**EXHIBIT 4.7**

 

THIS WARRANT, AND ANY SHARES OFCOMMON STOCK ACQUIRED UPON THE EXERCISE OF THIS WARRANT, HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANYOTHER SECURITIES LAWS.  THIS WARRANT HASBEEN ACQUIRED FOR INVESTMENT, AND NEITHER THIS WARRANT NOR ANY OF SUCH SHARESMAY BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVEREGISTRATION OF THEM UNDER THE ACT AND ANY OTHER APPLICABLE SECURITIES LAW, ORRECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TOTHE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THEACT. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE TRANSFERRED EXCEPT UPONTHE CONDITIONS SPECIFIED IN THIS WARRANT, AND NO TRANSFER OF THIS WARRANT ORANY OF SUCH SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONSSHALL HAVE BEEN COMPLIED WITH.

 

STOCK PURCHASE WARRANT

 

For 721,510 Sharesof the Common Stock ofAmerican Medical Technologies, Inc.

 

BY THISWARRANT, American Medical Technologies, Inc., a Delaware corporation (the“Company”), certifies that, for good and valuable consideration, the receiptand sufficiency of which are hereby acknowledged, Bank One, N.A., a nationalbanking association (“Bank One”), along with its assigns, as set forth inSection 12(a), (collectively, “Holder”) is entitled to subscribe for andpurchase from the Company, at the times and subject to the terms and conditionsset forth herein, a total of seven hundred thirty six thousand, two hundredthirty four (721,510) fully paid and nonassessable shares of Common Stock, $.04par value per share, of the Company (“Common Stock”), at an exercise price ofeleven cents ($.11) per share (the “Exercise Price”), subject to adjustmentfrom time to time pursuant to the provisions of Section 5 hereof.

 

This Warrantis subject to the following provisions, terms and conditions:

 

1.                                       Definitions.  For the purpose of the Warrant, thefollowing terms, whether or not capitalized or underlined in the text of thisWarrant, shall have the following meanings:

 

“Commission”shall mean the U.S. Securities and Exchange Commission or any othergovernmental authority at the time administering the Securities Act.

 

“Company”shall have the meaning specified in the introduction to this Warrant, and shallinclude any corporation or business entity resulting from the merger,consolidation or conversion of the Company.

 

“FairMarket Price Per Share” shall mean the average of the closing sales prices,if available, or the average of the bid and asked prices for the Common Stockon the principal market therefor for the five trading days preceding the daywhich is two business days prior to the day of exercise, or if no such price isavailable, by an appraiser selected by the holder hereof and reasonablyacceptable to the Company and

 

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such appraisal shall be thesole expense of the Company.  Thedetermination of such appraiser shall be conclusive and binding on the Holderhereof and the Company.

 

“ForbearanceAgreement” shall mean that Third Amended and Restated Forbearance Agreemententered into between the Company and Bank One dated as of October 30, 2002.

 

“SecuritiesAct” shall mean the Securities Act of 1933, as amended, or any similar orsuccessor federal statute, and the rules and regulations of the Commissionthereunder, all as the same shall be in effect at the time.  Reference to a particular section of theSecurities Act shall include a reference to the comparable section, if any, ofany such similar or successor federal statute.

 

“Warrant(s)”shall mean this Warrant issued by the Company, including all amendments theretoand all warrants issued in exchange, transfer or replacement therefor.

 

“WarrantShares” shall mean the shares of Common Stock purchased or purchasable uponthe exercise of the Warrant.

 

2.                                       Vestingand Term.  The rights represented bythis Warrant shall be fully vested, and the Warrant shall be immediatelyexercisable, upon the execution of the Forbearance Agreement (the “VestingDate”).  The Warrant and the rightsrepresented hereby shall terminate at midnight, Central Time, on the date (the“Expiration Date”) that is five years after the Vesting Date.

 

3.                                       Exercise;Issuance of Certificates; Payment for Shares.  The rights represented by this Warrant may be exercised by theHolder, in whole or in part, by the surrender of this Warrant, together with acompleted Exercise Agreement in the form attached hereto (“ExerciseAgreement”), during normal business hours on any business day at the principaloffice of the Company (or such other office or agency of the Company as it maydesignate by notice in writing to the Holder at the address of such Holderappearing on the books of the Company) at any time prior to the Expiration Dateand upon payment to the Company by certified check or wire transfer in anamount equal to the Exercise Price for the Warrant Shares to be purchased inconnection with such exercise.  TheHolder may, at its option, pay for the Warrant Shares by tendering Common Stock,including Warrant Shares and the right to receive Warrant Shares, valued attheir Fair Market Price Per Share on the date of exercise, or any combinationof cash and Common Stock. The Company agrees that the shares so purchased shallbe and are deemed to be issued to the Holder or its designee (subject to thetransfer restrictions applicable to this Warrant or to Warrant Shares) as therecord owner of such shares as of the close of business on the date on whichthis Warrant shall have been surrendered and payment made for such shares asaforesaid.

 

Certificatesfor the Warrant Shares so purchased, representing the aggregate number ofshares specified in said Exercise Agreement, shall be delivered to the Holderwithin a reasonable time after the rights represented by this Warrant shallhave been so exercised.  The stockcertificate or certificates so delivered shall be in such denominations as maybe requested by the Holder, shall be registered in the name of said Holder orsuch other name as shall be designated by said Holder (subject to the transferrestrictions applicable to this Warrant and to the Warrant Shares) and shallbear a restrictive legend similar to that on this Warrant unless in the opinionof counsel to the Holder such legend is not required in order to comply withthe Securities Act.  If this Warrantshall have been exercised only in part, then, unless this Warrant has expired,the Company shall, at its expense, at the time of delivery of said stockcertificates(s), deliver to said Holder a new Warrant representing the right topurchase the number of shares of Common

 

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Stock with respect to whichthis Warrant shall not then have been exercised.  The Company shall pay  allexpenses and charges payable in connection with the preparation, execution anddelivery of stock certificates (and any new Warrants) except that, in case suchstock certificates shall be registered in a name or names other than the Holderof this Warrant or such Holder’s nominee, funds sufficient to pay all stocktransfer taxes which shall be payable in connection with the execution anddelivery of such stock certificates shall be paid by the Holder to the Companyat the time of delivery of such stock certificates by the Company as mentionedabove.

 

This Warrant shallbe exercisable only for a whole number of Warrant Shares.  No fractions of shares of Common Stock, orscrip for any such fractions of shares, shall be issued upon the exercise ofthis Warrant.  The Company shall pay acash adjustment in respect of such fractional interest in an amount equal tothe Fair Market Price Per Share of one share of Common Stock at the time ofsuch exercise multiplied by such fraction computed to the nearest whole cent.

 

4.                                       Sharesto be Fully Paid; Reservation of Shares. The Company covenants and agrees that all Warrant Shares will be dulyauthorized and validly issued and upon issuance in accordance with the termsand conditions hereof, will be fully paid and nonassessable and free from alltaxes, liens and charges with respect to the issue thereof.  Without limiting the generality of theforegoing, the Company covenants and agrees that it will from time to time takeall such action as may be required to assure that the par value per WarrantShare is at all times equal to or less than the Exercise Price then ineffect.  The Company further covenantsand agrees that during the period within which the rights represented by thisWarrant may be exercised, the Company will at all times have authorized, andreserved for the purpose of issue upon exercise of the subscription rightsevidenced by this Warrant, a sufficient number of shares of Common Stock toprovide for the exercise of the rights represented by this Warrant and anyother warrants.

 

5.                                       Reclassifications,Consolidation, Merger or Sale of Assets. If the Company shall effect any reclassification or similar change ofoutstanding shares of the Common Stock, (including without limitation, asubdivision of the outstanding shares of Common Stock into a larger number ofshares of Common Stock or a combination of the outstanding shares of CommonStock into a smaller number of shares of Common Stock) or a reorganization or aconsolidation or merger of the Company with another entity, or a conveyance ofall or substantially all of the assets of the Company, this Warrant shall,after such capital reorganization, reclassification, consolidation, merger orconveyance, be exercisable only for the number of shares of stock or otherproperties, including cash, to which a holder of the number of shares of theCommon Stock deliverable upon exercise of this Warrant would have been entitledupon such capital reorganization, reclassification, change, consolidation,merger or conveyance if this Warrant had been exercised immediately prior tothe effective date of such event; and the Exercise Price then in effect shallbe adjusted to equal (A) the Exercise Price then in effect multiplied by thenumber of shares of Common Stock for which this Warrant is exercisableimmediately prior to the adjustment divided by (B) the number of shares ofCommon Stock for which this Warrant is exercisable immediately after suchadjustment; and, in any such case, appropriate adjustments (as determined bythe Company’s Board of Directors) shall be made in the application of theprovisions set forth in this Section 5 with respect to the rights and intereststhereafter of the Holder of this Warrant to the end that the provisions setforth in this Section 5 (including provisions with respect to changes in andother adjustments of the exercise rights in this Section 5) shall thereafter beapplicable, as nearly as may be reasonable, in relation to any shares of stockor other securities thereafter deliverable upon the exercise of this Warrant.The Company shall give written notice to the Holder of any transaction withinthe scope of this Section 5 promptly after the

 

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effective date therefor andprovide in such written notice a brief description of the terms and conditionsof such transaction.

 

6.                                       CertainAgreements of the Company.  TheCompany covenants and agrees that:

 

(a)                                  ProhibitedActions.  The Company will not, byamendment of its Articles of Incorporation or through any reorganization,transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observanceof this Warrant.

 

(b)                                 Successorsand Assigns.  This Warrant will bebinding upon any entity succeeding to the Company by merger or consolidation.

 

(c)                                  Issuanceof Warrant Shares.  If the issuanceof any Warrant Shares required to be reserved for purposes of exercise of thisWarrant is required to be registered with or approved by any federalgovernmental authority under any federal or state law (other than anyregistration under the Securities Act or state securities laws), before suchshares may be issued upon exercise of this Warrant, the Company will, at itsexpense, use its best efforts to cause such shares to be so registered orapproved, at such time, so that such shares may be issued in accordance withthe terms hereof.

 

7.                                     RegistrationRights.  The Company will, uponwritten request to it by the Holder made at any time after the firstanniversary date of the issuance of this Warrant, promptly file and use allcommercially reasonable efforts to be declared effective, a registrationstatement on Form S-3 (or any successor short-form registration) registeringall or a portion of the Warrant Shares under the Securities Act, but only if theCompany is able to use Form S-3 in such registration, and subject to thefollowing limitations and conditions:

 

(a)                                  Company’sObligations.  The Company will makecommercially reasonable efforts to (i) cause the registration statement tobecome and remain effective for a period of not less than two (2) years, (ii)furnish to the Holder copies of the registration statement, and all amendmentsand supplements thereto, and a sufficient number of prospectuses, and allamendments and supplements thereto, to facilitate the disposition of theWarrant Shares, (iii) notify the Holder of all material developments andcommunications from the Commission in connection with such filing, (iv)register or qualify the Warrant Shares under such other securities or blue skylaws of such jurisdictions in the United States as the Holder reasonablyrequests in light of Holder’s intended plan of distribution and (v) obtain thewithdrawal of any order suspending the effectiveness of the registrationstatement or the qualification of any shares covered thereby.

 

(b)                                 CompanyControl.  Except as otherwiseprovided herein, the Company shall have sole control in connection with thepreparation, filing, withdrawal, amendment or supplementing of the registrationstatement, the selection of any underwriters and the distribution ofprospectuses and may include in such registration statement shares issuedpursuant to the exercise of any other warrants issued by the Company for whichregistration by the Company is required.

 

(c)                                  SingleDemand.  The Company shall berequired to effect a registration on only one occasion, provided that suchregistration statement filed by the Company is declared effective by theCommission and remains effective for a period of at least two (2) years.

 

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(d)                                 Expenses.  The Company shall pay all expenses incurredin connection with such registration, except for the fees and expenses of anyunderwriter used by Holder in the sale.

 

(e)                                  Postponement.  The Company shall be entitled to postponesuch registration if and to the extent that (i) its Board of Directors shalldetermine that such registration would interfere with a pending corporatetransaction or (ii) the Company is in possession of material nonpublicinformation, the disclosure of which the Company believes would not be in thebest interests of the Company; provided that neither such postponement shallexceed 120 days.

 

(f)                                    Useof Rule 144.  The Company shall notbe obligated to register the Warrant Shares if the Holder is able sell theWarrant Shares (or the portion thereof that it desires to register) in the openmarket pursuant to the exemption provided by Rule 144(k) under the SecuritiesAct, in the reasonable judgment of outside counsel acceptable to both Holderand the Company.

 

(g)                                 Holder’sObligations.  In order to have theWarrant Shares registered by the Company, the Holder must furnish accurate andcomplete information regarding the Holder and the distribution of the WarrantShares as requested by the Company for inclusion in the registration statement,and enter into such underwriting agreements, questionnaires, powers ofattorney, indemnities and other documents as are then customary in such offerings.

 

8.                                       Piggyback Registration Rights. * *Atany time following the date hereof, whenever the Company proposes to registerany Common Stock for its own or the account of others under the Securities Actfor a public offering, other than (i) any shelf registration of shares to beused as consideration for acquisitions of additional businesses by the Companyand (ii) registrations relating to employee benefit plans, the Company shallgive the Holder prompt written notice of its intent to do so.  Upon the written request of the Holder givenwithin 15 business days after receipt of such notice, the Company, at its soleexpense, shall cause to be included in such registration all Warrant Shares(including any shares of Common Stock issued as a dividend or otherdistribution with respect to, or in exchange for, or in replacement of suchWarrant Shares) which the Holder requests; provided, however, if the Company isadvised in writing in good faith by any managing underwriter of an underwrittenoffering of the securities being offered pursuant to any registration statementunder this Section 8 that the number of shares to be sold by persons other thanthe Company is greater than the number of such shares which can be offeredwithout adversely affecting the offering, the Company may reduce pro rata thenumber of shares offered for the accounts of such persons, including the Holder(based upon the number of shares held by such person) to a number deemedsatisfactory by such managing underwriter. In consideration for the Company agreeing to its obligations under thisSection 8, the Holder agrees that, effective upon the request of theunderwriters managing the Company’s public offering, the Holder shall beobligated, so long as all executive officers and directors of the Company arebound by a comparable obligation, not to sell, make any short sale of, loan,grant any option for the purchase of, or otherwise dispose of any shares ofCommon Stock without the prior written consent of such underwriters, for suchperiod of time (not to exceed one hundred twenty (120) days) from the effectivedate of such public offering as the underwriters may specify.  Notwithstanding the foregoing, Section 7(f)shall apply to this Section 8.

 

9.                                       IssueTax.  The issuance of certificatesfor Warrant Shares upon the exercise of this Warrant shall be made withoutcharge to the Holder of such Warrant or such shares for any issuance tax inrespect thereof, provided that the Company shall not be required to pay any taxwhich may be payable in

 

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respect of any transferinvolved in the issuance and delivery of any certificate in a name other thanthat of the Holder of the Warrant exercised.

 

10.                                 Closingof Books.  The Company will at notime close its transfer books against the transfer of the Warrant, or in anymanner interfere with the timely exercise of the Warrant.

 

11.                                 NoRights or Liabilities as a Shareholder. This Warrant shall not entitle the Holder to any voting rights or otherrights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action bythe Holder to purchase Warrant Shares, and no mere enumeration herein of therights or privileges of the Holder, shall give rise to any liability of suchHolder for the Exercise Price or as a shareholder of the Company, whether suchliability is asserted by the Company or by creditors of the Company.

 

12.                                 Transferand Exchange.

 

(a)                                  NoTransfer of Warrant.  This Warrantmay not be assigned, offered, sold, pledged or otherwise transferred, except toan affiliate of Bank One.

 

(b)                                 WarrantExchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder atthe principal office of the Company (or such other office or agency of theCompany as it may designate by notice in writing to the Holder), for newWarrants of like tenor representing in the aggregate the right to subscribe forand purchase the number of shares of Common Stock which may be subscribed forand purchased hereunder, each of such new Warrants to represent the right tosubscribe for and purchase such number of shares as shall be designated by saidHolder at the time of such surrender.

 

(c)                                  Replacementof Warrant.  Upon receipt of writtennotice from the Holder or other evidence reasonably satisfactory to the Companyof the loss, theft, destruction or mutilation of this Warrant and, in the caseof any such loss, theft or destruction, upon delivery of an indemnityagreement, or other indemnity reasonably satisfactory to the Company, or, inthe case of any such mutilation, upon surrender and cancellation of suchWarrant, the Company will execute and deliver, in lieu thereof, a new Warrantof like tenor.

 

(d)                                 Cancellation;Payment of Expenses.  Upon thesurrender of this Warrant in connection with any exchange, transfer orreplacement as provided in this Section 12, this Warrant shall be promptlycanceled by the Company.  The Companyshall pay all taxes (other than securities transfer taxes) and all otherexpenses and charges payable in connection with the preparation, execution anddelivery of Warrants pursuant to this Section 12.

 

13.                                 Notices.  All notices and other communicationsrequired or permitted hereunder shall be in writing, and shall be deemed tohave been delivered on the date delivered by hand, telegram, facsimile or bysimilar means, on the first day following the day when sent by recognizedcourier or overnight delivery service (fees prepaid), or on the third dayfollowing the day when deposited in the mail, registered or certified (postageprepaid), addressed: (i) if to the Holder, at the registered address of theHolder as set forth in the register kept by the Company at its principal officewith respect to the Warrant, or to such other address as the Holder may havedesignated to the Company in writing, and (ii) if to the Company, at

 

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5555 Bear Lane, Corpus Christi,Texas 78405; Attn: Chief Executive Officer, or such other address as theCompany may have designated in writing to the Holder.

 

14.                                 GoverningLaw.  This Warrant shall beconstrued and enforced in accordance with, and the rights of the parties shallbe governed by, the laws of the State of Texas, without regard to principles ofconflicts of laws.

 

15.                                 Remedies.  The Company stipulates that the remedies atlaw of the Holder in the event of any default or threatened default by theCompany in the performance of or compliance with any of the terms of thisWarrant are not and will not be adequate, and that such terms may bespecifically enforced by a decree for the specific performance of any agreementcontained herein or by an injunction against a violation of any of the termshereof or otherwise.

 

16.                                 Miscellaneous.

 

(a)                                  Amendments.  This Warrant and any provision hereof may bechanged, waived, discharged or terminated, but only by an instrument in writingsigned by the party (or any predecessor in interest thereof) against whomenforcement of the same is sought.

 

(b)                                 DescriptiveHeadings.  The descriptive headingsof the several sections of this Warrant are inserted for purposes of referenceonly, and shall not affect the meaning or construction of any of the provisionshereof.

 

(c)                                  Conflictwith Forbearance Agreement.  In theevent of any conflict between the terms hereof and the terms of the ForbearanceAgreement regarding this Warrant, the terms hereof shall control.

 

 

IN WITNESSWHEREOF, the Company has caused this Warrant to be signed by its dulyauthorized officer effective as of October 30, 2002.

 
|   |   | American  Medical Technologies, Inc. |
|--------|--------|--------------------------------------|
|   |   |                                 |
|   |   |                                 |
|   |   | By:                                  | /s/ Roger Dartt |   |
|   |   |                                 | Roger Dartt,  President and CEO |

 

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**FORM OF EXERCISE AGREEMENT**

 

**[DATE]**

 

American Medical Technologies,Inc.5555 Bear LaneCorpus Christi, Texas 78405Attention: Chief Executive Officer

 

Theundersigned, pursuant to the provisions set forth in the attached Warrant,hereby agrees to subscribe for and purchase             sharesof Common Stock covered by such Warrant, and makes payment herewith in fulltherefor at the price per share provided by such Warrant in cash, WarrantShares or the right to receive Warrant Shares, as indicated below.

 

Method of Payment:                                                     

 
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