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NEITHER THE SECURITIES REPRESENTED BY THIS WARRANT INSTRUMENT NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND ALL SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AS SET FORTH IN THIS INSTRUMENT. NEITHER THE SECURITIES
REPRESENTED HEREBY NOR THE SECURITIES INTO WHICH THEY ARE EXERCISABLE MAY BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL TO THE
COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR DISPOSITION MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT 1933, AS AMENDED.
Issue Date: August 22, 2000
ORTHOVITA, INC.
This Warrant has been issued in connection with the execution of a Subscription
Agreement dated as of August 22, 2000 (the "Subscription Agreement") between
Orthovita, Inc. and Brown Simpson Partners I, Ltd.
THIS CERTIFIES that, for value received, Brown Simpson Partners I, Ltd., a
company organized under the laws of the Cayman Islands (the "Holder"), is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe for and purchase from the Company, at the Exercise Price (as defined
below) per share determined as provided herein, up to 762,712 fully paid and
nonassessable shares of the Company's common stock, $0.01 par value per share
(the "Common Stock").
1. As used in this Warrant, the following terms have the following
meanings:
1.1 "Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or under direct
or indirect common control with such Person. For the purposes of this
definition, "control," when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms of
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
1.2 "Appraiser" means a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing.
1.3 "Common Stock Deemed Outstanding" means, at any given time,
the sum of the number of shares of Common Stock actually outstanding at such
time plus the number of shares of Common Stock issuable upon the exercise of all
options, rights and warrants and the conversion or exchange of convertible or
exchangeable securities outstanding at such time, whether or not such options,
rights, or warrants, or convertible or exchangeable securities are actually
exercisable, convertible or exchangeable at such time.
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1.4 "Excluded Securities" means (i) shares of Common Stock issued
or issuable pursuant to the Warrant; (ii) any Dilution Shares (as such term is
defined in the Subscription Agreement); (iii) shares of Common Stock (including
options and warrants) issuable upon the exercise of, or pursuant to the anti-
dilution provisions contained within, any options, restricted stock awards or
warrants outstanding on the date hereof; (iv) up to 623,571 shares of Common
Stock or Options issued or issuable to officers, employees or directors of, or
consultants to, the Company pursuant to a stock purchase or option plan or other
employee stock bonus arrangement approved by the Company's Board of Directors;
(v) shares of Common Stock, Options or Convertible Securities issued or issuable
pursuant to a stock split, combination, subdivision, dividend or other
distribution on outstanding shares of Common Stock; (vi) any shares of Common
Stock, Options or Convertible Securities issued pursuant to Sections 13.5 or
13.6 hereof; or (vii) shares of Common Stock, if any, issued as payment for a
Registration Delay Payment (as such term is defined in the Registration Rights
Agreement dated as of August 22, 2000 among the Company, the Holder and the
other signatories thereto) or (vii) one or more issuances of Common Stock,
Options or Convertible Securities that, in the aggregate, do not exceed .5% of
the Company's Common Stock then outstanding, to the extent that the aggregate
proceeds raised in connection therewith do not exceed $500,000.
1.5 "Per Share Market Value" means on any particular date (i) the
closing bid price per share of the Common Stock on such date on (a) the NASDAQ
National Market, as reported by the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices),
or (b) such other Subsequent Market on which the Common Stock is then listed or
quoted or, if there is no such price on such date, then the closing bid price on
such exchange or quotation system on the date nearest preceding such date, or
(ii) if the Common Stock is not then publicly traded the fair market value of a
share of Common Stock as determined by an Appraiser selected in good faith by
the registered owners of a majority of the Underlying Shares then issuable;
provided, however, that, after receipt of the determination by such Appraiser,
the Company shall have the right to select, in good faith, an additional
Appraiser, in which case the fair market value shall be equal to the average of
the determinations by each such Appraiser; and provided, further that all
determinations of the Per Share Market Value shall be appropriately adjusted for
any stock dividends, stock splits or other similar transactions during such
period.
1.6 "Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
1.7 "Subsequent Market" means the New York Stock Exchange, the
American Stock Exchange or the NASDAQ SmallCap Market.
1.8 "Trading Day(s)" means any day on which the primary market
on which shares of Common Stock are listed is open for trading.
1.9 "Underlying Shares" means the shares of Common Stock
issuable upon exercise of this Warrant.
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2. Exercise Period - The purchase rights represented by this Warrant are
---------------
exercisable by the Holder, in whole or in part, at any time and from time to
time commencing on August 22, 2000 (the "Issue Date") and ending at 5:00 p.m.
Eastern Standard time on August 21, 2001 (the "Exercise Period"); provided,
however, that if Holder has not been able to freely sell the Underlying Shares
for at least 60 days (consecutive or non-consecutive) during the Exercise Period
under an effective Registration Statement (as such term is defined in the
Subscription Agreement), then the Exercise Period shall be extended until 5:00
p.m. Eastern Standard time of such date following August 21, 2001 that is the
60/th/ day on which the Holder has been able to freely sell the Underlying
Shares under an effective Registration Statement.
3. Exercise Price - The price per share of the Common Stock at which this
--------------
Warrant may be exercised (the "Exercise Price") shall be $5.90, subject to
adjustment as provided herein.
4. Exercise of Warrant - During the Exercise Period, this Warrant may be
-------------------
exercised, in whole or in part and from time to time, by the surrender of this
Warrant and the Notice of Exercise annexed hereto duly executed at the principal
office of the Company (or such other office or agency of the Company as it may
designate) and upon payment of the Exercise Price of the shares thereby
purchased (the aggregate of the Exercise Price for all shares to be exercised
being referred to herein as the "Purchase Price"). Payment of the Purchase Price
shall be made (i) by check or bank draft payable to the order of the Company or
(ii) by wire transfer to the account of the Company. Upon exercise, the Holder
shall be entitled to receive, promptly after payment in full, one or more
certificates, issued in the Holder's name or in such name or names as the Holder
may direct, subject to the limitations on transfer contained herein, for the
number of shares of Common Stock so purchased. The shares so purchased shall be
deemed to be issued as of the close of business on the date on which the Company
receives the duly executed Notice of Exercise and the Purchase Price.
The Company covenants that all shares of Common Stock that are issued upon
the exercise of rights represented by this Warrant will be fully paid,
nonassessable, and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
5. Issuances Below Exercise Price - If the Company, at any time:
------------------------------
5.1 issues or sells, or is deemed to have issued or sold, any
Common Stock (other than any Excluded Securities);
5.2 in any manner grants, issues or sells any rights, options,
warrants, options to subscribe for or to purchase Common Stock or any stock or
other securities convertible into or exchangeable for Common Stock (other than
any Excluded Securities) (such rights, options or warrants being herein called
"Options" and such convertible or exchangeable stock or securities being herein
called "Convertible Securities");
in each case, for a price per share less than the Exercise Price in effect
immediately prior to such issuance, sale or grant (the "Lower Exercise Price"),
then, immediately after such issuance, sale or grant, the number of shares of
Common Stock that may be purchased under this Warrant shall be increased to the
amount determined by dividing (1) the product of the number of shares that
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may be purchased under this Warrant immediately prior to such issuance, sale or
grant and the Exercise Price then in effect by (2) the Lower Exercise Price, and
the Exercise Price shall be reduced to the Lower Exercise Price. For purposes of
calculating the price per share (a) with respect to paragraph 5.1, above, the
"price per share" shall be determined by dividing the aggregate consideration
received for the issuance or sale by the total number of shares issued or sold;
and (b) with respect to paragraph 5.2 above, the "price per share" shall be
determined by dividing (1) the total amount, if any, received or receivable by
the Corporation as consideration for the granting of Options or the issuance or
sale of Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon exercise of all such
Options or upon the conversion or exchange of such Convertible Securities, by
(2) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or the conversion or exchange of all such Convertible
Securities. If there is a change at any time in (i) the exercise price provided
for in any Options, (ii) the additional consideration, if any, payable upon the
issuance, conversion or exchange of any Convertible Securities or (iii) the rate
at which any Convertible Securities are convertible into or exchangeable for
Common Stock, then immediately after such change the Exercise Price shall be
adjusted to the Exercise Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding provided for such
changed exercise price, additional consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold; provided that no
adjustment shall be made if such adjustment would result in an increase of the
Exercise Price then in effect. However, upon the expiration of any such Options
or Convertible Securities, the issuance or modification of which resulted in an
adjustment in the Exercise Price pursuant to this Section 5, if all of such
Options or Convertible Securities shall not have been exercised or converted,
the Exercise Price shall immediately upon such expiration be increased to the
price which it would have been prior to the issuance or modification of such
Options or Convertible Securities. Notwithstanding the foregoing, no adjustment
shall be made under this Section 5 if an adjustment hereunder would compound an
adjustment made under Section 13 hereof, which would result in double adjustment
for a single event triggering such adjustment provisions.
Notwithstanding anything to the contrary contained herein, the provisions
of this Section 5 shall not apply to any Warrant (or portion thereof)
transferred by the original Holder of this Warrant.
6. Effect on Exercise Price of Certain Events - For purposes of
------------------------------------------
determining the adjusted Exercise Price under Section 5, the following shall be
applicable:
6.1 Calculation of Consideration Received - If any 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, without deducting any
expenses paid or incurred by the Company or any commissions or compensations
paid or concessions or discounts allowed to underwriters, dealers or others
performing similar services in connection with such issue or sale. In case any
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company will be the fair value of such consideration as
determined in good faith by the Company's Board of Directors, provided, however,
that in the event such consideration consists of securities listed or quoted on
a national securities exchange or national quotation system, the amount of
consideration received by the
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Company will be that deemed in a definitive agreement entered into by the
Company in connection with the transaction, or if there is no such amount
specified in such an agreement, the average of the closing sale price of such
security for the five consecutive Trading Days immediately preceding the date of
receipt thereof. In case any Common Stock, Options or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value attributable to such Common Stock,
Options or Convertible Securities, as the case may be, as determined in good
faith by the Company's Board of Directors.
6.2 Integrated Transactions - In case any Option is issued in
-----------------------
connection with the issue or sale of other securities of the Company (such
Option and securities being referred to as a "unit"), together comprising one
integrated transaction in which no specific consideration is allocated to such
Options by the parties thereto, the Options will be deemed to have been issued
for an aggregate consideration equal to the higher of (x) $.001. or (y) the
difference between the consideration paid per unit and the closing sales price
of the Common Stock on the date of such payment.
7. Restriction on Exercise by Either the Holder or the Company -
-----------------------------------------------------------
Notwithstanding anything herein to the contrary, in no event shall the Holder or
the Company have the right or be required to exercise this Warrant to the extent
that such exercise would cause the aggregate number of shares of Common Stock
beneficially owned by such Holder and its Affiliates to exceed 4.99% of the
outstanding shares of the Common Stock following such exercise. For purposes of
this Section 7, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended. The
provisions of this Section 7 may be waived by a Holder as to itself (and solely
as to itself) upon not less than 65 days prior written notice to the Company,
and the provisions of this Section 7 shall continue to apply until such 65th day
(or later, if stated in the notice of waiver).
8. No Fractional Shares or Scrip - No fractional shares or scrip
-----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu thereof, a cash payment shall be made equal to such fraction
multiplied by the Exercise Price per share as then in effect.
9. Charges, Taxes and Expenses - Issuance of certificates for shares of
---------------------------
Common Stock shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate; provided, however, that the Holder shall be responsible for any
issue or transfer tax associated with such issuance.
10. No Rights as Shareholder - This Warrant does not entitle the Holder to
------------------------
any voting rights or other rights as a shareholder of the Company prior to
exercise and payment of the Exercise Price in accordance with Section 3 hereof.
11. Investment Representation - The Holder (i) is an "Accredited Investor"
-------------------------
as that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act; (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities"); (iii) has been furnished with and has had
access
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to such information as such Holder has considered necessary to make a
determination as to the purchase of the Securities together with such additional
information as is necessary to verify the accuracy of the information supplied;
(iv) has had the opportunity to ask questions concerning the Company and had all
questions which have been asked by such Holder satisfactorily answered by the
Company; and (v) has not been offered the Securities by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media. The
Holder, by acceptance of this Warrant, represents and warrants to the Company
that this Warrant and all securities acquired upon any and all exercises of this
Warrant are purchased for the Holder's own account for investment, and not with
view to distribution of either this Warrant or any securities purchasable upon
exercise hereof.
12. Listing Exercise or Transfer Without Registration
-------------------------------------------------
12.1 Listing - The Company shall promptly secure the listing of the
-------
shares of Common Stock issuable upon exercise of the Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance upon
exercise of this Warrant) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of Common Stock from
time to time issuable upon the exercise of this Warrant; and the Company shall
so list on each national securities exchange or automated quotation system, as
the case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated (warrant shares) quotation system.
12.2 Exercise or Transfer Without Registration - If, at the time of
-----------------------------------------
the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
shares of Common Stock issuable hereunder), shall not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), and under applicable
state securities or blue sky laws, the Company may require, as a condition of
allowing such exercise, transfer, or exchange, (i) that the holder or transferee
of this Warrant, as the case may be, furnish to the Company a written opinion of
counsel that is reasonably acceptable to the Company to the effect that such
exercise, transfer or exchange may be made without registration under the
Securities Act and under applicable state securities or blue sky laws, (ii) that
the holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and (iii) that the transferee be
an "accredited investor" as defined in Rule 501(a) promulgated under the
Securities Act; provided that no such opinion, letter or status as an
"accredited investor" shall be required in connection with a transfer pursuant
to Rule 144 under the Securities Act.
12.3 Registration Rights. The Holder understands that neither the
-------------------
Warrant nor the shares of Common Stock issuable hereunder have been registered
under the Securities Act. The shares of Common Stock issuable hereunder are
entitled to the registration rights contained within the Registration Rights
Agreement.
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13. Adjustments
-----------
The Exercise Price and the number and kind of securities purchasable
hereunder are subject to adjustment, as follows:
13.1 Merger and Sale of Assets. If at any time there shall be a
-------------------------
capital reorganization of the shares of the Company's Common Stock (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or a merger or consolidation of the Company with or into
another corporation when the Company is not the surviving corporation, or the
sale of all or substantially all of the Company's properties and assets to any
other Person (hereinafter referred to as a "Merger Event"), then, as a part of
such Merger Event, lawful provision shall be made so that the Holder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number of
shares of Common Stock or other securities of the successor corporation
resulting from such Merger Event, equivalent in value to that which would have
been issuable if Holder had exercised this Warrant immediately prior to the
Merger Event. In any such case, appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions of this Warrant Agreement with respect to the rights and interest
of the Holder after the Merger Event to the end that the provisions of this
Warrant Agreement (including adjustments of the Exercise Price and number of
shares of Common Stock purchasable) shall be applicable to the greatest extent
possible. The Company shall not effect any such Merger Event unless prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Merger Event shall assume by written
instrument executed and mailed or delivered to the Holder, at the last address
of the Holder appearing on the books of the Company, the obligation to deliver
to the Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to purchase.
13.2 Reclassification of Shares. If the Company at any time shall,
--------------------------
by combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclassification, exchange, subdivision or other change.
13.3 Subdivision or Combination of Shares. If the Company at any
------------------------------------
time shall combine or subdivide its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination, and the number of shares available for
purchase in effect immediately prior to such subdivision or combination shall be
proportionately adjusted.
13.4 Stock Dividends. If the Company at any time shall pay a
---------------
dividend payable in, or make any other distribution (except any distribution
specifically provided for in the foregoing Sections 13.1 or 13.2) of, the
Company's stock, then the Exercise Price shall be adjusted, from and after the
record date of such dividend or distribution, to that price determined
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by multiplying the Exercise Price in effect immediately prior to such record
date by a fraction (i) the numerator of which shall be the total number of all
shares of the Company's stock outstanding immediately prior to such dividend or
distribution, and (ii) the denominator of which shall be the total number of all
shares of the Company's stock outstanding immediately after such dividend or
distribution. The Holder shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares of Common
Stock (calculated to the nearest whole share) obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
shares of Common Stock issuable upon the exercise hereof immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
13.5 Rights; Options; Warrants or Other Securities - If the Company,
---------------------------------------------
at any time shall fix a record date for the issuance of rights, options,
warrants or other securities (collectively, "Rights") to the holders of its
Common Stock entitling them to subscribe for or purchase, convert into, exchange
for or otherwise acquire shares of Common Stock, or any stock or other
securities convertible into or exchangeable for Common Stock for no
consideration or for a price per share less than the Exercise Price, then the
Exercise Price shall be reduced to an amount determined by multiplying the
Exercise Price by a fraction, the numerator of which shall be (i) the number of
shares of Common Stock outstanding immediately prior to such record date plus
(ii) the number of shares of Common Stock which the aggregate consideration
received by the Company for the issuance of such Rights and the aggregate
consideration receivable by the Company upon exercise, conversion, exchange or
other acquisition of Common Stock pursuant to such rights would purchase at the
Exercise Price, and the denominator of which shall be (i) the number of shares
of Common Stock outstanding immediately prior to such record date plus (ii) the
number of additional shares of Common Stock offered for subscription, purchase,
conversion, exchange or acquisition, as the case may be, pursuant to such
Rights. Such adjustment shall be made whenever such rights, options, warrants or
other securities are issued, and shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
rights, options, warrants or other securities. However, upon the expiration of
any such Rights, the issuance of which resulted in an adjustment in the Exercise
Price pursuant to this Section 13.5, if all of such Rights shall not have been
exercised, the Exercise Price shall immediately upon such expiration be
increased to the price which it would have been prior to the issuance of such
Rights.
13.6 Subscription Rights - If the Company, at any time, shall fix a
-------------------
record date for the distribution to holders of its Common Stock evidence of its
indebtedness or assets or rights, options, warrants or other securities
entitling them to subscribe for or purchase, convert into, exchange for or
otherwise acquire any security (excluding those referred to in Sections 13.2-
13.5 above), then in each such case the Exercise Price at which this Warrant
shall thereafter be exercisable shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Per Share Market Value on such record date less
the then fair market value at such record date of the portion of such assets,
evidence of indebtedness, rights, options, warrants or other securities so
distributed applicable to one outstanding share of Common Stock as determined by
the Board of Directors in good faith, and the denominator of which shall be the
Per Share Market Value as of such record date; provided, however, that in the
event of a distribution exceeding ten percent (10%) of the net assets of the
Company, such fair market value shall be determined by an Appraiser selected in
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good faith by the registered owners of a majority of the Warrants and Underlying
Shares then outstanding; and provided, further, that the Company, after receipt
of the determination by such Appraiser shall have the right to select in good
faith an additional Appraiser meeting the same qualifications, in which case the
fair market value shall be equal to the average of the determinations by each
such Appraiser. Such adjustment shall be made whenever any such distribution is
made and shall become effective immediately after the record date mentioned
above.
13.7 Distribution of Assets, Securities, etc. - If the Company at any
----------------------------------------
time shall take a record of the holders of its Common Stock for the purpose of
making any distribution without consideration with respect to its Common Stock
(other than a cash dividend) payable otherwise than in its Common Stock, the
Holder shall, upon the exercise thereof, be entitled to receive, in addition to
the number of shares of Common Stock receivable thereupon, and without payment
of any additional consideration therefor, such assets or securities as would
have been payable to the Holder as owner of that number of Common Stock
receivable by exercise of the Warrants had the Holder been the holder of record
of such Common Stock on the record date for such distribution; and an
appropriate provision therefor shall be made a part of any such distribution.
13.8 Limitations on Certain Adjustments. In order to avoid compound
-----------------------------------
adjustments for single events, the adjustment provisions set forth in Sections
13.5, 13.6 and 13.7 shall be inapplicable if the Rights, subscription rights or
distributions described in such sections are granted or made to the holders of
the Warrants to the extent such rights are granted or made on a proportionate
basis equal to or more favorable than those rights, if any, given to holders of
the Company's Common Stock.
13.9 Notice of Adjustment - In each case of any adjustment or
--------------------
readjustment in the Common Stock issuable upon the exercise of this Warrant, the
Company at its expense will promptly compute such adjustment or readjustment in
accordance with the terms of this Warrant and prepare a report setting forth
such adjustment or readjustment and showing in reasonable detail the method of
calculation thereof and the facts upon such adjustment or readjustment is based.
The Company shall forthwith mail a copy of each such report to the Holder.
13.10 Notices of Record Date - In the event of 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 (other
than a cash dividend that is the same as cash dividends paid in previous
quarters) or other distribution, the Company shall mail to each Holder at least
ten days prior to the date specified for the taking of a record, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.
13.11 Notice of Certain Events - If:
------------------------
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock;
(b) the Company shall declare a special nonrecurring cash
dividend on or a redemption of its Common Stock;
9
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(c) the Company shall authorize the granting to the holders of
its Common Stock rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights;
(d) the approval of any shareholders of the Company shall be
required in connection with any reclassification of the Common Stock or any
Merger Event; or
(e) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of exercise of this Warrant, and shall cause to be delivered to the
Holder, at least 10 (ten) calendar days prior to the applicable record or
effective date hereinafter specified, a notice (provided such notice shall not
include any material non-public information) stating (a) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, or granting of options, rights or warrants, or if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (b) the date on which such reclassification or Merger Event is
expected to become effective or close, and the date as of which it is expected
that holders of record of Common Stock shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable in
connection with such reclassification or Merger Event; provided, however, that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Nothing herein shall prohibit the Holder from exercising this
Warrant during the 10-day period commencing on the date of such notice.
13.12 Other Events - If any event occurs that would adversely affect
------------
the rights of the Holder of this Warrant but is not expressly provided for by
Section 13 hereof (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Company's Board of Directors will make an appropriate adjustment in the
Exercise Price so as to protect the rights of the Holder; provided, however,
that no such adjustment will increase the Exercise Price.
13.13 Increase in Exercise Price - In no event shall any provision in
--------------------------
this Section 13 cause the Exercise Price to be greater than the Exercise Price
on the date of issuance of this Warrant.
14. Reservation of Stock Issuable on Exercise of Warrant - The Company
----------------------------------------------------
will at all times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, all shares of Common Stock from time to time
issuable upon the exercise of this Warrant.
15. Loss, Theft, Destruction Mutilation of Warrant - Upon receipt by the
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Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental
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thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new warrant of like tenor and dated as of such
cancellation in lieu of this Warrant.
16. Remedies - The Company stipulates that the remedies at law of the
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holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not adequate and may be enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
17. Notices, etc. - All notices and other communications from the Company
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to the holder of this Warrant shall be mailed, by first class mail or nationally
recognized overnight courier such as Federal Express, to such address as may
have been furnished to the Company in writing by such holder, or, until an
address is so furnished, to and at the address of the last holder of this
Warrant who has so furnished an address to the Company. All communications from
the holder of this Warrant to the Company shall be mailed by first class mail or
nationally recognized overnight courier such as Federal Express to the Company
at it principal business address, or such other address as may have been
furnished to the holder in writing by the Company.
18. Miscellaneous - This Warrant shall be construed and enforced in
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accordance with and governed by the laws of the State of New York without regard
to principles of conflicts of law. The headings in this Warrant are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof. This Warrant, or any portion hereof, may not, without the prior consent
of the Company, be assigned at any time.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed in
its corporate name by its duly authorized officer and to be dated as of the
issue date set forth on the first page of this Warrant.
ORTHOVITA, INC.
By: /s/ Bruce Peacock
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Bruce Peacock, President and Chief Executive Officer
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NOTICE OF EXERCISE OF WARRANT
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TO: Orthovita, Inc.
Pursuant to the terms of the attached Warrant, the undersigned hereby
elects to purchase _____shares of Common Stock of Orthovita, Inc. (the
"Company"), and tenders herewith payment of the Exercise Price of such shares in
full.
Please issue a certificate or certificates representing said shares of
Common Stock, in the name of the undersigned or in such other name(s) as is/are
specified immediately below or, if necessary, on an attachment hereto:
Name Address
---- -------
DATE:_____________________ HOLDER:_____________________
DATE:_____________________ HOLDER:_____________________
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