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Exhibit 4.1
[FORM OF SERIES A WARRANT]
STEREOTAXIS, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.:
Number of Shares of Common Stock:
Date of Issuance: December ,
2008 (" Issuance Date ")
Stereotaxis, Inc., a Delaware corporation (the " Company
"), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
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the registered holder hereof or its permitted assigns (the "
Holder "), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as
defined below) then in effect, upon surrender of this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the "
Warrant "), at any time or times on or after the date
immediately after the six month anniversary of the Issuance Date
(the " Initial Exercisability Date ") but not after 11:59
p.m., New York time, on the Expiration Date (as defined below),
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([ ])
1 fully paid
nonassessable shares of Common Stock (as defined below) (the "
Warrant Shares "). This Warrant is one of the Warrants to
purchase Common Stock (the " SPA Warrants ") issued pursuant
to Section 1 of that certain Securities Purchase Agreement,
dated as of December , 2008 (the "
Subscription Date "), by and among the Company and the
investors (individually, a " Buyer " and collectively, the "
Buyers ") referred to therein (the " Securities Purchase
Agreement "). Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in
Section 16.
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise . Subject to the terms and
conditions hereof (including, without limitation, the limitations
set forth in Section 1(f)), this Warrant may be exercised by
the Holder at any time or times on or after the Initial
Exercisability Date, in whole or in part, by (i) delivery of a
written notice, in the form attached hereto as Exhibit A
(the " Exercise Notice "), of the Holder’s election to
exercise this Warrant and (ii) (A) payment to the Company of
an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being
exercised (the " Aggregate Exercise Price ") in cash or by
wire transfer of immediately available funds or (B) by
notifying the Company that this Warrant is being exercised pursuant
to a Cashless Exercise (as defined in Section 1(d)). The
Holder shall not be required to deliver the original Warrant in
order to effect an exercise hereunder, but shall deliver the
original Warrant within five (5) Business Days after
exercising the Warrant in full. Execution and delivery of the
Exercise Notice with respect to less than all of the Warrant Shares
shall have the
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Insert a number of shares equal to
75% of the number of Common Shares (as defined in the Securities
Purchase Agreement) issued to the Holder pursuant to the Securities
Purchase Agreement.
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same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to
purchase the remaining number of Warrant Shares. On or before the
first (1 st ) Business Day following the date on which the Company has
received each of the Exercise Notice and the Aggregate Exercise
Price (or notice of a Cashless Exercise) (the " Exercise
Delivery Documents "), the Company shall transmit by facsimile
an acknowledgment of confirmation of receipt of the Exercise
Delivery Documents to the Holder and the Company’s transfer
agent (the " Transfer Agent "). On or before the third
(3 rd ) Trading Day following the date on which the Company has
received all of the Exercise Delivery Documents (the " Share
Delivery Date "), the Company shall (X) provided that the
Transfer Agent is participating in The Depository Trust Company ("
DTC ") Fast Automated Securities Transfer Program, upon the
request of the Holder, credit such aggregate number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to
the Holder’s or its designee’s balance account with DTC
through its Deposit Withdrawal Agent Commission system, or
(Y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, issue and dispatch by
overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number
of shares of Common Stock to which the Holder is entitled pursuant
to such exercise. Upon delivery of the Exercise Delivery Documents,
the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to
which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account
or the date of delivery of the certificates evidencing such Warrant
Shares, as the case may be. If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Warrant submitted
for exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then the Company shall as soon as
practicable and in no event later than three (3) Business Days
after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 7(d)) representing the right to
purchase the number of Warrant Shares issuable immediately prior to
such exercise under this Warrant, less the number of Warrant Shares
with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be
issued shall be rounded up to the nearest whole number. The Company
shall pay any and all taxes which may be payable with respect to
the issuance and delivery of Warrant Shares upon exercise of this
Warrant.
(b) Exercise Price . For purposes of this Warrant, "
Exercise Price " means $5.11, subject to adjustment as
provided herein.
(c) Company’s Failure to Timely Deliver Securities
. If the Company shall fail for any reason or for no reason to
issue to the Holder within three (3) Trading Days of receipt
of the Exercise Delivery Documents, a certificate for the number of
shares of Common Stock to which the Holder is entitled and register
such shares of Common Stock on the Company’s share register
or credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below, and
if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver
in
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satisfaction of a sale by the Holder of shares of
Common Stock issuable upon such exercise that the Holder
anticipated receiving from the Company (a " Buy-In "), then
the Company shall, within three (3) Business Days after the
Holder’s request and in the Holder’s discretion, either
(i) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including actual brokerage
commissions, if any) for the shares of Common Stock so purchased
(the " Buy-In Price "), at which point the Company’s
obligation to deliver such certificate (and to issue such Warrant
Shares or credit such Holder’s balance account with DTC)
shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing
such Warrant Shares or credit such Holder’s balance account
with DTC and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of
(A) such number of shares of Common Stock, times (B) the
Weighted Average Price on the date of exercise.
(d) Cashless Exercise . Notwithstanding anything
contained herein to the contrary, if the Registration Statement (as
defined in the Securities Purchase Agreement) covering the issuance
of the Warrant Shares that are the subject of the Exercise Notice
by the Holder pursuant to the 1933 Act (the " Unavailable
Warrant Shares ") is not available for the issuance of such
Unavailable Warrant Shares, the Holder may only exercise this
Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the "Net Number" of shares of Common
Stock determined according to the following formula (a "
Cashless Exercise "):
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Net Number
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=
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(A x B) - (A x C)
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B
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For purposes of the foregoing formula:
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A
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=
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the total number of shares with respect to which
this Warrant is then being exercised.
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B
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=
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the Weighted Average Price of the shares of
Common Stock (as reported by Bloomberg) on the date immediately
preceding the date of the Exercise Notice.
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C
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=
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the Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.
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(e) Disputes . In the case of a dispute as
to the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed
and resolve such dispute in accordance with
Section 12.
(f) Limitations on Exercises .
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(i) Beneficial Ownership . The Company
shall not effect the exercise of this Warrant, and the Holder shall
not have the right to exercise this Warrant, to the extent that
after giving effect to such exercise, such Person (together with
such Person’s affiliates) would beneficially own in excess of
4.99% the " Maximum Percentage ") of the shares of Common
Stock outstanding immediately after giving effect to such exercise.
For purposes of the foregoing sentence, the aggregate number of
shares of Common Stock beneficially owned by such Person and its
affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude
shares of Common Stock which would be issuable upon
(x) exercise of the remaining, unexercised portion of this
Warrant beneficially owned by such Person and its affiliates and
(y) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned
by such Person and its affiliates (including, without limitation,
any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the " 1934 Act
"). For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in
(1) the Company’s most recent Form 10-K, Form 10-Q,
Current Report on Form 8-K or other public filing with the
Securities and Exchange Commission (" SEC ") as the case may
be, (2) a more recent public announcement by the Company or
(3) any other notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. For
any reason at any time, upon the written or oral request of the
Holder, the Company shall within one (1) Business Day confirm
orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including
the SPA Warrants, by the Holder and its affiliates since the date
as of which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may from
time to time increase or decrease the Maximum Percentage to any
other percentage not in excess of 9.99% specified in such notice;
provided that (i) any such increase will not be effective
until the sixty-first (61 st ) day after such notice is
delivered to the Company and (ii) any such increase or
decrease will apply only to the other holder and not to any Holder
of SPA Warrants. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 1(f)(i) to correct
this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation.
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(ii) Principal Market Regulation . The
Company shall not be obligated to issue any shares of Common Stock
upon exercise of this Warrant and no Buyer shall be entitled to
receive any shares of Common Stock if the issuance of such shares
of Common Stock would exceed that number of shares of Common Stock
which the Company may issue upon exercise of the SPA Warrants or
otherwise without breaching the Company’s obligations under
the rules or regulations of any applicable Eligible Market (the "
Exchange Cap "), except that such limitation shall not apply
in the event that the Company (A) obtains the approval of its
shareholders as required by the applicable rules of the Eligible
Market for issuances of shares of Common Stock in excess of such
amount or (B) obtains a written opinion from outside counsel
to the Company that such approval is not required, which opinion
shall be reasonably satisfactory to the Required Holders. Until
such approval or written opinion is obtained, no Buyer shall be
issued in the aggregate upon exercise of any SPA Warrants, shares
of Common Stock in an amount greater than the product of the
Exchange Cap multiplied by a fraction, the numerator of which is
the total number of shares of Common Stock underlying the SPA
Warrants issued to such Buyer pursuant to the Securities Purchase
Agreement on the Issuance Date and the denominator of which is the
aggregate number of shares of Common Stock underlying the SPA
Warrants issued to the Buyers pursuant to the Securities Purchase
Agreement on the Issuance Date (with respect to each Buyer, the "
Exchange Cap Allocation "). In the event that any Buyer
shall sell or otherwise transfer any of such Buyer’s SPA
Warrants, the transferee shall be allocated a pro rata portion of
such Buyer’s Exchange Cap Allocation, and the restrictions of
the prior sentence shall apply to such transferee with respect to
the portion of the Exchange Cap Allocation allocated to such
transferee. In the event that any holder of SPA Warrants shall
exercise all of such holder’s SPA Warrants into a number of
shares of Common Stock which, in the aggregate, is less than such
holder’s Exchange Cap Allocation, then the difference between
such holder’s Exchange Cap Allocation and the number of
shares of Common Stock actually issued to such holder shall be
allocated to the respective Exchange Cap Allocations of the
remaining holders of SPA Warrants on a pro rata basis in proportion
to the shares of Common Stock underlying the SPA Warrants then held
by each such holder. In the event that the Company is prohibited
from issuing any Warrant Shares for which an Exercise Notice has
been received as a result of the operation of this
Section 1(f)(ii), the Company shall pay cash in exchange for
cancellation of such Warrant Shares, at a price per Warrant Share
equal to the difference between the Closing Sale Price and the
Exercise Price as of the date of the attempted exercise.
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(g) Insufficient Authorized Shares . If at
any time while this Warrant remain outstanding the Company does not
have a sufficient number of authorized and unreserved shares of
Common Stock to satisfy its obligation to reserve for issuance upon
exercise of this Warrant at least a number of shares of Common
Stock equal to (the " Required Reserve Amount ") the number
of shares of Common Stock as shall from time to time be necessary
to effect the exercise of all of this Warrant then outstanding (an
" Authorized Share Failure "), then the Company shall
immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve
Amount for this Warrant then outstanding. Without limiting the
generality of the foregoing sentence, as soon as practicable after
the date of the occurrence of an Authorized Share Failure, but in
no event later than sixty (60) days after the occurrence of
such Authorized Share Failure, the Company shall hold a meeting of
its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement
and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders
that they approve such proposal.
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES . The Exercise Price and the number of Warrant Shares
shall be adjusted from time to time as follows:
(a) Adjustment upon Issuance of shares of Common Stock .
If and whenever on or after the Subscription Date and through and
including the two (2) year anniversary of the Issuance Date
(the " Full Ratchet Period "), the Company issues or sells,
or in accordance with this Section 2 is deemed to have issued
or sold, any shares of Common Stock (including the issuance or sale
of shares of Common Stock owned or held by or for the account of
the Company, but excluding shares of Common Stock deemed to have
been issued by the Company in connection with any Excluded
Securities) for a consideration per share (the " New Issuance
Price ") less than a price (the " Applicable Price ")
equal to the Exercise Price in effect immediately prior to such
issue or sale or deemed issuance or sale (the foregoing a "
Dilutive Issuance "), then immediately after such Dilutive
Issuance, the Exercise Price then in effect shall be reduced to an
amount equal to the New Issuance Price. In the event of any
Dilutive Issuance (i) after the Full Ratchet Period or
(ii) after satisfaction of the Free Cash Flow Condition during
the Full Ratchet Period, then immediately after such Dilutive
Issuance, the Exercise Price then in effect shall be reduced to an
amount equal to the product of (A) the Exercise Price in
effect immediately prior to such Dilutive Issuance and (B) the
quotient determined by dividing (1) the sum of (I) the
product derived by multiplying the Exercise Price in effect
immediately prior to such Dilutive Issuance and the number of
shares of Common Stock Deemed Outstanding immediately prior to such
Dilutive Issuance plus (II) the consideration, if any, received by
the Company upon such Dilutive Issuance, by (2) the product
derived by multiplying (I) the Exercise Price in effect
immediately prior to such Dilutive Issuance by (II) the number of
shares of Common Stock Deemed Outstanding immediately after such
Dilutive Issuance. For purposes of determining the adjusted
Exercise Price under this Section 2(a), the following shall be
applicable:
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(i) I ssuance of Options . If the Company
in any manner grants any Options and the lowest price per share for
which one share of Common Stock is issuable upon the exercise of
any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is
less than the Applicable Price, then such share of Common Stock
shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the granting or sale of such Option
for such price per share. For purposes of this
Section 2(a)(i), the "lowest price per share for which one
share of Common Stock is issuable upon exercise of such Options or
upon conversion, exercise or exchange of such Convertible
Securities issuable upon exercise of any such Option" shall be
equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to any one share
of Common Stock upon the granting or sale of the Option, upon
exercise of the Option and upon conversion, exercise or exchange of
any Convertible Security issuable upon exercise of such Option. No
further adjustment of the Exercise Price or number of Warrant
Shares shall be made upon the actual issuance of such shares of
Common Stock or of such Convertible Securities upon the exercise of
such Options or upon the actual issuance of such shares of Common
Stock upon conversion, exercise or exchange of such Convertible
Securities.
(ii) Issuance of Convertible Securities . If the Company
in any manner issues or sells any Convertible Securities and the
lowest price per share for which one share of Common Stock is
issuable upon the conversion, exercise or exchange thereof is less
than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this
Section 2(a)(ii), the "lowest price per share for which one
share of Common Stock is issuable upon the conversion, exercise or
exchange thereof" shall be equal to the sum of the lowest amounts
of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale
of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security. No further adjustment of the
Exercise Price or number of Warrant Shares shall be made upon the
actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities, and if any
such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of this Warrant has
been or is to be made pursuant to other provisions of this
Section 2(a), no further adjustment of the Exercise Price or
number of Warrant Shares shall be made by reason of such issue or
sale.
(iii) Change in Option Price or Rate of Conversion. If
the purchase price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise
or exchange of any Convertible Securities, or the rate at
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which any Convertible Securities are convertible
into or exercisable or exchangeable for shares of Common Stock
increases or decreases at any time, the Exercise Price and the
number of Warrant Shares in effect at the time of such increase or
decrease shall be adjusted to the Exercise Price and the number of
Warrant Shares which would have been in effect at such time had
such Options or Convertible Securities provided for such increased
or decreased purchase price, additional consideration or increased
or decreased conversion rate, as the case may be, at the time
initially granted, issued or sold. For purposes of this
Section 2(a)(iii), if the terms of any Option or Convertible
Security that was outstanding as of the date of issuance of this
Warrant are increased or decreased in the manner described in the
immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease. No
adjustment pursuant to this Section 2(a) shall be made if such
adjustment would result in an increase of the Exercise Price then
in effect or a decrease in the number of Warrant Shares.
(iv) Calculation of Consideration Received . In case any
Option is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated
transaction in which no specific consideration is allocated to such
Options by the parties thereto, (x) the Options will be deemed
to have been issued for a value determined by use of the Black
Scholes Option Pricing Model (the " Option Value ") and
(y) the other securities issued or sold in such integrated
transaction shall be deemed to have been issued for the difference
of (I) the aggregate consideration received by the Company,
less (II) the Option Value. If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor will
be deemed to be the net amount received by the Company therefor. If
any shares of Common Stock, Options or Convertible Securities are
issued or sold for a consideration other than cash, the amount of
such consideration received by the Company will be the fair value
of such consideration, except where such consideration consists of
publicly traded securities, in which ca
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