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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER TILE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT 1933, AS AMENDED.
Issue Date: August 22, 2000
Void After: August 21, 2005
ORTHOVITA, INC.
This Warrant has been issued as a placement agent fee in connection with the
execution of an engagement letter for placement agent services dated as of
August 10, 2000 among Orthovita, Inc., Janney Montgomery Scott LLC and Emerging
Growth Equities, Ltd., and the Placement Agents Agreement of even date herewith
among Orthovita, Inc., Janney Montgomery Scott LLC and Emerging Growth Equities,
Ltd.
THIS CERTIFIES that, for value received, VFT Special Ventures Ltd., as
designee of Emerging Growth Equities, Ltd. (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 31,780 fully paid and nonassessable shares
of the Company's common stock, $0.01 par value per share (the "Common Stock").
1. Exercise Period - The purchase rights represented by this Warrant are
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exercisable by the Holder, in whole or in part, at any time and from time to
time during the Exercise Period, which shall commence at August 22, 2000 (the
"Issue Date") and shall end at 5:00 p.m. Eastern Standard time on August 21,
2005.
2. Exercise Price - The price per share of the Common Stock at which this
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Warrant may be exercised (the "Exercise Price") shall be $5.90, subject to
adjustment as provided herein.
3. Exercise of Warrant - During the Exercise Period, this Warrant may be
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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
may 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
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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).
4. No Fractional Shares or Scrip - No fractional shares or scrip
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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.
5. Charges, Taxes and Expenses - Issuance of certificates for shares of
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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.
6. No Rights as Shareholder - This Warrant does not entitle the Holder to
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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.
7. 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 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.
8. Listing Exercise or Transfer Without Registration
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8.1 Listing - The Company shall promptly, after the date hereof,
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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
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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.
8.2 Exercise or Transfer Without Registration - If, at the time of
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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.
8.3 Registration Rights. The Holder understands that neither the
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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 dated as of even date herewith by and among the Company, Brown Simpson
Asset Partners I, Ltd., Emerging Growth Equities, Ltd. and Janney Montgomery
Scott LLC.
9. Adjustments
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The Exercise Price and the number and kind of securities purchasable
hereunder are subject to adjustment, as follows:
9.1 Merger and Sale of Assets. If at any time there shall be a
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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.
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9.2 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.
9.3 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.
9.4 Stock Dividends. If the Company at any time shall pay a dividend
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payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing Sections 9.1 or 9.2) 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 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.
9.5 Notice of Adjustment - In each case of any adjustment or
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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.
9.6 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.
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10. 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.
11. Loss, Theft, Destruction Mutilation of Warrant - Upon receipt by the
----------------------------------------------
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 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.
12. 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.
13. 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.
14. Miscellaneous - This Warrant shall be construed and enforced in
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accordance with and governed by the laws of the Commonwealth of Pennsylvania
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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