Exhibit 10.7
[LOGO]
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Managing Director
Investment Banking
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇, President & CEO Diomed Holdings, Inc. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Amendment #2 ("Amendment") to the Financial Advisory and Investment
Banking Agreement ("Agreement") between Sunrise Securities Corp.
("Sunrise") and Diomed Holdings, Inc. ("Company") dated April 11, 2003,
as previously amended.
Dear ▇▇▇:
This Amendment to the Agreement between Sunrise and the Company dated as of
September 2, 2003, is to amend our existing Agreement and to confirm our
discussions and understandings regarding the receipt of our Financing Fees in
stock rather than cash upon the closing of the Financing. Capitalized terms used
in this Amendment which are not defined herein shall have the meanings ascribed
to such terms in the Agreement or in the draft Securities Purchase Agreement,
dated as of August 8, 2003, pursuant to which the Company currently proposes to
issue secured bridge notes and shares of Common Stock, as the same may hereafter
be revised, supplemented or amended (the "Proposed Financing").
1. Financing Fees: The Company and Sunrise hereby agree as follows:
(a) At Tranche I Closing, Sunrise and/or its designees shall
receive secured bridge notes (substantially the same as those
issued to the investors in the Proposed Financing) (the
"Notes") and warrants to purchase shares of Common Stock (the
"Warrants"), in each case, based on the total funds to be
received by the Company in the Proposed Financing (other than
funds raised from Special Parties), including funds received
by the Company at the Tranche I Closing and all funds then
remaining in escrow, and the value of Sunrise's Financing Fees
as though the amount of cash to which Sunrise would have been
entitled (but for this Amendment) was reinvested in the
Company.
(b) At the Tranche I Closing, Sunrise and/or its designees shall
receive such aggregate principal amount of Notes and Warrants
as is set forth in the table below.
(c) All Warrants shall be exercisable for five years from the date
of receipt of the approval of the Company's stockholders of
the Proposed Financing and are not exercisable until such
approval is obtained. The Warrants shall be substantially in
the form annexed hereto as Exhibit A.
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Aggregate Principal Amount of Notes $495,000
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Warrants (exercise price of $.001) 15,035,625
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Warrants (exercise price of $.08) 6,187,500
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Warrants (exercise price of $.10) 14,850,000
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The table above assumes that $18 million is raised in Tranche I
and Tranche II (and is raised other than from Special Parties) and
is in escrow as of the Tranche I Closing. If the total amount
raised in Tranche I and Tranche II is less than $18 million, the
numbers above will be adjusted downward.
If the total amount raised in Tranche I and Tranche II is greater
than $18 million, then Sunrise and/or its designees will receive
Warrants in respect of the total funds in excess thereof (i.e.,
the difference between the total amount raised and $18 million) as
set forth in the table below. The table below assumes that $2
million is raised in Tranche I and Tranche II in excess of the $18
million, or a total of $20 million (and is raised from other than
Special Parties) and is in escrow as of the Tranche I Closing. If
the total amount raised in excess of $18 million is less or more
than $2 million, then the numbers below will be adjusted downward
or upward, accordingly.
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Warrants (exercise price of $.001) 2,784,375
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Warrants (exercise price of $.08) 2,750,000
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In addition to the Notes and Warrants described above, Sunrise
and/or its designees shall be entitled to receive Late Filing
Payments and Late Effective Payments (as such terms are defined
and used in the Investors' Rights Agreement relating to the
Proposed Financing) based on the number of shares of Common Stock
underlying the Notes and the Warrants which are exercisable at
$.001.
2
The Company acknowledges that Sunrise intends to allocate a
substantial portion of the Notes and/or Warrants which are issued
to Sunrise and/or its designees to its employees and/or selected
broker dealers. The Company agrees that it shall promptly (and in
any event, within five business days), without charge to the
transferring holder or transferee, upon request by any transferor
for such transfer and upon receipt of Notes and/or Warrant
certificates representing the subject securities, properly
endorsed for transfer, issue new Notes and/or Warrant certificates
in such denominations and to such designated transferees as shall
be requested.
For the avoidance of doubt, none of the Notes or Warrants (or any
shares of Common Stock issued upon conversion of the Notes or
exercise of the Warrants) to be issued hereunder shall be eligible
for participation in the rights offering that the Company proposes
to make following the Tranche II Closing.
No provision of this Amendment may be amended, modified or waived, except in a
writing signed by all of the parties hereto.
This Amendment may be executed in any number of counterparts, each of which
together shall constitute one and the same original document. This Amendment may
be executed and delivered by exchange of facsimile copies showing the parties'
signatures, and those signatures need not be affixed to the same copy. The
facsimile copies showing the signatures of the parties will constitute
originally signed copies of the same Amendment requiring no further execution.
This Amendment shall be construed in accordance with and governed by the laws of
the State of New York, without giving effect to its conflict of law principles.
Except as modified by this Amendment, the Agreement shall continue in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the day
and year first above written.
DIOMED HOLDINGS, INC. SUNRISE SECURITIES CORP.
By Its Authorized Signatory: By Its Authorized Signatory:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇ LOW
-------------------------------- ----------------------------
Dated: September 3, 2003 Dated: September 3, 2003
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3
Exhibit A
[Form of Warrant to Follow]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE HEREOF MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), (ii) AN EXEMPTION FROM
REGISTRATION, OR (iii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH
ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF
SECURITIES).
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THE ATTACHED
WARRANT CERTIFICATE ARE RESTRICTED IN ACCORDANCE WITH THE TERMS
PROVIDED HEREIN.
STOCK PURCHASE WARRANT
Date of Issuance: [September 2, 2003]/1/ Certificate No. W-__
FOR VALUE RECEIVED, Diomed Holdings, Inc., a Delaware corporation, located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ (the "Company"), hereby grants to [ ] or its
registered assigns (the "Registered Holder") the right to purchase from the
Company up to [ ] shares of the Company's Common Stock (as adjusted from time to
time hereunder) at a price per share of Common Stock equal to [$ ] (as adjusted
from time to time hereunder, the "Exercise Price"). Certain capitalized terms
used herein are defined in Section 5 hereof. The amount and kind of securities
obtainable pursuant to the rights granted hereunder and the purchase price for
such securities are subject to adjustment pursuant to the provisions contained
in this Warrant.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1.1. Exercise Period. The Registered Holder may exercise, in
whole or in part, the purchase rights represented by this Warrant at any time
and from time to time after the Necessary Approval Date to and including 5:00
p.m., New York time, on the fifth anniversary thereof or, if such day is not a
Business Day, on the next preceding Business Day (the "Exercise Period"). The
Company shall give the Registered Holder written notice of the expiration of the
rights hereunder at least thirty (30) days but not more than ninety (90) days
prior to the end of the Exercise Period.
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1 Such date to be the date of the Tranche I closing.
1.2. Exercise Procedure.
(a) This Warrant shall be deemed to have been
exercised when the Company has received all of the following items (the
"Exercise Time"):
(i) a completed Exercise Agreement, as
described in paragraph 1.3 below, executed by the Person exercising all
or part of the purchase rights represented by this Warrant (the
"Purchaser");
(ii) this Warrant;
(iii) if this Warrant is not registered in
the name of the Purchaser, an Assignment or Assignments evidencing the
assignment of this Warrant to the Purchaser, in which case the
Registered Holder shall have complied with the provisions set forth in
Section 7 hereof; and
(iv) either (1) a check payable to the
Company in an amount equal to the product of the Exercise Price
multiplied by the number of shares of Common Stock being purchased upon
such exercise (the "Aggregate Exercise Price"), (2) the surrender to
the Company of debt or equity securities of the Company having a Fair
Market Value equal to the Aggregate Exercise Price of the Common Stock
being purchased upon such exercise (provided, that for purposes of this
subparagraph, the Fair Market Value of any note or other debt security
or any preferred stock shall be deemed to be equal to the aggregate
outstanding principal amount or liquidation value thereof plus all
accrued and unpaid interest thereon or accrued or declared and unpaid
dividends thereon) or (3) a written notice to the Company that the
Purchaser is exercising the Warrant (or a portion thereof) on a
"cashless" basis in exchange for that number of shares of Common Stock
equal to the product of (x) the number of shares as to which such
Warrants are being exercised multiplied by (y) a fraction, the
numerator of which is the Fair Market Value (as hereinafter defined) of
the Common Stock less the Exercise Price and the denominator of which
is such Fair Market Value. Solely for the purposes of this Section
1.2(a)(iv), Fair Market Value shall be calculated either (i) on the
trading date immediately preceding the date on which the Form of
Election to Purchase annexed to such Warrant Certificate as to such
exercise is deemed to have been sent to the Company pursuant to Section
10 hereof (the "Notice Date"), (ii) as the average of the Fair Market
Values for each of the twenty trading days preceding the date that is
two trading days prior to the Notice Date, or (iii) on the date of
issuance of this Warrant, whichever results in a higher Fair Market
Value.
(b) Certificates for shares of Common Stock purchased upon
exercise of this Warrant shall be delivered by the Company to the Purchaser
within three (3) Business Days after the date of the Exercise Time. Unless this
Warrant has expired or all of the purchase rights represented hereby have been
exercised, the Company shall prepare a new Warrant, substantially identical
hereto, representing the rights formerly represented by this Warrant which have
not expired or been exercised and shall within such three-day period, deliver
such new Warrant to the Person designated for delivery in the Exercise
Agreement.
(c) The Common Stock issuable upon the exercise of this
Warrant shall be deemed to have been issued to the Purchaser at the Exercise
Time, and the Purchaser shall be deemed for all purposes to have become the
record holder of such Common Stock at the Exercise Time.
(d) The issuance of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the Registered
Holder or the Purchaser for any issuance tax in respect thereof or other cost
incurred by the Company in connection with such exercise and the related
issuance of shares of Common Stock. Each share of Common Stock issuable upon
exercise of this Warrant shall upon payment of the Exercise Price therefor, be
fully paid and nonassessable and free from all liens and charges with respect to
the issuance thereof.
(e) The Company shall not close its books against the
transfer of this Warrant or of any share of Common Stock issued or issuable upon
the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant. The Company shall from time to time take all such
action as may be necessary to assure that the par value per share of the
unissued Common Stock acquirable upon exercise of this Warrant is at all times
equal to or less than the Exercise Price then in effect.
(f) The Company shall assist and cooperate with any
Registered Holder or Purchaser required to make any governmental filings or
obtain any governmental approvals prior to or in connection with any exercise of
this Warrant (including, without limitation, making any filings required to be
made by the Company).
(g) Notwithstanding any other provision hereof, if an
exercise of all or any portion of this Warrant is to be made in connection with
a registered public offering, a sale of the Company or any transaction or event,
including a Qualified Public Offering, such exercise may, at the election of the
Registered Holder, be conditioned upon the consummation of such transaction or
event in which case such exercise shall not be deemed to be effective until the
consummation of such transaction or event.
(h) The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock solely for
the purpose of issuance upon the exercise of the Warrants, such number of shares
of Common Stock as are issuable upon the exercise of all outstanding Warrants.
All shares of Common Stock which are so issuable shall, when issued, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges. The Company shall take all such actions as may be necessary to assure
that all such shares of Common Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which shares of Common Stock may be listed (except for
official notice of issuance which shall be immediately delivered by the Company
upon each such issuance). The Company shall not take any action which would
cause the number of authorized but unissued shares of Common Stock to be less
than the number of such shares required to be reserved hereunder for issuance
upon exercise of the Warrants. The Company will use its best efforts to cause
the shares of Common Stock, immediately upon such exercise, to be listed on any
domestic securities exchange upon which shares of Common Stock or other
securities constituting such shares of Common Stock are listed at the time of
such exercise.
1.3. Exercise Agreement. Upon any exercise of this Warrant,
the Exercise Agreement shall be substantially in the form set forth in either
Exhibit I or Exhibit II attached hereto, except that if the shares of Common
Stock are not to be issued in the name of the Person in whose name this Warrant
is registered, the Exercise Agreement shall also state the name of the Person to
whom the certificates for the shares of Common Stock are to be issued, and if
the number of shares of Common Stock to be issued does not include all the
shares of Common Stock purchasable hereunder, it shall also state the name of
the Person to whom a new Warrant for the unexercised portion of the rights
hereunder is to be delivered. Such Exercise Agreement shall be dated the actual
date of execution thereof.
1.4. Fractional Shares. If the Common Stock is listed on any
securities exchange or quoted on the Nasdaq Stock Market System or the
over-the-counter market and a fractional share of Common Stock would, but for
the provisions of this paragraph 1.4, be issuable upon exercise of the rights
represented by this Warrant, the Company shall, within five (5) Business Days
after the date of the Exercise Time, deliver to the Purchaser a check payable to
the Purchaser in lieu of such fractional share in an amount equal to the
difference between Fair Market Value of such fractional share as of the date of
the Exercise Time and the Exercise Price of such fractional share.
Section 2. Adjustment of Exercise Price and Number of Shares of Common
Stock. In order to prevent dilution of the rights granted under this Warrant and
grant the Registered Holder hereof certain additional rights, the Exercise Price
and the number of shares of Common Stock obtainable upon exercise of this
Warrant shall be subject to adjustment from time to time as provided in this
Section 2.
2.1. Computation of Adjusted Exercise Price. Except as
hereinafter provided and subject to Section 2.6 hereof, in case the Company
shall at any time after the date hereof issue or sell any shares of Common Stock
or Common Stock Equivalents for a consideration per share less than the Exercise
Price in effect immediately prior to the issuance or sale of such shares on the
date immediately prior to the issuance or sale of such shares, or without
consideration, then forthwith upon such issuance or sale, the Exercise Price
shall (until another such issuance or sale) be reduced to the price (calculated
to the nearest full cent) equal to the quotient derived by dividing (i) an
amount equal to the sum of (a) the total number of shares of Common Stock
outstanding immediately prior to the issuance or sale of such shares, multiplied
by the Exercise Price in effect immediately prior to such
issuance or sale, and (b) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance or sale, by (ii) the total
number of shares of Common Stock outstanding immediately after such issuance or
sale; provided, however, that in no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the Exercise Price in
effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by Section 2.3
hereof.
For the purposes of any computation to be made in accordance with this
Section 2.1, the following provisions shall apply:
(a) In the event of the issuance or sale of shares of
Common Stock for a consideration, part or all of which shall be cash, the amount
of the cash consideration therefor shall be deemed to be the amount of cash
received by the Company for such shares (or, if shares of Common Stock are
offered by the Company for subscription, the subscription price, or if either of
such securities shall be sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price) before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others performing
similar services, or any expenses incurred in connection therewith.
(b) In the event of the issuance or sale (otherwise
than as a dividend or other distribution on any stock of the Company) of shares
of Common Stock for a consideration part or all of which shall be other than
cash, the amount of the consideration therefor other than cash shall be deemed
to be the value of such consideration as determined in good faith by the Board
of Directors of the Company.
(c) Shares of Common Stock issuable by way of
dividend or other distribution on any capital stock of the Company shall be
deemed to have been issued immediately after the opening of business on the day
following the record date for the determination of stockholders entitled to
receive such dividend or other distribution and shall be deemed to have been
issued without consideration.
(d) The reclassification of securities of the Company
other than shares of Common Stock into securities including shares of Common
Stock shall be deemed to involve the issuance of such shares of Common Stock for
a consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to receive
such shares, and the value of the consideration allocable to such shares of
Common Stock shall be determined as provided in subsection (b) of this Section
2.1.
(e) The number of shares of Common Stock at any one
time outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof) upon the exercise of
Common Stock Equivalents.
2.2. Options, Rights, Warrants and Convertible and
Exchangeable Securities. Subject to Section 2.6 hereof, in the event the Company
at any time after the date hereof issues options, rights or warrants to
subscribe for shares of Common Stock, or issue any Common Stock Equivalents, for
a consideration per share less than the Exercise Price in effect immediately
prior
to the issuance of such options, rights or warrants, or such convertible or
exchangeable securities, or without consideration, the Exercise Price in effect
immediately prior to the issuance of such options, rights or warrants, or such
convertible or exchangeable securities, as the case may be, shall be reduced to
a price determined by making a computation in accordance with the provisions of
Section 2.1 hereof, provided that:
(a) The aggregate maximum number of shares of Common Stock, as the case
may be, issuable under such options, rights or warrants shall be deemed to
be issued and outstanding at the time such options, rights or warrants were
issued, and for a consideration equal to the minimum purchase price per
share provided for in such options, rights or warrants at the time of
issuance, plus the consideration (determined in the same manner as
consideration received on the issue or sale of shares in accordance with
the terms of the Warrants), if any, received by the Company for such
options, rights or warrants.
(b) The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange of any convertible or exchangeable securities
shall be deemed to be issued and outstanding at the time of issuance of
such securities, and for a consideration equal to the consideration
(determined in the same manner as consideration received on the issue or
sale of shares of Common Stock in accordance with the terms of the
Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or
exchange thereof.
(c) If any change shall occur in the price per share provided for
in any of the options, rights or warrants referred to in subsection (a) of this
Section 2.2, or in the price per share at which the securities referred to in
subsection (b) of this Section 2.2 are convertible or exchangeable, such
options, rights or warrants or conversion or exchange rights, as the case may
be, shall be deemed to have expired or terminated on the date when such price
change became effective in respect of shares not theretofore issued pursuant to
the exercise or conversion or exchange thereof, and the Company shall be deemed
to have issued upon such date new options, rights or warrants or convertible or
exchangeable securities at the new price in respect of the number of shares
issuable upon the exercise of such options, rights or warrants or the conversion
or exchange of such convertible or exchangeable securities.
(d) Calculation of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the net amount received by the Company therefor. In case any Common Stock,
Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of the consideration other than cash received by the
Company shall be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company shall be the Fair Market Value thereof as of the date of
receipt. In case any Common Stock, Options or Convertible Securities are issued
to the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving corporation, the amount of consideration therefor
shall be deemed to be the fair value of such portion of the net assets and
business of the non-surviving entity as is attributable to such Common Stock,
Options or Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities shall be determined jointly by the
Company and the Registered Holders of Warrants representing a
Majority (as defined in Section 19.4(l)) of the shares of Common Stock
obtainable upon exercise of the outstanding Warrants. If such parties are unable
to reach agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Company and the Registered
Holders of Warrants representing a Majority of the shares of Common Stock
obtainable upon exercise of the outstanding Warrants. The determination of such
appraiser shall be final and binding on the Company and the Registered Holders
of the Warrants, and the fees and expenses of such appraiser shall be paid by
the Company.
(e) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options shall be deemed to
have been issued without consideration.
(f) Treasury Shares. The disposition of any shares of Common Stock
owned or held by or for the account of the Company or any Subsidiary shall be
considered an issue or sale of Common Stock.
(g) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
2.3. Subdivision and Combination. In the event the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
2.4. Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 2, the number of
shares of Common Stock of the Company issuable upon the exercise of each Warrant
shall be adjusted to the nearest full amount by multiplying a number equal to
the Exercise Price in effect immediately prior to such adjustment by the number
of shares of Common Stock of the Company issuable upon exercise of the Warrants
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
2.5. Merger or Consolidation. In the event of any consolidation of the
Company with, or merger of the Company with, or merger of the Company into, or
sale by the Company of all or substantially all of its assets to another
corporation or other entity (other than a consolidation or merger which does not
result in any reclassification or change of the outstanding Common Stock), the
corporation or other entity formed by such consolidation or merger or acquiror
of such assets shall execute and deliver to the Registered Holder a supplemental
warrant agreement providing that the Registered Holder of each Warrant then
outstanding or to be
outstanding shall have the right thereafter (until the expiration of such
Warrant) to receive, upon exercise of such Warrant, the kind and amount of
shares of stock and other securities and property receivable upon such
consolidation or merger, by a holder of the number of shares of Common Stock of
the Company for which such Warrant might have been exercised immediately prior
to such consolidation, merger, sale or transfer. Such supplemental warrant
agreement shall provide for adjustments which shall be identical to the
adjustments provided in Section 2. The above provision of this Subsection shall
similarly apply to successive consolidations or mergers.
2.6. No Adjustment of Exercise Price in Certain Cases. No adjustment of
the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or the shares of
Common Stock issuable upon the exercise of the Warrants, or the options, rights
and Warrants issued and outstanding on the date hereof, or upon the issuance or
sale of any Excluded Securities or of any Common Stock or Common Stock
Equivalents issued upon the exercise, conversion or exchange of any Excluded
Securities; or
(b) If the amount of said adjustment shall be less than 1 cent
($.01) per share of Common Stock, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to at least 1 cent ($.01) per share of Common Stock.
2.7. Dividends and Other Distributions. In the event that the Company
shall at any time prior to the exercise of all Warrants declare a dividend
(other than a dividend consisting solely of shares of Common Stock) or otherwise
distribute to its stockholders any assets, property, rights, evidences of
indebtedness, securities (other than shares of Common Stock), whether issued by
the Company or by another, or any other thing of value, the Registered Holders
of the unexercised Warrants shall thereafter be entitled, in addition to the
shares of Common Stock or other securities and property receivable under the
exercise thereof, to receive, upon the exercise of such Warrants, the same
property, assets, rights, evidences of indebtedness, securities or any other
thing of value that they would have been entitled to receive at the time of such
dividend or distribution as if the Warrants had been exercised immediately prior
to such dividend or distribution. At the time of any such dividend or
distribution, the Company shall make appropriate reserves to ensure the timely
performance of the provisions of this Subsection 2.7.
2.8. Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Board of Directors shall make an appropriate adjustment in the Exercise Price
and the number of shares of Common Stock obtainable upon exercise of this
Warrant so as to protect the rights of the holders of the Warrants; provided,
that no such adjustment shall increase the Exercise Price or decrease the number
of shares of Common Stock obtainable as otherwise determined pursuant to this
Section 2.
2.9. Notices.
(a) Immediately upon any adjustment of the Exercise Price, the
Company shall give written notice thereof to the Registered Holder, setting
forth in reasonable detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Registered Holder
at least twenty (20) days prior to the date on which the Company closes its
books or takes a record (A) with respect to any dividend or distribution upon
the Common Stock, (B) with respect to any pro rata subscription offer to holders
of Common Stock or (C) for determining rights to vote with respect to any
Qualified Public Offering, Liquidation Event or other dissolution or
liquidation.
(c) The Company shall also give written notice to the Registered
Holders at least twenty (20) days prior to the date on which any Qualified
Public Offering, Liquidation Event or other dissolution or liquidation shall
take place.
Section 3. Liquidating Dividends. If the Company declares or pays a
dividend upon the Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted accounting
principles, consistently applied) except for a stock dividend payable in shares
of Common Stock (a "Liquidating Dividend"), then the Company shall allocate, for
the benefit of the Registered Holder of this Warrant, an amount equal to the
Liquidating Dividends which would have been payable to such Registered Holder
had he, she or it fully exercised this Warrant immediately prior to the record
date applicable to such Liquidating Dividends (or if there be no such record
date, the date as of which the record holders of Common Stock entitled to such
dividends are to be determined), and shall hold such amount, for the benefit of
the Registered Holder, pending the exercise or expiration of this Warrant.
Thereafter, upon the exercise of this Warrant, from time to time, in addition to
the shares of Common Stock purchased upon such exercise, the Company shall pay
to the Registered Holder of this Warrant the Liquidating Dividends which pertain
to such purchased shares of Common Stock. Upon expiration of this Warrant, any
allocated Liquidating Dividends which pertain to shares of Common Stock issuable
upon exercise of this Warrant but not so purchased pursuant to exercise will be
retained by the Company.
Section 4. Purchase Rights. If at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "Purchase Rights"), then the Registered Holder of
this Warrant shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights. For
the avoidance of doubt, the foregoing shall not apply to either this Warrant or
any shares of Common Stock issued upon the exercise of this Warrant in
connection with the rights offering that the Company proposes to make following
the Tranche II Closing.
Section 5. Definitions. The following terms have meanings set forth
below:
"Board of Directors" means the board of directors of the
Company.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banks in New York City are authorized or obligated by law or
executive order to close.
"Common Stock" means the Common Stock of the Company, par
value $0.001 per share, and except for purposes of the shares obtainable upon
exercise of this Warrant, any capital stock of any class of the Company
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"Common Stock Equivalents" means all Options, Convertible
Securities and other options, rights or warrants to subscribe for shares of
Common Stock or other securities that are exercisable for, convertible into or
exchangeable for Common Stock, including without limitation the Company's Class
E Preferred Stock and Class F Preferred Stock.
"Convertible Securities" means any stock or securities
(directly or indirectly) convertible into or exchangeable for Common Stock.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Excluded Securities" means all Common Stock Equivalents
issued and outstanding on the date hereof (including without limitation the
1,000,000 Options issued to ▇▇. ▇▇▇▇▇▇ ▇. Min and all additional Options
issuable to him pursuant to the Patent Purchase Agreement and the EVLT Promotion
Agreement between Diomed, Inc. and Dr. Min), up to 5,400,000 Common Stock
Equivalents (expressed on an as-converted into Common Stock basis) issued by the
Company pursuant to the 2003 Omnibus Incentive Plan of the Company, as the same
may be amended or supplement from time to time, any additional or successor
incentive option or other compensatory stock-based plan adopted by the Company
and approved by the stockholders of the Company; provided, such Common Stock
Equivalents shall be issued in accordance with the terms and conditions of any
such plan, together with any Common Stock or Common Stock Equivalents issued
pursuant to the exercise, conversion or exchange of any of the foregoing.
"Exercise Price" means the price per share of Common Stock set
forth herein, as adjusted from time to time pursuant to the provisions of
Section 2.
"Fair Market Value" means as to any security, the greater of
either (i) the closing price on the day "Fair Market Value" is to be determined
or (ii) the average of the closing prices of such security's sales on the New
York Stock Exchange, the American Stock Exchange or any
other domestic securities exchanges on which such security may at the time be
listed, or, if there have been no sales on any such exchanges on any day, the
average of the highest bid and lowest asked prices on all such exchanges at the
end of such day, or, if on any day such security is not so listed, the average
of the representative bid and asked prices quoted in the Nasdaq Stock Market as
of 4:00 P.M., New York time, on such day, or, if on any day such security is not
quoted on the Nasdaq Stock Market, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar successor
organization (collectively, a "Securities Exchange"), in each such case averaged
over a period of three (3) days consisting of the day as of which "Fair Market
Value" is being determined and the two (2) consecutive Business Days prior to
such day. If at any time such security is not listed or quoted on any Securities
Exchange, the "Fair Market Value" shall be the fair value thereof determined
jointly by the Company and the Registered Holders of Warrants representing a
Majority of the Common Stock purchasable upon exercise of all the Warrants then
outstanding; provided, that if such parties are unable to reach agreement within
a reasonable period of time, such fair value shall be determined by an appraiser
jointly selected by the Company and the Registered Holders of Warrants
representing two-thirds of the Common Stock purchasable upon exercise of all the
Warrants then outstanding. The determination of such appraiser shall be final
and binding on the Company and the Registered Holders of the Warrants, and the
fees and expenses of such appraiser shall be paid by the Company.
"Liquidation Event" means (a) the liquidation, dissolution or
winding up of the Company, (b) any merger, reorganization or consolidation to
which the Company is a party, except for a merger, reorganization or
consolidation in which the Company is the surviving Company, the terms of the
Warrants or Common Stock are not changed and neither the Warrants nor Common
Stock are exchanged for cash, securities or other property, and after giving
effect to such merger, reorganization or consolidation, the holders of the
Company's outstanding capital stock possessing a majority of the voting power
(under ordinary circumstances) to elect a majority of the Board of Directors
immediately prior to the merger, reorganization or consolidation shall continue
to own the Company's outstanding capital stock possessing the voting power
(under ordinary circumstances) to elect a majority of the Board of Directors,
(c) any sale or transfer of more than 50% of the assets of the Company and its
Subsidiaries on a consolidated basis (measured either by book value in
accordance with generally accepted accounting principles consistently applied or
by fair market value determined in the reasonable good faith judgment of the
Board of Directors) in any transaction or series of transactions and (d) any
sale, transfer or issuance or series of sales, transfers and/or issuances of
Common Stock or other securities by the Company or any holders thereof which
results in either (i) any Person or group of Persons (as the term "group" is
used under the Exchange Act), beneficially owning (as such term is used in the
Exchange Act) more than 50% of the Common Stock outstanding or on a fully
diluted basis at the time of such sale, transfer or issuance or series of sales,
transfers and/or issuances or (ii) Persons beneficially owning the Common Stock
outstanding or on a fully diluted basis at the time of such sale, transfer or
issuance or series of sales, transfers and/or issuances beneficially owning less
than 50% of the Common Stock outstanding or on a fully diluted basis following
such sale, transfer or issuance or series of sales, transfers and/or issuances.
"Necessary Approval Date" means the later of (a) the date on
which the stockholders of the Company approve the transactions contemplated by
that certain Securities Purchase Agreement, dated as of August 8, 2003, by and
among the Company and the investors party thereto, and (b) if, and only if, such
approval is necessary, the date on which the American Stock Exchange approves
the transactions contemplated by such Securities Purchase Agreement.
"Options" means any rights or options to subscribe for or
purchase Common Stock or Convertible Securities.
"Person" means an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Qualified Public Offering" means the sale, in an underwritten
public offering registered under the Securities Act, of shares of Common Stock
having an aggregate value (based on the aggregate proceeds received by the
Company in such offering, prior to applicable underwriting discounts or
commissions) of at least $20,000,000 million, and which are listed on any
securities exchange or quoted on the Nasdaq Stock Market System or the
over-the-counter market following such offering.
Section 6. No Voting Rights; Limitations of Liability. This Warrant
shall not have any voting rights. No provision hereof, in the absence of
affirmative action by the Registered Holder to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Registered Holder shall
give rise to any liability of such Registered Holder for the Exercise Price of
Warrant Shares acquirable by exercise hereof or as a stockholder of the Company.
Section 7. Warrant Transferable. Subject to the transfer conditions
referred to in the legend endorsed hereon, this Warrant and all rights hereunder
are transferable, in whole or in part, without charge to the Registered Holder,
upon surrender of this Warrant with a properly executed Assignment (in the form
of Exhibit III hereto) at the principal office of the Company.
Section 8. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrants of like tenor representing
in the aggregate the purchase rights hereunder, and each of such new Warrants
shall represent such portion of such rights as is designated by the Registered
Holder at the time of such surrender. All Warrants representing portions of the
rights hereunder are referred to herein as the "Warrants."
Section 9. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing this Warrant, and in the case of any such loss, theft
or destruction, upon receipt of an unsecured indemnity agreement of the
Registered Holder in form reasonably satisfactory to the Company, or, in the
case of any such mutilation upon surrender of such certificate, the Company
shall (at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the same rights represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
Section 10. Notices. Except as otherwise expressly provided hereunder,
all notices referred to herein shall be in writing and shall be (i) delivered in
person, (ii) transmitted by facsimile, (iii) sent by registered or certified
mail, postage prepaid with return receipt requested, or (iv) sent by reputable
overnight courier service, fees prepaid, to (x) the Company, at its principal
executive offices and (y) to any Registered Holder, at such Registered Holder's
address as it appears in the records of the Company (unless otherwise indicated
by any such Registered Holder). Notices shall be deemed given upon personal
delivery, upon receipt of return receipt in the case of delivery by mail, upon
acknowledgment by the receiving facsimile or one day following deposit with an
overnight courier service.
Section 11. Amendment and Waiver. Except as otherwise provided herein,
the provisions of the Warrants may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Registered Holders of Warrants representing two-thirds of the shares of Common
Stock obtainable upon exercise of outstanding Warrants; provided, that no such
action may increase the Exercise Price of the Warrants or decrease the number of
shares or class of stock obtainable upon exercise of each Warrant without the
written consent of the Registered Holders of Warrants representing 100% of the
shares of Common Stock obtainable upon exercise of the Warrants.
Section 12. Warrant Register. The Company shall maintain at its
principal executive offices books for the registration and the registration of
transfer of Warrants. The Company may deem and treat the Registered Holder as
the absolute owner hereof (notwithstanding any notation of ownership or other
writing hereon made by anyone) for all purposes and shall not be affected by any
notice to the contrary.
Section 13. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ITS CONFLICT OF LAWS PRINCIPLES. THE PARTIES HERETO FURTHER AGREE AND
ACKNOWLEDGE THAT ANY DISPUTE OR CONTROVERSY ARISING OUT OF OR IN ANY MANNER
WHATSOEVER RELATING TO THIS WARRANT SHALL BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK LOCATED IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
WARRANT HEREBY (i) ACCEPTS THE JURISDICTION OF THE AFORESAID COURTS; (ii)
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT OF ANY SUCH COURT WITH RESPECT TO
THIS WARRANT; AND (iii) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE,
COURT, ACTION OR PROCEEDING WITH RESPECT TO THIS WARRANT BROUGHT IN ANY SUCH
COURT AND FURTHER IRREVOCABLY WAIVES ANY SUCH CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
Section 14. Headings. The headings of the various sections of this
Warrant have been inserted for reference only and shall not be deemed to be a
part of this Warrant.
Section 15. Specific Performance. The Company, on the one hand, and the
Registered Holder, on the other hand, acknowledge that money damages would not
be a sufficient remedy for any breach of this Warrant. It is accordingly agreed
that the parties shall be entitled to specific performance and injunctive relief
as remedies for any such breach, these remedies being in addition to any of the
remedies to which they may be entitled at law or equity.
Section 16. Remedies Cumulative. Except as otherwise provided herein,
the remedies provided herein shall be cumulative and shall not preclude the
assertion by any party hereto of any other rights or the seeking of any other
remedies against any other party hereto.
Section 17. No Third Party Beneficiaries. Except as specifically set
forth or referred to herein, nothing herein is intended or shall be construed to
confer upon any person or entity other than the parties hereto and their
successors or assigns, any rights or remedies under or by reason of this
Warrant.
Section 18. Severability. If any term, provision, covenant or
restriction of this Warrant is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Warrant shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
Section 19. Registration Rights.
19.1 Registration Under the Securities Act of 1933. The
Warrants, and the shares of Common Stock issuable upon exercise of the Warrants,
have not been registered under the Securities Act of 1933, as amended (the
"Act"). Upon exercise, in part or in whole, of the Warrant certificates
representing the shares of Common Stock and any other securities issuable upon
exercise of the Warrants or issuable pursuant to this Warrant (the "Warrant
Securities") shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be offered or sold except pursuant to (i)
an effective registration statement under the Act, (ii) to the
extent applicable, Rule 144 under the Act (or any similar rule
under such Act relating to the disposition of securities), or
(iii) an opinion of counsel, if such opinion shall be
reasonably satisfactory to counsel to the issuer, that an
exemption from registration under such Act is available.
19.2 Piggyback Registration. If, at any time commencing after the date
hereof and expiring seven (7) years thereafter, the Company proposes to register
any of its securities under the Act (other than in connection with a merger or
pursuant to Form S-8), it will give written notice by registered mail, at least
thirty (30) days prior to the filing of each such registration statement, to the
Registered Holder of the Warrants and/or the Warrant Securities of its intention
to do so. If the Registered Holder of the Warrants and/or the Warrant Securities
notifies the Company within twenty (20) days after receipt of any such notice of
its or their desire to include any such securities in such proposed registration
statement, the Company shall afford such Registered Holder of the Warrants
and/or the Warrant Securities the opportunity to have any such Warrant
Securities registered under such registration statement.
Notwithstanding the provisions of this Section 19.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 19.2 (irrespective of whether a written request for inclusion of
any such securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
19.3 Demand Registration.
(a) At any time commencing after the date hereof and expiring
seven (7) years thereafter, the Registered Holder of the Warrants and/or Warrant
Securities representing a "Majority" (as hereinafter defined) of such securities
(assuming the exercise of all of the Warrants) shall have the right (which right
is in addition to the registration rights under Section 19.2 hereof),
exercisable by written notice to the Company, to have the Company prepare and
file with the Securities and Exchange Commission (the "Commission"), on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of counsel for the Company and
counsel for the Registered Holder, in order to comply with the provisions of the
Act, so as to permit a public offering and sale of their respective Warrant
Securities for nine (9) consecutive months by such Registered Holder and any
other Registered Holder of the Warrants and/or Warrant Securities who notify the
Company within ten (10) days after receiving notice from the Company of such
request.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 19.3 by any Registered Holder to all
other holders of the Warrants and the Warrant Securities within ten (10) days
from the date of the receipt of any such registration request.
(c) In addition to the registration rights under Section 19.2 and
subsection (a) of this Section 19.3, at any time commencing after the date
hereof and expiring five (5) years thereafter, any Registered Holder of Warrants
and/or Warrant Securities shall have the right, exercisable by written request
to the Company, to have the Company prepare and file, on one occasion, with the
Commission a registration statement so as to permit a public offering and sale
for nine (9) consecutive months by any such Registered Holder of its Warrant
Securities; provided, however, that the provisions of Section 19.4(b) hereof
shall not apply to any such registration request and registration and all costs
incident thereto shall be at the expense of the Registered Holder or Registered
Holders making such request.
(d) Notwithstanding anything to the contrary contained herein, if
the Company shall not have filed a registration statement for the Warrant
Securities within the time period specified in Section 19.4(a) hereof pursuant
to the written notice specified in Section 19.3(a) hereof of a Majority of the
Registered Holders of Warrants and/or Warrant Securities, the Company agrees
that upon the written notice of election of a majority of the holders of the
Warrants and/or Warrant Securities it shall repurchase (i) any and all Warrant
Securities at the higher of the Fair Market Value per share of Common Stock (x)
the date of the notice sent pursuant to Section 19.3(a), or (y) the expiration
of the period specified in Section 19.4(a) and (ii) any and all Warrants at such
Fair Market Value less the exercise price of such Warrant. Such repurchase shall
be in immediately available funds and shall close within two (2) days after the
later of (i) the expiration of the period specified in Section 19.4(a), or (ii)
the delivery of the written notice of election specified in this Section
19.3(d).
19.4 Covenants of the Company with Respect to Registration.
In connection with any registration under Sections 19.2 or 19.3 hereof,
the Company covenants and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within thirty (30) days of receipt of any demand therefor, shall use
its best efforts to have any registration statement declared effective at the
earliest possible time, and shall furnish each Registered Holder desiring to
sell Warrant Securities such number of prospectuses as shall reasonably be
requested.
(b) The Company shall pay all costs (excluding fees and expenses
of more than one counsel for the Registered Holder and any underwriting or
selling commissions), fees and expenses in connection with all registration
statements filed pursuant to Sections 19.2 and 19.3(a) hereof including, without
limitation, the Company's legal and accounting fees, printing expenses, blue sky
fees and expenses. The Registered Holder will pay all costs, fees and expenses
in connection with any registration statement filed pursuant to Section 19.3(c).
If the Company shall fail to comply with the provisions of Section 19.4(a), the
Company shall, in addition to any other equitable or other relief available to
the Registered Holder, be liable for any and all incidental, special and
consequential damages and damages due to loss of profit sustained by the
Registered Holder requesting registration of their Warrant Securities.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Warrant Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Registered Holder,
provided that the Company shall not be obligated to execute or file any general
consent to do business under the laws of any such jurisdiction.
(d) The Company shall indemnify the Registered Holder of the
Warrant Securities to be sold pursuant to any registration statement and each
person, if any, who controls such Registered Holder within the meaning of
Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), from and against any and all loss, claim,
damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such registration statement.
(e) The Registered Holder of the Warrant Securities to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, from and against any and all
loss, claim, damage, expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Act, the Exchange Act or otherwise,
arising from information furnished in writing by or on behalf of such Registered
Holder, or their successors or assigns, for specific inclusion in such
registration statement.
(f) Nothing contained in this Agreement shall be construed as
requiring the Registered Holder to exercise their Warrants prior to the initial
filing of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities
other than the Warrant Securities to be included in any registration statement
filed pursuant to Section 19.3 hereof without the prior written consent of the
Registered Holder of the Warrants and Warrant Securities representing a Majority
of such securities (assuming an exercise of all of the Warrants).
(h) The Company shall furnish to each Registered Holder
participating in the offering and to each underwriter, if any, a signed
counterpart, addressed to such Registered Holder or underwriter, of (i) an
opinion of counsel to the Company, dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under the underwriting agreement), and
(ii) a "cold comfort" letter dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering, a
letter dated the date of the closing under the underwriting agreement) signed by
the independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(i) The Company shall as soon as practicable after the effective
date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
(j) For purposes of this Agreement, the term "Majority" in
reference to the Registered Holder of Warrants or Warrant Securities, shall mean
in excess of fifty percent (50%) of the then outstanding Warrants or Warrant
Securities that (i) are not held by the Company, an affiliate, officer,
director, creditor, employee or agent thereof or any of their respective
affiliates, members of their family, persons acting as nominees or in
conjunction therewith, or (ii) have not been resold to the public.
(k) In addition to the Warrant Securities, upon the written
request therefor by any Registered Holder, the Company shall include in the
registration statement any other securities of the Company held by such
Registered Holder as of the date of filing of such registration statement,
including without limitation restricted shares of Common Stock, options,
warrants or any other securities convertible into or exchangeable for shares of
Common Stock.
Section 20. Entire Agreement; Modification. This Warrant contains the
entire understanding between the parties hereto with respect to the subject
matter hereof and may not be modified or amended except by a writing duly signed
by the party against whom enforcement of the modification or amendment is
sought.
Section 21. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Warrant. In the
event an ambiguity or question of intent or interpretation arises, this Warrant
shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Warrant.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed and attested by its duly authorized officers under its corporate seal and
to be dated the date hereof.
DIOMED HOLDINGS, INC.
By: _______________________________
Name:
Title:
EXHIBIT I
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 1.2(a)(iv)]
(Exercise and payment by check or securities)
To: Dated:
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. W-____), hereby agrees to subscribe for the
purchase of ____________ shares of the Common Stock covered by such Warrant and
makes payment herewith in full therefor at the price per share provided by such
Warrant.
Signature:_________________________________
Address:__________________________________
EXHIBIT II
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 1.2(a)(iv)(3)]
(Cashless Exercise)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _________________ shares of
Common Stock all in accordance with the terms hereof and Section 1.2(a)(iv)(3)
of the Warrant Agreement. The undersigned requests that a certificate for such
securities be registered in the name of whose address is and that such
Certificate be delivered to __________________ whose address is
_____________________.
Dated:
Signature _____________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate.)
-----------------------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
EXHIBIT III
[FORM OF ASSIGNMENT PURSUANT TO SECTION 1.2(a)(iii)]
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and hereby irrevocably constitutes and appoints _______________________________
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
Signature: ___________________________________
(Signature must confirm in all respects to name of holder as
specified on the face of the Warrant Certificate.)
(Insert Social Security or Other Identifying Number of Assignee).