Exhibit 4.1
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE ON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE
STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
OTHERWISE PERMITTED UNDER ANY CONTRACTUAL RESTRICTIONS ON RESALE APPLICABLE
TO THESE SECURITIES IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE SECURITIES REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN RESTRICTIONS ON
RESALE AND ON VOTING AND THE HOLDERS HEREOF MAY BE BOUND BY CERTAIN
RESTRICTIONS ON ACQUISITION OF THE ISSUER'S CAPITAL STOCK PURSUANT TO A
COMMON STOCK AND WARRANT PURCHASE AGREEMENT BETWEEN THE ORIGINAL HOLDERS OF
THESE SECURITES AND THE ISSUER, A COPY OF WHICH MAY BE OBTAINED FROM THE
ISSUER.
WARRANT TO PURCHASE COMMON STOCK
OF
▇▇▇▇▇▇▇▇.▇▇▇, INC.
No. V-1 Void after July 26, 2010
THIS CERTIFIES THAT VHA Inc., a Delaware corporation ("VHA" or
the "HOLDER"), or its permitted assigns is entitled to purchase under this
Warrant up to 30,845,020 shares (the "SHARES") of common stock, par value
$0.001 per share ("COMMON STOCK"), of ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware
corporation ("NEOFORMA" or the "COMPANY") at a per share price of $0.01
(the "EXERCISE PRICE") subject to the provisions and upon the terms and
conditions hereinafter set forth.
This Warrant is issued this 26th day of July, 2000 (the "ISSUE
DATE") pursuant to that certain Amended and Restated Common Stock and
Warrant Agreement amended and restated as of May 24, 2000 (the "STOCK AND
WARRANT AGREEMENT"), by and between the Company and the Holder.
1. Vesting and Term.
1.1 Vesting. Upon issuance, this Warrant shall not be
exercisable or vested with respect to any Shares. A total of 23,133,764
Shares shall be eligible for vesting in accordance with Section 1.1.2 below
("TRANCHE A SHARES") and a total of 7,711,256 Shares shall be eligible for
vesting in accordance with Section 1.1.3 below ("TRANCHE B SHARES"). Shares
with respect to which this Warrant becomes vested and exercisable are
referred to as "VESTED SHARES."
1.1.1. Definitions.
"CUMULATIVE SIGNED PURCHASING VOLUME" means, as of any
Determination Date, the sum of (x) the cumulative dollar volume of
purchases by Healthcare Organizations that are members or patrons of VHA
(calculated, for each such Healthcare Organization, by multiplying (A) the
amount of Novation LLC contract purchases (as reported in the SRIS system
maintained for Novation LLC's benefit) by such Healthcare Organization
during the most recent complete calendar year ending prior to the first
Determination Date on or prior to which such Healthcare Organization
Signed-Up with Neoforma by (B) 2.4 (the "BASE AMOUNT")) and that Signed-Up
with Neoforma on or prior to such Determination Date, plus (y) 80.4% of the
cumulative dollar volume of purchases by Healthcare Organizations that are
members or patrons of Healthcare Purchasing Partners International, LLC
(using, for each such Healthcare Organization, its Base Amount) and that
Signed-Up with Neoforma on or prior to such Determination Date, provided
that (i) for purposes of computing the first Base Amount for each
Healthcare Organization, such Base Amount will be increased by 3.625% and
(ii) in addition to the increase in the Base Amount for any Healthcare
Organization pursuant to the preceding clause (i), the Base Amount for each
Healthcare Organization shall also be increased annually by 7.25% when
computing Cumulative Signed Purchasing Volume for Determination Dates which
are subsequent to the first Determination Date on or prior to which a
particular Healthcare Organization Signed-Up with Neoforma. For purposes of
clarity, the parties agree that once a Healthcare Organization is deemed to
have "Signed-Up" with Neoforma, its Cumulative Signed Purchasing Volume, as
computed and increased under the formula set forth in this definition,
shall be included in the computation of Cumulative Signed Purchasing Volume
for all Determination Dates arising on or after the date such Healthcare
Organization Signed-Up with Neoforma, whether or not such Healthcare
Organization continues to do business with Neoforma.
"HEALTHCARE ORGANIZATION" shall mean any facility providing
health care services.
"PREFERRED PROVIDER" means the Healthcare Organization agrees
to use the Neoforma internet-based system for at least 50% of its
internet-based purchases of Novation contracted products.
"SIGNED-UP" means, with respect to any Healthcare Organization,
that such Healthcare Organization and Neoforma have entered into a written
agreement, arrangement or understanding for Neoforma to be the Preferred
Provider of an Internet-based system for the acquisition of Novation
contracted products by such Healthcare Organization.
1.1.2. Vesting Requirements for Tranche A Shares.
1. 5,783,441 Tranche A Shares shall become Vested Shares on
June 30, 2001 (the "FIRST DETERMINATION DATE") if Cumulative Signed
Purchasing Volume as of the First Determination Date is at least $2,328
million (the "FIRST TRANCHE A TARGET AMOUNT").
2. 5,783,441 Tranche A Shares shall become Vested Shares on
June 30, 2002 (the "SECOND DETERMINATION DATE") if Cumulative Signed
Purchasing Volume as of the Second Determination Date is at least $6,233
million (the "SECOND TRANCHE A TARGET AMOUNT").
3. 5,783,441 Tranche A Shares shall become Vested Shares on
June 30, 2003 (the "THIRD DETERMINATION DATE") if Cumulative Signed
Purchasing Volume as of the Third Determination Date is at least $9,629
million (the "THIRD TRANCHE A TARGET Amount").
4. 5,783,441 Tranche A Shares shall become Vested Shares on
June 30, 2004 (the "FOURTH DETERMINATION DATE") if Cumulative Signed
Purchasing Volume as of the Fourth Determination Date is at least $13,253
million (the "FOURTH TRANCHE A TARGET AMOUNT").
5. In the event the Tranche A Target Amount of Cumulative
Signed Purchasing Volume specified in any of Section 1.1.2 paragraphs 1, 2,
3 or 4 above is not achieved as of the particular Determination Date
specified in such paragraph (such shortfall below a particular Tranche A
Target Amount being referred to as a "TRANCHE A SHORTFALL AMOUNT"), then
the number of Tranche A Shares which shall become Vested Shares at a
particular Determination Date pursuant to Section 1.1.2 paragraphs 1, 2, 3
or 4 shall equal the product of 5,783,441 and a fraction, the numerator of
which is the Cumulative Signed Purchasing Volume as of the Determination
Date in question and the denominator of which is the Tranche A Target
Amount for the Determination Date in question. By way of example, using the
formula in the preceding sentence, if as of June 30, 2001, Cumulative
Signed Purchasing Volume is $2,000 million, 4,968,592 Tranche A Shares
shall become Vested Shares:
5,783,441 x 2,000 = 4,968,592 Vested Shares
------
2,328
If there is a Tranche A Shortfall Amount relating to a
particular Determination Date, then the number of Tranche A Shares which
will not vest due to such shortfall shall equal 5,783,441 minus the number
of Tranche A Shares which became Vested Shares on such Determination Date
(the "TRANCHE A SHORTFALL Shares"). Using the facts set forth in the
preceding example, if as of June 30, 2001, Cumulative Signed Purchasing
Volume is $2,000 million, and 4,968,592 Tranche A Shares become Vested
Shares, then 814,849 Tranche A Shares shall be deemed Tranche A Shortfall
Shares as of the First Determination Date:
5,783,441 - 4,968,592 = 814,849 Tranche A Shortfall Shares
A Determination Date as of which there is a Tranche A Shortfall
Amount is referred to as a "TRANCHE A SHORTFALL DETERMINATION DATE". A
Determination Date which occurs immediately after a Tranche A Shortfall
Determination Date is referred to as a "TRANCHE A CATCH UP DETERMINATION
DATE". If as of a Tranche A Catch Up Determination Date, the applicable
Tranche A Target Amount for such Tranche A Catch Up Determination Date is
met or exceeded, then the Tranche A Shortfall Shares which did not vest on
such Tranche A Shortfall Determination Date shall immediately become Vested
Shares on the Tranche A Catch Up Determination Date, it being agreed that
if the Tranche A Target Amount relating to such Tranche A Catch Up
Determination Date is not met, such Tranche A Shortfall Shares shall never
become vested. By way of example, if the Tranche A Shortfall Amount on the
First Determination Date is $328 million resulting in 814,849 Tranche A
Shortfall Shares, and as of the Second Determination Date (which, in this
example, is the Tranche A Catch Up Determination Date with respect to the
First Determination Date) the Second Tranche A Target Amount of Cumulative
Signed Purchasing Volume of $6,233 million is met, then the 814,849 Tranche
A Shortfall Shares relating to the First Determination Date which had
become a Tranche A Shortfall Determination Date will become Vested Shares
on the Second Determination Date, provided however, that if as of the
Second Determination Date Cumulative Signed Purchasing Volume is less than
$6,233 million, the 814,849 Tranche A Shortfall Shares relating to the
First Determination Date shall never become vested, even if as of the Third
Determination Date or the Fourth Determination Date the relevant Tranche A
Target Amount for such Determination Date is met or exceeded.
1.1.3 Vesting Requirements for Tranche B Shares.
1. 1,927,814 Tranche B Shares shall become Vested Shares on the
First Determination Date if Cumulative Signed Purchasing Volume as of the
First Determination Date is at least $3,104 million (the "FIRST TRANCHE B
TARGET Amount").
2. 1,927,814 Tranche B Shares shall become Vested Shares on the
Second Determination Date if Cumulative Signed Purchasing Volume as of the
Second Determination Date is at least $8,311 million (the "SECOND TRANCHE B
TARGET Amount").
3. 1,927,814 Tranche B Shares shall become Vested Shares on the
Third Determination Date if Cumulative Signed Purchasing Volume as of the
Third Determination Date is at least $12,838 million (the "THIRD TRANCHE B
TARGET Amount").
4. 1,927,814 Tranche B Shares shall become Vested Shares on the
Fourth Determination Date if Cumulative Signed Purchasing Volume as of the
Fourth Determination Date is at least $17,671 million (the "FOURTH TRANCHE
B TARGET Amount").
5. In the event the Tranche B Target Amount of Cumulative
Signed Purchasing Volume specified in any of Section 1.1.3 paragraphs 1, 2,
3, or 4 above is not achieved as of the particular Determination Date
specified in such paragraph (such shortfall below a particular Tranche B
Target Amount being referred to as a "TRANCHE B SHORTFALL AMOUNT"), then
the number of Tranche B Shares which shall become Vested Shares at a
particular Determination Date pursuant to Section 1.1.3 paragraphs 1, 2, 3
or 4 shall equal the product of 1,927,814 and a fraction, the numerator of
which is the Cumulative Signed Purchasing Volume as of the Determination
Date in question minus the Tranche A Target Amount for the Determination
Date in question and the denominator of which is the Tranche B Target
Amount for the Determination Date in question minus the Tranche A Target
Amount for the Determination Date in question. It is agreed that no Tranche
B Shares will become Vested Shares on a particular Determination Date if
the Tranche A Target Amount relating to such Determination Date is not
exceeded. By way of example, if as of June 30, 2001, Cumulative Signed
Purchasing Volume is $3,000 million, 1,669,447 Tranche B Shares shall
become Vested Shares:
1,927,814 x 3,000 - 2,328 = 1,669,447 Vested Shares
-------------
3,104 - 2,328
If there is a Tranche B Shortfall Amount relating to a
particular Determination Date, then the number of Tranche B Shares which
will not vest due to such shortfall shall equal 1,927,814 minus the number
of Tranche B Shares which became Vested Shares on such Determination Date
(the "TRANCHE B SHORTFALL Shares"). If no Tranche B Shares became Vested
Shares on a Determination Date, then there will be 1,927,814 Tranche B
Shortfall Shares with respect to the Determination Date in question. Using
the facts set forth in the preceding example, if as of June 30, 2001,
Cumulative Signed Purchasing Volume is $3,000 million, and 1,669,447
Tranche B Shares become Vested Shares, then 258,367 Tranche B Shares shall
be deemed Tranche B Shortfall Shares as of the First Determination Date:
1,927,814 - 1,669,447 = 258,367 Tranche B Shortfall Shares
A Determination Date as of which there is a Tranche B Shortfall
Amount is referred to as a "TRANCHE B SHORTFALL DETERMINATION DATE". A
Determination Date which occurs immediately after a Tranche B Shortfall
Determination Date is referred to as a "TRANCHE B CATCH UP DETERMINATION
DATE". If as of a Tranche B Catch Up Determination Date, the applicable
Tranche B Target Amount for such Tranche B Catch Up Determination Date is
met or exceeded, then the Tranche B Shortfall Shares which did not vest on
such Tranche B Shortfall Determination Date shall immediately become Vested
Shares on the Tranche B Catch Up Determination Date, it being agreed that
if the Tranche B Target Amount relating to such Tranche B Catch Up
Determination Date is not met, such Tranche B Shortfall Shares shall never
become vested. By way of example, if the Tranche B Shortfall Amount on the
First Determination Date is $104 million resulting in 258,367 Tranche B
Shortfall Shares, and as of the Second Determination Date (which, in this
example, is the Tranche B Catch Up Determination Date with respect to the
First Determination Date) the Second Tranche B Target Amount of Cumulative
Signed Purchasing Volume of $8,311 million is met, then the 258,367 Tranche
B Shortfall Shares relating to the First Determination Date which had
become a Shortfall Determination Date will become Vested Shares on the
Second Determination Date, provided however, that if as of the Second
Determination Date Cumulative Signed Purchasing Volume is less than $8,311
million, the 258,367 Tranche B Shortfall Shares relating to the First
Determination Date shall never become vested, even if as of the Third
Determination Date or the Fourth Determination Date the relevant Tranche B
Target Amount for such Determination Date is met or exceeded.
1.2 Acceleration of Vesting. In the event of a merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company in which all
shares of Common Stock of the Company are converted into cash, or a cash
tender offer for all shares of Common Stock is consummated, this Warrant
will become fully exercisable as to all of the Shares effective upon
consummation of such transaction, and this Warrant will expire on the later
of the date of such consummation or twenty days after written notice of
such transaction, provided that the Holder may exercise this Warrant
contingent on the consummation of such transaction.
1.3 Termination Date. Unless this Warrant expires pursuant to
Section 1.2, this Warrant shall remain exercisable with respect to Vested
Shares, if any, until 5:00 p.m. California time on the tenth anniversary of
the Issue Date at which time the Warrant shall expire and be of no further
force and effect.
2. Exercise or Conversion.
2.1 Method of Exercise; Payment; Issuance of New Warrant. This
Warrant may be exercised by the Holder, in whole or in part and from time
to time as to Vested Shares, by the surrender of this Warrant (with a
notice of exercise in the form attached as Exhibit A and the investment
representation certificate in the form attached as Exhibit B, each duly
executed) at the principal office of the Company and by the payment to the
Company by check or wire transfer of an amount equal to the then current
Exercise Price per share multiplied by the number of Vested Shares then
being purchased (the "AGGREGATE EXERCISE PRICE"). The Holder shall be
deemed to have become the holder of record of, and shall be treated for all
purposes as the record holder of the Vested Shares represented thereby, and
such Vested Shares shall be deemed to have been issued, immediately prior
to the close of business on the date or dates upon which this Warrant is
exercised. In the event of any exercise of this Warrant, certificates for
the Vested Shares so purchased shall be delivered to the Holder as soon as
possible and in any event within ten business days of receipt of such
notice by the Company and, unless this Warrant has been fully exercised or
expired, a new Warrant representing the portion of the Shares, if any, with
respect to which this Warrant shall not then have been exercised shall also
be issued to the Holder as soon as possible and in any event within such
ten business day period.
2.2 Right to Convert Warrant into Stock; Net Issuance. In
addition to and without limiting the rights of the Holder under the terms
of this Warrant, the Holder may elect to exercise this Warrant with respect
to then Vested Shares (the "CONVERSION RIGHT"), the aggregate value of
which Vested Shares shall be equal to the "in-the-money" value of this
Warrant or the portion thereof being converted as set forth below. The
Conversion Right may be exercised by the Holder by surrender of this
Warrant at the principal office of the Company together with notice of the
Holder's intention to exercise the Conversion Right, in which event the
Company shall issue to the Holder a number of Vested Shares computed using
the following formula:
X = Y (A-B)
-------
A
Where:
X The number of Vested Shares to be issued to the Holder.
Y The number of Vested Shares representing the portion of
this Warrant that is being converted.
A The fair market value of one Share.
B The Exercise Price (as adjusted to the date of such
calculations).
For purposes of this Section 2.2, the "fair market value" per Share shall
mean the market price of one share of Common Stock on the last business day
before the effective date of exercise of the Conversion Right. If the
Common Stock is then traded on a national securities exchange or admitted
to unlisted trading privileges on such an exchange, or is listed on the
Nasdaq Stock Market (the "NASDAQ MARKET"), the market price as of a
specified day shall be the last reported sale price of one share of Common
Stock on such exchange or on the Nasdaq Market on such date or if no such
sale is made on such day, the mean of the closing bid and asked prices for
such day on such exchange or on the Nasdaq Market. If the Common Stock is
not so listed or admitted to unlisted trading privileges, the market price
as of a specified day shall be the mean of the last bid and asked prices
for one share of Common Stock reported on such date (x) by the NASD or (y)
if reports are unavailable under clause (x) above by the National Quotation
Bureau Incorporated. If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not reported, the
market price of one share of Common Stock as of a specified day shall be
determined in good faith by written resolution of the Board of Directors of
the Company.
2.3 Automatic Conversion. In the event of termination of this
Warrant pursuant to Section 1 above, to the extent that this Warrant is
then exercisable and such exercise would result in the issuance of Shares
to the Holder, this Warrant shall be deemed automatically exercised in full
under Section 2.2 above immediately prior to the time at which it would
otherwise expire.
2.4 HSR Compliance. Exercise or conversion of this Warrant is
subject to compliance by the Holder with all applicable filing
requirements, and expiration of all applicable waiting periods, under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"). The Company will cooperate with the Holder in making all applicable
filings under the HSR Act, provided, however, that the Holder shall pay all
applicable filing fees.
3. Securities Fully Paid; Reservation of Shares. All Shares that
may be issued upon the exercise of the rights represented by this Warrant,
upon issuance, will be fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issue thereof. During the
period within which the rights represented by the Warrant may be exercised,
the Company will at all times have authorized and reserved for the purpose
of issuance upon exercise of the purchase rights evidenced by this Warrant,
a sufficient number of shares of Common Stock to provide for the exercise
of the rights represented by this Warrant. The Shares to be issued upon
exercise or conversion of this Warrant shall be approved for listing on the
Nasdaq Market, subject to official notice of issuance.
4. Adjustment of Exercise Price and Number of Shares. The Exercise
Price and the number and kind of securities or other property purchasable
upon the exercise of the Warrant shall be subject to adjustment from time
to time upon the occurrence of certain events, as follows:
4.1 Reclassification or Merger. In case of any
reclassification, change or conversion of securities in the class issuable
upon exercise of this Warrant (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or in case of any merger of the
Company with or into another corporation (other than a merger with another
corporation in which the Company is a continuing corporation and which does
not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), unless this Warrant shall have
been exercised or terminated in accordance with its terms, this Warrant
shall thereafter be exercisable solely for the kind and amount of
consideration, including but not limited to shares of stock, other
securities, money and property, that the Holder would have received upon
such reclassification, change, conversion or merger if the Holder had
exercised this Warrant in full prior to such reclassification, change,
conversion or merger. The provisions of this subparagraph shall similarly
apply to successive reclassifications, changes, conversions or mergers. The
Company agrees to make appropriate provision in any definitive agreements
providing for such a transaction in order to carry out the terms of this
Section.
4.2 Subdivisions or Combination of Shares. If at any time while
this Warrant remains outstanding and unexpired the Company shall subdivide
or combine the securities of the class issuable upon exercise of this
Warrant, the Exercise Price and the number of Shares issuable upon exercise
hereof shall be proportionately adjusted.
4.3 Stock Dividends. If, at any time while this Warrant is
outstanding and unexpired, the Company shall pay a dividend payable in
securities of the class issuable upon exercise of this Warrant (except any
distribution specifically provided for in the foregoing subparagraphs 4.1
and 4.2), then the Exercise Price shall be adjusted, from and after the
date of determination of stockholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Exercise Price in
effect immediately prior to such date of determination by a fraction, the
numerator of which shall be the total number of shares of such class of
securities outstanding immediately prior to such dividend or distribution,
and the denominator of which shall be the total number of shares of such
class of securities outstanding immediately after such dividend or
distribution, and the number of Shares subject to this Warrant shall be
proportionately adjusted.
4.4 Common Stock Rights. If, at any time while this Warrant is
outstanding and unexpired, the Company shall pay a dividend or other
distribution on all Common Stock consisting of, or shall otherwise issue to
all holders of Common Stock, rights, warrants or options (not being
available on an equivalent basis to the Holders of this Warrant upon
exercise) entitling the holders of Common Stock to subscribe for or
purchase Common Stock at a price per share less than the current market
price (determined as provided in Section 2.2) of a share of Common Stock on
the date fixed for the determination of stockholders entitled to receive
such rights, warrants or options (other than pursuant to a dividend
reinvestment plan), the Exercise Price shall be decreased by multiplying
the then current Exercise Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase
would purchase at such current market price, and the denominator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase, such decrease to
become effective immediately after the opening of business on the day
following the date fixed for such determination. In the event that such
rights or warrants are not so issued, the Exercise Price shall again be
adjusted to be the Exercise Price which would then be in effect if such
date fixed for the determination of stockholders entitled to receive such
rights, warrants or options had not been fixed. Upon adjustment of the
Exercise Price pursuant to this Section 4.4, the number of shares subject
to issuance upon exercise of this Warrant shall be adjusted by multiplying
such number of shares prior to such adjustment by a fraction, the numerator
of which is the Exercise Price in effect immediately prior to such
adjustment and the denominator of which is the Exercise Price in effect
immediately after giving effect to such adjustment. In making any
determinations under this Section 4.4, there shall be taken into account
any consideration received for such rights, warrants or options, the value
of which consideration, if other than cash, shall be fixed in good faith by
the Board of Directors of the Company, whose determination shall be final.
4.5 Distributions of Property. If, at any time while this
Warrant is outstanding and unexpired, the Company shall pay a dividend or
other distribution on all Common Stock consisting of evidences of its
indebtedness or assets (excluding any dividend or distribution paid in
cash, or any dividend or distribution described in Sections 4.2, 4.3 or 4.4
of this Warrant), the Exercise Price shall be decreased by multiplying the
then current Exercise Price by a fraction, the numerator of which shall be
the current market price (determined as provided in Section 2.2) of a share
of Common Stock on the date fixed for the determination of stockholders
entitled to receive such dividend or distribution less the fair market
value (as determined by the Board of Directors of Company, whose
determination shall be final) of the portion of indebtedness or assets so
distributed applicable to one share of Common Stock and the denominator of
which shall be such current market price of a share of Common Stock, such
decrease to become effective immediately after the opening of business on
the day following the date fixed for such determination. In the event that
such dividend or distribution is not so made, the Exercise Price shall
again be adjusted to be the Exercise Price which would then be in effect if
such date fixed for the determination of stockholders entitled to receive
such dividend or distribution had not been fixed. Upon adjustment of the
Exercise Price pursuant to this Section 4.5, the number of shares subject
to issuance upon exercise of this Warrant shall be adjusted by multiplying
such number of shares prior to such adjustment by a fraction, the numerator
of which is the Exercise Price in effect immediately prior to such
adjustment and the denominator of which is the Exercise Price in effect
immediately after giving effect to such adjustment.
4.6 Notice of Adjustments. Whenever the Exercise Price shall be
adjusted pursuant to the provisions hereof, the Company shall within thirty
days of such adjustment deliver a certificate to the Holder signed by its
chief financial officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which
such adjustment was calculated, and the number of Shares subject to this
Warrant and the Exercise Price therefor, as applicable, after giving effect
to such adjustment.
5. Compliance with Securities Laws; Restrictions on Transfer.
5.1 Accredited Investor. This issuance of this Warrant is
conditioned upon, and by its acceptance hereof the Holder hereby confirms,
that the Holder is an "accredited investor" as that term is defined under
Regulation D under the Securities Act of 1933, as amended.
5.2 Legend. Upon issuance, certificates evidencing the Shares
shall bear legends in substantially the form set forth in the Purchase
Agreement.
5.3 Transfer Restrictions; Compliance with Securities Laws on
Transfer. This Warrant may not be transferred in whole or in part without
the prior written consent of the Company, except that such consent shall
not be required for the transfer of all or any part of this Warrant
covering Vested Shares. Any purported transfer of this Warrant in violation
of the foregoing restriction shall be void, and the Company shall not
recognize any such purported transfer on the securities ledger of the
Company. In addition, no permitted transfer of this Warrant or the Shares
may be made without compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation,
the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company). The Company will reasonably
cooperate with the Holder in connection with any permitted transfer of this
Warrant, including by issuing new certificates representing the Warrant and
any portion thereof so transferred.
6. Fractional Shares. No fractional Shares will be issued in
connection with any exercise hereunder, but in lieu of such fractional
Shares the Company shall make a cash payment therefor upon the basis of the
Exercise Price then in effect.
7. Modification and Waiver. This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is
sought.
8. Notices.
8.1 Notice of Certain Events. The Company shall provide the
Holder with at least twenty days notice (or such greater amount of notice
as Delaware law requires to be given to stockholders having the right to
vote at a meeting on any Sale Event, as defined herein) prior to (i) a
merger of the Company with or into, the consolidation of the Company with,
or the sale by the Company of all or substantially all of its assets to,
another person or entity (other than such a transaction wherein the
stockholders of the Company prior to such transaction retain or obtain a
majority of the voting capital stock of the surviving, resulting or
purchasing entity) (a "SALE EVENT"), (ii) any liquidation, dissolution or
winding up of the Company or (iii) the record date for any cash or other
dividend or distribution declared on the Shares (each, a "NOTICE EVENT").
If a notice is provided pursuant to subsection (i) or (ii) of the previous
sentence, the notice will indicate the expected date of the Notice Event.
8.2 Notice Procedure. All notices and other communications
hereunder shall be in writing and shall be deemed given upon delivery
either personally or by commercial delivery service, or sent via facsimile
(receipt confirmed) to the parties at the following addresses or facsimile
numbers (or at such other address or facsimile numbers for a party as shall
be specified by like notice):
If to the Holder:
VHA Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to the Company:
▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
9. Lost Warrants or Stock Certificates. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant or any stock certificate for Shares and, in the
case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.
10. No Impairment. The Company will not, through any
reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issuance or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of
this Warrant and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
against impairment.
11. Assignment. Neither the Company nor the Holder may assign
either this Warrant or any of its rights, interests, or obligations
hereunder without the prior written consent of the other, except that the
Company's consent shall not be required for the Holder to assign all or any
portion of this Warrant covering Vested Shares. Subject to the preceding
sentence and the restrictions on transfer of this Warrant set forth in
Section 5.3, this Warrant shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Any purported assignment in violation of this Section shall be
void.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
12. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
laws of the State of Delaware, without regard to the conflict of laws
provisions thereof.
IN WITNESS WHEREOF, this Warrant has been executed as of the Issue
Date.
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: ________________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: CHIEF FINANCIAL OFFICER
EXHIBIT A
NOTICE OF EXERCISE FORM
(To be executed only upon partial or full
exercise of the within Warrant)
The undersigned registered Holder of the within Warrant hereby
irrevocably exercises the within Warrant for and purchases _________ shares
of Common Stock of ▇▇▇▇▇▇▇▇.▇▇▇, Inc. and herewith makes payment therefor
in the amount of $ , all at the price and on the terms and conditions
specified in the within Warrant and requests that a certificate (or _______
certificates in denominations of shares each) for the shares hereby
purchased be issued in the name of and delivered to _______________________
whose address is __________________________________________________ and, if
such shares shall not include all the Shares issuable as provided in the
within Warrant, that a new Warrant of like tenor for the number of shares
not being purchased hereunder be issued in the name of and delivered to the
undersigned, whose address is _____________________________________.
Date: ______________________
Holder:
VHA Inc.
By: _________________________
Name:
Title:
NOTICE: The signature to this Notice of Exercise must correspond with
the name as written upon the face of the within Warrant in
every particular, without alteration or enlargement or any
change whatever.
EXHIBIT B
INVESTMENT REPRESENTATION CERTIFICATE
Holder: VHA Inc.
Company: ▇▇▇▇▇▇▇▇.▇▇▇, Inc.
Security: Common Stock
Amount:
Date:
In connection with the purchase of the above-listed securities (the
"Shares"), the undersigned (the "HOLDER") represents to the Company as
follows:
The Shares to be purchased by or delivered to the Holder hereunder
will be acquired for investment for such Holder's own account, not as a
nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act of 1933, as amended ("1933
ACT"), and Holder represents that it has no present intention or agreement
to sell, grant any participation in, or otherwise distribute any of the
Shares to be acquired hereunder in any public resale or distribution within
the meaning of the 1933 Act. Holder also represents that it has not been
formed for the specific purpose of acquiring Securities under this
Agreement.
Holder has received or has had full access to all the information it
considers necessary or appropriate to make an informed investment decision
with respect to the Shares to be purchased under this Agreement. Holder
further has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the offering of the
Shares and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort
or expense) necessary to verify any information furnished to Holder or to
which Holder had access.
Holder understands that the purchase of the Shares involves
substantial risk. Holder: (i) has experience as an investor in securities
of companies in the development stage and acknowledges that Holder is able
to fend for itself, can bear the economic risk of Holder's investment in
the Shares and has such knowledge and experience in financial or business
matters that Holder is capable of evaluating the merits and risks of this
investment in the Shares and protecting its own interests in connection
with this investment and/or (ii) has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables Holder to be
aware of the character, business acumen and financial circumstances of such
persons. Holder is an "accredited investor" within the meaning of
Regulation D promulgated under the 1933 Act.
Holder understands that the Shares are characterized as "restricted
securities" under the 1933 Act inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under the
1933 Act and applicable regulations thereunder such securities may be
resold without registration under the 1933 Act only in certain limited
circumstances. In this connection, such Holder represents that Holder is
familiar with Rule 144 of the Securities and Exchange Commission, as
presently in effect, and understands the resale limitations imposed thereby
and by the 1933 Act.
At no time was Holder presented with or solicited by any publicly
issued or circulated newspaper, mail, radio, television or other form of
general advertising or solicitation in connection with the offer, sale and
purchase of the Shares.
Without in any way limiting the representations set forth above,
Holder further acknowledges that the Shares are subject to limitations on
disposition thereof set forth in the Warrant and in that certain Amended
and Restated Common Stock and Warrant Agreement, dated as of May 24, 2000
by and between the Company and Holder, and acknowledges that Holder is
bound by such restrictions.
Date: ______________________
Holder:
VHA Inc.
By: ______________________________
Name:
Title: