THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATE-MENT
RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS.
WARRANT AGREEMENT
TO PURCHASE SHARES OF THE COMMON STOCK OF
WORLDWIDE MEDICAL CORPORATION
DATED AS OF SEPTEMBER 18, 2002 (THE "EFFECTIVE DATE")
WHEREAS, Worldwide Medical Corporation, a Delaware corporation (the
"Company"), has entered into a Loan Agreement dated as of September 18, 2002
(the "Loan Agreement") with Xxxxxxx Healthcare Fund I, LP (the "Warrantholder").
WHEREAS, the Company desires to grant to the Warrantholder, in
consideration for entering into the Loan Agreement, the right to purchase shares
of the Company's Common Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Loan Agreement and in consideration of mutual covenants and
agreements contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
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The Company hereby grants to the Warrantholder, and the Warrantholder is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe to and purchase, from the Company, 2,598,053 fully paid and
non-assessable shares of the Company's Common Stock ("Common Stock") at a
purchase price of $0.10 per share (the "Exercise Price"), at such time and from
time to time thereafter, once the fair market value of the Common Stock of the
Company (as determined below), shall equal or exceed $0.20 per share (the
"Strike Price"). The number and purchase price of such shares are subject to
adjustment as provided in Section 8 hereof. As used herein, "Common Stock"
------------
shall mean the Company's Common Stock, and any other stock into or for which
such Common Stock may hereafter be converted or exchanged.
2. TERM OF THE WARRANT AGREEMENT.
---------------------------------
Except as otherwise provided for herein, the term of this Warrant Agreement
shall commence on the Effective Date and shall be exercisable for a period of
five (5) years following the Effective Date. The right to purchase Common Stock
as granted herein shall commence one year from the Effective Date and shall be
exercisable for a period of five (5) years following the Effective Date.
3. EXERCISE OF THE PURCHASE RIGHTS.
-----------------------------------
The purchase rights set forth in this Warrant Agreement are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time,
commencing one year from the Effective Date and thereafter prior to the
expiration of the term set forth in Section 2 above, by tendering to the
Company, at its principal office, a notice of exercise in the form attached
hereto as Exhibit I (the "Notice of Exercise"), duly completed and executed.
Promptly upon receipt of the Notice of Exercise and the payment of the purchase
price in accordance with the terms set forth below, and in no event later than
twenty-one (21) days thereafter, the Company shall issue to the Warrantholder a
certificate for the number of shares of Common Stock purchased and shall execute
the acknowledgment of exercise in the form attached hereto as Exhibit II (the
"Acknowledgment of Exercise") indicating the number of shares which remain
subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election either (i)
by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as
determined below. If the Warrantholder elects the Net Issuance method, the
Company will issue Common Stock in accordance with the following formula:
X = Y(A-B)
------
A
Where: X = the number of shares of Common Stock to be issued to the
Warrantholder.
Y = the number of shares of Common Stock requested to be
exercised under this Warrant Agreement.
A = the fair market value of one (1) share of Common Stock.
B = the Exercise Price.
For purposes of the above calculation, current fair market value of Common
Stock shall mean with respect to each share of Common Stock:
(i) if the Company's Common Stock is listed listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter
market:
(a) if traded on a securities exchange, the fair market value
shall be deemed to be the average of the closing prices over a five (5) day
period ending three days before the day the current fair market value of the
securities is being determined; or
(b) if actively traded over-the-counter, the fair market
value shall be deemed to be the average of the closing bid and asked prices
quoted on the NASDAQ system (or similar system) over the five (5) day period
ending three days before the day the current fair market value of the securities
is being determined.
(iii) if at any time the Common Stock is not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the current fair market value of Common Stock shall be the highest price
per share which the Company could obtain from a willing buyer (not a current
employee or director) for shares of Common Stock sold by the Company, from
authorized but unissued shares, as determined in good faith by its Board of
Directors, unless the Company shall become subject to a merger, acquisition or
other consolidation pursuant to which the Company is not the surviving party, in
which case the fair market value of Common Stock shall be deemed to be the value
received by the holders of the Company's Common Stock on a common equivalent
basis pursuant to such merger or acquisition.
Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.
4. RESERVATION OF SHARES.
-----------------------
(a) Authorization and Reservation of Shares. During the term of this
-----------------------------------------
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights to purchase Common Stock as provided for herein.
(b) Registration or Listing. If any shares of Common Stock required to
-----------------------
be reserved hereunder require registration with or approval of any governmental
authority under any Federal or State law (other than any registration under the
Securities Act of 1933, as amended ("1933 Act"), as then in effect, or any
similar Federal statute then enforced, or any state securities law, required by
reason of any transfer involved in such conversion), or listing on any domestic
securities exchange, before such shares may be issued as required hereunder upon
conversion, the Company will, at its expense and as expeditiously as possible,
use its best efforts to cause such shares to be duly registered, listed or
approved for listing on such domestic securities exchange, as the case may be.
5. NO FRACTIONAL SHARES OR SCRIP.
---------------------------------
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
---------------------------
This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrant.
7. WARRANTHOLDER REGISTRY.
-----------------------
The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.
8. ADJUSTMENT RIGHTS.
------------------
The purchase price per share and the number of shares of Common Stock
purchasable hereunder are subject to adjustment, as follows:
(a) Merger and Sale of Assets. If at any time there shall be a capital
-------------------------
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation whether or not the Company is the surviving corporation, or the sale
of all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number of
shares of Common Stock or other securities of the successor corporation
resulting from such Merger Event, equivalent in value to that which would have
been issuable if Warrantholder had exercised this Warrant immediately prior to
the Merger Event. In any such case, appropriate adjustment (as determined in
good faith by the Company's Board of Directors) shall be made in the application
of the provisions of this Warrant Agreement with respect to the rights and
interest of the Warrantholder after the Merger Event to the end that the
provisions of this Warrant Agreement (including adjustments of the Exercise
Price and number of shares of Common Stock purchasable) shall be applicable to
the greatest extent possible.
(b) Reclassification of Shares. If the Company at any time shall, by
----------------------------
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclas-sification, exchange, subdivision or other change.
(c) Subdivision or Combination of Shares. If the Company at any time
--------------------------------------
shall combine or subdivide its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) Stock Dividends. If the Company at any time shall pay a dividend
----------------
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of the Company's stock,
then the Exercise Price shall be adjusted, from and after the record date of
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction (i)
the numerator of which shall be the total number of all shares of the Company's
stock outstanding immediately prior to such dividend or distribution, and (ii)
the denominator of which shall be the total number of all shares of the
Company's stock outstanding immediately after such dividend or distribution.
The Warrantholder shall thereafter be entitled to purchase, at the Exercise
Price resulting from such adjustment, the number of shares of Common Stock
(calculated to the nearest whole share) obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon the exercise hereof immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(e) Anti-dilution Rights.
---------------------
(i) If, during the term of the Warrant, the Company shall issue any
shares of Common Stock or Common Stock Equivalents (as defined herein), the
number of shares exercisable hereunder shall be increased (with no
adjustment in Applicable Exercise Price, except as stated below) so that
the ratio of the number of shares issuable to the Warrantholder as of the
Effective Date, to the total number of shares of Common Stock or Common
Stock Equivalents outstanding as of the Effective Date remains the same
after such issuance, subject to the following adjustments in the Exercise
Price.
(ii) If the Company shall, during the term of the Warrant, issue or
sell shares of its Common Stock (or Common Stock Equivalents, as provided
herein) at a price per share equal to or greater than $0.25 per share,
subject to any subsequent adjustment of an Extraordinary Common Stock
Event, as defined below), the number of shares issuable hereunder shall be
increased as provided in Subsection 8(e)(i), above, without further
adjustment in the Applicable Exercise Price.
(iii) If the Company shall, during the term of the Warrant, issue or
sell shares of its Common Stock (or Common Stock Equivalents, as provided
herein) at a price per share that is less than $0.25 per share, but greater
than the "Applicable Exercise Price", as defined below, then: (a) the
number of shares issuable hereunder shall be increased as provided, in
subparagraph (i), above; and (b) the Applicable Exercise Price shall be
adjusted down so that the ratio of the Applicable Exercise Price to $0.25,
shall be the same as the ratio between the adjusted Applicable Exercise
Price and the price per share at which such new issuance is consummated.
(iv) If the Company shall, during the term of the Warrant, issue or
sell shares of its Common Stock (or Common Stock Equivalents, as provided
herein) without consideration or at a price per share less than the
Applicable Exercise Price in effect immediately prior to such issuance or
sale, then in each such case: (a) the number of shares issuable hereunder
shall be increased as provided, in subparagraph (i), above; and (b) such
Applicable Exercise Price upon each such issuance or sale, except as
hereinafter provided, shall be lowered so as to be equal to an amount
determined by multiplying such Applicable Exercise Price by a fraction:
the numerator of which shall be (a) the number of shares of Common
Stock outstanding immediately prior to the issuance of such additional
shares of Common Stock or Common Stock Equivalents (calculated on a
fully-diluted basis assuming the exercise or conversion of all
presently exercisable options, warrants, purchase right or convertible
securities), plus (b) the number of shares of Common Stock which the
net aggregate consideration, if any, received by the Company for the
total number of such additional shares of Common Stock or Common Stock
Equivalents so issued would purchase at the Applicable Exercise Price
in effect immediately prior to such issuance, and
the denominator of which shall be (a) the number of shares of Common
Stock outstanding immediately prior to the issuance of such additional
shares of Common Stock or Common Stock Equivalents (calculated on a
fully-diluted basis assuming the exercise or conversion of all
presently exercisable options, warrants, purchase right or convertible
securities), plus (b) the number of such additional shares of Common
Stock or Common Stock Equivalents so issued.
(v) For the purposes of this Subsection 8(e), the issuance of any
warrants, options, subscription or purchase rights with respect to shares
of Common Stock and the issuance of any securities convertible into or
exchangeable for shares of Common Stock, or the issuance of any warrants,
options, subscription or purchase rights with respect to such convertible
or exchangeable securities (collectively, "Common Stock Equivalents"),
shall be deemed an issuance of Common Stock with respect to the
determination of dilution hereunder, if the Net Consideration Per Share (as
hereinafter determined) which may be received by the Company for such
Common Stock shall be less than the Applicable Exercise Price in effect at
the time of such issuance. Any obligation, agreement or undertaking to
issue Common Stock Equivalents at any time in the future shall be deemed to
be an issuance at the time such obligation, agreement or undertaking is
made or arises. No adjustment of the Applicable Exercise Price shall be
made, under this Subsection 8(e), upon the issuance of any shares of Common
Stock which are issued pursuant to the exercise, conversion or exchange of
any Common Stock Equivalents if any adjustment shall previously have been
made upon the issuance of any such Common Stock Equivalents as above
provided.
(vi) Should the Net Consideration Per Share of any such Common Stock
Equivalents be decreased from time to time, then, upon the effectiveness of
each such change, the Applicable Exercise Price will be that which would
have been obtained (1) had the adjustments made upon the issuance of such
Common Stock Equivalents been made upon the basis of the actual Net
Consideration Per Share of such securities, and (2) had the adjustments
made to the Applicable Exercise Price since the date of issuance of such
Common Stock Equivalents been made to such Applicable Exercise Price as
adjusted pursuant to clause (i) above. Any adjustment of the Applicable
Exercise Price with respect to this paragraph which relates to Common Stock
or Common Stock Equivalents shall be disregarded if, as, and when all of
such Common Stock or Common Stock Equivalents expire or are cancelled
without being exercised, or are repurchased by the Corporation at a price
per share at or less than the original purchase price, so that the
Applicable Exercise Price for such stock effective immediately upon such
cancellation or expiration shall be equal to the Applicable Exercise Price
in effect at the time of the issuance of the expired or cancelled Common
Stock Equivalents, with such additional adjustments as would have been made
to the Applicable Exercise Price had the expired or cancelled Common Stock
Equivalents not been issued.
(vii) For purposes of this Subsection 8(e), the "Net Consideration Per
Share" which may be received by the Company shall be determined as follows:
(a) the "Net Consideration Per Share" shall mean the amount equal to the
total amount of consideration, if any, received by the Company for the
issuance of such Common Stock Equivalents, plus the minimum amount of
consideration, if any, payable to the Company upon exercise, or conversion
or exchange thereof, divided by the aggregate number of shares of Common
Stock that would be issued if all such Common Stock Equivalents were
exercised, exchanged or converted; and (b) the "Net Consideration Per
Share" which may be received by the Company shall be determined in each
instance as of the date of issuance of Common Stock Equivalents without
giving effect to any possible future upward price adjustments or rate
adjustments which may be applicable with respect to such Common Stock
Equivalents.
(viii) For purposes of this Subsection 8(e), if a part or all of the
consideration received by the Company in connection with the issuance of
shares of the Common Stock or the issuance of any of the securities
described in this Subsection 8(e), consists of property other than cash,
such consideration shall be deemed to have a fair market value as is
reasonably determined in good faith by the Board of Directors of the
Company. In the event of any dispute between the Warrantholder and the
Company regarding the determination of fair market value, at the option of
the Warrantholder, the Company shall engage a consulting firm or investment
banking firm selected jointly by the Company and the Warrantholder to
prepare an independent appraisal of the fair market value of such property
to be distributed. The expenses of such appraisal shall be borne by the
Company.
(ix) This Subsection 8(e) shall not apply with respect to: (a) the
issuance and sale of Common Stock or options to acquire common stock issued to
employees of the Company, not in excess of 500,000 shares of Common Stock,
except if such stock is issued at a price per share less than $0.20; (b)
securities issued in connection with an acquisition of another entity by the
Company; or (c) the issuance of Common Stock upon exercise of warrants and
options existing as of the effective date of this Agreement.
(x) Upon the happening of an Extraordinary Common Stock Event (as
hereinafter defined), the Applicable Exercise Price (and all other conversion
values set forth in Subsection 8(e) above) shall, simultaneously with the
happening of such Extraordinary Common Stock Event, be adjusted by multiplying
the Applicable Exercise Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Applicable Exercise Price. The Applicable Exercise Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
(xi) An "Extraordinary Common Stock Event" shall mean (a) the
issuance of additional shares of Common Stock as a dividend or other
distribution on outstanding shares of Common Stock, (b) a subdivision of
outstanding shares of Common Stock into a greater number of shares of Common
Stock, or (c) a combination or reverse stock split of outstanding shares of
Common Stock into a smaller number of shares of the Common Stock.
(xii) For purposes of this Subsection 8(e), the initial Applicable
Exercise Price for exercise of this Warrant shall be $0.10 per share, subject to
any subsequent adjustment as provided in this Subsection 8(e).
(f) Notice of Adjustments. If: (i) the Company shall declare any
-----------------------
dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company shall offer for subscription prorata to the
holders of any class of its Common or other convertible stock any additional
shares of stock of any class or other rights; (iii) there shall be any Merger
Event; or (iv) there shall be any voluntary dissolution, liquidation or winding
up of the Company; then, in connection with each such event, the Company shall
send to the Warrantholder: (A) at least twenty (20) days' prior written notice
of the date on which the books of the Company shall close or a record shall be
taken for such dividend, distribution, subscription rights (specifying the date
on which the holders of Common Stock shall be entitled thereto) or for
determining rights to vote in respect of such Merger Event, dissolution,
liquidation or winding up; and (B) in the case of any such Merger Event,
dissolution, liquidation or winding up, at least twenty (20) days' prior written
notice of the date when the same shall take place (and specifying the date on
which the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such Merger Event,
dissolution, liquidation or winding up).
Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.
(g) Timely Notice. Failure to timely provide such notice required by
--------------
subsection (f) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder. The notice period shall begin
on the date Warrantholder actually receives a written notice containing all the
information specified above.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
--------------------------------------------------------------
(a) Reservation of Common Stock. The Common Stock issuable upon
------------------------------
exercise of the Warrantholder's rights and the Common Stock issuable upon
conversion of such Common Stock have been duly and validly reserved and, when
issued in accordance with the provisions of this Warrant Agreement, will be
validly issued, fully paid and non-assessable, and will be free of any taxes,
liens, charges or encumbrances of any nature whatsoever; provided, however, that
the Common Stock issuable pursuant to this Warrant Agreement and the Common
Stock issuable upon conversion of such Common Stock may be subject to
restrictions on transfer under state and/or Federal securities laws. The
Company has made available to the Warrantholder true, correct and complete
copies of its Charter and Bylaws, as amended. The issuance of certificates for
shares of Common Stock upon exercise of the Warrant Agreement shall be made
without charge to the Warrantholder for any issuance tax in respect thereof, or
other cost incurred by the Company in connection with such exercise and the
related issuance of shares of Common Stock. The Company shall not be required to
pay any tax which may be payable in respect of any transfer involved and the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.
(b) Exempt Transaction. Subject to the accuracy of the Warrantholder's
------------------
representations in Section 10 hereof, the issuance of the Common Stock upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act, in reliance upon Section
4(2) thereof, and (ii) the qualifi-cation requirements of the applicable state
securities laws, to the extent that the requirements of Section 5 of the 1933
Act and of the applicable state securities laws are the same on the date of
exercise as they are on the date hereof.
(c) Compliance with Rule 144. At the written request of the
---------------------------
Warrantholder, who proposes to sell Common Stock issuable upon the exercise of
the Warrant, in compliance with Rule 144 promulgated by the Securities and
Exchange Commission, the Company shall furnish to the Warrantholder, within ten
(10) days after receipt of such request, a written statement confirming the
Company's compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
-------------------------------------------------------
This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
(a) Investment Purpose. The right to acquire Common Stock and the
-------------------
Common Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.
(b) Private Issue. The Warrantholder understands (i) that the Common
--------------
Stock issuable upon exercise of this Warrant is not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.
(c) Disposition of Warrantholder's Rights. In no event will the
----------------------------------------
Warrantholder make a disposition of any of its rights to acquire Common Stock or
the Common Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire the Common Stock issuable on the
exercise of such rights do not apply to transfers from the beneficial owner of
any of the aforementioned securities to its nominee or from such nominee to its
beneficial owner (including, but not limited to any distribution to the partners
of the Warrantholder), and shall terminate as to any particular share of Common
Stock or Common Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever
the restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Common Stock then outstanding as to which
such restrictions have terminated shall be entitled to receive from the Company,
without expense to such holder, one or more new certificates for the Warrant or
for such shares of Common Stock or Common Stock issuable upon conversion of such
Common Stock not bearing any restrictive legend.
(d) Financial Risk. The Warrantholder has such knowledge and
---------------
experi-ence in financial and business matters as to be capable of evaluating the
merits and risks of its investment, and has the ability to bear the economic
risks of its investment.
(e) Risk of No Registration. The Warrantholder understands that if the
-----------------------
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1934 Act (the "1934 Act"), or file reports pursuant to
Section 15(d), of the 1934 Act, or if a registration statement covering the
securities under the 1933 Act is not in effect when it desires to sell (i) the
rights to purchase Common Stock pursuant to this Warrant Agreement, or (ii) the
Common Stock issuable upon exercise of the right to purchase it may be required
to hold such securities for an indefinite period. The Warrantholder also
understands that any sale of its rights of the Warrantholder to purchase Common
Stock, or Common Stock issuable on the exercise of such rights which might be
made by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.
(f) Accredited Investor. Warrantholder is an "accredited investor"
--------------------
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
11. TRANSFERS.
---------
Subject to the terms and conditions con-tained in Section 10 hereof, this
Warrant Agreement and all rights hereunder are transferable in whole or in part
by the Warrantholder and any successor transferee, provided, however, in no
event shall (i) the number of transfers of the rights and interests in all of
the Warrants exceed three (3) transfers and (ii) the transferee be a direct
competitor of the Company, unless an "Event of Default" as defined in the Loan
Agreement has occurred, in which event this Warrant Agreement shall be
transferable to any transferee. The transfer shall be recorded on the books of
the Company upon receipt by the Company of a notice of transfer in the form
attached hereto as Exhibit III (the "Transfer Notice"), at its principal offices
and the payment to the Company of all transfer taxes and other governmental
charges imposed on such transfer.
12. MISCELLANEOUS.
-------------
(a) Effective Date. The provisions of this Warrant Agree-ment shall be
--------------
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall
be binding upon any successors or assigns of the Company.
(b) Attorney's Fees. In any litigation, arbitration or court
----------------
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party shall be entitled to attorneys' fees and expenses and all costs
of proceedings incurred in enforcing this Warrant Agreement.
(c) Governing Law. This Warrant Agreement shall be governed by and
--------------
construed for all purposes under and in accordance with the laws of the State of
New Jersey.
(d) Counterparts. This Warrant Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) Notices. Any notice required or permitted hereunder shall be given
-------
in the manner set forth in the Loan Agreement.
(f) Remedies. In the event of any default hereunder, the
--------
non-defaulting party may proceed to protect and enforce its rights either by
suit in equity and/or by action at law, including but not limited to an action
for damages as a result of any such default, and/or an action for specific
performance for any default where Warrantholder will not have an adequate remedy
at law and where damages will not be readily ascertainable. The Company
expressly agrees that it shall not oppose an application by the Warrantholder or
any other person entitled to the benefit of this Agreement requiring specific
performance of any or all provisions hereof or enjoining the Company from
continuing to commit any such breach of this Agreement.
(g) No Impairment of Rights. The Company will not, by amendment of its
-----------------------
Charter or through any other means, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholder against impairment.
(h) Survival. The representations, warranties, covenants and
--------
conditions of the respective parties contained herein or made pursuant to this
Warrant Agreement shall survive the execution and delivery of this Warrant
Agreement.
(i) Severability. In the event any one or more of the provisions of
------------
this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal or
unenforceable provision.
(j) Amendments. Any provision of this Warrant Agreement may be amended
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by a written instrument signed by the Company and by the Warrantholder.
(REMAINDER OF PAGE LEFT INTENTIONALLY BLANK)
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized as of the Effective
Date.
COMPANY: WORLDWIDE MEDICAL CORPORTAION
By: /s/ Xxxxxx X. XxXxxxx
______________________
Xxxxxx X. XxXxxxx
Title: President
WARRANTHOLDER: XXXXXXX HEALTHCARE FUND I, LP
By: /s/ Xxxxxxx Xxxxx
____________________
Xxxxxxx X. Xxxxx
Title: Member
EXHIBIT I
NOTICE OF EXERCISE
TO: ____________________________
(1) The undersigned Warrantholder hereby elects to purchase _______ shares
of the Common Stock of _________________, pursuant to the terms of the Warrant
Agreement dated the 18th day of September, 2002 (the "Warrant Agreement")
between Worldwide Medical Corporation and the Warrantholder, and tenders
herewith payment of the purchase price for such shares in full, together with
all applicable transfer taxes, if any.
(2) In exercising its rights to purchase the Common Stock of
________________________________________, the undersigned hereby confirms and
acknowledges the investment representations and warranties made in Section 10 of
the Warrant Agreement.
(3) Please issue a certificate or certificates repre-senting said shares of
Common Stock in the name of the under-signed or in such other name as is
specified below.
_________________________________
(Name)
_________________________________
(Address)
WARRANTHOLDER: XXXXXXX HEALTHCARE FUND I, LP
By: _________________________
Title: _________________________
Date: _________________________
EXHIBIT II
ACKNOWLEDGMENT OF EXERCISE
The undersigned ____________________________________, hereby acknowl-edges
receipt of the "Notice of Exercise" from Xxxxxxx Healthcare Fund I, LP to
purchase ____ shares of the Common Stock of Worldwide Medical Corporation,
pursuant to the terms of the Warrant Agreement, and further acknowledges that
______ shares remain subject to purchase under the terms of the Warrant
Agreement.
COMPANY: WORLDWIDE MEDICAL CORPORATION
By: _________________________
Title: _________________________
Date: _________________________
EXHIBIT III
TRANSFER NOTICE
(TO TRANSFER OR ASSIGN THE FOREGOING WARRANT AGREEMENT EXECUTE THIS FORM AND
SUPPLY REQUIRED INFORMATION. DO NOT USE THIS FORM TO PURCHASE SHARES.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to
_________________________________________________________________
(Please Print)
whose address is___________________________________________________
_________________________________________________________________
Dated: ____________________________________
Holder's Signature: _____________________
Holder's Address: _____________________
___________________________________________
Signature Guaranteed: ____________________________________________
NOTE: The signature to this Transfer Notice must correspond with the name as
it appears on the face of the Warrant Agreement, without alteration or
enlargement or any change whatever. Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant Agreement.
