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Exhibit 4.2
This Warrant has not been registered under the Securities Act of 1933, as
amended, or any applicable state securities laws, and may not be sold or
transferred unless such sale or transfer is in accordance with the registration
requirements of such Act and applicable laws or some other exemption from the
registration requirements of such Act and applicable laws is available with
respect thereto.
COMMON STOCK PURCHASE WARRANT
Warrant No. 1 Number of Shares 48,125
EXACT SCIENCES CORPORATION
1. ISSUANCE. This Warrant is issued to The Mayo Foundation for Medical
Education and Research ("Mayo") by EXACT SCIENCES CORPORATION, a DELAWARE
corporation (hereinafter with its successors called the "Company").
2. PURCHASE PRICE; NUMBER OF SHARES. Subject to the terms and
conditions hereinafter set forth, the registered holder of this Warrant (the
"Holder"), commencing on the date hereof, is entitled upon surrender of this
Warrant with the subscription form annexed hereto duly executed, at the office
of the Company, 64 Great Road, Maynard, Massachusetts 01754, or such other
office as the Company shall notify the Holder of in writing, to purchase from
the Company at a price per share (the "Purchase Price") of $10.9091, 48,125
fully paid and nonassessable shares of Common Stock, $.01 par value, of the
Company (the "Common Stock"). Until such time as this Warrant is exercised in
full or expires, the Purchase Price and the securities issuable upon exercise of
this Warrant are subject to adjustment as hereinafter provided.
3. PAYMENT OF PURCHASE PRICE. The Purchase Price may be paid (i) in
cash or by check, (ii) by the surrender by the Holder to the Company of any
promissory notes or other obligations issued by the Company, with all such notes
and obligations so surrendered being credited against the Purchase Price in an
amount equal to the principal amount thereof plus accrued interest to the date
of surrender, (iii) through delivery by the Holder to the Company of other
securities issued by the Company, with such securities being credited against
the Purchase Price in an amount equal to the fair market value thereof, as
determined in good faith by the Board of Directors of the Company (the "Board"),
or (iv) by any combination of the foregoing. The Board shall promptly respond in
writing to an inquiry by the Holder as to the fair market
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value of any securities the Holder may wish to deliver to the Company pursuant
to clause (iii) above.
4. NET ISSUE ELECTION. The Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof by the surrender of this Warrant or such
portion to the Company, with the net issue election notice annexed hereto duly
executed, at the office of the Company. Thereupon, the Company shall issue to
the Holder such number of fully paid and nonassessable shares of Common Stock as
is computed using the following formula:
X = Y (A-B)
-------
A
where
X = the number of shares to be issued to
the Holder pursuant to this Section 4.
Y = the number of shares covered by this Warrant in
respect of which the net issue election is made pursuant to
this Section 4.
A = the fair market value of one share of Common
Stock, as determined in good faith by the Board, as at the
time the net issue election is made pursuant to this Section
4.
B = the Purchase Price in effect under this Warrant
at the time the net issue election is made pursuant to this
Section 4.
The Board shall promptly respond in writing to an inquiry by the Holder as to
the fair market value of one share of Common Stock.
5. PARTIAL EXERCISE. This Warrant may be exercised in part, and the
Holder shall be entitled to receive a new warrant, which shall be dated as of
the date of this Warrant, covering the number of shares in respect of which this
Warrant shall not have been exercised.
6. ISSUANCE DATE. The person or persons in whose name or names any
certificate representing shares of Common Stock is issued hereunder shall be
deemed to have become the holder of record of the shares represented thereby as
at the close of business on the date this Warrant is exercised with respect to
such shares, whether or not the transfer books of the Company shall be closed.
7. EXPIRATION DATE; AUTOMATIC EXERCISE. Subject to Section 10, this
Warrant shall expire at the earlier of (a) the close of business on December 28,
2005 and (b) eighteen months following the closing of the Company's initial
public offering.
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8. RESERVED SHARES; VALID ISSUANCE. The Company covenants that it will
at all times from and after the date hereof reserve and keep available such
number of its authorized shares of Common Stock, free from all preemptive or
similar rights therein, as will be sufficient to permit the exercise of this
Warrant in full. The Company further covenants that such shares as may be issued
pursuant to the exercise of this Warrant will, upon issuance, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof.
9. DIVIDENDS. If after the Original Issue Date (as defined in Section
15 hereof) the Company shall subdivide the Common Stock, by split-up or
otherwise, or combine the Common Stock, or issue additional shares of Common
Stock in payment of a stock dividend on the Common Stock, the number of shares
issuable on the exercise of this Warrant shall forthwith be proportionately
increased in the case of a subdivision or stock dividend, or proportionately
decreased in the case of a combination, and the Purchase Price shall forthwith
be proportionately decreased in the case of a subdivision or stock dividend, or
proportionately increased in the case of a combination.
10. SALE OF ASSETS AND MERGERS. Upon (A) the sale by the Company of all
or substantially all of its assets, or (B) the merger or consolidation of the
Company with or into another entity in a transaction where the shares of the
Company's capital stock outstanding immediately prior to the closing of such
merger or consolidation represent or are converted into or exchanged for shares
that represent less than a majority of the shares of capital stock of the
resulting or surviving entity outstanding immediately after the closing of such
merger or consolidation (each, a "Business Event"), this Warrant shall expire
and thereafter be void. The Company shall give the Holder of this Warrant seven
(7) business days (the "Merger Exercise Period") prior written notice of a
Business Event. Holder may exercise this Warrant, in full or in part, during the
Merger Exercise Period. Upon the expiration of the Merger Exercise Period, this
Warrant shall expire and thereafter be void.
11. ADJUSTMENTS FOR ISSUANCES BELOW PURCHASE PRICE. In case the Company
shall at any time or from time to time after the Original Issue Date but prior
to an initial public offering of the Company's Common Stock issue or sell any
shares of Common Stock for a consideration per share less than the Purchase
Price in effect for this Warrant immediately prior to the time of such issue or
sale, or pay any dividend or make any other distribution upon the Common Stock
payable in cash, property or securities of the Company other than Common Stock
or in securities of a corporation other than the Company, then forthwith upon
such issue or sale, or upon the payment of such dividend or the making of such
other distribution, as the case may be, the Purchase Price shall (until another
such issue or sale, or dividend or other distribution) be reduced to a price
(calculated to the nearest cent) determined by dividing (i) an amount equal to
the sum of (X) the number of shares of Common Stock outstanding immediately
prior to such issue or sale or the payment of such dividend or the making of
such other distribution, multiplied by the Purchase Price in effect immediately
prior to such event plus (Y) the consideration, if any, received by the Company
upon such issue or sale minus (Z) the amount of such dividend or other
distribution in respect of Common Stock, by (ii) the total number of shares of
Common Stock outstanding immediately after such issue or sale or dividend or
other distribution. Further, the
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number of shares purchasable hereunder shall be increased to a number determined
by dividing (i) the number of shares purchasable hereunder immediately prior to
such issue or sale or dividend or other distribution, multiplied by the Purchase
Price hereunder immediately prior to such event, by (ii) the Purchase Price in
effect immediately after the foregoing adjustment. Notwithstanding the
foregoing, the Company shall not be required to make any adjustment as provided
herein in the case of the issuance from and after the date of this Warrant of
securities issued (i) upon conversion of any of the Preferred Shares, (ii)
securities issued pursuant to an acquisition transaction approved by the
Company's Board of Directors and pursuant to which the Company acquires not less
than 51% of the voting power of the acquisition target and after giving effect
to such transaction the stockholders of the Company prior to such transaction
continue to hold at least fifty-one (51%) of the voting power of the Company (on
a fully diluted basis after giving effect to the exercise or conversion of all
options, warrants and other convertible securities then outstanding), (iii)
pursuant to a firm commitment public offering, (iv) pursuant to the sale of
common stock or the exercise of options to purchase Common Stock granted to
directors, officers, employees or consultants of the Corporation in connection
with their service to the Corporation issued prior to or after the date hereof
(or retention as consultants), not to exceed in the aggregate 3,987,500 shares
of Common Stock (appropriately adjusted to reflect stock splits, stock
dividends, combinations of shares and the like with respect to the Common
Stock), plus such number of shares of Common Stock which are repurchased by the
Corporation from such persons after such date pursuant to contractual rights
held by the Corporation and at repurchase prices not exceeding the respective
original purchase prices paid by such persons to the Corporation therefor);
provided, however, that the aggregate number of shares of Common Stock and
options to purchase Common Stock may be increased with the consent of a majority
of the directors who were designated as Investor Nominees pursuant to the Second
Amended and Restated Stockholders Agreement dated as of April 6, 2000 (the
"Investor Nominees") or (v) to such strategic partners and in such amounts as
may be approved with the consent of a majority of the directors who were
designated as Investor Nominees.
For the purpose of this Section 11, the following provisions
shall also be applicable:
A. In case the Company shall in any manner offer any rights to
subscribe for or to purchase shares of Common Stock, or grant any options for
the purchase of shares of Common Stock, at a price less than the Purchase Price
in effect immediately prior to the time of the offering of such rights or the
granting of such options, as the case may be, all shares of Common Stock which
the holders of such rights or options shall be entitled to subscribe for or
purchase pursuant to such rights or options shall be deemed to be issued or sold
as of the date of the offering of such rights or the granting of such options,
as the case may be, and the minimum aggregate consideration named in such rights
or options for the Common Stock covered thereby, plus the consideration received
by the Company for such rights or options, shall be deemed to be the
consideration actually received by the Company (as of the date of the offering
of such rights or the granting of such options, as the case may be) for the
issue or sale of such shares.
B. In case the Company shall in any manner issue or sell any
shares of any class or obligations directly or indirectly convertible into or
exchangeable for shares of Common
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Stock and the price per share for which Common Stock is deliverable upon such
conversion or exchange (determined by dividing (i) the total minimum amount
received or receivable by the Company in consideration of the issue or sale of
such convertible or exchangeable shares or obligations, plus the total minimum
amount of premiums, if any, payable to the Company upon conversion or exchange,
by (ii) the total number of shares of Common Stock necessary to effect the
conversion or exchange of all such convertible or exchangeable shares or
obligations) shall be less than the Purchase Price in effect immediately prior
to the time of such issue or sale, then such issue or sale shall be deemed to be
an issue or sale (as of the date of issue or sale of such convertible or
exchangeable shares or obligations) of the total maximum number of shares of
Common Stock necessary to effect the conversion or exchange of all such
convertible or exchangeable shares or obligations, and the total minimum amount
received or receivable by the Company in consideration of the issue or sale of
such convertible or exchangeable shares or obligations, plus the total minimum
amount of premiums, if any, payable to the Company upon exchange or conversion,
shall be deemed to be the consideration actually received (as of the date of the
issue or sale of such convertible or exchangeable shares or obligations) for the
issue or sale of such Common Stock.
C. In the case of any dividend or other distribution on the
Common Stock of the Company payable in property, securities of the Company other
than Common Stock or securities of a corporation other than the Company, such
dividend or other distribution shall be deemed to have been paid or made at a
value equal to the fair value of the property or securities so distributed. Any
dividend or distribution referred to in this Subsection C shall be deemed to
have been paid or made on the day following the date fixed for the determination
of stockholders entitled to receive such dividend or distribution.
D. In determining the amount of consideration received by the
Company for Common Stock, securities convertible thereinto or exchangeable
therefor, or rights or options for the purchase thereof, no deduction shall be
made for expenses or underwriting discounts or commissions paid by the Company.
The Board shall determine in good faith the fair value of the amount of
consideration other than money received by the Company upon the issue by it of
any of its securities. The Board shall also determine in good faith the fair
value of any dividend or other distribution made upon Common Stock payable in
property, securities of the Company other than Common Stock or securities of a
corporation other than the Company. The Board shall, in case any Common Stock,
securities convertible thereinto or exchangeable therefor, or rights or options
for the purchase thereof are issued with other stock, securities or assets of
the Company, determine in good faith what part of the consideration received
therefor is applicable to the issue of the Common Stock, securities convertible
thereinto or exchangeable therefor, or rights or options for the purchase
thereof.
E. If there shall be any change in (i) the minimum aggregate
consideration named in the rights or options referred to in Subsection A above,
(ii) the consideration received by the Company for such rights or options, (iii)
the price per share for which Common Stock is deliverable upon the conversion or
exchange of the convertible or exchangeable shares or obligations referred to in
Subsection B above, (iv) the number of shares which may be subscribed for or
purchased pursuant to the rights or options referred to in Subsection A above,
or (v) the
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rate at which the convertible or exchangeable shares or obligations referred to
in Subsection B above are convertible into or exchangeable for Common Stock,
then the Purchase Price in effect at the time of such event shall be readjusted
to the Purchase Price which would have been in effect at such time had such
rights, options, or convertible or exchangeable shares or obligations still
outstanding provided for such changed consideration, price per share, number of
shares, or rate of conversion or exchange, as the case may be, at the time
initially offered, granted, issued or sold, but only if as a result of such
adjustment the Purchase Price then in effect hereunder is thereby reduced.
12. FRACTIONAL SHARES. In no event shall any fractional share of Common
Stock be issued upon any exercise of this Warrant. If, upon exercise of this
Warrant as an entirety, the Holder would, except as provided in this Section 12,
be entitled to receive a fractional share of Common Stock, then the Company
shall issue the next higher number of full shares of Common Stock, issuing a
full share with respect to such fractional share.
13. CERTIFICATE OF ADJUSTMENT. Whenever the Purchase Price is adjusted,
as herein provided, the Company shall promptly deliver to the Holder a
certificate of a firm of independent public accountants setting forth the
Purchase Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment.
14. NOTICES OF RECORD DATE, ETC. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right,
(b) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger involving the
Company, or sale or conveyance of all or substantially all of its assets, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
any such reclassification, reorganization, consolidation, merger, sale or
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record in respect of
such event are to be determined. Except as provided in Section 7 hereof, such
notice shall be mailed at least 20 days prior to the date specified in such
notice on which any such action is to be taken.
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15. OTHER WARRANTS. This Warrant is being issued by the Company on
December 28, 2000 (the "Original Issue Date") pursuant to a Warrant Agreement,
dated December 28, 2000, among the Company and the Holder.
16. AMENDMENT. The terms of this Warrant may be amended, modified or
waived only with the written consent of the Company s. No such amendment,
modification or waiver shall be effective as to this Warrant unless the terms of
such amendment, modification or waiver shall apply with the same force and
effect to all of the other Warrants then outstanding.
17. WARRANT REGISTER; TRANSFERS, ETC.
A. The Company will maintain a register containing the names
and addresses of the registered holders of the Warrant. The Holder may change
its address as shown on the warrant register by written notice to the Company
requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be given by certified mail or delivered
to the Holder at its address as shown on the warrant register.
B. Subject to compliance with applicable federal and state
securities laws, this Warrant may be transferred by the Holder with respect to
any or all of the shares purchasable hereunder. Upon surrender of this Warrant
to the Company, together with the assignment hereof properly endorsed, for
transfer of this Warrant as an entirety by the Holder, the Company shall issue a
new warrant of the same denomination to the assignee. Upon surrender of this
Warrant to the Company, together with the assignment hereof properly endorsed,
by the Holder for transfer with respect to a portion of the shares of Common
Stock purchasable hereunder, the Company shall issue a new warrant to the
assignee, in such denomination as shall be requested by the Holder hereof, and
shall issue to such Holder a new warrant covering the number of shares in
respect of which this Warrant shall not have been transferred.
C. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and denomination
and deliver the same (i) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost,
stolen or destroyed, upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft or destruction of such Warrant (including a
reasonably detailed affidavit with respect to the circumstances of any loss,
theft or destruction) and of indemnity reasonably satisfactory to the Company,
provided, however, that so long as the Mayo is the registered holder of this
Warrant, no indemnity shall be required other than its written agreement to
indemnify the Company against any loss arising from the issuance of such new
warrant.
18. NO IMPAIRMENT. The Company will not, by amendment of its
certificate of incorporation or through any reclassification, capital
reorganization, consolidation, merger, sale or conveyance of assets,
dissolution, liquidation, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder.
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19. GOVERNING LAW. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the State of
Delaware.
20. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.
21. BUSINESS DAYS. If the last or appointed day for the taking of any
action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in the State of Massachusetts, then such
action may be taken or right may be exercised on the next succeeding day which
is not a Saturday or Sunday or such a legal holiday.
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Dated: December 28, 2000 EXACT SCIENCES CORPORATION
(Corporate Seal) By: /s/ Don M. Hardison
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Attest: Title: President
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Subscription
To:____________________ Date:_________________________
The undersigned hereby subscribes for __________ shares of Common Stock
covered by this Warrant. The certificate(s) for such shares shall be issued in
the name of the undersigned or as otherwise indicated below:
______________________________________
Signature
______________________________________
Name for Registration
______________________________________
Mailing Address
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Net Issue Election Notice
To:____________________ Date:_________________________
The undersigned hereby elects under Section 4 to surrender the right to
purchase _______ shares of Common Stock pursuant to this Warrant. The
certificate(s) for the shares issuable upon such net issue election shall be
issued in the name of the undersigned or as otherwise indicated below.
______________________________________
Signature
______________________________________
Name for Registration
______________________________________
Mailing Address
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Assignment
For value received ____________________________ hereby sells,
assigns and transfers unto ______________________________________
________________________________________________________________________________
Please print or typewrite name and address of Assignee
________________________________________________________________________________
the within Warrant, and does hereby irrevocably constitute and appoint
_______________________ its attorney to transfer the within Warrant on the books
of the within named Company with full power of substitution on the premises.
Dated:_______________________
_____________________________________
In the Presence of:
_____________________________
