holder
shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract
to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than
to transferees or donees who agree to be similarly bound) any
securities of the Company held by it at any time during such period
except Common Stock included in such registration. In order to
enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Common Stock of
Holder (and the shares or securities of every other person subject
to the foregoing restriction) until the end of such period. This
Section 3.1 shall survive any termination or the expiration of this
Warrant.
4. Adjustment of Exercise
Price and Number of Shares . The Exercise Price and the number
and kind of New Equity Shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the
happening of certain events as follows:
4.1 Conversion of New
Equity Shares into Common Stock . Upon conversion of all of the
issued and outstanding shares of the Company’s Preferred
Stock into Common Stock, this Warrant shall be automatically
exercisable only for such number of shares of Common Stock as
Holder would have received had this Warrant been exercised in full
for the New Equity Shares and then co
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