EXHIBIT 10.9
STOCK PURCHASE WARRANT
THIS STOCK PURCHASE WARRANT (hereinafter referred to as the "Warrant") is
made and entered into as of July 21, 1998 (the "Issuance Date"), by and between
ENDEAVOR TECHNOLOGIES, INC., a Georgia corporation (the "Company"), and MATRIA
HEALTHCARE, INC. (the "Warrantholder").
W I T N E S S E T H:
WHEREAS, the Company desires to grant the Warrantholder warrants to
purchase shares of the Company's Common Stock Series D (the "Stock"), upon the
terms and conditions herein contained;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF WARRANT. The Company hereby grants to the Warrantholder the
right to purchase 80,000 shares of Stock (the "Warrant Shares"), subject to
adjustment as set forth in Section 6.
2. EXERCISE PRICE. The purchase price (the "Exercise Price") for each
Warrant Share shall be the per share price at which the Company's stock is
offered to the public in the Company's initial public offering of its capital
stock (the "IPO"); provided, however, that if the closing of the IPO has not
-------- -------
occurred on or before June 30, 1999, the Exercise Price shall be equal to the
lesser of (i) $20.00 or (ii) the fair market value of the Company's stock on
June 30, 1999 as determined by the Board of Directors of the Company in a
commercially reasonable manner. The basis of determination shall be provided in
writing to the Warrantholder.
3. EXERCISE OF WARRANT.
(a) The Warrant shall be exercisable upon the earlier of (i) the
closing of the IPO or (ii) June 30, 1999, and shall remain exercisable until the
expiration of the Warrant in accordance with its terms. The Warrantholder may
exercise the Warrant by delivering to the Company a written notice of exercise
signed by the Warrantholder, in substantially the form attached hereto as
Exhibit A (a "Notice of Exercise"), together with payment to the Company of the
aggregate Exercise Price of the Warrant Shares so purchased. The Exercise Price
shall be payable, at the option of the Warrantholder (i) by a check payable to
the Company or (ii) by the surrender of a portion of this Warrant where the
Warrant Shares subject to the portion of this Warrant that is surrendered have a
fair market value equal to such aggregate Exercise Price for the Warrant Shares
to be purchased pursuant to the Notice of Exercise.
(b) The Warrantholder may not exercise the Warrant for less than
5,000 Warrant Shares (except that if the number of remaining Warrant Shares is
less than 5,000, this Warrant may be exercised with respect to such lesser
number of Warrant Shares).
(c) Within 15 days after the exercise of the Warrant as herein
provided, the Company shall deliver to the Warrantholder a certificate or
certificates for the Warrant Shares being issued in the name of the
Warrantholder and in such denominations as are requested by the Warrantholder.
Additionally, if the Warrant is being exercised for fewer than all of the
Warrant Shares issuable thereunder, the Company shall execute and deliver to the
Warrantholder a new warrant (dated the date hereof) evidencing the right to
purchase the balance of the Warrant Shares.
(d) The Company covenants and agrees that all Warrant Shares which
may be issued upon exercise of the Warrant shall, upon issuance and payment
therefor, be legally and validly issued and outstanding, fully paid and
nonassessable, and free from all liens, claims and encumbrances, except
restrictions imposed by applicable securities laws, the Company's Articles of
Incorporation, as amended, or this Warrant. The Company shall at all times
reserve and keep available for issuance upon the exercise of the Warrant such
number of authorized but unissued shares of Stock as will be sufficient to
permit the exercise in full of the Warrant.
4. TERM OF WARRANT. The term of the Warrant shall continue in effect
until the earlier of: (i) the date on which the Warrant has been exercised or
canceled with respect to all of the Warrant Shares; or (ii) five years from the
Issuance Date.
5. CONSENT TO TRANSFER. This Warrant and all rights hereunder are
nontransferable and nonassignable by the Warrantholder, unless the Company
consents thereto in writing. Any transfer or attempted transfer except pursuant
to the preceding sentence shall be null and void and of no effect whatsoever.
6. ADJUSTMENTS.
(a) If, prior to the termination of the Warrant as provided in
Section 4 hereof:
(i) The number of outstanding shares of Stock is increased by a
stock split, stock dividend, or other similar event, the Exercise Price
shall be proportionately reduced and the number of Warrant Shares that have
not theretofore been purchased by the Warrantholder shall be
proportionately increased.
(ii) The number of outstanding shares of Stock is decreased by a
combination or reclassification of shares, or other similar event, the
Exercise Price shall be proportionately increased and the number of Warrant
Shares that have not theretofore been purchased by the Warrantholder shall
be proportionately reduced.
If any adjustment under this Section 6(a) would create a fractional share of
Stock or a right to acquire a fractional share of Stock, such fractional share
shall be disregarded and the number of Warrant Shares subject to the Warrant
shall be the next higher number of shares.
2
(b) If, prior to the termination of the Warrant as provided in
Section 4 hereof, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Stock shall be changed into the same or a different number of shares
of the same or another class or classes of stock or securities of the Company or
another entity, then the Warrantholder shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions specified
in this Warrant and in lieu of the Warrant Shares immediately theretofore
purchasable and receivable upon the exercise of the Warrant, such shares of
stock and/or securities as may be issued or payable with respect to or in
exchange for the number of Warrant Shares immediately theretofore purchasable
and receivable upon the exercise of the Warrant had such merger, consolidation,
exchange of shares, recapitalization or reorganization not taken place, and in
any such case appropriate provisions shall be made with respect to the rights
and interests of the Warrantholder to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Exercise Price
and of the number of shares purchasable upon the exercise of the Warrant) shall
thereafter be applicable, as nearly as may be practicable in relation to any
shares of stock or securities thereafter deliverable upon the exercise hereof.
The Company shall not effect any transaction described in this subsection (b)
unless the resulting successor or acquiring entity (if not the Company) assumes
by written instrument the obligation to deliver to the Warrantholder such shares
of stock and/or securities as, in accordance with the foregoing provisions, the
Warrantholder may be entitled to purchase. The foregoing notwithstanding, in the
event of a merger or consolidation in which the Company is not the surviving
entity, if the Company concludes that it will be unable to satisfy the
conditions of this subsection (b) without a material adverse effect on the terms
of such proposed transaction, then the Company shall have the option, prior to
or contemporaneously with the closing of such merger or consolidation, to
purchase the Warrant from the Warrantholder at its then fair value, determined
with regard to both the spread between the Exercise Price and the value of the
consideration to be received in the transaction and the remaining term of the
Warrant. The Company and the Warrantholder shall agree on such fair value or, in
the event they are unable to agree, shall submit the question of fair value to
an investment banking firm to be selected by the Warrantholder and reasonably
satisfactory to the Company, with the cost of such investment banking firm to be
paid by the Company.
7. INVESTMENT REPRESENTATION. As a condition to the issuance of Warrant
Shares hereunder, the Warrantholder shall represent to the Company that the
Warrant Shares it will acquire pursuant to such exercise are being purchased for
its own account for investment purposes only and not with a present view to
resale or a distribution thereof, unless the Warrantholder delivers to the
Company an opinion of counsel acceptable to counsel for the Company stating that
such a representation is not required under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws. The Warrantholder
acknowledges that the Warrant Shares may be "restricted securities" as defined
in the Act and that such Warrant Shares may not be able to be resold unless such
resale is registered under the Act and applicable state securities laws or
unless an exemption is available.
8. CERTAIN NOTICES. In case at any time the Company shall propose to:
(a) declare any cash dividend upon its Common Stock;
3
(b) declare any dividend upon its Common Stock payable in stock or
make any special dividend or other distribution to the holders of its
Common Stock;
(c) offer for subscription to the holders of any of its Common Stock
generally any additional shares of stock in any class or other rights;
(d) reorganize, or reclassify the capital stock of the Company, or
consolidate, merge or otherwise combine with, or sell all or substantially
all of its assets to, another corporation;
(e) voluntarily or involuntarily dissolve, liquidate or wind up of
the affairs of the Company; or
(f) redeem or purchase any shares of its capital stock or securities
convertible into its capital stock;
then, in any one or more of said cases, the Company shall give to the
Warrantholder, by certified or registered mail, (i) at least twenty days'
prior written notice of the date on which the books of the Company shall
close or a record shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, and (ii) in the case of such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, at least twenty days' prior written notice of
the date when the same shall take place. Any notice required by clause (i)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and any notice required by clause (ii) shall specify the
date on which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be.
9. NO RIGHTS AS A SHAREHOLDER. The Warrantholder shall not have any
interest in or shareholder rights with respect to any shares of Stock which are
subject to the Warrant until such shares have been issued and delivered to the
Warrantholder in accordance with this Warrant.
10. TAXES. As a condition to the issuance of Warrant Shares hereunder, the
Company may withhold, or require the Warrantholder to pay or reimburse the
Company for, any taxes which the Company determines are required to be withheld
under federal, state or local law in connection with the exercise of the
Warrant.
11. HEIRS AND SUCCESSORS. This Warrant and all terms and conditions hereof
shall be binding upon the Company and its successors and assigns.
4
12. GOVERNING LAW. This Warrant shall be governed by, and construed and
enforced in accordance with, the laws of the State of Georgia without regard to
the principles of conflicts of laws.
13. NOTICES. The addresses of record for the parties for all purposes of
this Warrant shall be the addresses set forth below, unless a party notifies the
other party of a new address in writing. Any notice under this Warrant provided
by either party shall be in writing and shall be deemed to have been
sufficiently given or served and effective for all purposes upon receipt by the
other party of such notice.
Endeavor Technologies, Inc.
400 The Lenox Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Matria Healthcare, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
14. SEVERABILITY. The provisions of this Warrant, and of each separate
section and subsection, are severable, and if any one or more provisions may be
determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions, and any unenforceable provision to the extent enforceable,
shall nevertheless be binding and enforceable.
15. COUNTERPARTS. This Warrant may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. Facsimile transmission of
signatures shall be deemed originals.
5
IN WITNESS WHEREOF, the Company and Warrantholder have caused this Warrant
to be executed by their duly authorized officers as of the Issuance Date.
ENDEAVOR TECHNOLOGIES, INC.
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Title: Chief Operating Officer
--------------------------------------------
MATRIA HEALTHCARE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Title: Executive Vice President and Chief Operating
--------------------------------------------
Officer
--------------------------------------------
6
EXHIBIT A
NOTICE OF EXERCISE
[DATE]
Endeavor Technologies, Inc.
400 The Lenox Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Re: Exercise of Stock Purchase Warrant
----------------------------------
Dear Sir:
The undersigned, __________________________________, pursuant to that
certain Warrant, dated as of ______________________, 1998, by and between
Endeavor Technologies, Inc. and the undersigned (the "Warrant"), hereby
exercises the Warrant for the following number of Warrant Shares, subject to the
terms and conditions of the Warrant:
Number of Warrant Shares Being Purchased _______________________________
Total Purchase Price and Amount Remitted _______________________________
Very truly yours,
___________________________________
[Name]