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SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
SUBSCRIPTION AGREEMENT
INSTRUCTIONS
Each subscriber must complete and sign the Subscription Agreement in
accordance with the following instructions. Subscribers must meet certain
requirements in order for Specialized Health Products International, Inc. (the
"Company"), a Delaware corporation, to comply with the offering exemptions from
registration and qualification under the federal Securities Act of 1933, as
amended, and applicable state securities laws. The Company will be relying on
the accuracy and completeness of information provided in the Subscription
Agreement to establish the qualifications of prospective investors and the
Company's legal right to sell these securities. The Subscription Agreement will
at all times be kept strictly confidential, unless necessary to establish the
legality of a prospective investor's participation in the offering. The Company
should be contacted immediately if there is any change in the information the
prospective investor has provided.
1. Complete and sign the SUBSCRIPTION AGREEMENT.
2. The following sets forth the number of signatures required for
different forms of ownership:
Form of Ownership: Signatures Required
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Individual: One signature required.
Joint Tenants With
Right of Survivorship: Both parties must sign.
Tenants in Common: All parties must sign.
Community Property: One signature required if security
will be held in one name; two
signatures required if security will
be held in both names.
Corporation: Signature of authorized officer or
officers required.
Partnership: Signature of general partner required;
additional signatures only if required
by partnership agreement.
Trust: Trustee's signature must indicate
"Trustee for the _____________ Trust."
Other Entities: As required by the applicable
document governing such entity.
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SUBSCRIPTION AGREEMENT
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
(000) 000-0000
THIS SUBSCRIPTION AGREEMENT made this day of January, 1998, by and between
Specialized Health Products International, Inc., a Delaware corporation (the
"Issuer"), and Xxxxxxx & Xxxxxxx Development Corporation, a New Jersey
corporation (the "Subscriber"), who, for and in consideration of the mutual
promises and covenants set forth herein, do hereto agree as follows:
1. Subscription. The Subscriber hereby subscribes for 1,000,000 Units at a
price of $2.00 per Unit, and for a total capital contribution in the amount of
$2,000,000 which the Subscriber has tendered herewith in good funds as payment
for said Units. Each Unit consists of one share of the Company's $.02 par value
common stock and one Series D Warrant, as described in the confidential private
placement memorandum. The minimum subscription is 50,000 Unites ($100,000). The
subscription evidenced by this Subscription Agreement ("Subscription") is an
irrevocable offer by the Subscriber to subscribe for the securities offered by
the Issuer, and, subject to the terms hereof, shall become upon the acceptance
thereof by the Issuer a contract for the sale of said securities. Subscription
proceeds will be deposited as soon as practicable after receipt into an escrow
account with U.S. Bank Trust Company.
2. Acceptance. This Subscription Agreement is made subject to the Issuer's
discretionary right to accept or reject the subscription herein in whole or in
part, and the Subscriber will be promptly notified as to whether the
subscription has been accepted. If the Issuer shall for any reason reject all or
part of this Subscription, the amount paid by the Subscriber with respect to the
rejected Subscription, or part thereof, will be refunded, without interest.
Acceptance of this Subscription by the Issuer will be evidenced by the execution
hereof by an officer of the Issuer.
3. Subscriber Representations. The Subscriber hereby represents and
warrants that:
(a) The Subscriber's representations in this Subscription Agreement
are complete and accurate to the best of the Subscriber's knowledge, and the
Issuer and any sales agent may rely upon them. The Subscriber will notify the
Issuer and any such agent immediately if any material change occurs in any of
this information before the sale of the Units.
(b) The Subscriber is able to bear the economic risk of an
investment in the securities for an indefinite period of time, can afford the
loss of the entire investment in the securities, and will, after making an
investment in the securities, have sufficient means of providing for his (or
her) current needs and possible future contingencies. Additionally, the
Subscriber's overall commitment to investments which are not readily marketable
is not disproportionate to his (or her) net worth and this Subscription will not
cause such overall commitment to become excessive.
(c) The securities subscribed for herein will not be sold by the
Subscriber without registration under applicable securities acts or a proper
exemption from such registration.
(d) The securities subscribed for herein are being acquired for the
Subscriber's own account and risk, for investment purposes, and not on behalf of
any other person or with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act of 1933. The
Subscriber is aware that there are substantial restrictions on the
transferability of the securities.
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(e) The Subscriber has had access to any and all information
concerning the Issuer which the Subscriber and the Subscriber's financial, tax
and legal advisors required or considered necessary to make a proper evaluation
of this investment. In making the decision to purchase the securities herein
subscribed for, the Subscriber and his or her advisers have relied solely upon
their own independent investigations, and fully understand that there are no
guarantees, assurances or promises in connection with any investment hereunder
and understand that the particular tax consequences arising from this investment
in the Issuer will depend upon the individual circumstances of the Subscriber.
The Subscriber further understands that no opinion is being given as to any
securities or tax matters involving the offering.
(f) All of the representations and warranties of the Subscriber
contained herein and all information furnished by the Subscriber to the Issuer
are true, correct and complete in all respects, and the Subscriber agrees to
notify the Issuer immediately of any change in any representation, warranty or
other information set forth herein.
(g) The Subscriber also understands and agrees that stop transfer
instructions relating to the securities will be placed in the Issuer's stock
transfer ledger, and that the certificates evidencing the securities sold will
bear legends in substantially the following form:
The securities represented by this Certificate have not been
registered under the Securities Act of 1933 (the "Act") and are
"restricted securities" as that term is defined in Rule 144 under
the Act. The securities may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration
statement under the Act or pursuant to an exemption from
registration under the Act, the availability of which is to be
established to the satisfaction of the Issuer.
(h) Subscriber has been given the unrestricted opportunity to ask
questions of, and receive answers from, the Issuer, or persons acting on its
behalf, concerning the terms and conditions of, and all other matters relating
to the offering, and has been given the unrestricted opportunity to obtain such
additional information with respect to the offering as he has desired,
including, but not limited to, any additional information necessary to verify
the accuracy of the information set forth in the attached documentation. The
undersigned has carefully read the Issuer's Confidential Private Placement
Memorandum dated December 4, 1997, (the "Memorandum") and all material attached
to or accompanying the Memorandum as specified therein. Capitalized terms used
but not defined herein shall have the respective meanings assigned to such terms
in the Memorandum.
(i) The Subscriber knows that the securities subscribed for herein
are offered and sold pursuant to exemptions from registration under the
Securities Act of 1933, and state securities law based, in part, on these
warranties and representations, which are the very essence of this Subscription
Agreement, and constitute a material part of the bargained-for consideration
without which this Subscription Agreement would not have been executed.
(j) By reason of the Subscriber's business or financial experience
or the business or financial experience of professional advisors who are
unaffiliated with and who are not compensated by the Issuer or any affiliate or
selling agent of the Issuer, directly or indirectly, the Subscriber has the
capacity to protect his (or her) own interest in connection with this
transaction or has a pre-existing personal or business relationship with the
Issuer or one or more of its officers, directors or controlling persons
consisting of personal or business contacts of a nature and duration such as
would enable a reasonably prudent purchaser to be aware of the character,
business acumen and general business and financial circumstances of such person
with whom such relationship exists.
(k) This Subscription Agreement when fully executed and delivered by
the Issuer will constitute a valid and legally binding obligation of the
Subscriber, enforceable in accordance with its terms. The Subscriber, if it is a
partnership, joint venture, corporation, trust or other entity, was not formed
or
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organized for the specific purpose of acquiring the Units. The purchase of the
Units by the Subscriber, if it is an entity investor, is a permissible
investment in accordance with the Subscriber's Articles of Incorporation,
by-laws, partnership agreement, declaration of trust or other similar charter
document, and has been duly approved by all requisite action by the entity's
owners, directors, officers or other authorized managers. The person signing
this document and all documents necessary to consummate the purchase of the
shares has all requisite authority to sign such documents on behalf of the
Subscriber, if it is an entity investor.
(l) The Subscriber has not duplicated or distributed the Memorandum
to anyone other than his personal advisors, and will not do so in the future.
(m) The securities offered hereby were not offered to the Subscriber
by way of general solicitation or general advertising and at no time was the
Subscriber presented with or solicited by means of any leaflet, public
promotional meeting, circular, newspaper or magazine article, radio or
television advertisement.
(n) By entering into this Subscription Agreement, the undersigned
Subscriber acknowledges receipt of the Memorandum used in connection with this
offering.
(o) The Subscriber is an "accredited investor" as defined under Rule
501 of Regulation D by reason of:
FOR INDIVIDUALS ONLY (INITIAL IF APPLICABLE):
______ 1. I had individual income (exclusive of any income attributable to
Initial my spouse) in excess of $200,000 in each of the most recent two
Here years and I reasonably expect to have an individual income in
excess of $200,000 for the current year, or I had joint income with
my spouse in excess of $300,000 in each of those years and I
reasonably expect to have a joint income with my spouse in excess
of $300,000 for the current year.
______ 2. I have an individual net worth, or my spouse and I have a
Initial combined individual net worth, in excess of $1,000,000. For
Here purposes of this Subscription Agreement, "individual net worth"
means the excess of total assets at fair market value, including
home and personal property, over total liabilities.
______ 3. I am qualified as an "accredited investor" pursuant to Rule
Initial 501(a) of Regulation D of the 1933 Act for the following reason:
Here _________________________________________________________________
FOR CORPORATIONS AND PARTNERSHIPS ONLY (INITIAL IF APPLICABLE):
______ 1. The undersigned hereby certifies that the Partnership or
Initial Corporation which he/she represents possesses total assets in
Here excess of $5,000,000 and was not formed for the specific purpose
of acquiring the securities offered by Issuer.
______ 2. The undersigned hereby certifies personally, and on behalf of
Initial the Partnership or Corporation which he/she represents, that all
Here of the beneficial owners of equity qualify individually as
accredited investors under the individual accredited investor
test set forth above.
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FOR TRUSTS ONLY (INITIAL IF APPLICABLE):
______ 1. The undersigned hereby certifies that the trust which he/she
Initial represents possesses total assets in excess of $5,000,000 and
Here was not formed for the specific purpose of acquiring the
securities offered by Issuer, and that the purchase of the
securities is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) of the Act.
______ 2. The undersigned hereby certifies personally, and on behalf of
Initial the trust that he/she represents, that such trust is a revocable
Here trust which may be amended or revoked at any time by the
grantors, and all the grantors are accredited individual investors
under the individual accredited investor test set forth above.
FOR TRUSTEES AND AGENTS (READ AND INITIAL BOTH STATEMENTS):
______ 1. The undersigned hereby acknowledges that he/she is acting as an
Initial agent or trustee for the following person or entity: __________
Here _______________________________________________________________
______ 2. The undersigned hereby agrees to provide to Issuer, upon
Initial Issuer's request, the following documents:
Here
(a) a copy of the trust agreement, power of attorney or other
instrument granting the power and authority to execute and
deliver the Subscription Agreement, or
(b) an opinion of counsel verifying the undersigned's power and
authority to execute and deliver the Subscription Agreement.
FOR RETIREMENT OR EMPLOYEE BENEFIT PLANS (INITIAL IF APPLICABLE):
______ 1. The undersigned hereby certifies that the plan which he/she
Initial represents is an employee benefit plan within the meaning of the
Here Employment Retirement Income Security Act of 1974 ("ERISA") and
that either
______ (a) the decision to invest in the securities was made by a plan
Initial fiduciary, as defined in Section 3(21) of ERISA, which is
Here either a bank, savings and loan association, insurance
company, or registered investment advisor, or
______ (b) the employee benefit plan has total assets in excess of
Initial $5,000,000, or
Here
______ (c) the plan is a self-directed plan, the decision to invest in
Initial the securities was made solely by a person that is an
Here accredited investor, and each of the following statements is
true with respect to that plan:
o the plan provides for segregated accounts for each plan
participant,
o the document governing the plan provides each participant
with the power to direct each particular investment to the
extent of the participant's voluntary contributions plus
any portion of employer contributions that have vested to
the participant's benefit, and
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o the decision to invest in the securities was made pursuant
to the plan participant's power to direct the investment of
his or her account in the plan trust.
4. Entire Agreement. This Subscription Agreement together with the other
documents executed contemporaneously herewith, constitute the entire agreement
between the parties with respect to the matters covered thereby, and may only be
amended by a writing executed by all parties hereto.
5. Survival of Representations. The representations, warranties,
acknowledgments and agreements made by the Subscriber shall survive the
acceptance of this Subscription and run in favor of, and for the benefit of, the
Issuer.
6. Waiver. No waiver or modification of any of the terms of this
Subscription Agreement shall be valid unless in writing. No waiver of a breach
of, or default under, any provision hereof shall be deemed a waiver of such
provision or of any subsequent breach or default of the same or similar nature
or of any other provision or condition of this Subscription Agreement.
7. Counterparts. This Subscription Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8. Notices. Except as otherwise required in this Subscription Agreement,
any notice required or permitted under this Subscription Agreement shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit with the United States Post Office, by registered or certified
mail, postage prepaid, addressed as follows:
To the Issuer: Specialized Health Products International, Inc.
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
To the Subscriber: At the address set forth beneath the
Subscriber's signature
9. Non-Assignability. The obligations of the Subscriber hereunder shall
not be delegated or assigned to any other party without the prior written
consent of the Issuer.
10. Form of Ownership. Please indicate the form of ownership which the
Subscriber desires for the Units:
___ Individual
___ Joint Tenants with Right of Survivorship
___ Tenants in Common
___ Community Property
___ Trust
___ Corporation
___ Partnership
___ Other:
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INDIVIDUAL(S) SIGN HERE: SUBSCRIBER:
(Signature)
-----------------------------------
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(Print Name)
(Address)
(Day Phone Number)
(Evening Phone Number)
Social Security No.:
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Number of Units Subscribed
for Purchase:
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Dollar Amount of Subscription: $
ORGANIZATIONS SIGN HERE: SUBSCRIBER:
XXXXXXX & XXXXXXX DEVELOPMENT
CORPORATION
(Print Name of Organization)
By:
(Print Name and Title)
(Address)
(Phone Number)
Tax ID No.:
Number of Units Subscribed
for Purchase:
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Dollar Amount Subscribed for $
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ACCEPTED:
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
By:
Date:
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EXHIBIT 2
(Form of Series D Warrant)
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SERIES "D" WARRANTS
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THE WARRANTS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE AND MAY
BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO RELEVANT
PROVISIONS OF FEDERAL AND STATE SECURITIES OR BLUE SKY LAWS OR IF AN EXEMPTION
FROM SUCH REGISTRATION OR QUALIFICATION IS APPLICABLE.
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
Incorporated Under the Laws of the State of Delaware
No. D - _________ _________ Series D Common Stock
Purchase Warrants
CERTIFICATE FOR SERIES "D" COMMON STOCK
PURCHASE WARRANTS
1. Warrant. This Warrant Certificate certifies that ______________________
_____________________________, or registered assigns (the "Registered Holder"),
is the registered owner of the above indicated number of Warrants expiring on
the Expiration Date, as hereinafter defined. One (1) Warrant entitles the
Registered Holder to purchase one (1) share of the common stock, $.02 par value
(a "Share"), of Specialized Health Products International, Inc., a Delaware
corporation (the "Company"), from the Company at a purchase price of Two Dollars
and no/100 ($2.00) (the "Exercise Price") at any time during the Exercise
Period, as hereinafter defined, upon surrender of this Warrant Certificate with
the exercise form hereon duly completed and executed and accompanied by payment
of the Exercise Price at the principal office of the Company.
Upon due presentment for transfer or exchange of this Warrant Certificate
at the principal office of the Company, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued in exchange for this Warrant Certificate, subject to
the limitations provided herein, upon payment of any tax or governmental charge
imposed in connection with such transfer. Subject to the terms hereof, the
Company shall deliver Warrant Certificates in required whole number
denominations to Registered Holders in connection with any transfer or exchange
permitted hereunder.
2. Restrictive Legend. Each Warrant Certificate and each certificate
representing Shares issued upon exercise of a Warrant, unless such Shares are
then registered under the Securities Act of 1933, as amended (the "Act"), shall
bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES OR BLUE SKY
LAWS OF ANY STATE AND MAY BE OFFERED AND
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SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO RELEVANT PROVISIONS OF
FEDERAL AND STATE SECURITIES OR BLUE SKY LAWS OR IF AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS APPLICABLE.
3. Exercise. Subject to the terms hereof, the Warrant evidenced by this
Warrant Certificate may be exercised at the Exercise Price in whole or in part
at any time during the period (the "Exercise Period") commencing on October 1,
1998 (except that upon a notice of redemption by the Company as described
herein, the warrants become immediately exercisable) and terminating at the
close of business on that day (the "Expiration Date") which is the second
anniversary of the date on which a registration statement filed pursuant to the
Act covering the resale of the Shares to be issued upon exercise of this Warrant
is declared effective by the Securities and Exchange Commission, provided that
the Exercise Period shall be extended and the Expiration Date delayed by one
business day for each business day subsequent to such effectiveness on which a
prospectus meeting the prospectus delivery requirements of the Act and covering
the resale of such Shares by the Registered Holder hereof or the successors in
interest to such Registered Holder is not available. The Exercise Period may
also be extended by the Company's Board of Directors.
A Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date (the "Exercise Date") of the surrender to the
Company at its principal executive offices of this Warrant Certificate with the
exercise form attached hereto executed by the Registered Holder and accompanied
by payment to the Company, by wire transfer, or by official bank or certified
check, of an amount equal to the aggregate Exercise Price, in lawful money of
the United States of America.
The person entitled to receive the Shares issuable upon exercise of a
Warrant or Warrants ("Warrant Shares") shall be treated for all purposes as the
holder of such Warrant Shares as of the close of business on the Exercise Date.
The Company shall not be obligated to issue any fractional share interests in
Warrant Shares issuable or deliverable on the exercise of any Warrant or scrip
or cash with respect thereto, and such right to a fractional share shall be of
no value whatsoever. If more than one Warrant shall be exercised at one time by
the same Registered Holder, the number of full Shares which shall be issuable on
exercise thereof shall be computed on the basis of the aggregate number of full
shares issuable on such exercise.
Promptly, and in any event within ten business days after the Exercise
Date, the Company shall cause to be issued and delivered to the person or
persons entitled to receive the same, a certificate or certificates for the
number of Warrant Shares deliverable on such exercise.
The Company may deem and treat the Registered Holder of the Warrants at
any time as the absolute owner thereof for all purposes, and the Company shall
not be affected by any notice to the contrary. The Warrants shall not entitle
the Registered Holder thereof to any of the rights of shareholders or to any
dividend declared on the Shares unless the Registered Holder shall have
exercised the Warrants and thereby purchased the Warrant Shares prior to the
record date for the determination of holders of Shares entitled to such dividend
or other right.
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4. Reservation of Shares and Payment of Taxes. The Company covenants that
it will at all times reserve and have available from its authorized Common Stock
such number of shares as shall then be issuable on the exercise of outstanding
Warrants. The Company covenants that all Warrant Shares which shall be so
issuable shall be duly and validly issued, fully paid and nonassessable, and
free from all taxes, liens and charges with respect to the issue thereof.
The Registered Holder shall pay all documentary, stamp or similar taxes
and other government charges that may be imposed with respect to the issuance,
transfer or delivery of any Warrant Shares on exercise of the Warrants. In the
event the Warrant Shares are to be delivered in a name other than the name of
the Registered Holder of the Warrant Certificate, no such delivery shall be made
unless the person requesting the same has paid the amount of any such taxes or
charges incident thereto.
5. Registration of Transfer. The Warrant Certificates may be transferred
in whole or in part, provided any such transfer complies with all applicable
federal and state securities laws and, if requested by the Company, the
Registered Holder delivers to the Company an opinion of counsel to that effect,
in form and substance reasonably acceptable to the Company. Warrant Certificates
to be transferred shall be surrendered to the Company at its principal office.
The Company shall execute, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the transfer
shall be entitled to receive.
The Company shall keep transfer books at its principal office or at the
office of its warrant agent which shall register Warrant Certificates and the
transfer thereof. On due presentment of any Warrant Certificate for registration
of transfer at such office, the Company shall execute, issue and deliver to the
transferee or transferees a new Warrant Certificate or Certificates representing
an equal aggregate number of Warrants. All Warrant Certificates presented for
registration of transfer or exercise shall be duly endorsed or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company. The Company may require payment of a sum sufficient to cover any tax or
other government charge that may be imposed in connection therewith.
All Warrant Certificates so surrendered, or surrendered for exercise, or
for exchange in case of mutilated Warrant Certificates, shall be promptly
canceled by the Company and thereafter retained by the Company until the
Expiration Date. Prior to due presentment for registration of transfer thereof,
the Company may treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof (notwithstanding any notations of ownership or writing
thereon made by anyone other than the Company), and the Company shall not be
affected by any notice to the contrary.
6. Loss or Mutilation. On receipt by the Company of evidence satisfactory
as to the ownership of and the loss, theft, destruction or mutilation of this
Warrant Certificate, the Company shall execute and deliver, in lieu thereof, a
new Warrant Certificate representing an equal aggregate number of Warrants. In
the case of loss, theft or destruction of any Warrant Certificate, the
individual requesting issuance of a new Warrant Certificate shall be required to
indemnify the Company in an amount satisfactory to the Company. In the event a
Warrant Certificate is mutilated, such Certificate shall be surrendered and
canceled by the Company prior to delivery of a new Warrant Certificate.
Applicants for a new Warrant Certificate shall also comply with such other
regulations and pay such other reasonable charges as the Company may prescribe.
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7. Call Option. So long as the closing bid price or last trade in the
principal market in which, or on the principal exchange on which, the Shares
trade exceeds Six Dollars ($6.00) for the ten (10) consecutive trading days
preceding but not including the date of the notice of such call, the Company
shall have the right and option, upon no less than twenty (20) trading days'
written notice to the Registered Holder, to call, and thereafter to redeem and
acquire all of the Warrants remaining outstanding and unexercised at the date
fixed for such redemption in such notice (the "Redemption Date"), which
Redemption Date shall be at least 20 trading days after the date of such notice,
for an amount equal to One-Tenth of One Cent ($.001) per Warrant; provided,
however, that the Registered Holder shall have the right during the period
between the date of such notice and the Redemption Date to exercise the Warrants
in accordance with the provisions of Section 3 hereof and provided further that
a prospectus meeting the prospectus delivery requirements of the Act and
covering the resale of the Shares to be issued upon exercise of this Warrant by
the Registered Holder hereof or the successors in interest to such Registered
Holder is available during the entire period between such notice and the
Redemption Date. Said notice of redemption shall require the Registered Holder
to surrender to the Company, not later than on the Redemption Date, at the
principal executive offices of the Company, his certificate or certificates
representing the Warrants to be redeemed. Notwithstanding the fact that any
Warrants called for redemption have not been surrendered for redemption and
cancellation on the Redemption Date, after the Redemption Date such Warrants
shall be deemed to be expired and all rights of the Registered Holder of such
unsurrendered Warrants shall cease and terminate, other than the right to
receive the redemption price of $.001 per Warrant for such Warrants, without
interest.
In connection with any call hereunder, the Company shall have no
obligation to call any other stock purchase warrant or warrants, whether or not
having similar terms, and no call made pursuant to any other stock purchase
warrant shall obligate the Company to exercise its right and option to make a
call hereunder.
8. Adjustment of Shares. The number and kind of securities issuable upon
exercise of a Warrant shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
(a) Stock Splits, Stock Combinations and Certain Stock Dividends. If
the Company shall at any time subdivide or combine its outstanding Shares,
or declare a dividend in Shares or other securities of the Company
convertible into or exchangeable for Shares, a Warrant shall, after such
subdivision or combination or after the record date for such dividend, be
exercisable for that number of Shares and other securities of the Company
that the Registered Holder would have owned immediately after such event
had the Warrant been exercised immediately before such event. Any
adjustment under this Section 8 (a) shall become effective at the close of
business on the date the subdivision, combination or dividend becomes
effective.
(b) Adjustment for Reorganization, Consolidation, Merger. In case of
any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time receivable upon exercise of a
Warrant) or in case the Company (or any such other corporation) shall
merge into or with or consolidate with another corporation or convey all
or substantially all of its assets to another corporation or enter into a
business combination of any form as a result of which the Shares or other
securities receivable upon exercise of a Warrant are converted into other
stock or securities of the same or another corporation, then and in each
such case, the Registered Holder of a Warrant, upon exercise of the
purchase right at any time after the consummation of such reorganization,
consolidation, merger, conveyance or combination, shall be entitled to
receive, in lieu of the Shares or other securities to which such
Registered Holder would
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have been entitled had he exercised the purchase right immediately prior
thereto, such stock and securities which such Registered Holder would have
owned immediately after such event had the Warrant been exercised
immediately prior to such event.
In the event that any of the foregoing occurs, a corresponding adjustment
to the exercise price of the Warrant shall be made. In each case of an
adjustment in the exercise price or the number of Shares or other securities
receivable upon the exercise of a Warrant, the Company shall promptly notify the
Registered Holder of such adjustment. Such notice shall set forth the facts upon
which such adjustment is based.
9. Reduction in Exercise Price at Company's Option. The Company's Board of
Directors may, at its sole discretion, reduce the Exercise Price of the Warrants
in effect at any time either for the life of the Warrants or any shorter period
of time determined by the Company's Board of Directors. The Company shall
promptly notify the Registered Holders of any such reduction in the Exercise
Price.
10. Registration Rights.
(a) Certain Definitions. As used in this Section 10, the following
definitions shall apply:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Act.
"Holder" means any holder of a Warrant or outstanding Registerable
Securities.
"Registerable Securities" means the Warrant Shares issued or issuable upon
the exercise of a Warrant, provided, however, that Registerable Securities shall
not include any Shares and other securities which have previously been
registered and sold to the public.
"Registration Expenses" means all expenses incurred by the Company in
complying with Section 10(b) including, without limitation, all registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the expense of any
special audits incident to or required in connection with any such registration.
Registration Expenses shall not include selling commissions, discounts or other
compensation paid to underwriters or other agents or brokers to effect the sale.
The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act (and any post-effective amendments filed in connection
therewith), and the declaration of the effectiveness of such registration
statement.
(b) Registration. The Company shall:
(i) Following the original issuance of the Warrants represented by
this Warrant Certificate at such time as the Company first prepares and
files with the Commission a registration statement on an appropriate form
that would permit inclusion of the Registerable Securities in such
registration statement or a pre-effective amendment to such a registration
statement, include the Registrable Securities among the securities being
registered pursuant to such registration statement. The Company shall
diligently prosecute such registration statement to effectiveness. Such
16
registration statement shall cover the resale of such Warrant Shares by
the Holder. The Company will promptly notify the Holder regarding (i) the
filing of such registration statement and all amendments thereto, (ii) the
effectiveness of such registration statement and any post-effective
amendments thereto, (iii) the occurrence of any event or condition that
causes the prospectus that is part of such registration statement no
longer to comply with the requirements of the Act, and (iv) any request by
the Commission for any amendment or supplement to such registration
statement or any prospectus relating thereto;
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and current and to comply with the provisions of the
Act with respect to the resale of the Registerable Securities, including
such amendments and supplements as may be necessary to reflect the
intended method of disposition by the Holder, but for no longer than one
hundred eighty (180) days subsequent to the Expiration Date or the
Redemption Date;
(iii) Furnish to each Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as such Holder may reasonably request in
order to facilitate the public sale or other disposition of the
Registerable Securities by such Holder;
(iv) Use its best efforts to comply with all applicable rules and
regulations of the Commission, including without limitation the rules and
regulations relating to the periodic reporting requirements under the
Securities Exchange Act of 1934, as amended; and
(v) Make available for inspection by the Holder or by any
underwriter, attorney, accountant or other agent acting for such Holder in
connection with the disposition of Registrable Securities, in each case
upon receipt of an appropriate confidentiality agreement, all corporate
records, documents and properties as may be reasonably requested.
(c) Expenses of Registration. All Registration Expenses incurred in
connection with the registration, qualification or compliance pursuant to
Section 10(b) hereof shall be borne by the Company. The Holder shall be
responsible for all costs and expenses associated herewith that are not
Registration Expenses.
(d) Indemnification. In the event any of the Registerable Securities are
included in a registration statement under this Section 10:
(i) The Company will indemnify each Holder, each of such Holder's
officers and directors and partners and each person controlling such
Holder within the meaning of Section 15 of the Act, and each underwriter,
if any, and each person who controls any underwriter within the meaning of
Section 15 of the Act, against all expenses, claims, losses, damages or
liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any registration
statement, prospectus, or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance,
or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in
17
which they were made, not misleading, or any violation by the Company of
any rule or regulation promulgated under the Act applicable to the Company
in connection with any such registration, qualification or compliance, and
the Company will reimburse the Holder, each of its officers and directors
and partners and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to
the extent that any such claim, loss, damage, liability or expense arises
out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with
written information furnished to the Company by such Holder or underwriter
for use therein.
(ii) In order to include Registerable Securities in a registration
statement under this Section 10, a Holder will be required to indemnify
the Company, each of its directors and officers, its legal counsel and
independent accountants, each underwriter, if any, of the Company's
securities covered by such registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15
of the Act, and each other selling shareholder, each of such other selling
shareholder's officers and directors and partners and each person
controlling such selling shareholder within the meaning of Section 15 of
the Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document,
or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading and will reimburse the Company, such holders, such
directors, officers, counsel, accountants, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity
with written information furnished to the Company by the Holder for use
therein.
(iii) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (which
approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such Indemnified Party's expense. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or litigation.
(iv) If the indemnification provided for in this Section is held by
a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense
referred to herein, then the Indemnifying Party, in lieu of indemnifying
the Indemnified Party, shall contribute to the amount paid or payable by
such Indemnified Party with
18
respect to such loss, liability, claim, damage or expense in the
proportion that is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnified Party in connection with the
statements or omissions that resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations.
The relative fault of the Indemnifying Party and the Indemnified Party
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of material fact or the omission to
state a material fact relates to information supplied by the Indemnifying
Party or by the Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) Information by Holder. Each Holder of Registerable Securities included
in any registration shall furnish to the Company such information regarding such
Holder, such securities and the distribution proposed by such Holder as the
Company may request in writing.
11. Notices. All notices, demands, elections, or requests (however
characterized or described) required or authorized hereunder shall be deemed
given sufficiently if in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, or by facsimile or telegram to the
Company, at its principal executive office, and to the Registered Holder, at the
address of such holder as set forth on the books maintained by the Company.
12. General Provisions. This Warrant Certificate shall be construed and
enforced in accordance with, and governed by, the laws of the State of Delaware.
Except as otherwise expressly stated herein, time is of the essence in
performing hereunder. The headings of this Warrant Certificate are for
convenience in reference only and shall not limit or otherwise affect the
meaning hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed as of the ____ day of ________, 1997.
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
By By
--------------------------------- ---------------------------------
X. Xxxxx Xxxxxxxx, Secretary Xxxxx X. Xxxxxxxx, President
19
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JR TEN - as joint tenants with right of survivorship and not as tenants
in common
UNIF TRANS MIN ACT - ____________ (Custodian for Minor) as custodian for
__________ (name of minor) under the Uniform Transfers to Minors Act
Additional abbreviations may also be used though not in the above list.
FORM OF ASSIGNMENT
(To be Executed by the Registered Holder if He or She
Desires to Assign Warrants Evidenced by the
Within Warrant Certificate)
FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto _____________________________ _________________________ (_______)
Warrants, evidenced by the within Warrant Certificate, and does hereby
irrevocably constitute and appoint _____________________ __________________
Attorney to transfer the said Warrants evidenced by the within Warrant
Certificates on the books of the Company, with full power of substitution.
Dated:
-------------------- -----------------------------
Signature
Notice: The above signature must correspond with the name as written
upon the face of the Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
Signature Guaranteed:
------------------------------------------
SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
20
FORM OF ELECTION TO PURCHASE
(To be Executed by the Holder if Holder Desires to Exercise
Warrants Evidenced by the Warrant Certificate)
To Specialized Health Products International, Inc.
The undersigned hereby irrevocably elects to exercise
___________________________ (______) Warrants, evidenced by the within Warrant
Certificate for, and to purchase thereunder, _____________ _______________
(______) full shares of Common Stock issuable upon exercise of said Warrants and
delivery of $_________ and any applicable taxes.
The undersigned requests that certificates for such shares be issued in
the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
----------------------------------- -----------------------------------
(Please print name and address
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
If said number of Warrants shall not be all the Warrants evidenced by the
within Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so exercised be issued in the name of
and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(SIGNATURES CONTINUED ON FOLLOWING PAGE)
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Dated: Signature:
--------------------- --------------------------
NOTICE: The above signature must correspond with the name as written upon
the face of the within Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever, or if
signed by any other person the Form of Assignment hereon must be
duly executed and if the certificate representing the shares or
any Warrant Certificate representing Warrants not exercised is to
be registered in a name other than that in which the within
Warrant Certificate is registered, the signature of the holder
hereof must be guaranteed.
Signature Guaranteed:
-------------------------------------------
SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
