EXHIBIT 4.13
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE LAWS OF ANY STATE. THE TRANSFER OF THIS WARRANT IS SUBJECT
TO THE RESTRICTIONS SET FORTH IN ARTICLE 3 HEREOF, AND NO TRANSFER OF THIS
WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL THE TERMS AND
CONDITIONS OF ARTICLE 3 HEREOF HAVE BEEN COMPLIED WITH.
Warrant No. 1
WARRANT
To Purchase Common Stock of
CARDIAC CONTROL SYSTEMS, INC.
This is to certify that, for value received, XXXXXXXXX XXXXXXX, P.A.,
(together with its successors and permitted assigns, "Holder"), is entitled to
purchase from Cardiac Control Systems, Inc., a Delaware corporation (the
"Company"), at any time or from time to time prior to 5 P.M. local time at the
place where the Warrant Office hereinafter referred to is located on or before
July 31, 2003, 35,000 duly authorized, validly issued, fully paid and
nonassessable shares of common stock, par value $.10 per share, of the Company
("Common Stock"), at the Current Warrant Price (as hereinafter defined) in
lawful money of the United States of America. The purchase price hereunder at
any time of a single share of Common Stock is referred to herein as the "Current
Warrant Price". Initially, and until adjustment in the manner hereinafter
provided, the Current Warrant Price with respect to such 35,000 shares shall be
$.375 per share, which is the average of the bid and asked price of the Common
Stock as of the close of business on July 31, 1998; PROVIDED, HOWEVER, that the
Current Warrant Price for additional shares hereunder shall depend on the date
upon which the right to purchase such shares of Common Stock was granted, as
hereinafter set forth. In the event that any amount owed under that certain
Promissory Note in the principal amount of $199,000 of even date herewith made
by the Company in favor of Holder; (the "Note"), or any extension, amendment or
modification thereof, shall be outstanding on August 31, 1998, or on the last
day of any month thereafter, the Company hereby grants to Holder the right to
purchase an additional 35,000 shares of Common Stock hereunder upon such date
and upon the last day of each month thereafter that any such amount owed under
the Note, or any extension, amendment, or modification thereof, shall be
outstanding. Each such additional grant of rights to purchase Common Stock shall
expire five (5) years from the date of such grant and shall be exercisable at a
price per share of Common Stock equal to the average of the bid and asked price
of Common Stock (or of the common stock of any successor corporation to the
Company, including, without limitation, the common stock, par value $.10 per
share, ("CTG Common Stock") of Catheter Technologies Group, Inc., ("CTG") which
shall be exchanged on a one for one basis with the Common Stock pursuant to a
restructuring of the Company as a wholly-owned subsidiary of CTG) as of the
close of business on the date of such additional grant. In the event that any
warrants are issued on a day on which trading in the Common Stock does not
occur, the Current Warrant Price with respect to the Common Stock
issuable pursuant to such warrants shall be determined based on the average of
the bid and asked price of the Common Stock as of the last trade. All references
to Common Stock hereunder shall be deemed to include the CTG Common Stock, after
the restructuring and all references to the Company shall be deemed to include
CTG, after the restructuring. The number of shares of Common Stock purchasable
hereunder and the Current Warrant Price are subject to adjustment from time to
time in the manner provided in Article 4 below. Certain terms in this Warrant
are defined in Article 5 below.
ARTICLE 1
EXERCISE OF WARRANTS
SECTION 1.1. METHOD OF EXERCISE. Subject to the provisions of Article 3
below, to exercise this Warrant in whole or in part, the holder hereof shall
deliver to the Company at the Warrant Office designated pursuant to Section 2.1:
(i) a written notice, in substantially the form of the Subscription Notice
appearing at the end of this Warrant, of such holder's election to exercise this
Warrant, which notice shall specify the number of shares of Common Stock to be
purchased and the nature of payment, whether by check or by this Warrant
(pursuant to Section 1.4) or by a combination thereof; (ii) a certified or
official bank check or attorneys' check payable to the order of the Company
and/or a cancellation of a number of warrants (pursuant to Section 1.4) (and/or
any other form of consideration which the Company and the holder hereof may have
agreed to accept in payment of the Current Warrant Price) in the aggregate equal
to the aggregate Current Warrant Price of the number of shares of Common Stock
being purchased; and (iii) this Warrant. The Company shall as promptly as
practicable, and in any event within 7 days after receipt by the Company of such
notice, execute and deliver or cause to be executed and delivered, in accordance
with said notice, a certificate or certificates representing the aggregate
number of shares of Common Stock specified in said notice. The stock certificate
or certificates so delivered shall be in the denomination as may be specified in
said notice and shall be issued in the name of such holder or such other name as
shall be designated in said notice. Such certificate or certificates shall be
deemed to have been issued and such holder or any other person so designated to
be named therein shall be deemed for all purposes to have become a holder of
record of such shares as of the date the consideration specified for such shares
is received by the Company as aforesaid. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of said
certificate or certificates, deliver to such holder a new Warrant evidencing the
rights of such holder to purchase the remaining shares of Common Stock called
for by this Warrant, which new Warrant shall in all other respects be identical
with this Warrant, or, at the request of such holder, appropriate notation may
be made on this Warrant and the same returned to such holder. The Company shall
pay all expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of such stock certificates and new Warrants,
except that, in case such stock certificates or new Warrants shall be registered
in a name or names other than the name of the holder of this Warrant, funds
sufficient to pay all stock transfer taxes which shall be payable upon the
issuance of such stock certificate or certificates or new Warrants shall be paid
by the holder hereof at the time of delivering the notice of exercise mentioned
above or promptly upon receipt of a written request of the Company for payment
of the same.
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SECTION 1.2. WARRANT SHARES TO BE FULLY PAID AND NONASSESSABLE. All shares
of Common Stock issued upon the exercise of this Warrant shall be validly
issued, fully paid and nonassessable and, if the Common Stock is then listed on
a securities exchange, shall be duly listed thereon, subject to registration
under the Securities Exchange Act of 1934, as amended.
Section 1.3. NO FRACTIONAL SHARES TO BE ISSUED, The Company shall not be
required upon any exercise of this Warrant to issue a certificate representing
any fraction of a share of Common Stock, but, in lieu thereof, shall pay to the
holder of this Warrant cash in an amount equal to a corresponding fraction
(calculated to the nearest 1/100 of a share) of the Current Market Price of one
share of Common Stock as of the date of receipt by the Company of notice of
exercise of this Warrant.
SECTION 1.4. PAYMENT OF CURRENT WARRANT PRICE WITH WARRANTS. Upon any
exercise of this Warrant as provided in Section 1.1, the holder hereof may, in
lieu of payment of the Current Warrant Price in cash, surrender this Warrant (or
any successor hereto or fraction hereof) (valued for such purpose at the Current
Market Price of the underlying Common Stock for which such Warrant is
exercisable on the date of such exercise less the Current Warrant Price then in
effect) and apply all or a portion of the amount so determined to the payment of
the Current Warrant Price for the number of shares of Common Stock being
purchased.
SECTION 1.5. LEGEND ON WARRANT SHARES. Each certificate for shares
initially issued upon exercise of this Warrant, unless at the time of exercise
such Warrant Shares are registered under the Act, shall bear a legend in
substantially the following form (and any additional legend required by any
securities exchange upon which such Warrant Shares may, at the time of such
exercise, be listed) on the face thereof:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the laws of any state and may
not be sold or otherwise transferred except pursuant to an effective
registration statement or an available exemption therefrom."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of: (i) a public distribution pursuant to a registration statement; or (ii) an
exempt sale pursuant to Rule 144 or Rule 144A under the Act of the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel for the holder thereof as shall be reasonably acceptable to the Company,
the securities represented thereby need no longer be subject to the restrictions
contained in Article 3 below. The provisions of Article 3 below shall be binding
upon all subsequent holders of this Warrant.
SECTION 1.6. ACKNOWLEDGMENT OF CONTINUING OBLIGATIONS. The Company will,
at the time of any exercise of this Warrant in whole or in part, upon request of
the holder hereof, acknowledge in writing its then continuing obligation to such
holder in respect of any rights pursuant to this Warrant (including, without
limitation, any right to registration, if any, of the shares of Common Stock
issued upon such exercise) to which such holder shall continue to be
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entitled after such exercise in accordance with this Warrant; PROVIDED, HOWEVER,
that the failure of such holder to make any such request shall not affect the
continuing obligation of the Company to such holder in respect of such rights.
ARTICLE 2
WARRANT OFFICE; TRANSFER,
DIVISION OR COMBINATION OF WARRANTS
SECTION 2.1. WARRANT OFFICE. The Company shall maintain an office for
certain purposes specified herein (the "Warrant Office"), which office shall
initially be the Company's office at 0 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx
00000, and may subsequently be such other office of the Company or of any
transfer agent of the Common Stock in the continental United States as to which
written notice has previously been given to all of the Warrantholders.
SECTION 2.2. OWNERSHIP OF WARRANT. The Company may deem and treat the
person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article 2.
SECTION 2.3. TRANSFER OF WARRANTS. The Company agrees to maintain books at
the Warrant Office for the registration and transfer of the Warrants, and,
subject to the provisions of Article 3 below, this Warrant and all rights
hereunder are transferable, in whole or in part, on said books at said office,
upon surrender of this Warrant at said office, together with a written
assignment of this Warrant duly executed by the holder hereof or his duly
authorized agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument of
assignment, and this Warrant shall promptly be canceled. A Warrant may be
exercised by a new holder for the purchase of shares of Common Stock without
having a new Warrant issued.
SECTION 2.4. DIVISION OR COMBINATION OF WARRANTS. This Warrant may be
divided or combined with other Warrants upon presentation hereof and of any
Warrant or Warrants with which this Warrant is to be combined at the Warrant
Office, together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by the holders hereof and thereof or
their respective duly authorized agents or attorneys. Subject to compliance with
Section 2.3 above as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice; PROVIDED, that no holder of this Warrant may divide the
Warrant into a Warrant exercisable into less than 1,000 shares of Common Stock.
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SECTION 2.5. EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of any Warrant hereunder.
ARTICLE 3
RESTRICTIONS ON EXERCISE
AND TRANSFER; REGISTRATION RIGHTS
SECTION 3.1. RESTRICTIONS ON EXERCISE AND TRANSFER. The holder of this
Warrant, as of the date of issuance hereof, represents to the Company that it is
not acquiring the Warrants with a view to the distribution thereof.
Notwithstanding any provisions contained in this Warrant to the contrary, this
Warrant and the related Warrant Shares shall not be transferable except pursuant
to the proviso contained in the following sentence or upon the conditions
specified in this Article 3, which conditions are intended, among other things,
to insure compliance with the provisions of the Act and applicable state law in
respect of the transfer of this Warrant or such Warrant Shares. The holder of
this Warrant, by its acceptance hereof, agrees that it will not transfer this
Warrant or the related Warrant Shares prior to delivery to the Company of an
opinion of such holder's counsel reasonably satisfactory to the Company (as such
opinion and such counsel are described in Section 3.2 below) or until
registration of such Warrant Shares under the Act has become effective or after
a sale of such Warrant or Warrant Shares has been consummated pursuant to Rule
144 or Rule 144A under the Act; PROVIDED, HOWEVER, that such holder may freely
transfer this Warrant or such Warrant Shares (without delivery to the Company of
an opinion of counsel) (w) to one of its nominees, (x) to a pension or
profit-sharing fund established and maintained for its employees, (y) from a
nominee to any of the aforementioned persons as beneficial owner of this Warrant
or such Warrant Shares, or (z) to a qualified institutional buyer as defined by
the rules promulgated under the federal securities laws so long as such transfer
is effected in compliance with Rule 144A under the Act.
SECTION 3.2. NOTICE OF INTENTION TO TRANSFER; OPINION OF COUNSEL. The
holder of this Warrant, by its acceptance hereof, agrees that prior to any
transfer of this Warrant or of the related Warrant Shares (other than as
permitted by Section 3.1 above or pursuant to a registration under the Act),
such holder will give written notice to the Company of its intention to effect
such transfer, together with an opinion of counsel for such holder as shall be
reasonably acceptable to the Company, to the effect that the proposed transfer
of this Warrant and/or such Warrant Shares may be effected without registration
under the Act or applicable state law. Upon delivery of such notice and opinion
to the Company, the holder of this Warrant or such Warrant Shares shall be
entitled to transfer this Warrant and/or such Warrant Shares in accordance with
the intended method of disposition specified in the notice delivered by such
holder to the Company; PROVIDED, HOWEVER, that if such method of disposition
would, in the opinion of such counsel, require that the Company take any
reasonable action and/or execute and file with the Commission and/or any state
securities authority with jurisdiction and/or deliver to the Warrantholder or
any other person any form or document (other than a registration statement under
the Act or under any state securities laws or any information requirements
pursuant to Regulation D) in order to establish the entitlement of the holder of
this Warrant ("Warrantholder") to take advantage of such method of disposition,
the Company agrees promptly, at its expense, to take any such action and/or
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execute and file and/or deliver any such form or document; and, PROVIDED,
FURTHER, that the Company will reimburse such holder in full for the reasonable
fees and disbursements of such counsel incurred by such holder or on its behalf
in connection with such transfer of this Warrant and/or such Warrant Shares
and/or the obtaining of an opinion pursuant to this Section 3.2.
SECTION 3.3. "PIGGYBACK REGISTRATIONS".
(a) If the Company at any time prior to the expiration of the
Warrants, proposes to register any of its equity securities (as defined in the
Act), other than securities which are convertible into shares of Common Stock,
under the Act on Forms X-0, X-0, X-0 or SB-1, or SB-2 (but not Form S-4 or S-8)
or on any other form upon which may be registered securities similar to the
Warrant Shares, it will at each such time give written notice at least 30 days
prior to the filing of the registration statement to all Warrantholders of its
intention so to do. Such notice shall specify the proposed date of the filing of
the registration statement and advise each Warrantholder of its right to
participate therein. Upon the written request of any Warrantholder given prior
to the proposed date of filing set forth in such notice, the Company will cause
each Warrant Share which the Company has been requested to register by such
Warrantholder to be registered under the Act, all to the extent requisite to
permit the sale or other disposition by such Warrantholder of the Warrant Shares
so registered.
(b) If, in the written opinion of the underwriter or underwriters
managing the public offering which is the subject of a registration pursuant to
Section 3.3(a) above (or in the event that such distribution shall not be
underwritten, in the written opinion of an investment banking firm of recognized
standing satisfactory to the Warrantholders), the total amount of the securities
to be so registered, when added to the total amount of Warrant Shares which the
Warrantholders have requested to be registered pursuant to Section 3.3(a) above,
will exceed the maximum amount of securities of the Company which can be
marketed: (i) at a price reasonably related to their then current market value;
or (ii) without otherwise materially and adversely affecting the entire
offering, then the Company shall have the right to exclude from such
registration such number of Warrant Shares which it would otherwise be required
to register pursuant to Section 3.3(a) above as is necessary to reduce the total
amount of securities to be so registered to the maximum amount of securities
which can be so marketed; PROVIDED, HOWEVER, that if the securities (other than
the Warrant Shares) to be so registered for sale are to be offered for the
account of the Company and others, the Company may only cut back Warrant Shares
pro rata with the securities held by such other persons (it being agreed that in
the case where such registration is to be effected as a result of the exercise
by a holder of the Company's securities of such holder's right to cause such
securities to be so registered, such pro rata cut back shall include the
Company).
SECTION 3.4. COMPANY'S OBLIGATIONS IN REGISTRATION. If and whenever the
Company is obligated by the provisions of this Article 3 to effect the
registration of any Warrant Shares under the Act, as expeditiously as possible
the Company will:
(a) as expeditiously prepare and file with the Commission a
registration statement with respect to such Warrant Shares and use its best
efforts to cause such registration
6
statement to become and remain effective during the period required for the
distribution of the securities covered by the registration statement; PROVIDED,
HOWEVER, that in the event that the Warrant Shares covered by such registration
statement are not to be sold to or through underwriters acting for the Company,
the Company shall not be required to keep such registration statement in effect,
or to prepare and file any amendments or supplements thereto, after the
expiration of six months following the date on which such registration statement
becomes effective under the Act or such longer period during which the
Commission requires that such registration statement be kept effective with
respect to any of the Warrant Shares so registered;
(b) as expeditiously as possible, 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 to comply with the provisions of the Act
with respect to the disposition of all Warrant Shares covered by such
registration statement, whenever the Warrantholders for whom such Warrant Shares
are registered or are to be registered shall desire to dispose of the same,
subject, however to the proviso contained in Section 3.4(a) above; PROVIDED,
HOWEVER, that in any event the Company's obligations under this Section 3.4(b)
shall terminate 90 days after the effective date of any such registration
statement if none of the Warrant Shares registered thereunder shall have been
sold;
(c) as expeditiously as possible, furnish to the Warrantholders for
whom such Warrant Shares are registered or are to be registered and to any
underwriter or underwriters such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Act, and such
other documents as such Warrantholders may reasonably request in order to
facilitate the disposition of such Warrant Shares;
(d) use its reasonable efforts to register or qualify the Warrant
Shares covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as the Warrantholders for whom such Warrant
Shares are registered or are to be registered shall reasonably request, and do
any and all other reasonable acts and things to so register or qualify which may
be necessary or advisable to enable such Warrantholders to consummate the
disposition in such jurisdictions of such Warrant Shares;
SECTION 3.5. PAYMENT OF REGISTRATION EXPENSES. The costs and expenses of
all registrations under the Act and of all other actions which the Company is
required to take or effect pursuant to this Article 3 shall be paid for by the
Company (including, without limitation, all registration, qualification and
filing fees, printing expenses, expenses of distributing prospectuses and other
documents, fees and disbursements of counsel and accountants for the Company,
and expenses of any special audits incident to or required in connection with
any such registration hereof, but excluding the fees and disbursements of
special counsel for the Warrantholders, any consultants retained by the
Warrantholders and underwriters' or brokers' discounts or commissions applicable
to the Warrant Shares).
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SECTION 3.6. INFORMATION FROM WARRANTHOLDERS. Notices and requests
delivered by Warrantholders to the Company pursuant to this Article 3 shall
contain such information regarding the Warrant Shares and the intended method of
disposition thereof as shall reasonably be required in connection with the
action to be taken.
SECTION 3.7. COMPANY'S INDEMNIFICATION. In the event of any registration
under the Act of any Warrant Shares pursuant to this Article 3, the Company
hereby agrees to indemnify and hold harmless each Warrantholder disposing of
such Warrant Shares and each other person, if any, who controls such
Warrantholder within the meaning of Section 15 of the Act and each other person
(including underwriters) who participates in the offering of such Warrant Shares
against any losses, claims, damages or liabilities, joint or several, to which
such Warrantholder or controlling person or participating person may become
subject under the Act or otherwise, in so far as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained,
on the effective date thereof, in any registration statement under which such
Warrant Shares were registered under the Act, in any preliminary prospectus or
final prospectus contained therein, or in any amendment or supplement thereto,
or arise out of or are based upon the 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 such Warrantholder and
each such controlling person or participating person for any legal or any other
expenses incurred by such Warrantholder or such controlling person or
participating person in connection with investigating or defending any such
loss, claim, damage, liability or proceeding; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon: (a) an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, said preliminary or final prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Warrantholder or such controlling
or participating person, as the case may be, specifically for use in the
preparation thereof; or (b) an untrue statement or alleged untrue statement,
omission or alleged omission in a prospectus if such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in an amendment or
supplement to the prospectus which amendment or supplement is delivered to such
Warrantholder and such Warrantholder thereafter fails to deliver such prospectus
as so amended or supplemented prior to or concurrently with the sale of Warrant
Shares to the person asserting such loss, claim, damage, liability or expense.
SECTION 3.8. WARRANTHOLDER'S INDEMNIFICATIONS. If the Company so requests,
each Warrantholder for whom Warrant Shares are to be so registered shall execute
an agreement or agreements, whereby such Warrantholder agrees to indemnify and
hold harmless the Company, each other person referred to in subparts (1), (2)
and (3) of Section 11(a) of Section 15 of the Act in respect of such
registration statement and each other person, if any, which controls the Company
within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which the Company or such other person or such
person controlling the Company may become subject under the Act or otherwise,
but only to the extent that such losses, claims, damages or liabilities (or
proceeding in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date
8
thereof, in any registration statement under which such Warrant Shares were
registered under the Act, in any preliminary prospectus or final prospectus
contained therein or in any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which, in each such case, has been made in or omitted from such
registration statement, said preliminary or final prospectus or said amendment
or supplement in reliance upon, and in conformity with, written information
furnished to the Company by such Warrantholder specifically for use in the
preparation thereof. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above, with respect to information with respect to such persons so furnished in
writing by such persons specifically for inclusion in any prospectus or
registration statement.
SECTION 3.9. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person entitled
to indemnification hereunder will: (a) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification;
and (b) unless, in such indemnified party's reasonable judgment, a conflict of
interest may exist between such indemnified and indemnifying parties with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
PROVIDED, HOWEVER, that the failure of an indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Section 3.9 with respect to such indemnified party, except to the
extent that the indemnifying party is actually prejudiced by such failure.
Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to the 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 of such claim or litigation. An indemnifying party who is
not entitled to, or elects not to, assume the defense of the claim against the
indemnified party, will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
If for any reason the indemnification provided for in the preceding
Sections 3.7 and 3.8 above is unavailable to an indemnified party as
contemplated thereby, the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the indemnifying party, as well
as any other relevant equitable considerations. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of fraudulent
misrepresentation.
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SECTION 3.10. PUBLIC INFORMATION. The Company covenants and agrees that if
and so long as the Common Stock shall be registered under Section 12 of the
Exchange Act, at any time when any Warrantholder so entitled desires to make
sales of any Warrant Shares in reliance on Rule 144 or Rule 144A under the Act
either: (i) there will be available adequate current public information with
respect to the Company as required by said Rules; or (ii) if such information is
not available the Company will use its best efforts to make such information
available without delay. Without limiting the foregoing, after the time of any
such registration the Company will timely file with the Commission all reports
required to be filed under Sections 13 and 15(d) of the Exchange Act and will
promptly furnish to any Warrantholder so requesting a written statement that the
Company has complied with all such reporting requirements.
SECTION 3.11. NO CONFLICTING REGISTRATION RIGHTS. The Company covenants
and agrees that if and so long as any Warrants or any Warrant Shares shall
remain outstanding and the holders thereof shall have any rights under this
Article 3, it will not enter into any agreement with any person creating any
rights with respect to any shares of Common Stock or any other security in
conflict with or inconsistent with any rights retained by any holder of Warrants
or Warrant Shares pursuant to this Article 3.
ARTICLE 4
ANTI-DILUTION PROVISIONS
SECTION 4.1. ADJUSTMENT OF CURRENT WARRANT PRICE AND NUMBER OF SHARES
PURCHASABLE. The Current Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall be subject to adjustment
from time to time as hereinafter provided in this Article 4. Upon each
adjustment of the Current Warrant Price, the holder of this Warrant shall
thereafter be entitled to purchase at the Current Warrant Price resulting from
such adjustment, the number of shares (calculated to the nearest whole share) of
Common Stock calculated by multiplying the Current Warrant Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Current Warrant Price resulting from such adjustment.
SECTION 4.2. EFFECT OF "SPLIT-UPS" AND STOCK DIVIDENDS. In case at any
time or from time to time the Company shall subdivide or combine as a whole, by
reclassification, by the issuance of a stock dividend on the Common Stock
payable in Common Stock, or otherwise, the number of shares of Common Stock then
outstanding into a greater or lesser number of shares of Common Stock, with or
without par value, the Current Warrant Price shall be reduced or increased (as
applicable) proportionately. The issuance of such a stock dividend shall be
treated as a subdivision of the whole number of shares of Common Stock
outstanding immediately prior to such dividend into a number of shares equal to
such whole number of shares so outstanding plus the number of shares issued as a
stock dividend. Upon any such adjustment, the number of shares shall be rounded
upward to the nearest whole share.
SECTION 4.3. EFFECT OF MERGER OR CONSOLIDATION. In case the Company shall,
while this Warrant remains outstanding, enter into any consolidation with or
merger into any other
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corporation wherein the Company is not the surviving corporation, or wherein
securities of a corporation other than the Company are distributable to holders
of Common Stock, or sell or convey its property as an entirety or substantially
as an entirety followed by distribution of any or all of the proceeds thereof to
shareholders, and in connection with such consolidation, merger, sale or
conveyance, shares of stock or other securities or property shall be issuable or
deliverable in exchange for the Common Stock, then, as a condition of such
consolidation, merger, sale or conveyance, lawful and adequate provision shall
be made whereby the holder of this Warrant shall thereafter be entitled to
purchase pursuant to this Warrant (in lieu of the number of shares of Common
Stock which such holder would have been entitled to purchase immediately prior
to such consolidation, merger, sale or conveyance) the shares of stock or other
securities or property to which such number of shares of Common Stock would have
been entitled at the time of such consolidation, merger, sale or conveyance, at
an aggregate purchase price equal to that which would have been payable if such
number of shares of Common Stock had been purchased by exercise of this Warrant
immediately prior thereto. In case of any such consolidation, merger, sale or
conveyance, appropriate provision shall be made with respect to the rights and
interests thereafter of the holders of Warrants, to the end that all the
provisions of the Warrants (including the provisions of this Article 4) shall
thereafter be applicable, as nearly as practicable, to such stock or other
securities or property thereafter deliverable upon the exercise of the Warrants.
The Company shall not effect any such consolidation, merger, sale or conveyance
unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger or purchasing such assets shall assume by written instrument, executed
and mailed or delivered to each holder of Warrants, the obligation to deliver to
such holder such shares of stock or other securities or property as, in
accordance with the foregoing provisions, such Warrantholder may be entitled to
receive, which instrument shall contain the express assumption by such successor
corporation of the due and punctual performance and observance of every
provision of this Warrant to be performed and observed by the Company and of all
liabilities and obligations of the Company hereunder.
SECTION 4.4. EFFECT OF CERTAIN DIVIDENDS. Except as provided in Section
4.3 above, in case on any date the Company makes a distribution to holders of
its Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
evidences of its indebtedness or assets of the Company (excluding rights,
warrants or options to purchase shares of Common Stock which are exercisable
only for 45 days after such date), the Company shall pay the distribution that
would be payable to holders of the Warrants if the Warrant Shares had been
outstanding as of the record date (the "Distribution") to an escrow holder who
shall be a national banking institution to hold in escrow (together with
proceeds from the distribution). Any Distribution or proceeds which is cash will
be invested by the escrow holder in commercial paper rated in one of the two
highest rating categories by both Xxxxx'x Investor Services and Standard &
Poor's Corporation and the interest will accrue to the benefit of the holder of
the Warrants. Upon any exercise of the Warrants, the escrow holder will
distribute any amounts held in escrow relating to the exercised Warrants
together with the proceeds therefrom
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(including interest) to the holder of the Warrant. If one or more Warrants
terminates, the escrow holder will distribute to the Company any amounts held in
escrow relating to the terminated Warrants together with the proceeds therefrom
(including interest). Payments of amounts held in escrow to the holders of the
Warrants shall not be subject to restriction by agreement or operation of law
except as provided in this Section 4.4.
SECTION 4.5. REORGANIZATION OR RECLASSIFICATION. In case of any capital
reorganization or any reclassification of the capital stock of the Company
(except as provided in Section 4.2 above) while this Warrant remains
outstanding, then, as a condition of such reorganization or reclassification,
lawful and adequate provision shall be made whereby the holder of this Warrant
shall thereafter be entitled to purchase pursuant to this Warrant (in lieu of
the number of shares of Common Stock which such holder would have been entitled
to purchase immediately prior to such reorganization or reclassification) the
shares of stock of any class or classes or other securities or property to which
such number of shares of Common Stock would have been entitled at the time of
such reorganization or reclassification, at an aggregate purchase price equal to
that which would have been payable if such number of shares of Common Stock had
been purchased immediately prior to such reorganization or reclassification. In
case of any such capital reorganization or reclassification, appropriate
provision shall be made with respect to the rights and interests thereafter of
the holders of Warrants, to the end that all the provisions of the Warrants
(including the provisions of this Article 4) shall thereafter be applicable, as
nearly as practicable, to such stock or other securities or property thereafter
deliverable upon the exercise of the Warrants.
SECTION 4.6. STATEMENT OF ADJUSTMENT. Upon each adjustment of the Current
Warrant Price and the number of shares of Common Stock purchasable hereunder,
and in the event of any change in the rights of the holder of this Warrant by
reason of other events herein set forth, then and in each such case the Company
will promptly prepare a schedule setting forth the adjusted Current Warrant
Price and the adjusted number of shares purchasable hereunder, or specifying the
other shares of stock, other securities or property and the amount thereof
receivable as a result of such change in rights, and setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based. The Company will promptly mail a copy of such schedule to the registered
holder of this Warrant.
SECTION 4.7. NOTIFICATIONS BY THE COMPANY. In case at any time the Company
proposes:
(a) to pay any dividend payable in stock (of any class or classes) or
make any distribution to the holders of the Common Stock;
(b) to make an offer for subscription pro rata to the holders of
Common Stock of any additional shares of stock of any class or other rights or
to grant to the holders of Common Stock generally any rights, warrants or
options;
(c) to effect any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with, or
sale of all or substantially all of its assets to, another corporation; or
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(d) to effect a voluntary or involuntary dissolution, liquidation or
winding-up of the Company; then, in any one or more such cases, the Company
shall give written notice to the registered holder of this Warrant of the date
on which: (i) the transfer books of the Company shall close or a record date
shall be taken for such dividend, distribution, subscription rights or grant;
(ii) a record date shall be taken to determine stockholders entitled to notice
of and to vote at any meeting of stockholders at which any such proposed
reorganization, reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding-up is to be considered; or (iii) such
reorganization, reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding-up shall take place, as the case may be.
Such notice shall also specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution, subscription rights
or grant, or shall be entitled to vote on or exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale of assets, dissolution,
liquidation or winding-up, as the case may be. Such written notice shall be
given not less than 30 days and not more than 60 days prior to such date on
which the transfer books of the Company shall close or a record date shall be
taken or any event shall occur, as the case may be, and such notice may state
that any such action will be taken only if certain events specified in such
notice (such as the clearing of proxy material by the Commission or an
affirmative vote of stockholders) occur prior thereto.
ARTICLE 5
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise requires,
the following terms shall have the following respective meanings:
"ACT": the Securities Act of 1933, as amended from time to time, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"COMMISSION": the Securities and Exchange Commission, or any other federal
agency then administering the Act.
"CURRENT WARRANT PRICE" (per share of Common Stock at any date): the price
at which one share of Common Stock may be purchased hereunder at any time;
initially the average of the bid and asked price of Common Stock as of the close
of trading on the date the Warrant to purchase such Common Stock was issued or
if no trading occurred on such date, then the average of the bid and asked price
of Common Stock as of the last trade prior to the issuance of such Warrant, it
being understood that the Current Warrant Price may vary with respect to
different Warrant Shares hereunder depending on the date of issuance of the
Warrants. The Current Warrant Price is subject to adjustment from time to time
pursuant to Article 4 above.
"EXCHANGE ACT": the Securities Exchange Act of 1934, as amended from time
to time, or any successor federal statute, and the rules and regulations of the
Commission thereunder.
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"OUTSTANDING": when used with reference to Common Stock at any date, all
issued shares of Common Stock (including, but without duplication, shares deemed
issued pursuant to Article 4 above) at such date, except shares then held in the
treasury of the Company.
"PERSON": an individual, corporation, partnership, joint venture, trust
estate, unincorporated organization or government or an agency or political
subdivision thereof.
"TOTAL WARRANTS": the sum of the aggregate number of shares of: (i) Common
Stock purchasable by the holder(s) upon exercise of all Warrants then
outstanding; and (ii) Warrant Shares which had been issued pursuant to the
exercise of Warrants.
"WARRANT OFFICE": see Section 2.1 above.
"WARRANT SHARES": the shares of Common Stock purchasable or purchased by
the Warrantholders upon the exercise of the Warrants. Unless otherwise expressly
stated herein, Warrant Shares shall not include shares of Common Stock purchased
upon exercise of a Warrant which have been sold by a Warrantholder pursuant to a
registration statement under the Act.
"WARRANTHOLDER": the registered holder of a Warrant or Warrants or any
related Warrant Shares.
"WARRANTS": the warrants issued by the Company evidencing the right
initially to purchase an aggregate of 35,000 shares of Common Stock and all
warrants issued in substitution, combination or subdivision of any thereof and
all additional warrants issuable hereunder.
ARTICLE 6
CERTAIN COVENANTS OF THE COMPANY
The Company covenants and agrees that
(a) it will reserve and set apart and have at all times, free from
preemptive rights, a number of shares of authorized but unissued Common Stock or
other securities or property deliverable upon the exercise of the Warrants
sufficient to enable it at any time to fulfill all its obligations thereunder;
(b) before taking any action which would cause an adjustment reducing
the Current Warrant Price below the then par value of the shares of Common Stock
issuable upon exercise of the Warrants, it will take any corporate action which
may be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of such Common Stock at such adjusted Current
Warrant Price;
(c) if any shares of Common Stock required to be reserved for the
purposes of the exercise of this Warrant require registration with or approval
of any governmental authority under any federal law (other than the Act) or
under any state law before such shares may be
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issued upon exercise of this Warrant, the Company will, at its expense, as
expeditiously as possible, cause such shares to be duly registered or approved,
as the case may be;
(d) if and so long as the Common Stock is listed on any national
securities exchange (as defined in the Exchange Act), it will, at its expense,
obtain and maintain the approval for listing upon official notice of issuance of
all shares of Common Stock issuable upon the exercise of the Warrants at the
time outstanding and maintain the listing of such shares after their issuance;
and the Company will so list on such national securities exchange, will register
under the Exchange Act (or any similar statute then in effect) and will maintain
such listing of any other securities that at any time are issuable upon exercise
of the Warrants if, and at the time that, any securities of the same class shall
be listed on such national securities exchange by the Company;
(e) it will review its stock ledgers, stock transfer books and other
corporate records periodically (and not less often than once in each calendar
quarter) in order to determine whether any Warrantholder is or shall have
become, directly or indirectly, the beneficial owner of more than such
percentage of any class of its equity securities (as defined in the Exchange
Act) as shall cause such Warrantholder to be required to make any filings or
declarations to the Company, the Commission or any national securities exchange
pursuant to the provisions of the Exchange Act or any comparable federal
statute, and the Company will give prompt notice to such Warrantholder whenever
it shall have determined, upon the basis of the information disclosed by any
such review, that such Warrantholder is or has become such a holder, which
notice shall also specify the information upon which the Company bases such
determination; PROVIDED, HOWEVER, that the Company shall give such notice only
once in each fiscal year to any Warrantholder whose percentage of beneficial
ownership of the Company's equity securities has not changed since the date of
the giving of the immediately preceding notice; and
(f) this Warrant shall be binding upon CTG and/or any corporation
succeeding to the Company by merger, consolidation or acquisition of all or
substantially all of the Company's assets.
ARTICLE 7
NOTICE
Any notice or other document required to be given or delivered to the
Warrantholders shall be delivered at, or sent by certified or registered mail
to, each such holder at the last address shown on the books of the Company
maintained at the Warrant Office for the registration and registration of
transfer of the Warrants or at any more recent address of which any
Warrantholder shall have notified the Company in writing. Any notice or other
document required or permitted to be given or delivered to holders of record of
outstanding Warrant Shares shall be delivered at, or sent by certified or
registered mail to, each such holder at such holder's address as the same
appears on the stock records of the Company. Any notice or other document
required or permitted to be given or delivered to the Company, other than such
notice or documents required to be delivered to the Warrant Office, shall be
delivered at, or sent by certified or registered mail to, the office of the
Company at 0 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, or such
15
other address within the United States of America as shall have been furnished
by the Company to the Warrantholders and the holders of record of Warrant
Shares. Any notice or other document sent by certified or registered mail,
return receipt requested, shall be deemed to have been delivered and received
when sent if the receipt is appropriately completed and returned. Notices or
documents delivered in any other manner than as set forth above shall be deemed
to have been delivered only when and if received.
ARTICLE 8
LIMITATIONS OF LIABILITY;
NOT STOCKHOLDERS
No provision of this Warrant shall be construed as conferring upon the
holder hereof the right to vote, consent, receive dividends or receive notice
other than as herein expressly provided in respect of meetings of stockholders
for the election of directors of the Company or any other matter whatsoever as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the holder hereof to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the purchase price of any Warrant
Shares or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
ARTICLE 9
LOSS, DESTRUCTION, ETC. OF WARRANTS
Upon receipt of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of any Warrant, and in the case of any such loss,
theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of the Warrant, the Company will
make and deliver a new Warrant, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Warrant. Any Warrant issued under the provisions of this
Article 9 in lieu of any Warrant alleged to be lost, destroyed or stolen, or in
lieu of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.
ARTICLE 10
LAW GOVERNING
This Warrant shall be governed by, and construed and enforced in
accordance with, the law of the State of Florida, without reference to its
choice of law principles.
ARTICLE 11
SUCCESSORS AND ASSIGNS
The rights and obligations of the parties hereunder shall be binding upon
and inure to the benefit of their respective successors and assigns.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its President and attested by its Secretary or an Assistant
Secretary, on August 27, 1998, effective as of the 31st day of July, 1998.
CARDIAC CONTROL SYSTEMS, INC.
Dated: August 27, 1998
By: /s/ XXXX X. XXXXX
--------------------
Xxxx X. Xxxxx
President
Attest:
/s/ W. A. XXXXXX
-----------------
Secretary
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SUBSCRIPTION NOTICE
Cardiac Control Systems, Inc.
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, shares of the Common Stock covered by said Warrant and herewith (a)
makes payment in full therefor of $___________ by certified or official bank
check payable to the order of the Company; and (b) requests (1) that
certificates for such shares (and any securities or other property issuable upon
such exercise) be issued in the name of and delivered to
__________________________________, whose address is
________________________________ and (2) if such shares shall not include all of
the shares issuable as provided in said Warrant, that a new Warrant of like
tenor and date for the balance of the shares issuable thereunder be delivered to
the undersigned.
___________________________________
Signature Guaranteed:
Dated:____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________ the rights represented by the foregoing Warrant of Cardiac
Control Systems, Inc. and appoints ______________________________ attorney to
transfer said rights on the books of said corporation, with full power of
substitution in the premises.
__________________________________
Signature Guaranteed:
Dated:______________________
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