WARRANT
Exhibit 4.3
WARRANT
THE WARRANT EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO A
SHAREHOLDER AGREEMENT BY AND AMONG ZARS, INC. AND THE SHAREHOLDERS OF ZARS, INC.
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ZARS, INC., QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE ACT AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER.
ZARS, INC.
Stock Purchase Warrant
ZARS, Inc., a [Utah] corporation (the “Company”), hereby certifies that, for value received,
, or assigns (the “Holder”), is entitled to purchase from the Company, subject to the
terms set forth below, at the price of Four AND 86/100ths Dollars ($4.86) per share (the “Exercise
Price”), up to ( ) shares of the Company’s voting common stock, par value $0.12
(the “Common Stock). This Warrant is herein called the “Warrant.”
1. Exercise of Warrant. The purchase rights evidenced by this Warrant shall be
exercised by the Holder surrendering this Warrant, with the form of subscription at the end hereof
duly executed by such holder, to the Company at its offices at 0000 Xxxx 0000 Xxxxx Xxxxx X Xxxx
Xxxx Xxxx, Xxxx or such other location as the parties may agree, accompanied by payment, in cash,
by certified or official bank check or by wire transfer of an amount equal to the Exercise Price
multiplied by the number of shares being purchased pursuant to such exercise of the Warrant. This
Warrant may be exercised for less than the full number of shares of Common Stock, in which case the
number of shares receivable upon the exercise of this Warrant as a whole, and the sum payable upon
the exercise of this Warrant as a whole, shall be proportionately reduced. Upon any such partial
exercise, the Company at its expense will forthwith issue to the Holder a new Warrant or Warrants
of like tenor calling for the number of shares of Common Stock as to which rights have not been
exercised, such Warrant or Warrants to be issued in the name of the Holder.
2. Delivery of Stock Certificates on Exercise. As soon as practicable after the
exercise of this Warrant and payment of the Exercise Price, and in any event within ten (10) days
thereafter, the Company, at its expense, will cause to be issued in the name of and delivered
to the Holder hereof a certificate or certificates for the number of fully paid and non-assessable
shares to which such Holder shall be entitled upon such exercise. The Company agrees that the
shares so purchased shall be deemed to be issued to the Holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid.
3. Exercise Date and Term of Warrant. Unless accelerated as described in Section 4
below, the Holder shall not be entitled to exercise this Warrant until a period of one year after
February 27, 2004 (the “Exercise Date”). Holder shall have from the Exercise Date until May 31,
2013, in which to exercise this Warrant, at which time all of the Holder’s rights hereunder shall
terminate. Moreover, this Warrant shall expire, and the Holder shall have no rights hereunder,
unless the Holder has been continuously and actively involved with the affairs of the Company, by
providing meaningful services to the Company or its subsidiaries, from the date hereto until the
Exercise Date.
4. Acceleration of Exercise Date. In the event the Company enters into an agreement to
sell a majority of its assets, the Exercise Date shall be accelerated and shall be the date on
which the Company enters into such agreement. In such an event, the Company shall provide notice to
the Holder in accordance with this Warrant.
5. Shareholder Agreement. Upon exercise of this Warrant and at the request of the
Company, the Holder shall execute and deliver to the Company a Shareholder Agreement or Statement
of Acceptance thereof prior to the transfer or delivery of any shares and prior to the expiration
of the Exercise Period. The Company shall have no obligation to transfer or deliver the shares
issued pursuant to this Warrant unless or until the Holder executes and delivers the foregoing to
the Company.
6. No Impairment. The Company will not, by amendment of its articles of incorporation
or through reorganization, consolidation, merger, dissolution, sale of assets 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 against impairment. Without limiting the generality of the foregoing, the Company will
not increase the par value of any shares of stock receivable upon the exercise of this Warrant
above the amount payable therefor upon such exercise, and at all times will take all such action as
may be necessary or appropriate in order that the Company may validly and legally issue fully paid
and non-assessable stock upon the exercise of this Warrant and all other Warrants at the time
outstanding.
7. Reservation of Stock, Etc., Issuable on Exercise of Warrants. The Company shall at
all times reserve and keep available out of its authorized but unissued stock,
2.
solely for the issuance and delivery upon the exercise of this Warrant and other similar
Warrants, such number of its duly authorized shares of Common Stock as from time to time shall be
issuable upon the exercise of this Warrant, and all other Warrants at the time outstanding.
8. Assignment or Transfer Prohibited: This Warrant is not transferable by the Holder
other than by will or the laws of descent and distribution, and this Warrant shall be exercisable
during the Holder’s lifetime only by the Holder. This Warrant shall become null and void in the
event the Holder attempts to transfer, assign, pledge, hypothecate or otherwise dispose of this
Warrant contrary to the provisions hereof.
9. Miscellaneous.
a. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required)
in an amount reasonably satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of like tenor.
b. Remedies. The Company stipulates that the remedies at law of the Holder in the
event of any default by the Company in the performance of or compliance with any of the terms of
this Warrant are not and will not be adequate, and that the same may be specifically enforced.
c. Rights Prior to Exercise. Prior to the exercise of this Warrant, the Holder shall
not be entitled to any rights of a shareholder of the Company with respect to shares for which this
Warrant shall be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company.
d. Subdivision of Rights. This Warrant (as well as any new warrants issued pursuant to
the provisions of this paragraph) is exchangeable, upon the surrender hereof by the Holder, at the
principal office of the Company for any number of new warrants of like tenor and date representing
in the aggregate the right to subscribe for and purchase the number of shares of Common Stock of
the Company which may be subscribed for and purchased hereunder.
e. Mailing of Notices, Etc. All notices and other communications from the Company to
the Holder shall be mailed by first-class certified mail, postage prepaid, to the address furnished
to the Company in writing.
3.
f. Headings, Etc. The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect the meaning hereof.
g. Change, Waiver, Etc. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is sought.
h. Governing Law. This Warrant shall be construed and enforced in accordance with the
laws of the State of Utah.
| ZARS, INC. | ||||
| By | ||||
| Name: | Xxxxx Xxxxx | |||
| Title: | President | |||
Dated: June 7, 2004
4.
[To be signed only upon exercise of Warrant]
To ZARS, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the
purchase right represented by such Warrant for, and to purchase thereunder, shares of
Common Stock of ZARS, Inc. and herewith makes payment of $
_____ therefor, and requests that the
certificates for such shares be issued in the name of, and be delivered to the undersigned, whose
address is .
Dated:
| (Signature must conform in all respects to name of | ||
| Holder as specified on the face of the Warrant) | ||
| Address |
Schedule
to Form of Common Stock Warrant
| Name | Date | Shares | Price | |||||||||
Xxxxx, Xxxxxxx |
2/27/2004 | 2,000 | $ | 4.86 | ||||||||
Dow Pharmaceutical |
5/18/2001 | 15,000 | $ | 4.86 | ||||||||
Xxxxxxx, Xxxxxxx |
4/1/2003 | 500 | $ | 4.86 | ||||||||
Xxxxxxx, Xxxxxx |
4/25/2006 | 1,750 | $ | 3.41 | ||||||||
Xxxxxx, Xxxxxxx |
2/28/2000 | 12,000 | $ | 2.50 | ||||||||
Xxxxxx, Xxxxxxx |
2/27/2004 | 2,000 | $ | 4.86 | ||||||||
Xxxxxxx, Xxxxxx |
7/21/2003 | 1,000 | $ | 4.86 | ||||||||
Xxxxx, Xxxxxx |
5/5/2004 | 3,000 | $ | 4.86 | ||||||||
Xxxxx, Xxxxxx |
2/14/2003 | 3,000 | $ | 4.86 | ||||||||
Xxxxx, Xxxxx |
2/27/2004 | 20,000 | $ | 4.86 | ||||||||
Xxxx, Xxxxx |
2/28/2000 | 12,000 | $ | 2.50 | ||||||||
Venture
Spark, Inc. |
8/30/2004 | 208 | $ | 4.86 | ||||||||
Venture
Spark, Inc. |
5/18/2001 | 7,202 | $ | 4.86 | ||||||||
Venture
Spark, Inc. |
5/18/01 | 7,202 | $ | 4.86 | ||||||||
Xxxxxxx,
Xxxxxxxx X. |
8/5/2004 | 5,000 | $ | 4.86 | ||||||||
Xxxxxxx,
Xxxxxxxx X. |
2/27/2004 | 15,000 | $ | 4.86 | ||||||||
Xxxxxxx, Xxxx |
10/5/2004 | 1,000 | $ | 2.00 | ||||||||
Coast
Ventures |
8/30/2004 | 139 | $ | 4.86 | ||||||||
Xxxxxxx, Xxxxxxxxxxx |
5/25/2005 | 500 | $ | 2.00 | ||||||||
Xxxxxxxxxxxx, Xxx |
3/31/2000 | 9,000 | $ | 2.50 | ||||||||
| Total | 117,501 | |||||||||||
THE WARRANT EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO A
SHAREHOLDER AGREEMENT BY AND AMONG ZARS, INC. AND THE SHAREHOLDERS OF ZARS, INC.
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ZARS, INC., QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE ACT AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER.
ZARS, INC.
Stock Purchase Warrant
ZARS, Inc., a Utah corporation (the “Company”), hereby certifies that, for value
received, , or assigns (the “Holder”), is entitled to purchase from the
Company, subject to the terms set forth below, at the price of Four Dollars and eighty-six cents
($4.86) per share (the “Exercise Price”), up to ( ) shares of the
Company’s voting common stock, par value $0.12 (the “Common Stock”). This Warrant is herein called
the “Warrant.”
10. Exercise of Warrant. The purchase rights evidenced by this Warrant shall be exercised by
the Holder surrendering this Warrant, with the form of subscription at the end hereof duly executed
by such holder, to the Company at its offices at 0000 Xxxx 0000 Xxxxx, Xxxxx X, Xxxx Xxxx Xxxx,
Xxxx 00000 or such other location as the parties may agree. The purchase rights evidenced by this
Warrant may be exercised by the Holder surrendering this Warrant without payment of any cash or
other additional consideration. This Warrant may be exercised for less than the full number of
shares of Common Stock, in which case the number of shares receivable upon the exercise of this
Warrant as a whole, and the sum payable upon the exercise of this Warrant as a whole, shall be
proportionately reduced. Upon any such partial exercise, the Company at its expense will forthwith
issue to the Holder a new Warrant or Warrants of like tenor calling for the number of shares of
Common Stock as to which rights have not been exercised, such Warrant or Warrants to be issued in
the name of the Holder.
11. Delivery of Stock Certificates on Exercise. As soon as practicable after the exercise of
this Warrant, and in any event within ten (10) days thereafter, the Company, at its expense, will
cause to be issued in the name of and delivered to the Holder hereof a certificate or certificates
for the number of fully paid and non-assessable shares to which such Holder shall be entitled upon
such exercise. The Company agrees that the shares so purchased shall be deemed to
1
be issued to the Holder hereof as the record owner of such shares as of the close of business
on the date on which this Warrant shall have been surrendered and payment made for such shares as
aforesaid.
12. Exercise Date and Term of Warrant. Unless accelerated as described in Section 4 below,
the Holder shall not be entitled to exercise this Warrant until December 1, 2004 (the “Exercise
Date”). Holder shall have from the Exercise Date until December 1, 2010, in which to exercise this
Warrant, at which time all of the Holder’s rights hereunder shall terminate.
13. Acceleration of Exercise Date. In the event the Company enters into an agreement to sell,
convey or dispose of all or substantially all of the Company’s property or business or the
Company’s merger with or into or consolidation with any other corporation (other than a
wholly-owned subsidiary of the corporation) or if the Company effects any other transaction or
series of related transactions in which more than fifty percent (50%) of the voting power of the
Company is disposed of, the Exercise Date shall be accelerated and shall be the date on which the
Company enters into such transaction. In such an event, the Company shall provide notice to the
Holder in accordance with this Warrant.
14. Shareholder Agreement. Upon exercise of this Warrant and at the request of the Company,
the Holder shall execute and deliver to the Company a Shareholder Agreement or Statement of
Acceptance thereof prior to the transfer or delivery of any shares and prior to the expiration of
the Exercise Period. The Company shall have no obligation to transfer or deliver the shares issued
pursuant to this Warrant unless or until the Holder executes and delivers the foregoing to the
Company.
15. No Impairment. The Company will not, by amendment of its articles of incorporation or
through reorganization, consolidation, merger, dissolution, sale of assets 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
against impairment. Without limiting the generality of the foregoing, the Company will not
increase the par value of any shares of stock receivable upon the exercise of this Warrant above
the amount payable therefor upon such exercise, and at all times will take all such action as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and
non-assessable stock upon the exercise of this Warrant and all other Warrants at the time
outstanding.
16. Reservation of Stock, Etc., Issuable on Exercise of Warrants. The Company shall at all
times reserve and keep available out of its authorized but unissued stock, solely for the issuance
and delivery upon the exercise of this Warrant and other similar Warrants, such number of its duly
authorized shares of Common Stock as from time to time shall be issuable upon the exercise of this
Warrant, and all other Warrants at the time outstanding.
2
17. Assignment or Transfer Prohibited. This Warrant is not transferable by the Holder other
than by will or the laws of descent and distribution, and this Warrant shall be exercisable during
the Holder’s lifetime only by the Holder. This Warrant shall become null and void in the event the
Holder attempts to transfer, assign, pledge, hypothecate or otherwise dispose of this Warrant
contrary to the provisions hereof.
18. Miscellaneous.
a. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an
amount reasonably satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of like tenor.
b. Remedies. The Company stipulates that the remedies at law of the Holder in the event of
any default by the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that the same may be specifically enforced.
c. Rights Prior to Exercise. Prior to the exercise of this Warrant, the Holder shall not be
entitled to any rights of a shareholder of the Company with respect to shares for which this
Warrant shall be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company.
d. Subdivision of Rights. This Warrant (as well as any new warrants issued pursuant to the
provisions of this paragraph) is exchangeable, upon the surrender hereof by the Holder, at the
principal office of the Company for any number of new warrants of like tenor and date representing
in the aggregate the right to subscribe for and purchase the number of shares of Common Stock of
the Company which may be subscribed for and purchased hereunder.
e. Mailing of Notices, Etc. All notices and other communications from the Company to the
Holder shall be mailed by first class certified mail, postage prepaid, to the address furnished to
the Company in writing.
f. Headings, Etc. The headings in this Warrant are for purposes of reference only, and shall
not limit or otherwise affect the meaning hereof.
g. Change, Waiver, Etc. Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is sought.
3
h. Governing Law. This Warrant shall be construed and enforced in accordance with the laws of
the State of Utah.
| ZARS, INC. |
||||
| By: | ||||
| Xxxxx X. Xxxxx | ||||
| Its: President | ||||
Dated: December 1 , 2003
4
Schedule
to Form of Common Stock Warrant
| Name | Date | Shares | Price | |||||||||
Venture
Spark, Inc |
12/1/2003 | 1,052 | $ 4.86 | |||||||||
Coast
Ventures |
12/1/2003 | 701 | $ 4.86 | |||||||||
Wasatch Venture Fund II, LLC |
10/16/2003 | 20,000 | $ 4.86 | |||||||||
| Total | 21,753 | |||||||||||
