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THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS ("BLUE SKY LAWS") AND MAY NOT BE
TRANSFERRED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF (A "TRANSFER") IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE BLUE SKY LAWS OR PURSUANT TO AN OPINION FROM COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION (AS DEFINED BELOW) THAT SUCH TRANSFER IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE BLUE
SKY LAWS
WARRANT
TO PURCHASE 500,000 SHARES OF COMMON STOCK OF
HORIZON MEDICAL PRODUCTS, INC.
Date of Issuance: April 1, 1998
For value received, HORIZON MEDICAL PRODUCTS, INC., a Georgia
corporation (the "Corporation"), hereby grants to PREMIER PURCHASING PARTNERS,
L.P., a California limited partnership ("Premier"), or its permitted and
registered assigns, the right to subscribe for and purchase from the
Corporation, at any time and from time to time during the Effective Period (as
defined herein) the Warrant Shares (as defined herein) at the Exercise Price (as
defined herein) and upon the terms and subject to the conditions hereinafter set
forth.
1. DEFINITIONS. For the purposes of this Warrant, the following terms
have the meanings indicated:
"Accelerated Shares" shall have the meaning set forth in Section 3.3
hereof.
"Accelerated Year" shall have the meaning set forth in Section 3.3
hereof.
"Additional Shares" shall mean all shares of Common Stock issued by
the Corporation after the date hereof, other than (i) shares of Common Stock
issued in connection with an acquisition by the Corporation of the Stock or
assets of another Person or in connection with a business combination
("Acquisition Consideration") and for which acquisition or business combination
there shall have been issued an opinion from a nationally recognized investment
banking firm with respect to the fairness, from a financial point of view, of
such Acquisition Consideration, (ii) up to 500,000 shares of Common Stock issued
upon exercise of options granted under the Corporation's 1998 Stock Incentive
Plan (the "Stock Plan"), (iii) shares of Common Stock
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issued under, or pursuant to the exercise of options issued under, the
Consulting Agreement dated February 1, 1996, as heretofore amended, between the
Corporation and Health Care Alliance, Inc. (the "Health Care Alliance
Agreement"), (iv) shares of Common Stock issued under, or pursuant to the
exercise of options or warrants issued under, the Consulting Agreement dated May
8, 1997 between the Corporation and Xxxxxx Xxxxx (the "Xxxxx Agreement") and (v)
shares of Common Stock issued to Premier or any Person controlling, controlled
by or under common control with Premier.
"Base Shares" shall have the meaning set forth in Section 3.1
hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia are authorized or
required by law to close.
"Common Stock" shall mean the Corporation's Common Stock, par value
$0.001 per share.
"Contract Year" shall mean the period commencing on the date hereof
and ending June 30, 1999 and each of the four successive one-year periods
commencing on the first, second, third and fourth annual anniversaries of June
30, 1999.
"Convertible Securities" shall mean evidences of indebtedness,
shares of Stock, warrants or other securities (other than Options) which are or
may be at any time convertible into or exercisable or exchangeable for or into
shares of Common Stock, other than securities issued under the Stock Plan, the
Health Care Alliance Agreement, the Xxxxx Agreement or as Acquisition
Consideration. The term "Convertible Security" shall mean one of the Convertible
Securities.
"Effective Date" shall mean, with respect to any Warrant Shares
vesting in respect of the initial Contract Year, the second annual anniversary
of the vesting thereof and, with respect to any Warrant Shares vesting in
respect of the second, third, fourth and fifth Contract Years, the first annual
anniversary of the respective vesting dates thereof.
"Effective Period" shall mean with respect to any Warrant Shares the
period beginning at 9:00 a.m. Eastern Standard Time on the Effective Date
applicable to such Warrant Shares and ending on (x) with respect to Warrant
Shares vesting with respect to the initial Contract Year, the third annual
anniversary date of the Effective Date at 5:00 p.m. Eastern Standard Time and
(y) with respect to Warrant Shares vesting with respect to the second, third,
fourth and fifth Contract Years, the fourth annual anniversary date of their
respective Effective Dates at 5:00 p.m. Eastern Standard Time.
"Exercise Date" shall mean a date on which an exercising Holder of
this Warrant has submitted to the Corporation this Warrant and the subscription
form attached hereto as Exhibit A and, if applicable, has paid the Exercise
Price as required by Section 3.5 hereof.
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"Exercise Price" shall mean the Initial Public Offering price per
share to the public of a share of Common Stock subject to adjustment in
accordance with Section 6 hereof.
"Fair Market Value" of a share of Common Stock as of any date shall
mean the average of the closing prices of Common Stock for the twenty (20)
consecutive Trading Days prior to the date of determination. The closing price
for each day shall be:
(i) the closing sale price or, in the absence of a
closing sale price, the average of the highest bid
and lowest asked prices of one share of Common Stock
quoted in the Nasdaq Stock Market's National Market
or any similar system of automated dissemination of
quotations of securities prices then in common use,
if so quoted; or
(ii) if not quoted as described in clause (i), the average
of the highest bid and lowest offered quotations for
one share of Common Stock as reported by the National
Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and offered
quotations for Common Stock on at least five (5) of
the twenty (20) consecutive Trading Days next
preceding the date of determination; or
(iii) if the Common Stock is listed or admitted for trading
on any national securities exchange, the last sale
price, or the closing bid price if no sale occurred,
of one share of Common Stock on the principal
securities exchange on which the Common Stock is
listed or admitted for trading.
If none of the conditions set forth above is met, the closing
price of one share of Common Stock on any day or the average of such closing
prices for any period shall be the Fair Market Value of Common Stock for such
day or period as determined by a member firm of the New York Stock Exchange
selected by the Corporation and approved by the Holder. If the Corporation and
the Holder are unable to agree on the selection of a member firm, then the issue
of selection of a member firm shall be submitted to the American Arbitration
Association.
"Group Purchasing Agreement" shall mean the Group Purchasing
Agreement of even date herewith between Premier and the Corporation, as the same
may be amended from time to time in accordance with the terms thereof.
"Holder" shall mean Premier, as the original registered holder
of this Warrant, and any permitted and registered transferee of Premier.
"Horizon Products" shall mean the Products (as defined in the
Group Purchasing Agreement) available for purchase by Premier Organizations
pursuant to the Group Purchasing Agreement.
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"Initial Public Offering" shall mean the first registration of an
offering of shares of Common Stock under the Securities Act which is declared
effective by the Securities and Exchange Commission (other than by a
registration on Form S-4 or S-8 or any successor or similar forms).
"Option" shall mean any option to subscribe for or purchase any
shares of Common Stock or any Convertible Security, other than options issued
under the Stock Plan, the Health Care Alliance Agreement, the Xxxxx Agreement or
as Acquisition Consideration.
"Performance Goal" shall have the meaning set forth in Section 3.1
hereof.
"Performance Goal Statement" shall have the meaning set forth in
Section 3.1 hereof.
"Person" shall mean an individual, corporation, partnership, trust,
unincorporated organization, limited liability company, limited liability
partnership, government body or agency or political subdivision thereof, or
other association, sole proprietorship or entity.
"Premier Organizations" shall mean the limited partners and
affiliates of Premier, their affiliated hospitals and hospital systems and all
other Persons who have been granted the right to effect purchases pursuant to
contracts to which Premier or an affiliate of Premier is a party.
"Rescinded Adjustment" shall have the meaning set forth in Section
6.4.3 hereof.
"Registration Shares" shall mean the Warrant Shares issued pursuant
to any exercise of this Warrant.
"Restricted Securities" shall have the meaning set forth in Section
4.
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar Federal statute then in effect.
"Stock" shall mean, with respect to any Person, any and all shares,
interests or other equivalents (however designated) of, or participations in,
the capital stock of any class of such Person.
"Trading Day" shall mean, with respect to the Common Stock: (i) if
the Common Stock is quoted on the Nasdaq Stock Market's National Market, any
similar system of automated dissemination of quotations of securities prices, or
the National Quotation Bureau Incorporated, each day on which quotations may be
made on such system; or (ii) if the Common Stock is listed or admitted for
trading on any national securities exchange, days on which such national
securities exchange is open for business; or (iii) if shares of the Common Stock
are not quoted on any system or listed or admitted for trading on any securities
exchange, a Business Day.
"Transfer Notice" shall have the meaning set forth in Section 4(b)
hereof.
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"Warrant" shall mean this Warrant and any replacement warrants
issued with respect hereto pursuant to Sections 3.5 or 12 hereof.
"Warrant Shares" shall initially mean up to five hundred thousand
(500,000) shares of Common Stock (and thereafter such number of shares of Common
Stock as shall result from the adjustments specified herein) and shall mean only
those shares of Common Stock which vest in accordance with Section 3 hereof.
2. DURATION. The Holder shall have the right to exercise this Warrant
and to subscribe for and purchase Warrant Shares only during the Effective
Period applicable to the Warrant Shares subscribed for.
3. VESTING; METHOD OF EXERCISE; PAYMENT; ISSUANCE OF NEW WARRANT.
3.1. General. Subject to the acceleration provisions set forth in
Sections 3.2 and 3.3 below and the provisions of Section 6 below, the shares of
Common Stock issuable hereunder shall vest in five (5) increments of 100,000
shares ("Base Shares") on the last Business Day of each Contract Year during the
term of this Warrant based upon the satisfaction by Premier during each Contract
Year and/or on a cumulative basis of the minimum annual performance goals
("Minimum Annual Performance Goals") and the minimum cumulative sales goals
("Minimum Cumulative Sales Goals" and, together with the Minimum Annual
Performance Goals, "Performance Goals"), with respect to sales of Horizon
Products to Premier Organizations, set forth in table 3.1 below:
PERFORMANCE GOALS (TABLE 3.1)
Minimum Annual
Performance Goal Minimum Cumulative
(Dollar Amount of Sales Performance Goal (Dollar
of Horizon Products to Amount of Sales of Number of Warrant
Contract Premier Organizations) Horizon Products to Shares Eligible for
Year Premier Organizations) Vesting
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1 $13,000,000 $ 13,000,000 100,000
2 $20,000,000 $ 33,000,000 100,000
3 $27,000,000 $ 60,000,000 100,000
4 $34,000,000 $ 94,000,000 100,000
5 $38,000,000 $132,000,000 100,000
For the purposes of determining whether a Performance Goal has been met
with respect to any Contract Year, or on a cumulative basis, the Corporation
shall give Premier written notice (a "Performance Goal Statement") within thirty
(30) days after the end of each Contract Year, indicating aggregate sales of
Horizon Products to Premier Organizations (i) for such Contract Year
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and (ii) since the date of issuance of this Warrant. Premier shall have thirty
(30) days after its receipt of any Performance Goal Statement to review the same
and to notify the Corporation in writing if it disputes any amounts reflected on
a Performance Goal Statement. If a dispute notice is given by Premier in a
timely manner, Premier and the Corporation shall attempt to resolve the
amount(s) in dispute as promptly as practicable. In the event Premier and the
Corporation are unable to resolve the dispute within ten (10) days of receipt by
the Corporation of the dispute notice, then Premier and the Corporation shall
submit the disputed items on the Performance Goal Statement to a mutually
acceptable nationally recognized certified public accounting firm. In the event
Premier and the Corporation cannot agree on the selection of a nationally
recognized certified public accounting firm, either party may request the
American Arbitration Association to appoint such a firm, and such appointment
shall be conclusive and binding on the parties. Within ten (10) days of the
selection or appointment of such accounting firm, each party shall submit to the
accounting firm a written statement describing the disputed Performance Goal
Statement item(s) in reasonable detail. The accounting firm shall, within
fifteen (15) days thereafter, resolve the disputed item(s) and such resolution
shall be set forth in writing and shall be accepted as final and binding on the
parties. In resolving the disputed item(s), the accounting firm shall not assign
a value to any item greater than the highest, or less than the lowest, value for
such item(s) claimed by either the Corporation or Premier. Upon request
therefore, the Corporation shall provide to Premier and/or its accountants and
other financial advisors copies of the work papers and related data used by the
Corporation in connection with the preparation of the Performance Goal
Statement.
3.2. Accelerated Vesting. If sales of Horizon Products to
Premier Organizations in a Contract Year exceed the Minimum Annual Performance
Goal and the Minimum Cumulative Performance Goal for such Contract Year, then
the number of Warrant Shares which shall vest with respect to such Contract Year
shall be increased to reflect the accelerated vesting of a portion of the Base
Shares eligible to vest in the subsequent Contract Year in accordance with the
following formula:
Number of $ Amount in $ Amount of
Additional Excess of Annual
Warrant Shares Minimum Performance Goal
Vesting in Current = Annual / for Subsequent x 100,000*
Contract Year Performance Contract Year
from Acceleration Goal for Current
Contract Year
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*Plus the number of additional shares, if any, deemed to be Base Shares
for the subsequent Contract Year in accordance with Section 6.5 hereof.
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To the extent that the vesting of Base Shares with respect to any Contract Year
(an "Accelerated Year") has been accelerated (such accelerated Base Shares being
"Accelerated Shares") to a preceding Contract Year, in determining the number of
Warrant Shares eligible to vest in such Accelerated Year, the number of
Accelerated Shares shall be deducted from the number of Base Shares eligible to
vest.
3.3. Non-Satisfaction of Performance Goals. In the event the
Minimum Annual Performance Goal for any Contract Year is not satisfied, no
Warrant Shares shall vest with respect to such Contract Year unless the Minimum
Cumulative Performance Goal for such Contract Year has been satisfied, in which
event the number of Warrant Shares which vest shall equal (1) the number of Base
Shares eligible to vest in such year (reflecting any necessary reductions for
Accelerated Shares), plus (2) the amount by which the actual cumulative sales
for such Contract Year exceed the Minimum Cumulative Performance Goal for such
Contract Year divided by the Minimum Annual Performance Target for the
subsequent Contract Year.
3.4. Maximum Warrant Shares Issuable. Subject to Section 6
below, in no event shall the number of Warrant Shares issuable under this
Warrant exceed 500,000.
3.5. Exercise Procedure. During the Effective Period, the
Holder hereof may exercise this Warrant from time to time with respect to the
Warrant Shares by delivery to the Corporation at its office at Xxx Xxxxxxx Xxx,
Xxxxxxxxxx, Xxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxxxx, Xx., President (or
such other address or person as the Corporation may specify to the Holder from
time to time), of (i) a written notice of the Holder's election to exercise this
Warrant, substantially in the form of the notice attached to this Warrant as
Exhibit A, duly executed by the Holder or its agent or attorney, (ii) payment of
the Exercise Price by either (x) a check payable to the Corporation in an amount
equal to the Exercise Price multiplied by the number of Warrant Shares being
purchased upon such exercise, (y) the delivery of a notice to the Corporation
that the Holder is exercising the Warrant by authorizing the Corporation to
reduce the Warrant Shares subject to the Warrant by the number of Warrant Shares
having an aggregate Fair Market Value as of the Exercise Date equal to the
Exercise Price multiplied by the number of Warrant Shares being purchased upon
such exercise or (z) the delivery to the Corporation of that number of shares of
Common Stock having an aggregate Fair Market Value as of the Exercise Date equal
to the Exercise Price multiplied by the number of Warrant Shares being purchased
upon such exercise and (iii) this Warrant. In the event of any exercise of the
rights represented by this Warrant, (i) certificates for the shares of Common
Stock so purchased shall be dated the date of such exercise and delivered to the
Holder hereof within a reasonable time, not exceeding twenty (20) Business Days,
after such exercise, and the Holder hereof shall be deemed for all purposes to
be the Holder of the Common Stock so purchased as of the date of such exercise,
and (ii) unless this Warrant has expired, a new Warrant representing the number
of shares of Common Stock, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the Holder hereof within such
time. Any such replacement warrant shall be dated the date hereof and shall be
identical with this Warrant except as to the number of shares of Common Stock
issuable pursuant to the exercise thereof.
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4. RESTRICTED SECURITIES. (a) This Warrant and the Warrant Shares
issuable hereunder (the "Restricted Securities") have not been registered under
the Securities Act or any Blue Sky Laws and shall not be transferred, sold,
pledged, assigned or otherwise disposed of except pursuant to an effective
registration statement under the Securities Act or pursuant to a transaction
that is exempt from the registration requirements of the Securities Act and in
accordance with paragraph (b) below. Certificates representing Warrant Shares
shall bear substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY APPLICABLE STATE SECURITIES LAWS ("BLUE SKY LAWS") AND MAY NOT BE
TRANSFERRED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF (A
"TRANSFER") IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN OPINION FROM COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION THAT SUCH TRANSFER IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE BLUE
SKY LAWS
(b) Prior to any Transfer, or attempted Transfer of Restricted
Securities, other than a Transfer or attempted Transfer pursuant to (x) a
transaction covered by an effective registration statement under the Securities
Act or (y) Rule 144 under the Securities Act, the Holder thereof shall give ten
(10) Business Days prior written notice (a "Transfer Notice") to the Corporation
of such Holder's intention to effect such Transfer, describing the manner and
circumstances of the proposed Transfer, accompanied by an acknowledgment of the
transferee of the terms and conditions hereof, and provide to the Corporation a
written opinion of counsel reasonably satisfactory to the Corporation and
addressed to the Corporation to the effect that the proposed Transfer of the
Restricted Securities may be effected without registration under the Securities
Act and applicable Blue Sky Laws. After receipt of the Transfer Notice and such
opinion of counsel, the Corporation shall, within five (5) Business Days
thereof, notify the Holder of the Restricted Securities in writing as to whether
the Holder is in compliance with the transfer provisions hereof and, if the
Corporation finds such compliance, such Holder shall thereupon be entitled to
Transfer the Restricted Securities, in accordance with the terms of the Transfer
Notice. The Holder of the Restricted Securities giving the Transfer Notice shall
not be entitled to transfer any of the Restricted Securities until receipt of
notice from the Corporation under this Section 4(b); provided, however, that the
Corporation shall be deemed to have delivered notice to the Holder approving any
Transfer described in a Transfer Notice to which the Corporation has not
otherwise responded within the five (5) Business Day period described above.
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5. STOCK FULLY PAID; RESERVATION OF SHARES. The Corporation covenants
and agrees that all shares of Common Stock which may be issued upon the exercise
of this Warrant will upon issuance be fully paid and non-assessable and free
from all taxes, liens and charges with respect to issuance and free of
preemptive rights. The Corporation further covenants and agrees that, during the
Effective Period, the Corporation will at all times have authorized and reserved
for the purpose of the issue upon exercise of this Warrant a sufficient number
of shares of Common Stock to provide for the exercise of the rights represented
by this Warrant.
6. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number and
kind of securities issuable upon the exercise of this Warrant and the amount of
the Exercise Price shall be subject to adjustment from time to time upon the
happening of the following events during the Effective Period:
6.1. Consolidation, Merger and Other Sales Events. In the
event of any consolidation of the Corporation with, or a merger of the
Corporation into, any other Person, or a sale or lease or other transfer of all
or substantially all of the assets of the Corporation, or a distribution by the
Corporation of its assets with respect to the Common Stock as a liquidating or
partial liquidating dividend (a "Sale Event"), the Holder shall have the right
thereafter to exercise this Warrant and acquire the kind and amount of shares of
stock or other securities and property to which the Holder would have been
entitled if the Holder had purchased Common Stock of the Corporation by the
exercise of this Warrant immediately prior to any such Sale Event with respect
to all vested shares of Common Stock issuable hereunder, and the Corporation
shall make lawful provision therefor as part of such event. The Corporation
shall not effect any such Sale Event involving another Person (other than a
liquidation event) unless, upon or prior to the consummation thereof, the
successor Person or the Person to which the property of the Corporation has been
consolidated, merged, sold, leased or otherwise transferred, shall assume by
written instrument the obligations of the Corporation under the Group Purchasing
Agreement and this Warrant (as to unvested shares of Common Stock issuable
hereunder) and the obligation of the Corporation to deliver to the Holder such
shares of stock, securities, cash or property (or appropriate substitute stock,
securities, cash or property) as in accordance with the foregoing provisions the
Holder shall be entitled to receive or to earn.
6.2. Subdivision or Combination of Shares. If, at any time
while this Warrant is outstanding following the completion of an Initial Public
Offering , the Corporation shall subdivide or combine any class or classes of
its Common Stock, the Exercise Price shall be adjusted, as of the date the
Corporation shall take a record of the holders of such class or classes of
Common Stock for the purpose of such subdivision or combination (or, if no such
record is taken, as of the date of such subdivision or combination), to that
price determined by multiplying the Exercise Price in effect immediately prior
to the record date (or, if no such record is taken, then immediately prior to
such subdivision or combination), by a fraction, the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to such
subdivision or combination, and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such subdivision
or combination (plus in
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the event that the Corporation paid cash for fractional shares, the number of
additional shares which would have been outstanding had the Corporation issued
fractional shares in connection therewith). Upon each adjustment in the Exercise
Price pursuant to this Section 6.2, the number of shares of Common Stock
purchasable hereunder shall be adjusted to the product obtained by multiplying
the number of such shares purchasable immediately prior to such adjustment in
the Exercise Price by a fraction, the numerator of which shall be the Exercise
Price immediately prior to such adjustment and the denominator of which shall be
the Exercise Price immediately thereafter.
6.3. Issuance of Additional Shares of Common Stock; Stock
Dividends. If, at any time while this Warrant is outstanding following the
completion of an Initial Public Offering, the Corporation shall issue any
Additional Shares, including shares issued as a Common Stock distribution or
dividend (other than as provided in the foregoing Sections 6.1 and 6.2), at a
price per share less than Fair Market Value of the Common Stock as of the date
immediately prior to such issuance, then the number of shares of Common Stock
purchasable upon exercise of this Warrant shall be adjusted by multiplying the
number of shares of Common Stock subject to purchase upon exercise of this
Warrant by a fraction, the numerator of which shall be the total number of
shares of Common Stock outstanding (including shares issuable upon exercise or
conversion of outstanding Convertible Securities) immediately prior to such
issuance of Additional Shares of Common Stock plus the number of Additional
Shares of Common Stock so issued, and the denominator of which shall be an
amount equal to the sum of (a) the number of shares of Common Stock outstanding
(including shares issuable upon exercise or conversion of outstanding
Convertible Securities) immediately prior to such issuance of Additional Shares
of Common Stock plus (b) the number of shares of Common Stock which the
aggregate consideration, if any, received by the Corporation (determined as
provided in Section 6.7 hereof) for such issuance of Additional Shares of Common
Stock would buy at the Fair Market Value thereof as of the date immediately
prior to such issuance. In the event of any such adjustment, the Exercise Price
shall be adjusted to a number determined by dividing the Exercise Price
immediately prior to such issuance of Additional Shares of Common Stock by the
fraction used for purposes of the aforementioned adjustment. The provisions of
this Section 6.3, including by operation of Section 6.4 below, shall not operate
to increase the Exercise Price or to reduce the number of shares of Common Stock
subject to purchase upon exercise of this Warrant.
6.4. Issuance of Options or Convertible Securities.
6.4.1. If the Corporation shall, at any time while
this Warrant is outstanding, issue any Options, whether or not
such Options or the rights to convert or exchange any
Convertible Securities issuable upon exercise of such Options
are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such Options or
upon conversion or exchange of Convertible Securities issuable
upon exercise of such Options (determined by dividing (i) the
aggregate amount, if any, received or receivable by the
Corporation as consideration for the granting of such Options,
plus the
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minimum aggregate amount of additional consideration payable
to the Corporation upon the exercise of all such Options,
plus, in the case of Options to acquire Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion or exchange
thereof, by (ii) the maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than
the Fair Market Value per share of outstanding Common Stock on
the date immediately prior to the issuance of such Options or
immediately prior to the date of announcement thereof
(whichever is less), then for purposes of Section 6.3 hereof,
the maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the
maximum amount of such Convertible Securities issuable upon
the exercise of such Options shall be deemed to have been
issued as of the date of granting of such Options and
thereafter shall be deemed to be outstanding and the
Corporation shall be deemed to have received as consideration
such price per share, determined as provided above, therefor.
Except as otherwise provided in Section 6.4.3 hereof, no
additional adjustment of the number of shares of Common Stock
purchasable upon the exercise of this Warrant or of the
Exercise Price shall be made upon the actual exercise of such
Options or upon conversion or exchange of such Convertible
Securities.
6.4.2. If the Corporation shall, at any time while
this Warrant is outstanding, issue any Convertible Securities,
whether or not the rights to exchange or convert any such
Convertible Securities are immediately exercisable, and the
price per share for which Common Stock is issuable upon such
conversion or exchange (determined by dividing (i) the
aggregate amount received or receivable by the Corporation as
consideration for such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any,
payable to the Corporation upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common
Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Fair Market
Value per share of outstanding Common Stock of the Corporation
on the date immediately prior to such issuance or on the date
immediately prior to the announcement thereof (whichever is
less), then for purpose of Section 6.3 hereof, the maximum
number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to
have been issued as of the date immediately prior to the
issuance of such Convertible Securities and thereafter shall
be deemed to be outstanding and the Corporation shall be
deemed to have received as consideration such price per share,
determined as provided above, therefor. Except as otherwise
provided in Section 6.4.3, no additional adjustment of the
number of shares of Common Stock purchasable upon exercise of
this Warrant or of the Exercise Price shall be made upon the
actual conversion or exchange of such Convertible Securities.
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6.4.3. If the purchase price provided for in any
Option referred to in Section 6.4.1 hereof, the additional
consideration, if any, payable upon the conversion or exchange
of any Convertible Securities referred to in Sections 6.4.1 or
6.4.2 hereof, or the ratio at which any Convertible Securities
referred to in Sections 6.4.1 or 6.4.2 hereof are convertible
into or exchangeable for Common Stock shall change at any time
(other than under or by reason of provisions designed to
protect against, and having the effect of protecting against,
dilution upon an event which results in a related adjustment
pursuant to this Section 6), the number of shares of Common
Stock purchasable upon exercise of this Warrant and the
Exercise Price then in effect shall forthwith be readjusted
(effective only with respect to any exercise of this Warrant
after such readjustment) to the number of shares of Common
Stock purchasable upon exercise of this Warrant and the
Exercise Price which would then be in effect had the
adjustment made upon the issuance of such Options or
Convertible Securities been made based upon such changed
purchase price, additional consideration or conversion ratio,
as the case may be; provided, however, that such readjustment
shall give effect to such change only with respect to such
Options and Convertible Securities as then remain outstanding.
If, at any time after any adjustment or readjustment of the
number of shares of Common Stock purchasable upon exercise of
this Warrant or the Exercise Price shall have been made
pursuant to this Section 6.4.3, the right of conversion,
exercise or exchange of such Option or Convertible Securities
shall expire or terminate and the right of conversion,
exercise or exchange in respect of all or a portion of such
Option or Convertible Securities shall not have been
exercised, such previous adjustment shall be rescinded and
annulled. Thereupon, a recomputation shall be made of the
effect of such adjustment (a "Rescinded Adjustment") on the
number of shares of Common Stock, if any, theretofore actually
issued pursuant to the exercise of this Warrant during the
period from the issuance of the relevant Option or Convertible
Securities and the rescission of the Rescinded Adjustment and
the consideration actually received by the Corporation
therefor, and a new adjustment of the number of shares of
Common Stock purchasable upon exercise of this Warrant and the
Exercise Price shall be made, which new adjustment shall
supersede (effective only with respect to any exercise of this
Warrant after such readjustment) the previous adjustment so
rescinded and annulled.
6.4.4. If the Corporation shall after the date of
issuance of this Warrant pay a dividend or make any other
distribution upon the Common Stock of the Corporation payable
in Common Stock, Options or Convertible Securities, then, for
purposes of Section 6.3 and this Section 6.4, such Common
Stock, Options or Convertible Securities, as the case may be,
shall be deemed to have been issued or sold without
consideration.
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6.5. Increase in Number of Shares Issuable. The aggregate
amount of any increase in the number of shares of Common Stock issuable
hereunder shall be allocated as evenly as possible among the number of Base
Shares in each Contract Year of the term remaining hereunder at the time of such
adjustment.
6.6. Subscription Rights. If at any time the Corporation
grants its shareholders any right to subscribe pro rata for additional
securities of the Corporation, whether Common Stock, Options, Convertible
Securities, or other classifications, or for any other securities or interests
that the Holder would have been entitled to subscribe for if, immediately prior
to such grant, the Holder had exercised this Warrant, and if such action by the
Corporation does not result in a readjustment of the number of Warrant Shares or
in the Warrant Price under any other subsection of this Section 6, then the
Corporation shall also grant to the Holder the same subscription rights that the
Holder would be entitled to if the Holder had exercised this Warrant in full
(without regard to vesting) immediately prior to such grant.
6.7. Computation of Consideration. The consideration received
by the Corporation shall be deemed to be the following: (i) to the extent that
any Additional Shares, Options or Convertible Securities shall be issued for
cash consideration, the consideration received by the Corporation therefor; (ii)
if such Additional Shares, Options or Convertible Securities are offered by the
Corporation for subscription, the subscription price; (iii) if such Additional
Shares, Options or Convertible Securities are sold to underwriters or dealers
for public offering without a subscription offering, the initial public offering
price, without deduction of any compensation, discounts, commissions, or
expenses paid or incurred by the Corporation for or in connection with the
underwriting thereof or otherwise in connection with the issue thereof. In case
of the issuance at any time of any Additional Shares, Options or Convertible
Securities in payment or satisfaction of any dividend upon any class of Stock
other than Common Stock, the Corporation shall be deemed to have received for
such Additional Shares, Options or Convertible Securities a consideration equal
to the amount of such dividend so paid or satisfied. In any case in which the
consideration to be received or paid shall be other than cash, the Board of
Directors of the Corporation shall determine in good faith the fair market value
of such consideration and promptly notify the Holder of its determination of the
fair market value of such consideration prior to payment or accepting receipt
thereof. If, within thirty (30) days after receipt of said notice, the Holder
shall notify the Board of Directors of the Corporation in writing of its
objection to such determination, a determination of fair market value for such
consideration shall be made by an appraiser selected by the Corporation and
approved by the holder. If the Corporation and the Holder are unable to agree on
the selection of an appraiser, the issue of selection of an appraiser shall be
submitted to the American Arbitration Association.
6.8. Treasury Shares. In making any adjustment in the Exercise
Price provided in this Section 6, the number of shares of Common Stock at any
time outstanding shall not include any shares thereof then directly or
indirectly owned or held by or for the account of the Corporation or any of its
Subsidiaries.
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6.9. Other Action Affecting Common Stock. In case after the
date hereof the Corporation shall take any action affecting its Common Stock,
other than an action described in any of the foregoing Sections 6.1 through 6.7,
inclusive, and the failure to make any adjustment would not fairly protect the
purchase rights represented by this Warrant in accordance with the intent and
principles of this Section 6, then the Warrant Price shall be adjusted in such
manner as the Board of Directors of the Corporation shall in good faith
determine to be equitable in the circumstances.
7. NOTICE OF CERTAIN EVENTS, ADJUSTMENTS
7.1. Prior Notice of Certain Events. The Corporation shall
deliver (by first class mail postage prepaid) to the Holder of this Warrant
written notice at least ten (10) days prior to the occurrence of the following
events:
(i) the date on which a record is to be taken for the
purpose of any dividend, subdivision or combination
of shares, or, if a record is not to be taken, the
date as of which the shareholders of Common Stock of
record to be entitled to such dividend, subdivision
or combination are to be determined;
(ii) the date on which a record is to be taken for the
purpose of determining shareholders of Common Stock
entitled to vote on any reclassification,
reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up,
purchase, retirement or redemption; and
(iii) the date, if any, as of which holders of record of
the Common Stock will be entitled to exchange their
Common Stock for securities or other property
deliverable upon such reclassification,
reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up,
purchase, retirement or redemption.
7.2. Notice of Adjustments. If any circumstance or adjustment
described in Section 6 hereof occurs, then within five (5) days after the
occurrence of such circumstance or such adjustment, the Corporation shall
deliver (by first class mail postage prepaid) to the holder of this Warrant
notice thereof, and shall state in reasonable detail (i) the event requiring any
adjustment to either the Exercise Price or the number of shares of Common Stock
purchasable upon exercise of this Warrant, (ii) the amount of the adjustment,
(iii) the method by which such adjustment was calculated (including a
description hereunder), and (iv) the Exercise Price and number of shares of
Common Stock purchasable hereunder after giving effect to such adjustment.
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8. WARRANT HOLDER NOT SHAREHOLDER. Subject to Section 6 hereof, until
exercised, this Warrant shall not entitle the Holder to any voting rights or
other rights of a shareholder of the Corporation.
9. REGISTRATION RIGHTS
9.1. Incidental Registration. If the Corporation, at any time
prior to April 1, 2004, proposes to register any Common Stock under the
Securities Act for sale (except with respect to an Initial Public Offering and
registration statements on Forms S-4 or S-8 or any successor or similar forms),
each such time it will give written notice to Premier of its intention so to do.
Upon the written request of Premier, given within ten (10) days after receipt of
any such notice, to register any of Premier's Registration Shares, the
Corporation will use its reasonable efforts to cause the Registration Shares as
to which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be filed by
the Corporation. The number of Registration Shares to be included in a firm
commitment underwritten public offering pursuant to this Section 9.1 may be
reduced if and to the extent that the managing underwriters shall be of the
opinion that such inclusion would adversely affect the marketing of the
securities to be sold thereunder. Premier's Registration Shares are subject to
the priority of registration rights with respect to Common Stock granted to any
other party as of the date of issuance of this Warrant which are superior to the
rights of Premier under this Agreement or otherwise conflict with the rights of
Premier under this Agreement. Premier's Registration Shares shall not be subject
to any priority of registration rights with respect to Common Stock granted or
issued to any other party following the date hereof, provided that registration
rights may be granted on a pari passu basis, in which event Premier's
Registration Shares shall participate in any registration on a pro rata basis
with any other shares of Common Stock entitled to such registration rights.
Notwithstanding anything to the contrary contained in this Section 9.1, in the
event that there is a firm commitment underwritten public offering of Common
Stock pursuant to which Premier has incidental registration rights under this
Section 9.1 and (i) Premier does not elect to sell Registration Shares in
connection with such underwritten public offering, and (ii) the directors,
officers and substantially all of the holders of unregistered shares of Common
Stock representing 5% or more of the outstanding Common Stock of the Corporation
("Other Holders") have agreed to refrain from selling any shares of Common Stock
then owned by them during the period of distribution of the Corporation's Common
Stock by the underwriters for any such underwritten public offering and for such
period of time thereafter as such underwriters shall reasonably determine with
respect to both Premier and the Other Holders, then Premier shall refrain from
selling any Registration Shares then owned by Premier during the period of
distribution of the Corporation's Common Stock by such underwriters and for such
period of time thereafter as such underwriters shall reasonably determine with
respect to both Premier and the Other Holders.
9.2. Registration Procedures. If and whenever the Corporation
is required by the provisions of Section 9.1 hereof to effect the registration
of any of the Registration Shares under the Securities Act, the Corporation
shall, as expeditiously as possible:
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(a) prepare and file with the Commission a registration
statement on the applicable form with respect to such
securities (such registration statement to include
all information which Premier shall reasonably
request) and use its reasonable efforts to cause such
registration statement to become and remain effective
for the period specified in Section 9.2(f) below;
provided, however, that the Corporation will (i)
furnish to counsel selected by Premier copies of the
registration statement and copies of all documents
proposed to be filed therewith, and the Corporation
shall not file the registration statement or any such
documents to which such counsel shall have reasonably
objected on the grounds that such registration
statement and documents do not comply in all material
respects with the requirements of the Securities Act
or of the rules or regulations thereunder, (ii) permit
counsel to Premier to conduct such legal due
diligence as may reasonably be required to satisfy
their due diligence obligation under the Securities
Act and (iii) notify Premier of (x) any request by
the Commission to amend such registration statement,
or (y) any stop order issued or threatened by the
Commission, and take all reasonable actions required
to prevent the entry of such stop order to promptly
remove if it entered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be
necessary to keep such registration statement effective
for the distribution period specified in Section 9.2(f)
below and to comply with the provisions of the Securities
Act with respect to the disposition of all Registration
Shares covered by such registration statement;
(c) furnish to Premier and to each underwriter such number of
copies of the registration statement and the prospectus
included therein (including each preliminary prospectus)
as such persons may reasonably request in order to
facilitate the public sale or other disposition of the
Registration Shares covered by such registration
statement;
(d) use its reasonable efforts to register or qualify the
Registration Shares covered by such registration statement
under the Blue Sky Laws of such jurisdictions as the
managing underwriters shall reasonably request;
(e) use its reasonable efforts to cause all such Registration
Shares to be listed on each securities exchange and
quotation system on which similar securities issued
by the Corporation are then listed and, if such
securities are not then listed on the New York Stock
Exchange, American Stock Exchange or the Nasdaq
National Market, on such exchange or quotation system
as may be reasonably requested by Premier, provided
that the Corporation then meets or
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is reasonably capable of meeting the eligibility
requirements for such exchange or system, and to
enter into such customary agreements as may be
required in furtherance thereof, including, without
limitation, listing applications and indemnification
agreements in customary form;
(f) immediately notify Premier and each underwriter, at any
time when a prospectus relating to Registration Shares is
required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus
contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in the light of the circumstances then
existing;
(g) cause members of its management to participate in a road
show with respect to any firm commitment underwritten
public offering in which Registration Shares are included;
and
(h) the period of distribution of Registration Shares in a
firm commitment underwritten public offering pursuant to
Section 9.1 shall be deemed to extend until each
underwriter has completed the distribution of all
securities purchased by it.
9.3. Premier's Cooperation. In connection with each registration
hereunder, Premier will furnish to the Corporation in writing such information
with respect to itself and the proposed distribution by Premier as shall be
reasonably necessary in order to assure compliance with federal and applicable
Blue Sky Laws.
9.4. Underwriting Agreement. In connection with each
registration pursuant to Section 9.1 hereof covering a firm commitment
underwritten public offering, the Corporation agrees to enter into a written
agreement with the managing underwriters selected by the Corporation in such
form and containing such provisions as are customary in the securities business
for such an arrangement between major underwriters and companies of the
Corporation's size and investment stature; provided, however, that such
agreement shall not contain any such provision applicable to the Corporation
which is inconsistent with the provisions hereof; provided, further, however,
that the time and place of the closing under said agreement shall be as
reasonably agreed upon by the Corporation and such managing underwriters.
9.5. Expenses. All expenses incurred by the Corporation and
Premier in connection with a registration contemplated by Section 9.1 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Corporation, fees of the National Association of Securities Dealers,
Inc. and fees of transfer agents and registrars, but excluding any Selling
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Expenses (as hereinafter defined), are herein called "Registration Expenses."
All underwriting discounts, selling commissions, taxes, fees and disbursements
of counsel for Premier and brokerage fees and expenses applicable to the sale of
Registration Shares are herein called "Selling Expenses." All Registration
Expenses in connection with each registration statement filed pursuant to
Section 9.1 hereof shall be borne by the Corporation. All Selling Expenses in
connection with each registration statement filed pursuant to Section 9.1 hereof
shall be borne by Premier.
9.6. Indemnification. In the event of a registration of any of
the Registration Shares under the Securities Act pursuant to Section 9.1 hereof,
the Corporation will indemnify and hold harmless Premier and each other person,
if any, who controls Premier within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which Premier
or such controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registration Shares were registered under the Securities Act
pursuant to Section 9.1 hereof, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse Premier and each such controlling person for any
legal expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Corporation will not be liable and will not reimburse Premier or any
such controlling person in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by Premier or any controlling person of
Premier or underwriter of Registration Shares in writing specifically for use in
such registration statement or preliminary or final prospectus (or amendment or
supplement thereto).
In the event of a registration of any of the Registration Shares under
the Securities Act pursuant to Section 9.1 hereof, Premier will indemnify and
hold harmless the Corporation and each person, if any, who controls the
Corporation within the meaning of the Securities Act, each officer of the
Corporation who signs the registration statement, each director of the
Corporation, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Corporation or such officer or
director or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registration Shares were registered
under the Securities Act pursuant to Section 9.1 hereof, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a
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material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Corporation and each such
officer, director, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that Premier will be liable hereunder in any such case if and only to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to Premier,
as such, furnished in writing to the Corporation by Premier specifically for use
in such registration statement or prospectus; provided, further, however, that
the liability of Premier hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of shares sold by Premier under such registration
statement bears to the total public offering price of all securities sold
thereunder, but not to exceed the proceeds received by Premier from the sale of
Registration Shares covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to any indemnified party except to the extent that the
indemnifying party demonstrates that it has been irreparably prejudiced thereby.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9.6 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded based upon advice of
counsel that there may be defenses available to it which are different from or
additional to those available to the indemnifying party or if the interests of
the indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, then the indemnified party shall have the right to
select a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and fees
of such separate counsel and other reasonable expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, in any such action, any indemnified
party shall have the right to retain his or its own counsel, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood
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that the indemnifying party shall not, in connection with any action or related
actions in the same jurisdiction, be liable for the fees and disbursements of
more than one separate firm qualified in such jurisdiction to act as counsel for
the indemnified party. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of this
Section 9.6 is unavailable or insufficient to hold harmless an indemnified party
under such paragraphs in respect of any losses, claims, damages or liabilities
or actions in respect thereof referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party, as a result of such losses, claims,
damages, liabilities or actions in such proportion as appropriate to reflect the
relative fault of the Corporation, on the one hand, and Premier, on the other,
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give the notice required under such
paragraphs. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the Corporation, on the one hand, or Premier,
on the other hand, and to the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Corporation and Premier agree that it would not be just and equitable if
contributions pursuant to this paragraph were determined by pro rata allocation
or by any other method of allocation which did not take account of the equitable
considerations referred to above in this paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or actions in respect thereof, referred to above in this paragraph, shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph, Premier shall not be
required to contribute any amount in excess of the amount, if any, by which the
total price at which the Registration Shares sold by Premier was offered to the
public exceeds the amount of any damages which it has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation.
10. AMENDMENT AND WAIVER. Any term, covenant, agreement or conditions
in this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Corporation and the Holder.
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11. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
12. REPLACEMENT. On receipt of evidence reasonably satisfactory to the
Corporation of the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, of an indemnity agreement or bond
reasonably satisfactory in form and amount of the Corporation or, in the case of
mutilation, on surrender and cancellation of this Warrant, the Corporation, at
its expense, will execute and deliver in lieu of this Warrants a new warrant of
like tenor.
13. SPECIFIC PERFORMANCE. The Holder shall have the right to specific
performance by the Corporation of the provisions of this Warrant. The
Corporation hereby irrevocably waives, to the extent that it may do so under
applicable law, any defense based on the adequacy of a remedy at law which may
be asserted as a bar to the remedy of specific performance in any action brought
against the Corporation for specific performance of this Warrant by the Holder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Corporation has executed and delivered this
Warrant as of the date first set forth above.
HORIZON MEDICAL PRODUCTS, INC., a
Georgia corporation
By: /s/ Xxxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxxx X. Xxxx
Title: Chairman and CEO
Attest:
-------------------------
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EXHIBIT A
EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
CASH EXERCISE METHOD
The undersigned registered owner of the attached Warrant irrevocably
exercises, by the cash exercise method in accordance with Section 3.5(ii)(x) of
the Warrant, the attached Warrant for the purchase of ___ shares of Common
Stock, $0.001 par value, of Horizon Medical Products, Inc. and herewith makes
payment therefor, to the order of the Corporation in the amount of $________ as
of the Exercise Price in accordance with the terms set forth in Section
3.5(ii)(x).
NON-CASH EXERCISE METHOD
The undersigned registered owner of the attached Warrant irrevocably
exercises, by the non-cash exercise method in accordance with Section 3.5(ii)(y)
of the Warrant, the attached Warrant for the purchase of _____ shares of Common
Stock,$0.001 par value, of Horizon Medical Products, Inc. in accordance with
the terms set forth in Section 3.5(ii)(y); or
The undersigned registered owner of the attached Warrant irrevocably
exercises, by the non-cash exercise method in accordance with Section 3.5(ii)(z)
of the Warrant, the attached Warrant for the purchase of _______ shares of
Common Stock, $0.001 par value, of Horizon Medical Products, Inc. in accordance
with the terms set forth in Section 3.5(ii)(z).
ISSUANCE INSTRUCTIONS
The undersigned requests that a certificate for such Common Stock be
registered in the name of _____ whose address is ____ and that such certificate
be delivered to __________________ whose address is ____. If such number of
shares of Common Stock is less than all of the shares of Common Stock which
may be purchased upon the exercise of the Warrant, the undersigned hereby
requests that a new Warrant representing the remaining balance of this Warrant
be registered in the name of ____ whose address is _______and that such Warrant
be delivered to ________ whose address is ________.
A-1
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Name of Registered Owner
---------------------------------
Signature of Registered Owner
---------------------------------
---------------------------------
Address
---------------------------------
Federal ID Number
A-2
