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EXHIBIT 10.1
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH SECURITIES ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED.
June 19, 2001
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HORIZON MEDICAL PRODUCTS, INC.
COMMON STOCK PURCHASE WARRANT
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This certifies that, for good and valuable consideration, HORIZON
MEDICAL PRODUCTS, INC., a Georgia corporation (the "COMPANY"), grants to Bank of
America, N.A. (the "WARRANTHOLDER"), the right to subscribe for and purchase
from the Company, during the Exercise Period (as hereinafter defined), 435,157
validly issued, fully paid and nonassessable shares, par value $.001, of Common
Stock of the Company (subject to adjustment as set forth below, the "WARRANT
SHARES"), at the exercise price per share of $.05 (subject to adjustment as set
forth below, the "EXERCISE PRICE"), all subject to the terms, conditions and
adjustments herein set forth. Capitalized terms used herein shall have the
meanings ascribed to such terms in Section 12 below.
1. Warrant. This Warrant is issued pursuant to, and in accordance
with, Section 5(i) of that certain Forbearance Agreement dated as of March 30,
2001, by and among the Company, Horizon Acquisition Corp., Strato/Infusaid,
Inc., Xxxxxx Corporation, and Bank of America, N.A.
2. Exercise of Warrant; Payment of Taxes.
2.1 Exercise of Warrant. Subject to the terms and
conditions set forth herein, this Warrant may be exercised at any time, in whole
or in part, by the Warrantholder during the Exercise Period by:
(a) the surrender of this Warrant to the
Company, with a duly executed Exercise Form, and
(b) the delivery of payment to the Company, for
the account of the Company, by cash or wire transfer of immediately available
funds, certified or official bank check or any other means approved by the
Company, of the aggregate Exercise Price in lawful money of the United States of
America. The Company agrees that the Warrant Shares shall be
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deemed to be issued to the Warrantholder as the record holder of such Warrant
Shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for the Warrant Shares as aforesaid.
2.2 Conversion Option.
(a) In lieu of the payment of the aggregate
Exercise Price, the Warrantholder at its sole discretion may have the Company
convert this Warrant, in whole or in part, into shares of Common Stock (the
"CONVERSION OPTION") as provided for in this Section 2.2. Upon exercise of the
Conversion Option, the Company shall deliver to the Warrantholder (without
payment by the Warrantholder of any of the Exercise Price in accordance with
Paragraph 2.1(b)) that number of Warrant Shares computed using the following
formula:
X = Y(A-B)
------
A
Where:
X = the number of Warrant Shares to be issued to the
Warrantholder;
Y = the number of Warrant Shares purchasable under this Warrant
or, if only a portion of the Warrant is being converted, the
portion of the Warrant being converted;
A = the current market value per share of the Common Stock (at
the date of such conversion); and
B = the Exercise Price (as adjusted to the date of such
calculation).
For purposes of the calculation above, the "current
market value per share of Common Stock" shall be the Market Price of the Common
Stock on the Exercise Date of the Conversion Option. For the purpose of this
Paragraph 2.2(a), the "Market Price" per share of Common Stock on any date (the
"MARKET PRICE") shall be deemed to be the closing price of the Common Stock on
the principal national securities exchange on which the Common Stock is then
listed or admitted to trading or The Nasdaq Stock Market (including The Nasdaq
National Market and The Nasdaq SmallCap Market, as the case may be), if the
Common Stock is then listed or admitted to trading on any national securities
exchange or in such market system. The closing price shall be the last reported
sale price on such day, or, in case no such sale takes place on such day, the
average of the closing bid and asked price, as reported by said exchange or
market system. If the Common Stock is not then so listed on a national
securities exchange or in such market system, the Market Price shall be deemed
to be the mean between the representative closing bid and asked prices of the
Common Stock in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or, if
the Common Stock is not then quoted by NASDAQ, the Market Price shall be
determined in good faith by agreement between the Warrantholder and the Company.
(b) The Conversion Option may be exercised by
the Warrantholder on any Business Day prior to the end of the Exercise Period by
surrender of this Warrant to the Company, with a duly executed Exercise Form
with the conversion section
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completed, exercising the Conversion Option and specifying the total number of
shares of Common Stock that the Warrantholder will be issued pursuant to such
conversion.
2.3 Warrant Shares Certificate. A stock certificate or
certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within five (5) Business Days after receipt of
the Exercise Form by the Company and, unless the Conversion Option is exercised,
the payment by the Warrantholder of the aggregate Exercise Price. If this
Warrant is exercised only in part, the Company shall, at the time of delivery of
the stock certificate or certificates, deliver to the Warrantholder a new
Warrant evidencing the right to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical to this Warrant.
2.4 Payment of Taxes. The Company will pay all
documentary stamp or other issuance taxes, if any, attributable to the issuance
of Warrant Shares upon the exercise of this Warrant.
3. Requirements for Transfer; Legend; Warrant Register.
3.1 Transferability. Subject to the provisions of this
Section 3, this Warrant and all rights hereunder are transferable, in whole or
in part, upon surrender of this Warrant with a properly executed assignment (in
the form of Exhibit B hereto) at the principal office of the Company.
3.2 Representations of Warrantholder. By accepting this
Warrant, the Warrantholder represents and warrants to the Company as follows:
(a) This Warrant and the Warrant Shares issuable
upon exercise of the Warrantholder's rights contained herein will be acquired
for investment for the Warrantholder's own account 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 from the Securities Act.
(b) The Warrantholder understands and
acknowledges (i) that the Warrant Shares issuable upon exercise of the
Warrantholder's rights contained herein are not registered under the Securities
Act or qualified under applicable state securities laws because the issuance
contemplated by this Warrant will be exempt from the registration and
qualification requirements thereof, and (ii) that the Company's reliance on such
exemptions is predicated on the accuracy of the representations set forth in
this Section 3.2.
(c) The Warrantholder has such knowledge and
experience 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.
(d) The Warrantholder understands that if the
Company's Common Stock ceases to be registered with the Securities and Exchange
Commission pursuant
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to Paragraph 12 of the Securities Exchange Act of 1934 (the "EXCHANGE ACT"), or
if the Company ceases to file the reports required under the Exchange Act, or if
a registration statement covering the securities under the Securities Act is not
in effect when it desires to resell (i) this Warrant or (ii) the Warrant Shares
issuable upon exercise of this Warrant, it may be required to hold such
securities for an indefinite period. The Warrantholder is aware of the
provisions of Rule 144 promulgated under the Securities Act.
(e) The Warrantholder will not offer, sell or
otherwise dispose of this Warrant or any Warrant Shares to be issued upon
exercise hereof except under circumstances that will not result in a violation
of the Securities Act or any state securities laws.
(f) Upon exercise of this Warrant, the
Warrantholder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely for the Warrantholder's own account and not as a nominee for any
other party, for investment, and not with a view toward distribution or resale.
3.3 Securities Law Matters. This Warrant and the Warrant
Shares may not be sold or transferred unless either (i) they first shall have
been registered under the Securities Act of 1933, as amended (the "ACT"), or
(ii) if requested by the Company, the Company first shall have been furnished
with an opinion of legal counsel, reasonably satisfactory to the Company, to the
effect that such sale or transfer is exempt from the registration requirements
of the Act. Notwithstanding the foregoing, no registration or opinion of counsel
shall be required for a sale or transfer made either (Y) in accordance with Rule
144 under the Act provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide reasonable
assurance that the requirements of Rule 144 have been satisfied, or (Z) by the
initial Warrantholder to any Affiliate of such Warrantholder which is an
"Accredited Investor" as such term is defined in Rule 501 (a) promulgated under
the Act.
3.4 Legend. Each certificate representing Warrant Shares
shall bear a legend substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH
SECURITIES ARE REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY,
IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
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3.5 Register. The Company will maintain a register
containing the names and addresses of the Registered Holders of this Warrant.
Any Registered Holder may change its address as shown on the warrant register by
written notice to the Company requesting such change. Until any transfer of this
Warrant is made in the warrant register, the Company may treat the Registered
Holder of this Warrant as the absolute owner hereof for all purposes; provided,
however, that if and when this Warrant is properly assigned in blank, the
Company may (but shall not be obligated to) treat the bearer hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
3.6 Replacement Warrants on Transfer. On surrender of
this Warrant for exchange, properly endorsed on the Assignment Form and subject
to the provisions of this Warrant with respect to compliance with the Securities
Act and with the limitations on assignments and transfers contained in this
Section 3, the Company shall issue to or on the order of the Warrantholder a new
warrant or warrants with the same terms and conditions, in the name of the
Warrantholder or as the Warrantholder (on payment by the Warrantholder of any
applicable transfer and stamp taxes) may direct, for the number of shares
issuable upon exercise thereof.
4. Representations and Warranties of the Company. The Company
represents, warrants, covenants and agrees as follows:
4.1 Capitalization. The authorized, issued and reserved
Capital Stock of the Company, immediately prior to the issuance of this Warrant,
consists of:
(a) Common Stock: 50,000,000 shares of Common
Stock, $.001 par value, of which 13,366,278 shares are issued and
outstanding, shares reserved for issuance upon exercise of outstanding
warrants and options are described below, and another 435,157 shares
are reserved for issuance in connection with the exercise of this
Warrant.
The Company's 1998 Stock Incentive Plan (the "Plan")
currently has 1,400,000 shares of Common Stock authorized and reserved
for issuance. As of the date hereof, options to purchase 660,275 shares
of Common Stock are outstanding under the Plan.
In connection with the Premier Purchasing Partners,
L.P. Agreement, the Company entered into a warrant agreement during
1998 pursuant to which the Company granted Premier a warrant (the
"Premier Warrant") to acquire up to 500,000 shares of the Company's
Common Stock for $14.50 per share. Shares of Common Stock issuable
under such Premier Warrant will vest annually in increments of 100,000
only upon the achievement of certain specified minimum annual sales
and/or minimum cumulative sales of the Company's products. As of the
date hereof, no warrants have been earned or are exercisable
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under the Premier Warrant. As of the date hereof, the specified minimum
annual sales and/or minimum cumulative sales requirements have not been
met in relation to warrants to purchase 200,000 shares, and such
warrants have expired and are not, and will never be, exercisable.
The Company has a Consulting and Services Agreement
with Healthcare Alliance (the "Alliance Agreement") pursuant to which
the Company has granted options to purchase up to one percent (1%) of
the Company's outstanding Common Stock at an exercise price equal to
the closing price of the Common Stock on the date such options vest, to
Healthcare Alliance if certain performance criteria are met. In
addition, under the Alliance Agreement the Company granted an
additional option to Healthcare Alliance for the purchase of 45,000
shares of Common Stock an exercise price equal to the closing price of
the Common Stock on the date such options vest. Such options will vest
upon the achievement of certain incremental sales under the Company's
group purchasing agreement with Premier Purchasing Partners, L.P. As of
the date hereof, no options issued to Healthcare Alliance have vested
or are exercisable.
(b) Preferred Stock: 5,000,000 shares of
Preferred Stock, none of which are designated, issued or outstanding.
Except as set forth above, there are no shares of Capital
Stock issued and outstanding and there are no outstanding preemptive, conversion
or other rights, options, warrants or agreements granted or issued by or binding
upon the Company for the purchase or acquisition of any shares of its capital
stock.
4.2 Warrantholder's Percentage Ownership. Immediately
following issuance of this Warrant, the Warrant Shares shall represent three
percent (3%) of the Common Stock of the Company on a Fully Diluted Basis.
4.3 No Liens, etc. All Warrant Shares that are issued
upon the exercise of this Warrant shall, upon issuance, be validly issued, fully
paid and non-assessable, not subject to any preemptive rights, and be free from
all taxes, liens, security interests, charges, and other encumbrances with
respect to the issuance thereof, other than taxes in respect of any transfer
occurring contemporaneously with such issue and other than any liens, security
interests, and other encumbrances not created by the Company or its
subsidiaries.
4.4 Reservation of Warrant Shares. The Company shall at
all times have authorized and reserved, and shall keep available and free from
preemptive rights, a sufficient number of shares of Common Stock to provide for
the exercise of the rights represented by this Warrant.
5. Adjustments to Warrant Shares and Exercise Price. The Exercise
Price and the number of Warrant Shares to be received upon exercise of this
Warrant shall be subject to adjustment as follows:
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5.1. Special Adjustment Upon Issuance of Certain
Securities. (a) If the Company shall at any time or from time to time, after the
issuance of this Warrant but prior to the exercise hereof, issue or sell (such
issuance or sale, a "NEW ISSUANCE") any shares of Common Stock or Common Stock
Equivalents, other than as provided in Section 5.1(e) below, and other than
issuances or sales for which an adjustment is made pursuant to another
subsection of this Section 5, then, and in each such case, the aggregate number
of Warrant Shares issuable upon exercise of this Warrant (the "WARRANT SHARE
NUMBER") immediately prior to such New Issuance shall be adjusted so that
immediately following such New Issuance the Warrant Share Number shall be
increased (but not decreased) to be equal to such percentage of the Common Stock
of the Company calculated on a Fully Diluted Basis after giving effect to the
New Issuance that is equal to the percentage the aggregate of the Warrant Share
Number and the Common Stock held by Warrantholder upon exercise of this Warrant
represented to the Common Stock of the Company calculated on a Fully Diluted
Basis immediately prior to the New Issuance. In the event of an adjustment to
the Warrant Share Number pursuant to this Section 5.1, the Exercise Price then
in effect shall be adjusted so that it is equal to the lower of (A) the result
obtained by dividing the aggregate Exercise Price in effect immediately prior to
the New Issuance by the Warrant Share Number as adjusted as a result of the New
Issuance or (B) an amount equal to the consideration per share received by the
Company for the Common Stock issued in the New Issuance or the Price Per Share
(as defined below) for which Common Stock is issuable upon conversion or
exercise of the Common Stock Equivalents issued or granted in the New Issuance.
For purposes of this Section 5.1, the following Sections
5.1(b) to 5.1(d) shall also be applicable:
(b) In case at any time the Company shall in any manner
grant any warrants or other rights to subscribe for or to purchase, or
any options for the purchase of, Common Stock or any Common Stock
Equivalent whether or not the right to exercise, convert or exchange
any such Common Stock Equivalents are immediately exercisable,
convertible or exchangeable, and the Price Per Share (as defined below)
for which Common Stock is issuable upon the exercise, conversion or
exchange of such Common Stock Equivalents (including any Common Stock
Equivalents issuable upon exercise, conversion or exchange of options,
warrants or other rights to acquire Common Stock Equivalents), then the
total maximum number of shares of Common Stock issuable upon the
exercise, conversion or exchange of such Common Stock Equivalents
(including upon exercise, conversion or exchange of Common Stock
Equivalents issuable upon the exercise, conversion or exchange of
options, warrants or other rights to acquire Common Stock Equivalents)
shall be deemed to have been issued for such Price Per Share as of the
date of granting or the issuance of such Common Stock Equivalents. No
adjustment of the Exercise Price shall be made upon the actual issue of
such Common Stock upon exercise, conversion or exchange of such Common
Stock Equivalents to the extent that the appropriate adjustment has
been made pursuant to this Section 5.1. For purposes of this Section
5.1, the "Price Per Share" shall be determined by dividing (i) the
total amount of consideration, if any, received or receivable by the
Company as consideration for the granting of such Common Stock
Equivalents, plus the minimum aggregate amount of
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additional consideration payable to the Company upon the exercise,
conversion or exchange of all such Common Stock Equivalents, plus, in
the case of such options, warrants or other rights to acquire Common
Stock Equivalents, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Common
Stock Equivalents and upon the conversion or exchange thereof, by (ii)
the total maximum number of shares of Common Stock issuable upon the
exercise, conversion or exchange of all such Common Stock Equivalents.
(c) Upon the happening of any of the following events,
namely, if the Price Per Share provided for in any Common Stock
Equivalent referred to in Section 5.1 shall change at any time
(including, but not limited to, changes under or by reason of
provisions designed to protect against dilution), the Exercise Price in
effect at the time of such event shall forthwith be increased or
decreased to the Exercise Price which would have been in effect at the
time of such event had such Common Stock Equivalents still outstanding
provided for such changed Price Per Share at the time initially
granted, issued or sold.
(d) In case any shares of Common Stock or Common Stock
Equivalents shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the amount received by the
Company therefor, without deduction therefrom of any expenses incurred
or any underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In case any shares of Common Stock or
Common Stock Equivalents shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of such
consideration as determined by written agreement between the
Warrantholder and the Company, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any Common Stock
Equivalents shall be issued in connection with the issue and sale of
other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such
Common Stock Equivalents by the parties thereto, such Common Stock
Equivalents shall be deemed to have been issued for such consideration
as determined by written agreement between the Warrantholder and the
Company.
(e) Notwithstanding the foregoing, a New Issuance shall
not include, and no adjustments pursuant to this Section 5 shall be
made, for any Common Stock or Common Stock Equivalent issued or
issuable by the Company if (A) (i) the New Issuance is at or above the
Market Price and (ii) the gross proceeds received by the Company for
such New Issuance are (x) in cash, and (y) the net proceeds received by
the Company are used to repay outstanding debt to the Warrantholder or
the Warrantholder's successors in interest to such debt pursuant to
that certain Amended and Restated Credit Agreement, dated as of May 26,
1998, as amended by the First Amendment to Amended and Restated Credit
Agreement dated as of November 11, 1998, and the Second Amendment to
Amended and Restated Credit Agreement and Waiver dated as of March 31,
1999 and the Third Amendment to the Amended and Restated Credit
Agreement and Waiver dated
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March 29, 2000, the Fourth Amendment to the Amended and Restated Credit
Agreement and Waiver dated June 6, 2000, the Fifth Amendment to the
Amended and Restated Credit Agreement and Waiver dated August 14, 2000
by and among Horizon Medical Products, Inc, Horizon Acquisition Corp.,
Strato/Infusaid, Inc. and Xxxxxx Corporation, the Lenders signatory to
the Credit Agreement, and Bank Of America, N.A., successor to Banc Of
America Commercial Finance Corporation, formerly known as NationsCredit
Commercial Corporation or (B) any options issued pursuant to, and in
accordance with, the Horizon Medical Products, Inc. 1998 Stock
Incentive Plan that are issued in accordance with past practice of the
Company, provided such options (x) are not issued to Xxxxxxx X.
Xxxxxxxx, Xx., Xxxxxxxx X. Xxxx, or any of their affiliates or family,
and (y) do not exceed 200,000 options granted per fiscal year. For the
purposes of this Section 5.1(e), "net proceeds" shall mean the gross
proceeds less the reasonable and customary costs and fees associated
with such New Issuance to be paid to third-party service providers,
which expenses shall have been approved in writing by Warrantholder in
advance of the New Issuance.
5.2 Dividend, Subdivision, Combination or
Reclassification of Common Stock. If the Company shall at any time or from time
to time, after the issuance of this Warrant but prior to the exercise hereof,
(w) make a dividend or distribution on the outstanding shares of Common Stock
payable in Capital Stock, (x) subdivide the outstanding shares of Common Stock
into a larger number of shares, (y) combine the outstanding shares of Common
Stock into a smaller number of shares or (z) issue any shares of its Capital
Stock in a reclassification of the Common Stock (other than any such event for
which an adjustment is made pursuant to another clause of this Section 4), then,
and in each such case, (A) the aggregate Warrant Share Number immediately prior
to such event shall be adjusted (and any other appropriate actions shall be
taken by the Company) so that the Warrantholder shall be entitled to receive
upon exercise of this Warrant the number of shares of Common Stock or other
securities of the Company that it would have owned or would have been entitled
to receive upon or by reason of any of the events described above, had this
Warrant been exercised immediately prior to the occurrence of such event and (B)
the Exercise Price payable upon the exercise of this Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the Warrant Share Number immediately
prior to such adjustment, and the denominator of which shall be the Warrant
Share Number immediately thereafter. An adjustment made pursuant to this Section
5.2 shall become effective retroactively (x) in the case of any such dividend or
distribution, to a date immediately following the close of business on the
record date for the determination of holders of shares of Common Stock entitled
to receive such dividend or distribution or (y) in the case of any such
subdivision, combination or reclassification, to the close of business on the
day upon which such corporate action becomes effective.
5.3 Certain Distributions. If the Company shall at any
time or from time to time, after the issuance of this Warrant but prior to the
exercise hereof, distribute to all holders of shares of Common Stock (including
any such distribution made in connection with a merger or consolidation in which
the Company is the resulting or surviving Person and shares of Common Stock are
not changed or exchanged) cash, evidences of indebtedness of the Company or
another issuer, securities of the Company or another issuer or other assets
(excluding
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dividends or distributions payable in shares of Common Stock for which
adjustment is made under Section 5.2) or rights or warrants to subscribe for or
purchase any of the foregoing, then, and in each such case, (A) the Exercise
Price then in effect shall be adjusted (and any other appropriate actions shall
be taken by the Company) by multiplying the Exercise Price in effect prior to
the date of distribution by a fraction (i) the numerator of which shall be such
Current Market Price of Common Stock immediately prior to the date of
distribution less the then Fair Market Value of the portion of the cash,
evidences of indebtedness, securities or other assets so distributed or of such
rights or warrants applicable to one share of Common Stock and (ii) the
denominator of which shall be the Current Market Price of the Common Stock
immediately prior to the date of distribution (but such fraction shall not be
greater than one) and (B) the Warrant Share Number shall be increased by being
multiplied by a fraction (i) the numerator of which shall be the Current Market
Price of one share of Common Stock immediately prior to the record date for the
distribution of such cash, evidences of indebtedness, securities, other assets
or rights or warrants and (ii) the denominator of which shall be the Current
Market Price of one share of Common Stock immediately prior to such record date
less the Fair Market Value of the portion of such cash, evidences of
indebtedness, securities, other assets or rights or warrants so distributed.
Such adjustment shall be made whenever any such distribution is made and shall
become effective retroactively to a date immediately following the close of
business on the record date for the determination of stockholders entitled to
receive such distribution.
5.4 Spin-off; Reorganization, Reclassification, Merger or
Sale Transaction.
(a) In case of any spin-off by the Company of
another Person (the "SPIN-OFF ENTITY") at any time after the issuance of this
Warrant but prior to the exercise hereof, the Company shall issue to the
Warrantholder a new warrant, in form and substance satisfactory to the
Warrantholder, entitling the Warrantholder to purchase, at the exercise price
equal to the excess of the Exercise Price in effect immediately prior to such
spin-off over the adjusted Exercise Price pursuant to Section 5.3, the number of
shares of common stock or other proprietary interest in the Spin-off Entity that
the Warrantholder would have owned had the Warrantholder, immediately prior to
such spin-off, exercised this Warrant.
(b) In case of any capital reorganization,
reclassification, Sale Transaction, mandatory share exchange (other than a Sale
Transaction or a mandatory share exchange in which the Company is the surviving
corporation and in which the Common Stock is not exchanged or converted ) of the
Company or other change of outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value) (each, a "TRANSACTION") at any time after the issuance of this
Warrant but prior to the exercise hereof, the Company shall execute and deliver
to the Warrantholder at least ten (10) Business Days prior to effecting such
Transaction a certificate (and, if following a Transaction, the Warrant shall be
exercisable for securities of any Person other than the Company, such Person
also shall, no later than simultaneously with the closing of the Transaction,
issue a certificate) stating that the Warrantholder shall have the right
thereafter to exercise this Warrant for the kind and amount of shares of stock
or other securities, property or cash receivable upon such Transaction by a
holder of the number of shares of Common Stock into which this Warrant
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could have been exercised immediately prior to such Transaction, and provision
shall be made therefor in the agreement, if any, relating to such Transaction.
Such certificates shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
5. The provisions of this Section 5.4 and any equivalent thereof in any such
certificate similarly shall apply to successive transactions.
5.5 Other Changes. If the Company at any time or from
time to time, after the issuance of this Warrant but prior to the exercise
hereof, shall take any action affecting its Common Stock similar to or having an
effect similar to any of the actions described in any of Sections 5.1, 5.2, 5.3
or 5.4 herein (but not including any action described in any such Section) and
the Board of Directors in good faith determines that it would be equitable in
the circumstances to adjust the Exercise Price and Warrant Share Number as a
result of such action, then, and in each such case, the Exercise Price and
Warrant Share Number shall be adjusted in such manner and at such time as the
Board of Directors in good faith determines would be equitable in the
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the Warrantholder).
5.6 Certificate as to Adjustments. Upon any adjustment
in the Exercise Price or Warrant Share Number, the Company shall within a
reasonable period (not to exceed ten (10) days) following any of the foregoing
transactions deliver to the Warrantholder a certificate, signed by (i) the Chief
Executive Officer of the Company and (ii) the Chief Financial Officer of the
Company, setting forth in reasonable detail the event requiring the adjustment
and the method by which such adjustment was calculated and specifying the
adjusted Exercise Price and Warrant Share Number then in effect following such
adjustment.
5.7 Notices. In case at any time or from time to time:
(w) the Company shall pay a dividend (or other
distribution) on its shares of Common Stock;
(x) the Company shall authorize the granting to
the holders of shares of its Common Stock rights or warrants to subscribe for or
purchase any shares of Capital Stock or any other rights or warrants;
(y) the Company issues or grants any shares of
Common Stock or Common Stock Equivalents; or
(z) there shall occur a spin-off or Transaction;
then the Company shall mail to the Warrantholder, as promptly as possible but in
any event at least ten (10) Business Days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution or granting of rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution or granting
of rights or warrants are to be determined, or (B) the date on which such
spin-off or Transaction is expected
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to become effective and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
shares of stock or other securities or property or cash deliverable upon such
spin-off or Transaction. Notwithstanding the foregoing, in the case of any event
to which Section 5.4 is applicable, the Company shall also deliver the
certificate described in such Section 5.4 to the Warrantholder at least ten (10)
Business Days prior to effecting such reorganization or reclassification as
aforesaid.
5.8 No Adjustment. Notwithstanding anything herein to the
contrary, no adjustment under this Section 5 need be made to the Exercise Price
or Warrant Share Number if the Company receives written notice from the
Warrantholder that no such adjustment is required.
6. Registration Rights.
6.1 Certain Definitions. As used in this Section 6, the
following terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Holder" shall mean any holder of the outstanding Registrable
Securities.
"Registrable Securities" shall mean (i) Common Stock issued or issuable
upon exercise or conversion of this Warrant, (ii) any Common Stock issued in
respect of securities issued pursuant to the conversion of the Shares upon any
stock split, stock dividend, recapitalization or similar event and (iii) any
Common Stock now owned or hereafter acquired by Holder. Notwithstanding the
foregoing, shares that are Registrable Securities shall cease to be Registrable
Securities (i) upon any sale pursuant to a registration statement, (ii) upon
eligibility for sale pursuant to Rule 144 under the Securities Act (other than
clause (k) thereunder), or (iii) upon any sale or transfer in any manner to a
person or entity which is not entitled to the rights provided by this Section.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses incurred by the Company
in compliance with this Section 6, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, reasonable fees and
disbursements of one counsel for all the selling Holders and other security
holders, and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
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"Selling Expenses" shall mean all underwriting discounts, selling
commissions and transfer taxes applicable to the sale of Registrable Securities
and the fees and expenses of each selling Holder's own counsel (other than the
counsel selected to represent all selling Holders).
6.2 Company Registration.
(a) If the Company shall determine to register any of its
securities either for its own account or the account of a security holder or
holders exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans, a registration statement
on Form S-8 or Form S-4, or their successors, the Company will:
(i) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made by any Holder within twenty (20)
days after receipt of the written notice from the Company described in
clause (i) above, except as set forth in Section 6.2(b) below. Such
written request may specify all or a part of a Holder's Registrable
Securities.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 6.2 (a)(i). In such event the right of any Holder to
registration pursuant to this Section 6.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the Other Shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for underwriting by
the Company, provided that such underwriting agreement shall not provide for
indemnification or contribution obligations on the part of Holders greater than
the obligations of the Holders pursuant to Section 6.5 unless agreed to by such
Holders. Notwithstanding any other provision of this Section 6.2, if the
underwriter determines that marketing factors require a limitation on the number
of shares to be underwritten, the underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following manner. The
securities of the Company held by officers and directors of the Company (other
than Registrable Securities) shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a limitation on
the number of shares is still required, the number of shares that may be
included in the registration and underwriting shall be allocated among all such
Holders and Other Shareholders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities and other securities which they
held at the time the Company gives the notice specified in Section 6.2(a)(i). If
any Holder of Registrable Securities
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or any officer, director or Other Shareholder disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
6.3 Expenses of Registration. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to this Section 6 shall be borne by the Company, and all Selling
Expenses shall be borne by the holders of the securities so registered pro rata
on the basis of the number of their shares so registered.
6.4 Registration Procedures. In the case of each
registration effected by the Company pursuant to Section 6, the Company will
keep each Holder advised in writing as to the initiation of each registration
and as to the completion thereof. At its expense, the Company will:
(a) Use its reasonable best efforts to keep such
registration effective for a period of one hundred twenty
(120) days or until the Holder or Holders have completed the
distribution described in the registration statement relating
thereto, whichever first occurs;
(b) Furnish such number of prospectuses and
other documents incident thereto as a Holder from time to time
may reasonably request;
(c) In connection with any underwritten offering
pursuant to a registration statement filed pursuant to Section
6.2 hereof, enter into an underwriting agreement reasonably
necessary to effect the offer and sale of Common Stock,
provided such underwriting agreement contains customary
underwriting provisions and provided further that if the
underwriter so requests the underwriting agreement will
contain customary contribution provisions on the part of the
Company; and
(d) Use its reasonable best efforts to obtain a
comfort letter from the Company's independent public
accountants in customary form and covering such matters of the
type customarily covered by comfort letters and an opinion
from the Company's counsel in customary form and covering such
matters of the type customarily covered in a public issuance
of securities, in each case addressed to the Holders.
If the Company has delivered preliminary or final prospectuses to the selling
Holders and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall notify the selling Holders
and, if requested, the selling Holders shall immediately cease making offers of
Registrable Securities and return all prospectuses to the Company. The Company
shall as promptly as practicable provide the selling Holders with revised
prospectuses, and, following receipt of the revised prospectuses, the selling
Holders may resume making offers of the Registrable Securities.
Any other provision of this Agreement notwithstanding, upon receipt by
a Holder of a written notice from the Company to the effect set forth below, the
Company shall not be obligated during a reasonable period of time thereafter to
effect any registrations pursuant to this
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Agreement, and the Holders agree that they will immediately suspend sales of
securities under any effective registration statement for a reasonable period of
time, in either case not to exceed 90 days, at any time at which, in the
Company's reasonable judgment, (i) there is a development involving the Company
or any of its subsidiaries that is material but that has not yet been publicly
disclosed or (ii) registration requires a special audit. In the event sales by
the Holder pursuant to an effective registration statement are suspended in
compliance with this paragraph, there shall be added to the period during which
the Company is obligated to keep a registration statement effective the number
of days for which sales were so suspended.
6.5 Indemnification.
(a) The Company will, and hereby does, indemnify each Holder, each
of its officers, directors and partners, and each person controlling such
Holder, with respect to which registration, qualification or compliance has been
effected pursuant to this Section 6, and each underwriter, if any, and each
person who controls any underwriter within the meaning of the Securities Act and
the rules and regulations thereunder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or registration statement, incident to any
such registration, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and will reimburse each such
Holder, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability, action or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by such Holder or underwriter and
stated to be specifically for use therein or in the preparation thereof.
(b) Each Holder and Other Shareholder will, and hereby does, if
Registrable Securities held by him are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of the Securities
Act and the rules and regulations thereunder, each other such Holder and Other
Shareholder and each of their officers, directors and partners, and each person
controlling such Holder or Other Shareholder, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and such Holders, Other
Shareholders, directors, officers, partners, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating
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or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
or Other Shareholder and stated to be specifically for use therein or in the
preparation thereof; provided, however, that the obligations of such Holders and
Other Shareholders hereunder shall be limited to an amount equal to the proceeds
to each such Holder or Other Shareholder of securities sold as contemplated
herein.
(c) Each party entitled to indemnification under this Section 6.5
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, but the
failure of any Indemnified Party to give notice shall not relieve the
Indemnifying Party of its obligation under this Section 6.5. The Indemnifying
Party will be entitled to participate in, and to the extent that it may elect by
written notice delivered to the Indemnified Party promptly after receiving the
aforesaid notice from such Indemnified Party, at its expense to assume, the
defense of any such claim or any litigation resulting therefrom, with counsel
reasonably satisfactory to such Indemnified Party, provided that the Indemnified
Party may participate in such defense at its expense, notwithstanding the
assumption of such defense by the Indemnifying Party, and provided, further,
that if the defendants in any such action shall include both the Indemnified
Party and the Indemnifying Party and the Indemnified Party shall have reasonably
concluded that there may be legal defenses available to it and/or other
Indemnified Parties which are different from or additional to those available to
the Indemnifying Party, the Indemnified Party or Parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
Parties and the fees and expenses of such counsel shall be paid by the
Indemnifying Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with defense of
such claim and litigation resulting therefrom.
6.6 Information by Holder. Each Holder of Registrable Securities,
and each Other Shareholder holding securities included in any registration,
shall furnish to the Company such information regarding such Holder or Other
Shareholder and the distribution proposed by such Holder or Other Shareholder as
the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 6.
6.7 Limitations on Registration of Issues of Securities. From and
after the date of this Agreement, the Company shall not enter into any agreement
with any holder or prospective holder of any securities of the Company giving
such holder or prospective holder the right to require the Company to initiate
any registration of any securities of the Company, provided that this Section
6.7 shall not limit the right of the Company to enter into any agreements with
any
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holder or prospective holder of any securities of the Company giving such holder
or prospective holder the right to require the Company, upon any registration of
any of its securities, to include, among the securities which the Company is
then registering, securities owned by such holder. Any right given by the
Company to any holder or prospective holder of the Company's securities in
connection with the registration of securities shall be conditioned such that it
shall be subordinate to the rights of the Holders provided in this Agreement.
6.8 Rule 144 Reporting. With a view to making available
the benefits of certain rules and regulations of the Commission which may permit
the sale of the Restricted Securities to the public without registration, the
Company agrees to use its reasonable best efforts to:
(a) make and keep public information available
as those terms are understood and defined in Rule 144 under
the Securities Act;
(b) file with the Commission in a timely manner
all reports and other documents required of the Company under
the Securities Act and the Exchange Act at any time after it
has become subject to such reporting requirements; and
(c) so long as you own any Restricted
Securities, furnish to you forthwith upon request a written
statement by the Company as to its compliance with the
reporting requirements of Rule 144 and of the Securities Act
and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and
documents so filed as you may reasonably request in availing
yourself of any rule or regulation of the Commission allowing
you to sell any such securities without registration.
6.9 Transfer or Assignment of Registration Rights. The
rights to cause the Company to register your securities granted to you by the
Company under Section 6.2 may be transferred or assigned by you to a transferee
or assignee of any of your Restricted Securities, provided that the Company is
given written notice by you at the time of or within a reasonable time after
such transfer or assignment, stating the name and address of such transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned, and provided, further, that the
transferee or assignee of such rights assumes your obligations under this
Section 6.
6.10 "Market Stand-off" Agreement. You agree, if requested
by the Company and an underwriter of Common Stock (or other equity securities)
of the Company, not to sell or otherwise transfer or dispose of any Common Stock
(or other equity securities) of the Company held by you during the ninety-day
period following the effective date of a registration statement of the Company
filed under the Securities Act, provided that all Holders, Other Shareholders
and officers and directors and other shareholders of the Company holding in
excess of 1% of the outstanding Common Stock (on an as converted and Fully
Diluted Basis) of the Company enter into similar agreements.
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Such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the shares (or securities) subject to the foregoing restriction
until the end of such ninety-day period.
7. Loss or Destruction of Warrant. Subject to the terms and
conditions hereof, upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of such bond or indemnification
as the Company may reasonably require, and, in the case of such mutilation, upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor; provided, however, in the event of the loss, theft
or destruction of this Warrant, or the mutilation of this Warrant if the
Warrantholder shall not have delivered such mutilated Warrant to the Company,
the Company may require that the Warrantholder provide a bond or written
indemnification in favor of the Company with respect to any claims, expenses or
losses the Company may incur in connection with such lost, stolen, destroyed or
mutilated Warrant.
8. 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, together with proper
written notice, for transfer.
9. Amendments. Any provision of this Warrant may be amended and
the observance thereof waived only with the written consent of the Company and
the Warrantholder.
10. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"AFFILIATE" means any Person who is an "affiliate" as defined in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock and any and all
rights, warrants or options exchangeable for or convertible into such capital
stock (including but not limited to any debt security which is exchangeable for
or convertible into such capital stock).
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"COMMON STOCK" means the Common Stock, par value $.001 per share, of
the Company.
"COMMON STOCK EQUIVALENT" means any security or obligation which is by
its terms convertible into or exercisable into shares of Common Stock,
including, without limitation, any option, warrant or other subscription or
purchase right with respect to Common Stock.
"COMPANY" has the meaning set forth in the first paragraph of this
Warrant.
"CURRENT MARKET PRICE" means, as of the date of determination, the
average of the daily Market Price of the Common Stock during the immediately
preceding ten (10) consecutive trading days ending on such date.
"EXERCISE FORM" means an Exercise Form in the form annexed hereto as
Exhibit A.
"EXERCISE PERIOD" means the period from the date hereof to 5:00 p.m.,
Eastern time, on June 19, 2004.
"EXERCISE PRICE" has the meaning set forth in the first paragraph of
this Warrant.
"FAIR MARKET VALUE" means the amount which a willing buyer would pay a
willing seller in an arm's length transaction reasonably determined by written
agreement between the Warrantholder and the Company or, if such determination is
not satisfactory to the Warrantholders, such determination shall be made by a
nationally recognized investment banking firm selected by the Company and the
Majority Warrantholders, the expenses for which shall be born equally by the
Company and the Warrantholder.
"FORBEARANCE AGREEMENT" has the meaning set forth in Section 1 of this
Warrant.
"FULLY DILUTED BASIS" means, with respect to any calculation of the
Common Stock of the Company, that number of shares of Common Stock that includes
all issued and outstanding shares of Common Stock, and all shares of Common
Stock which are subject to issuance upon exercise, conversion or exchange of
warrants, options, Common Stock Equivalents and other rights to purchase Capital
Stock of the Company (including but not limited to all shares of Capital Stock
reserved for issuance in connection with any option plan of the Company, but
which shall not include any shares of Capital Stock reserved for issuance for
which options have not been granted), whether or not such warrants, options,
Common Stock Equivalents or other rights are then exercisable, convertible or
exchangeable, subject to the provisions of Section 5.
"MARKET PRICE" on any date shall have the meaning set forth in Section
2.2.
"NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System.
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"NEW ISSUANCE" has the meaning set forth in Section 5.1 of this
Warrant.
"PERSON" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental body or other entity of any kind.
"SALE TRANSACTION" shall mean (a) (i) the merger or consolidation of
the Company into or with one or more Persons, (ii) the merger or consolidation
of one or more Persons into or with the Company or (iii) a tender offer or other
business combination if, in the case of (i), (ii) or (iii), the stockholders of
the Company prior to such merger or consolidation do not retain at least 50% of
the voting power of the surviving Person or (b) the voluntary sale, conveyance,
exchange or transfer to another Person of (i) the voting Capital Stock of the
Company if, after such sale, conveyance, exchange or transfer, the stockholders
of the Company prior to such sale, conveyance, exchange or transfer do not
retain at least 50% of the voting power of the Company or (ii) all or
substantially all of the assets of the Company.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder.
"SPIN-OFF ENTITY" has the meaning set forth in Section 5.4 of this
Warrant.
"SUBSIDIARIES" has the meaning set forth in the Forbearance Agreement.
"TRANSACTION" has the meaning set forth in Section 5.4 of this Warrant.
"WARRANT SHARE NUMBER" has the meaning set forth in Section 5.1 of this
Warrant.
"WARRANT SHARES" has the meaning set forth in the first paragraph of
this Warrant.
"WARRANTHOLDER" has the meaning set forth in the first paragraph of
this Warrant.
10. Miscellaneous
10.1 Entire Agreement. This Warrant and the Forbearance
Agreement constitute the entire agreement between the Company and the
Warrantholder with respect to the Warrant and supersedes all prior agreements
and understanding with respect to the subject matter of this Warrant.
10.2 Binding Effect; Benefits. This Warrant shall inure to
the benefit of and shall be binding upon the Company and the Warrantholder and
their respective permitted successors and assigns. Nothing in this Warrant,
expressed or implied, is intended to or shall confer on any person other than
the Company and the Warrantholder, or their respective permitted successors or
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Warrant.
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10.3 Headings. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning of this Warrant.
10.4 Notices. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery:
(a) if to the Company:
Horizon Medical Products, Inc.
Xxx Xxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxxx, Xx., Esq.
(b) if to the Warrantholder to the name and
address set forth in the Warrant Register;
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, LLP
0000 Xxxxxxxxx Xx., X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx XxXxxxx, Esq.
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given upon personal delivery or upon deposit in the United
States mail, by registered or certified mail, addressed (i) to the Warrantholder
at the address set forth above, and (ii) to the Company at the address set forth
above, or, if sent by facsimile to the numbers set forth above, when receipt of
such facsimile is verbally (but not mechanically) acknowledged by the recipient
thereof. Any party may by notice given in accordance with this Section 10.4
designate another address or Person for receipt of notices hereunder.
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10.5 Severability. Any term or provision of this Warrant
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the terms and
provisions of this Warrant or affecting the validity or enforceability of any of
the terms or provisions of this Warrant in any other jurisdiction.
10.6 GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF.
10.7 No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be determined as conferring upon the
Warrantholder any rights as a stockholder of the Company or as imposing any
liabilities on the Warrantholder to purchase any securities whether such
liabilities are asserted by the Company or by creditors or stockholders of the
Company or otherwise.
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IN WITNESS WHEREOF, the Company and the Warrantholder have
caused this Warrant to be executed this 19th day of June, 2001.
HORIZON MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: President
BANK OF AMERICA, N.A.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
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Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase _______ shares of Common Stock and
herewith tenders payment for such shares to the order of the Company in the
amount of $____________ or hereby exercises its Conversion Option in accordance
with the terms of this Warrant. The undersigned requests that a certificate for
such Warrant Shares to which the undersigned is entitled pursuant to the
purchase price above or as calculated pursuant to Section 2.2, as appropriate,
be registered in the name of the undersigned and that such certificate be
delivered to the undersigned's address below.
Dated:
Name
------------------------------------------------
(Print)
Signature:
-------------------------------------------
Title:
-----------------------------------------------
-----------------------------------------------
(Street Address)
-----------------------------------------------
(City) (State) (Zip Code)
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EXHIBIT B
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto
________________ the right represented by the within Warrant to purchase
___________ shares of Common Stock to which the within Warrant relates, and
appoints _____________________________ as its Attorney to transfer such right on
the books of HORIZON MEDICAL PRODUCTS, INC. with full power of substitution in
the premises.
Dated:_____________________ (Signature must conform to name of holder as
specified on the face of the Warrant)
--------------------------------------------
--------------------------------------------
Signed in the presence of:
----------------------------
