WARRANT AGREEMENT
__________________, 1997
CAPITAL WEST SECURITIES, INC.
c/o Capital West Securities, Inc.
000 X. Xxxxxxxx
16th Floor, Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
HORIZON Pharmacies, Inc. (the "Company"), agrees to issue and sell to
you warrants (the "Warrants") to purchase the number of shares of common
stock, $0.01 par value per share (the "Common Stock"), of the Company set
forth herein, subject to the terms and conditions contained herein.
1. ISSUANCE OF WARRANTS; EXERCISE PRICE. The Warrants, which shall
be in the form attached hereto as Exhibit A, shall be issued to you
concurrently with the execution hereof in consideration of the payment by you
to the Company of the sum of $.001 cash per share of Common Stock subject to
the Warrants, the receipt and sufficiency of which are hereby acknowledged.
The Warrant shall provide that you, or such other holder or holders of the
Warrants to whom transfer is authorized in accordance with the terms of this
Agreement, shall have the right to purchase an aggregate of 120,000 shares
of Common Stock for an exercise price equal to $6.00 per share (the "Exercise
Price") or $720,000 in the aggregate. The number, character and Exercise
Price of such shares of Common Stock are subject to adjustment as hereinafter
provided, and the term "Common Stock" shall mean, unless the context
otherwise requires, the stock and other securities and property receivable
upon exercise of the Warrants. The term "Exercise Price" shall mean, unless
the context otherwise requires, the price per share of the Common Stock
purchasable under the Warrants as set forth in this Section 1, as adjusted
from time to time pursuant to Section 6.
2. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to you and to each subsequent holder of Warrants and agrees that:
(a) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding obligation of
the Company enforceable in accordance with its terms; and neither the
issuance of the Warrants nor the issuance of the shares of Common Stock
issuable upon exercise of the Warrants will result in a breach or violation
of any terms or provisions of, or constitute a default under, any contract,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound,
the Certificate of Incorporation or Bylaws of the Company, or any law, order,
rule, regulation or decree of any government, governmental instrumentality or
court, domestic or foreign, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company.
(b) No consent, approval, authorization or order of any court or
governmental agency or body is required for the sale and issuance of the
Warrants or the sale and issuance of the shares of Common Stock issuable upon
exercise of the Warrants, except such as have been obtained or may be
required under the Securities Act of 1933, as amended (the "Act"), and such
as may be required under state securities or blue sky laws in connection with
the issuance of the Warrants and the shares of Common Stock issuable upon
exercise of the Warrants. Upon exercise of the Warrants by the holder
thereof, the shares of Common Stock with respect to which the Warrants are
exercised will be validly issued, fully paid, and nonassessable, and good and
marketable title to such shares of Common Stock shall be delivered to such
holder free and clear of all liens, encumbrances, equities, claims or
preemptive or similar rights.
(c) During the term of this Agreement, the Company shall make
timely filings of all periodic and other reports and forms and other
materials required (but only to the extent required) to be filed with the
Securities and Exchange Commission (the "Commission") pursuant to the Act or
the Securities Exchange Act of 1934, as amended, and with any national
securities exchange or quotation system upon which any of the securities of
the Company may be listed.
3. NOTICES OF RECORD DATE; ETC. In the event of (i) any taking by
the Company of a record date with respect to the holders of any class of
securities of the Company for purposes of determining which of such holders
are entitled to dividends or other distributions (other than regular
quarterly dividends), or any right to subscribe for, purchase or otherwise
acquire shares of stock of any class or any other securities or property, or
to receive any other right, (ii) any capital reorganization of the Company,
or reclassification or recapitalization of capital stock of the Company or
any transfer in one or more related transactions of all or a majority of the
assets or revenue or income generating capacity of the Company to, or
consolidation or merger of the Company with or into, any other entity or
person, or (iii) any voluntary or involuntary dissolution or winding up of
the Company, then and in each such event the Company will mail or cause to be
mailed to each holder of a Warrant at the time outstanding a notice
specifying, as the case may be, (A) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right; or (B) the
date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or any other class of stock or
securities of the Company, or another issuer pursuant to Section 6,
receivable upon the exercise of the Warrants) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such event. Any such notice
shall be deposited in the United States mail, postage prepaid, at least ten
(10) days prior to the date therein specified, and the holders(s) of the
Warrant(s) may exercise the Warrant(s) and participate in such event as a
registered holder of Common Stock, upon exercise of the Warrant(s) so held,
within the ten (10) day period from the date of mailing of such notice.
4. NO IMPAIRMENT. The Company shall not, by amendment of its
organizational documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
action, avoid or seek to avoid the observance or performance of any of the
terms of this Agreement or of the Warrants, but will at all times in good
faith take any and all action as may be necessary in order to protect the
rights of the holders of the Warrants against impairment. Without limiting
the generality of the foregoing, the Company (a) will at all times reserve
and keep
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available, solely for issuance and delivery upon exercise of the Warrants,
shares of Common Stock issuable from time to time upon exercise of the
Warrants, (b) will not increase the par value of any shares of stock
receivable upon exercise of the Warrants above the amount payable in respect
thereof upon such exercise, and (c) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable stock upon the exercise of the Warrants,
or any of them.
5. EXERCISE OF WARRANTS. At any time and from time to time on and
after the first anniversary of the date hereof and expiring on the fifth
anniversary of the effective date of the public offering of the Common Stock
at 5:00 p.m., Oklahoma City, Oklahoma time, Warrants may be exercised as to
all or any portion of the whole number of shares of Common Stock covered by
the Warrants by the holder thereof by surrender of the Warrants, accompanied
by a subscription for shares to be purchased in the form attached hereto as
Exhibit B and by a check payable to the order of the Company in the amount
required for purchase of the shares as to which the Warrant is being
exercised, delivered to the Company at its principal office at 000 X.
Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000, Attention: Xxxx X. XxXxxx. Warrants
may also be exercised from time to time, without any payment required for the
purchase of the shares as to which the Warrant is being exercised, as to all
or any portion of the number of shares of Common Stock covered by the
Warrant(s) by the holder thereof by surrender of the Warrants, accompanied by
a subscription for shares in the form attached as Exhibit C, pursuant to
which the holder thereof will be entitled to receive upon such surrender of
the Warrant(s) (and without any further payment) that number of shares of
Common Stock equal to the product of the number of shares of Common Stock
obtainable upon exercise of the Warrant(s) (or the portion thereof as to
which the exercise relates) multiplied by a fraction: (i) the numerator of
which shall be the difference between the then Current Value (as defined in
this Section 5 and Section 7(d)) of one full share of Common Stock on the
date of exercise and the Exercise Price, and (ii) the denominator of which
shall be the Current Value of one full share of Common Stock on the date of
exercise. Upon the exercise of a Warrant in whole or in part, the Company
will within five (5) days thereafter, at its expense (including the payment
by the Company of any applicable issue or transfer taxes), cause to be issued
in the name of and delivered to the Warrant holder a certificate or
certificates for the number of fully paid and non-assessable shares of Common
Stock to which such holder is entitled upon exercise of the Warrant. In the
event such holder is entitled to a fractional share, in lieu thereof such
holder shall be paid a cash amount equal to such fraction, multiplied by the
Current Value of one full shares of Common Stock on the date of exercise.
Certificates for shares of Common Stock issuable by reason of the exercise of
the Warrant or Warrants shall be dated and shall be effective as of the date
of the surrendering of the Warrant for exercise, notwithstanding any delays
in the actual execution, issuance or delivery of the certificates for the
shares so purchased. In the event a Warrant or Warrants is exercised as to
less than the aggregate amount of all shares of Common Stock issuable upon
exercise of all Warrants held by such person, the Company shall issue a new
Warrant to the holder of the Warrant so exercised covering the aggregate
number of shares of Common Stock as to which Warrants remain unexercised.
For purposes of this section, Current Value is defined (i) in the
case for which a public market exists for the Common Stock at the time of
such exercise, according to Section 7(d), and (ii) in the case no public
market exists at the time of such exercise, at the Appraised Value. For the
purposes of this Agreement, "Appraised Value" is the value determined in
accordance with the following procedures. For a period of five (5) days after
the date of an event (a "Valuation Event") requiring determination of Current
Value at a time when no public market exists for the Common Stock (the
"Negotiation Period"), each party to this Agreement agrees to negotiate in
good faith to reach agreement upon the Appraised Value of the securities or
property at issue, as of the date of the Valuation Event, which will be the
fair
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market value of such securities or property, without premium for control or
discount for minority interests, illiquidity or restrictions on transfer. In
the event that the parties are unable to agree upon the Appraised Value of
such securities or other property by the end of the Negotiation Period, then
the Appraised Value of such securities or property will be determined for
purposes of this Agreement by a recognized appraisal or investment banking
firm mutually agreeable to the holders of the Warrants and the Company (the
"Appraiser"). If the holders of the Warrants and the Company cannot agree on
an Appraiser within two (2) business days after the end of the Negotiation
Period, the Company, on the one hand, and the holders of the Warrants, on the
other hand, will each select an Appraiser within ten (10) business days after
the end of the Negotiation Period and those two Appraisers will select ten
(10) days after the end of the Negotiation Period an independent Appraiser to
determine the fair market value of such securities or property, without
premium for control or discount for minority interests. Such independent
Appraiser will be directed to determine fair market value of such securities
or property as soon as practicable, but in no event later than thirty (30)
days from the date of its selection. The determination by an Appraiser of
the fair market value will be conclusive and binding on all parties to this
Agreement. Appraised Value of each share of Common Stock at a time when (i)
the Company is not a reporting company under the Exchange Act and (ii) the
Common Stock is not traded in the organized securities markets, will, in all
cases, be calculated by determining the Appraised Value of the entire Company
taken as a whole and dividing that value by the number of shares of Common
Stock then outstanding, without premium for control or discount for minority
interests, illiquidity or restrictions on transfer. The costs of the
Appraiser will be borne by the Company. In no event will the Appraised Value
of the Common Stock be less than the per share consideration received or
receivable with respect to the Common Stock or securities or property of the
same class in connection with a pending transaction involving a sale, merger,
recapitalization, reorganization, consolidation, or share exchange,
dissolution of the Company, sale or transfer of all or a majority of its
assets or revenue or income generating capacity, or similar transaction.
6. PROTECTION AGAINST DILUTION. The Exercise Price for the shares of
Common Stock and number of shares of Common Stock issuable upon exercise of
the Warrants is subject to adjustment from time to time as follows:
(a) STOCK DIVIDENDS, SUBDIVISIONS, RECLASSIFICATIONS, ETC.. In
case at any time or from time to time after the date of execution of this
Agreement, the Company shall (i) take a record of the holders of Common Stock
for the purpose of entitling them to receive a dividend or a distribution on
shares of Common Stock payable in shares of Common Stock or other class of
securities, (ii) subdivide or reclassify its outstanding shares of Common
Stock into a greater number of shares, or (iii) combine or reclassify its
outstanding Common Stock into a smaller number of shares, then, and in each
such case, the Exercise Price in effect at the time of the record date for
such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted in such a manner that the
Exercise Price for the shares issuable upon exercise of the Warrants
immediately after such event shall bear the same ratio to the Exercise Price
in effect immediately prior to any such event as the total number of shares
of Common Stock outstanding immediately prior to such event shall bear to the
total number of shares of Common Stock outstanding immediately after such
event.
(b) ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. When any
adjustment is required to be made in the exercise Price under this Section 6,
(i) the number of shares of Common Stock issuable upon exercise of the
Warrants shall be changed (upward to the nearest full share) to the number of
shares determined by dividing (x) an amount equal to the number of shares
issuable pursuant to the exercise of
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the Warrants immediately prior to the adjustment, multiplied by the Exercise
Price in effect immediately prior to the adjustment, by (y) the Exercise
Price in effect immediately after such adjustment, and (ii) upon exercise of
the Warrant, the holder will be entitled to receive the number of shares or
other securities referred to in Section 6(a) that such holder would have
received had the Warrant been exercised prior to the events referred to in
Section 6(a).
(c) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.. In
case of any reorganization or consolidation of the Company with, or any
merger of the Company with or into, another entity (other than a
consolidation or merger in which the Company is the surviving corporation) or
in case of any sale or transfer to another entity of the majority of assets
of the Company, the entity resulting from such reorganization or
consolidation or surviving such merger or to which such sale or transfer
shall be made, as the case may be, shall make suitable provision (which shall
be fair and equitable to the holders of Warrants) and shall assume the
obligations of the Company hereunder (by written instrument executed and
mailed to each holder of the Warrants then outstanding) pursuant to which,
upon exercise of the Warrants, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, the holder shall be
entitled to receive the stock or other securities or property that such
holder would have been entitled to upon consummation if such holder had
exercised the Warrants immediately prior thereto, all subject to further
adjustment as provided in this Section 6.
(d) CERTIFICATE AS TO ADJUSTMENTS. In the event of adjustment as
herein provided in paragraphs of this Section 6, the Company shall promptly
mail to each Warrant holder a certificate setting forth the Exercise Price
and number of shares of Common Stock issuable upon exercise after such
adjustment and setting forth a brief statement of facts requiring such
adjustment. Such certificate shall also set forth a brief statement of facts
requiring such adjustment. Such certificate shall also set forth the kind
and amount of stock or other securities or property into which the Warrants
shall be exercisable after any adjustment of the Exercise Price as provided
in this Agreement.
(e) MINIMUM ADJUSTMENT. Notwithstanding the foregoing, no
certificate as to adjustment of the Exercise Price hereunder shall be made if
such adjustment results in a change in the Exercise Price then in effect of
less than ______ ($_____) and any adjustment of less than ______ ($_____)
of any Exercise Price shall be carried forward and shall be made at the time
of and together with any subsequent adjustment that, together with the
adjustment or adjustments so carried forward, amounts to ______ ($_____) or
more; provided however, that upon the exercise of a Warrant, the Company
shall have made all necessary adjustments (to the nearest cent) not
theretofore made to the Exercise Price up to and including the date upon
which such Warrant is exercised.
7. REGISTRATION RIGHTS.
(a) The Company agrees that upon written notice given to the
Company at any time on or after the first anniversary of the effective date
of the public offering of the Common Stock but before the fifth anniversary
of the effective date of the public offering, from the holder or holders of
not less than fifty-one percent (51%) of the shares issued and issuable upon
exercise of the Warrants, of a proposed distribution by such holder or
holders of Common Stock issued or issuable upon exercise of Warrants, the
Company will, within 45 days after receipt of such notice, promptly prepare,
file and diligently prosecute to effectiveness, an appropriate filing with
the Commission of a registration statement covering the proposed sale or
distribution of all or any part of such shares under the Securities Act of
1933, as amended (the "Act"), and the appropriate registration statements or
applications under the
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securities laws of such states as such holders, in their discretion, shall
determine, and will use its reasonable best efforts to have such registration
and application (including both the registration under the Act and the
registration or application made under the various state securities laws)
declared effective as soon as practicable after the filing thereof and to
remain effective for such period that may be reasonably necessary to complete
the distribution of securities so registered or qualified. At least 15 days
prior to such filing, the Company shall give written notice of such proposed
filing to each registered holder of any Warrants at the holders' addresses
appearing on the records of the Company and to each registered holder of
Common Stock purchased from the exercise of any Warrants at such holder's
address appearing on the Company records, and shall offer to include in such
registration statement any proposed distribution of such Common Stock held or
to be held by each such registered holder; provided, however, that except as
provided in Section 7(e), the Company need not effect the registration of the
sale or distribution of Common Stock purchased upon exercise of Warrants more
than once. All expenses, disbursements and fees (including fees and expenses
of counsel for the Company, special auditing fees specifically attributable
to the sale by the selling holder or holders of Common Stock, printing
expenses (including all necessary copies of the registration statement and
prospectuses contained therein), registration and filing fees and blue sky
fees and expenses, and fees and charges of the Company's transfer agent and
registrar for services rendered in connection therewith) shall be borne by
the Company; provided, however, that the Company shall not be required to pay
for any expenses of any registration proceeding begun (in which case holders
shall bear such expenses), if the registration request is subsequently
withdrawn at any time at the request of the holder or holders of not less
than 51% of the shares issued and issuable upon exercise of the Warrants,
unless such withdrawal is due to the misconduct of the Company or due to an
unforeseen material adverse change in the business, properties, prospects or
financial condition of the Company occurring prior to the effectiveness of
the registration statement, in which case the Company will continue to bear
such expenses.
(b) In connection with any registration under the Act and
specified state securities law pursuant to this Agreement, the Company will,
without charge, furnish each holder whose shares are registered thereunder
with copies of the registration statement and all amendments thereto and
will, without charge, supply each such holder with copies of any preliminary
and final prospectus included therein in such quantities as may be necessary
for the purposes of such proposed sale or distribution that the holder or
holders may reasonably request.
(c) In connection with any registration of shares pursuant to this
Section 7, the holders whose shares are being registered shall furnish the
Company with such information concerning such holders and the proposed sale
or distribution as shall be required for use in the preparation of such
registration statement and applications.
(d) Notwithstanding the foregoing provisions of this Section 7,
upon receipt of such written notice from the holder or holders of not less
than fifty one percent (51%) of the shares issued and issuable upon exercise
of the Warrants requesting that the Company effect registration of the sale
or distribution of Common Stock as provided in Section 7(a) or upon
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election by holders of Warrants or Common Stock to participate in a
registration pursuant to Section 7(e), the Company shall have the option, for
a period of ten (10) days thereafter, to purchase all or any such Warrants
and all or any such shares of Common Stock acquired pursuant to the exercise
of the Warrants and held by holders providing the request for registration
under Section 7(a) and/or 7(e) and held by any other holder of Warrants or
shares issued and will exercise its option if it so elects as follows:
(i) as to such Warrants, at a price per Warrant equal to the
difference between (A) the average of the means between the closing bid and
asked prices of the Common Stock in the over-the-counter market for 20
consecutive business days commencing 30 business days before the date of
receipt of such notice, (B) if the Common Stock is quoted on the Nasdaq
SmallCap Market, at the average of the means of the daily closing bid and
asked prices of the Common Stock for 20 consecutive business days commencing
30 business days before the date of such notice, or (C) if the Common Stock
is listed on any national securities exchange or quoted on the Nasdaq
National Market System, at the average of the daily closing prices of the
Common Stock for 20 consecutive business days commencing 30 business days
before the date of such notice and the Exercise Price of the Warrant at the
time of receipt of such notice; and
(ii) as to shares of Common Stock previously purchased
pursuant to the exercise of Warrants, at a price per share equal to (A) the
average of the means between the closing bid and asked prices of the Common
Stock in the over-the-counter market for 20 consecutive business days
commencing 30 business days before the date of such notice, (b) if the Common
Stock is quoted on the Nasdaq SmallCap Market, at the average of the means of
the daily closing bid and asked prices of the Common Stock for 20 consecutive
business days commencing 30 business days before the date of such notice or
(C) if the Common Stock is listed on any national securities exchange or the
Nasdaq National Market System, at the average of the daily closing prices of
the Common Stock for 20 consecutive business days commencing 30 business days
before the date of such notice (such value of shares so determined in this
Section 7(d)(ii), as the case may be, is referred to herein as the "Current
Value").
(e) If any time on or after the first anniversary of the date
hereof but before the fifth anniversary of the date hereof the Company
proposes to file a registration statement under the Act covering a proposed
sale of shares of Common Stock, it shall give to each holder who then owns
any Warrants or any shares of Common Stock acquired pursuant to the exercise
of the Warrants notice of such proposed registration at least 30 days prior
to the filing of the registration statement and shall afford each such holder
who then proposed to sell or distribute publicly any of the shares subject to
the Warrants upon giving not less than 10 days notice prior to such filing,
the opportunity to have such shares included in the securities registered
under the registration statement. All expenses, disbursements and fees
(including, but without limitation, fees and expenses of counsel, auditing
fees, printing expenses, SEC filing fees and expenses, but excluding any
underwriting discounts or commissions) incurred in connection with the
registration by the Company of the sale of any shares for any such holder
under this Section 7(e) shall be borne by the Company.
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8. INDEMNIFICATION; CONTRIBUTION.
(a) The Company will indemnify and hold harmless each holder and
each affiliate thereof of Common Stock registered pursuant to this Agreement
with the Commission, or under any Blue Sky Law or regulation against any
losses, claims, damages, or liabilities, joint or several, to which such
holder may become subject under the Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, registration
statement, prospectus, or 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 each such holder and
affiliate for any legal or other expenses reasonably incurred by such holder
in connection with investigating or defending any such action or claim
regardless of the negligence of any such holder or affiliate; provided,
however, that the Company shall 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 an untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus, registration statement or
prospectus, or any such amendment or supplement thereto, in reliance upon and
in conformity with written information furnished to the Company by any such
holder expressly for use therein.
(b) Each holder of Common Stock registered pursuant to this
Agreement will indemnify and hold harmless the Company against any losses,
claims, damages, or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, registration statement or prospectus, or 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, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
preliminary prospectus, registration statement or prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by such holder expressly for use
therein.
(c) Promptly after receipt by an indemnified party under Sections
8(a) or (b) above of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under either such subsection, notify the indemnifying party in writing
of the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability that it may otherwise have to
any indemnified party. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof the indemnifying party shall be entitled to assume the
defense thereof by notice in writing to the indemnified party. After notice
from the indemnifying party to such indemnified party of its election to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under either of such
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subsections for any legal expenses of other counsel or any other expense, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation incurred
prior to the assumption by the indemnifying party, unless such expenses have
been specifically authorized in writing by the indemnifying party, the
indemnifying party has failed to assume the defense and employ counsel, or
the named parties to any such action include both the indemnified party and
the indemnifying party, as appropriate, and such indemnified party has been
advised by counsel that the representation of such indemnified party and the
indemnifying party by the same counsel would be inappropriate due to actual
or potential differing interests between them, in each of which cases the
fees of counsel for the indemnified party will be paid by the indemnifying
party.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b) in respect of any losses, claims, damages, or
liabilities (or action in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the holder or
holders from this Agreement and from the offering of the shares of Common
Stock. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the holders in connection with
the statement or omissions that resulted in such losses, claims, damages, or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the holder
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company
and the holders agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation (even if
the holders were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this subsection (e). Except as provided
in Section 8(c), the amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above in this Section 8(d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigation or defending any such action or claim. 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 such fraudulent misrepresentation. Notwithstanding any
provision in this Section 8(d) to the contrary, no holder shall be liable for
any amount, in the aggregate, in excess of the net proceeds to such holder
from the sale of such holder's shares (obtained upon exercise of Warrants)
giving rise to such losses, claims, damages, or liabilities.
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(e) The obligations of the Company under this Section 8 shall be
in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any holder of Warrants within the meaning of the Act. The
obligations of the holders of Common Stock under this Section 8 shall be in
addition to any liability that such holders may otherwise have and shall
extend, upon the same terms and conditions to each person, if any, who
controls the Company within the meaning of the Act.
9. STOCK EXCHANGE LISTING. In the event the Company lists its Common
Stock on any national securities exchange, the Company will, at its expense,
also list on such exchange, upon exercise of a Warrant, all shares of Common
Stock issuable pursuant to such Warrant.
10. SPECIFIC PERFORMANCE. The Company stipulates that remedies at
law, in money damages, available to the holder of a Warrant, or of a holder
of Common Stock issued pursuant to exercise of a Warrant, in the event of any
default or threatened default by the Company in the performance of or
compliance with any of the terms of this Agreement are not and will not be
adequate. Therefore, the Company agrees that the terms of this Agreement may
be specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
11. SUCCESSORS AND ASSIGNS; BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of you and the Company and their
respective successors and permitted assigns.
12. NOTICES. Any notice hereunder shall be given by registered or
certified mail, if to the Company, at its principal office referred to in
Section 5 and, if to the holders, to their respective addresses shown in the
Warrant ledger of the Company, provided that any holder may at any time on
three (3) days' written notice to the Company designate or substitute another
address where notice is to be given. Notice shall be deemed given and
received after a certified or registered letter, properly addressed with
postage prepaid, is deposited in the U.S. mail.
13. SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the
remainder of this Agreement.
14. ASSIGNMENT; REPLACEMENT OF WARRANTS. If the Warrant or Warrants
are assigned, in whole or in part, the Warrants shall be surrendered at the
principal office of the Company, and thereupon, in the case of a partial
assignment, a new Warrant shall be issued to the holder thereof covering the
number of shares not assigned, and the assignee shall be entitled to receive
a new Warrant covering the number of shares so assigned. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of any Warrant and appropriate bond or
indemnification protection, the Company shall issue a new Warrant of like
tenor. Except as contemplated by Section 7 of this Agreement, the Warrants
will not be transferred, sold, or otherwise hypothecated by you or any other
person and the Warrants
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will be nontransferable, except to (i) one or more persons, each of which on
the date of transfer is an officer, shareholder, or employee of you; (ii) a
partnership or partnerships, the partners of which are you and one or more
persons, each of whom on the date of transfer is an officer to you; (iii) a
successor to you in merger or consolidation; (iv) a purchaser of all or
substantially all of your assets; or (v) a person that receives a Warrant
upon death of a Holder pursuant to will, trust, or the laws of intestate
succession.
15. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Oklahoma without giving effect to
the principles of choice of laws thereof.
16. DEFINITION. All references to the word "you", and to "Capital West
Securities, Inc." in this Agreement shall be deemed to apply with equal
effect to any persons or entities to whom Warrants have been transferred in
accordance with the terms hereof, and, where appropriate, to any persons or
entities holding shares of Common Stock issuable upon exercise of Warrants.
17. HEADINGS. The headings herein are for purposes of reference only
and shall not limit or otherwise affect the meaning of any of the provisions
hereof.
Very truly yours,
HORIZON PHARMACIES, INC.
By:
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Xxxx X. XxXxxx, President
Accepted as of ___________________, 1997.
CAPITAL WEST SECURITIES, INC.
By:
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