Document:

f8k012512ex10iv_maxsound.htm

Exhibit 10.4

 

EXHIBIT B

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

WARRANT TO PURCHASE

 

SHARES OF COMMON STOCK

 

OF

 

MAX SOUND CORPORATION

 

Expires January 24, 2017

 

No.: W-11-1 Number of Shares: 12,000,000

Date of Issuance: January 24, 2012

 

FOR VALUE RECEIVED, the undersigned, Max Sound Corporation, a Delaware corporation (together with its successors and assigns, the "Issuer" and the “Company”), hereby certifies that 590 Partners Capital, LLC (“590”) or its registered assigns is entitled to subscribe for and purchase, during the Term (as hereinafter defined), up to twelve million (12,000,000) shares (the “Shares”) (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise price per share the greater of $1.00 or an amount equal to 130% of the average Closing Price based on the 15 Trading Days preceding March 31, 2012. Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 9 hereof.

 

1.            Term. The term of this Warrant shall commence on January 24, 2012 and shall expire at 6:00 p.m., Eastern Time, on January 24, 2017 (such period being the "Term").

 

2.            Method of Exercise; Payment; Issuance of New Warrant; Transfer and Exchange.

 

(a)   Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part during the Term.

 

(b)   Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such Holder's election (i) by certified or official bank check or by wire transfer to an account designated by the Issuer, (ii) by "cashless exercise" in accordance with the provisions of subsection (c) of this Section 2, or (iii) by a combination of the foregoing methods of payment selected by the Holder of this Warrant.

 

  

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(c)   Cashless Exercise.

 

(i)    Notwithstanding any provisions herein to the contrary, subject to Section 2(c)(ii) below, if (i) the Per Share Market Value of one share of Common Stock is greater than the Warrant Price (at the date of calculation as set forth below) and (ii) a registration statement under the Securities Act providing for the resale of the Warrant Stock is not then in effect by the date such registration statement is required to be effective pursuant to the Registration Rights Agreement (as defined in the Purchase Agreement) or not effective at any time during the Effectiveness Period (as defined in the Registration Rights Agreement) in accordance with the terms of the Registration Rights Agreement, unless the registration statement is not effective as a result of the Issuer exercising its rights under Section 3(n) of the Registration Rights Agreement, in lieu of exercising this Warrant by payment of cash, the Holder may exercise this Warrant by a cashless exercise and shall receive the number of shares of Common Stock equal to an amount (as determined below) by surrender of this Warrant at the principal office of the Issuer together with the properly endorsed Notice of Exercise in which event the Issuer shall issue to the Holder a number of shares of Common Stock computed using the following formula:

 

	 	
X = Y - (A)(Y)

                  B

	 

 

	Where	X =	the number of shares of Common Stock to be issued to the Holder.
	 	 	 
	 	Y =	the number of shares of Common Stock purchasable upon exercise of all of the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised.
	 	 	 
	 	A =	the Warrant Price.
	 	 	 
	 	B =	the Per Share Market Value of one share of Common Stock.

 

(ii)    Holders of this Warrant shall not have the right to exercise this Warrant by a cashless exercise pursuant to Section 2(c)(i) above if GEM Global Yield Fund Limited (“GEM”) does not, within six months from the date of January 24, 2012, deliver a bona fide fair market offer for a licensing or funding opportunity that results in the Issuer receiving at least $3,000,000 of cash income.

 

(iii)    Holders of this Warrant shall not have the right to exercise this Warrant by a cashless exercise pursuant to Section 2(c)(i) above if the Company does not become S-3 Eligible for a period of at least 90 calendar days within the six months period beginning on January 24, 2012 and ending 180 days later.

 

  

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(iv)    If the Company does not become S-3 Eligible for a 90-day period within six months from the period beginning on January 24, 2012 and ending 180 days later, and if GEM does not, within six months from the date of January 24, 2012, deliver to the Company a bona fide fair market offer for a licensing or funding opportunity that results in the Issuer receiving at least $3,000,000 of cash income, then 10,800,000 of the Shares issuable upon exercise of this Warrant shall expire immediately and in their entirety 181 days after January 24, 2012, and the remaining 1,200,000 of Shares issuable upon exercise of this Warrant shall remain in tact without a cashless exercise option and without the Company having any obligation to register the Shares other than in accordance with piggyback registration rights in the event that the Company otherwise files a registration statement.

 

(d)   Issuance of Stock Certificates . In the event of any exercise of this Warrant in accordance with and subject to the terms and conditions hereof, certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three (3) Trading Days after such exercise (the “Delivery DateÓ) or, at the request of the Holder (provided that a registration statement under the Securities Act providing for the resale of the Warrant Stock is then in effect or that the shares of Warrant Stock are otherwise exempt from registration), issued and delivered to the Depository Trust Company (ÒDTCÓ) account on the Holder’s behalf via the Deposit Withdrawal Agent Commission System (ÒDWACÓ) within a reasonable time, not exceeding three (3) Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the holder of the shares of Warrant Stock so purchased as of the date of such exercise. Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent shall be obligated to issue and deliver the shares to the DTC on a holder’s behalf via DWAC only if such exercise is in connection with a sale or other exemption from registration by which the shares may be issued without a restrictive legend and the Issuer and its transfer agent are participating in DTC through the DWAC system. The Holder shall deliver this original Warrant, or an indemnification reasonably acceptable to the Issuer undertaking with respect to such Warrant in the case of its loss, theft or destruction, at such time that this Warrant is fully exercised. With respect to partial exercises of this Warrant, the Issuer shall keep written records for the Holder of the number of shares of Warrant Stock exercised as of each date of exercise.

 

(e)   Compensation for Buy-In on Failure to Timely Deliver Certificates Upon  Exercise. In addition to any other rights available to the Holder, if the Issuer fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Stock pursuant to an exercise on or before the Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Stock which the Holder anticipated receiving upon such exercise (a ÒBuy-In”), then the Issuer shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of shares of Warrant Stock that the Issuer was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of shares of Warrant Stock for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Issuer timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Issuer shall be required to pay the Holder $1,000. The Holder shall provide the Issuer written notice indicating the amounts payable to the Holder in respect of the Buy -In, together with applicable confirmations and other evidence reasonably requested by the Issuer. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Issuer’s failure to timely deliver certificates representing shares of Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.

 

  

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(f)            Transferability of Warrant. Subject to Section 2(h) hereof, this Warrant may be transferred by a Holder, in whole or in part, without the consent of the Issuer. If transferred pursuant to this paragraph, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants to purchase the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant thereto.

 

(g)            Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such Holder shall fail to make any such request, the failure shall not affect the continuing obligation of the Issuer to afford such rights to such Holder.

 

(h)            Compliance with Securities Laws.

 

(i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws.

 

(ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing shares of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form:

 

	 	THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.	 

 

  

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(iii)    The Issuer agrees to reissue this Warrant or certificates representing any of the Warrant Stock, without the legend set forth above if at such time, prior to making any transfer of any such securities, the Holder shall give written notice to the Issuer describing the manner and terms of such transfer. Such proposed transfer will not be effected until: (a) either (i) the Issuer has received an opinion of counsel reasonably satisfactory to the Issuer, to the effect that the registration of such securities under the Securities Act is not required in connection with such proposed transfer, (ii) a registration statement under the Securities Act covering such proposed disposition has been filed by the Issuer with the Securities and Exchange Commission and has become effective under the Securities Act, (iii) the Issuer has received other evidence reasonably satisfactory to the Issuer that such registration and qualification under the Securities Act and state securities laws are not required, or (iv) the Holder provides the Issuer with reasonable assurances that such security can be sold pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issue r has received an opinion of counsel reasonably satisfactory to the Issuer, to the effect that registration or qualification under the securities or "blue sky" laws of any state is not required in connection with such proposed disposition, or (ii) compliance with applicable state securities or "blue sky" laws has been effected or a valid exemption exists with respect thereto. The Issuer will respond to any such notice from a holder within three (3) Trading Days. In the case of any proposed transfer under this Section 2(h), the Issuer will use reasonable efforts to comply with any such applicable state securities or "blue sky" laws, but shall in no event be required, (x) to qualify to do business in any state where it is not then qualified, (y) to take any action that would subject it to tax or to the general service of process in any state where it is not then subject, or (z) to comply with state securities or “blue sky” laws of any state for which registration by coordination is unavailable to the Issuer. The restrictions on transfer contained in this Section 2(h) shall be in addition to, and not by way of limitation of, any other restrictions on transfer contained in any other section of this Warrant. Whenever a certificate representing the Warrant Stock is required to be issued to a the Holder without a legend, in lieu of delivering physical certificates representing the Warrant Stock, the Issuer shall cause its transfer agent to electronically transmit the Warrant Stock to the Holder by crediting the account of the Holder or Holder's Prime Broker with DTC through its DWAC system (to the extent not inconsistent with any provisions of this Warrant or the Purchase Agreement).

 

(i)   Accredited Investor Status. In no event may the Holder exercise this Warrant in whole or in part unless the Holder is an “accredited investor” as defined in Regulation D under the Securities Act.

 

3.   Stock Fully Paid; Reservation and Listing of Shares; Covenants.

 

(a)            Stock Fully Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, when issued in accordance with the terms of this Warrant, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issuance upon exercise of this Warrant a number of authorized but unissued shares of Common Stock equal to at least one hundred fifty (150%) of the number of shares of Common Stock issuable upon exercise of this Warrant without regard to any limitations on exercise.

 

(b)            Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any Governmental Authority under any federa l or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, and maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder (provided that such Warrant Stock has been registered pursuant to a registration statement under the Securities Act then in effect), and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer.

 

(c)            Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by -laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) not amend or modify any provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect the rights of the Holder, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exempt ions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant.

 

  

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(d)            Loss, Theft, Destruction of Warrant. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock.

 

(e)            Payment of Taxes. The Issuer will pay any documentary stamp taxes attributable to the initial issuance of the Warrant Stock issuable upon exercise of this Warrant; provided, however, that the Issuer shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates representing Warrant Stock in a name other than that of the Holder in respect to which such shares are issued.

 

4.   Adjustment of Warrant Price. The price at which such shares of Warrant Stock may be purchased upon exercise of this Warrant shall be subject to adjustment from time to time as set forth in this Section 4. The Issuer shall give the Holder notice of any event described below which requires an adjustment pursuant to this Section 4 in accordance with the notice provisions set forth in Section 5.

 

(a)   Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale.

 

(i)    In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate or merge with or into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made to the Warrant Price and the number of shares of Warrant Stock that may be purchased upon exercise of this Warrant so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, to receive at the Warrant Price as adjusted to take into account the consummation of such Triggering Event, in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such H older had exercised the rights represented by this Warrant immediately prior thereto (including the right of a shareholder to elect the type of consideration it will receive upon a Triggering Event), subject to adjustments (subsequent to such corporate act ion) as nearly equivalent as possible to the adjustments provided for elsewhere in this Section 4; provided, however, the Holder at its option may elect to

 

  

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receive shares of Common Stock in an amount equal to eighty percent (80%) of the average VWAP of the Common Stock for the forty (40) Trading Days preceding the date of such Triggering Event. Immediately upon the occurrence of a Triggering Event, the Issuer shall notify the Holder in writing of such Triggering Event and provide the calculations in determining the number of shares of Warrant Stock issuable upon exercise of the new warrant and the adjusted Warrant Price. Upon the Holder’s request, the continuing or surviving corporation as a result of such Triggering Event shall issue to the Holder a new warrant of like tenor evidencing the right to purchase the adjusted number of shares of Warrant Stock and the adjusted Warrant Price pursuant to the terms and provisions of this Section 4(a)(i). Notwithstanding the foregoing to the contrary, this Section 4(a)(i) shall only apply if the surviving entity pursuant to any such Triggering Event is a company that has a class of equity securities registered pursuant to the Securities Exchange Act of 1934, as amended, and its common stock is listed or quoted on a national securities exchange, national automated quotation system or the OTC Bulletin Board. In the event that the surviving entity pursuant to any such Triggering Event is not a public company that is registered pursuant to the Securities Exchange Act of 1934, as amended, or its common stock is not listed or quoted on a national securities exchange, national automated quotation system or the OTC Bulletin Board, then the Holder shall have the right to demand that the Issuer pay to the Holder an amount in cash equal to the value of this Warrant calculated in accordance with the Black-Scholes formula.

 

(ii)    In the event that the Holder has elected not to exercise this Warrant prior to the consummation of a Triggering Event and has also elected not to receive shares of Common Stock pursuant to the provisions of Section 4(a)(i) above, so long as the surviving entity pursuant to any Triggering Event is a company that has a class of equity securities registered pursuant to the Securities Exchange Act of 1934, as amended, and its common stock is listed or quoted on a national securities exchange, national automated quotation system or the OTC Bulletin Board, the surviving entity and/or each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, any continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and the surviving entity and/or each such Person shall have similarly delivered to such Holder an opinion of counsel for the surviving entity and/or each such Person, which counsel shall be reasonably satisfactory to such Holder, or in the alternative, a written acknowledgement executed by the President or Chief Financial Officer of the Issuer, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of this subsection (a)) shall be applicable to the Securities, cash or property which the surviving entity and/or each such Person may be required to deliver upon any exercise of this Warrant or the exercise of any rights pursuant hereto.

 

  

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(b)   Stock Dividends, Subdivisions and Combinations. If at any time the Issuer shall:

 

(i) make or issue or set a record date for the holders of the Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, shares of Common Stock,

 

(ii) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

 

(iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock,

 

then (1) the number of shares of Common Stock for which this Warrant is exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock which a record holder of the same number of shares of Common Stock for which this Warrant is exercisable immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and (2) the Warrant Price then in effect shall be adjusted to equal (A) the Warrant Price then in effect multiplied by the number of shares of Common Stock for which this Warrant is exercisable immediately prior to the adjustment divided by (B) the number of shares of Common Stock for which this Warrant is exercisable immediately after such adjustment.

 

(c)   Certain Other Distributions. If at any time the Issuer shall make or issue or set a record date for the holders of the Common Stock for the purpose of entitling them to receive any dividend or other distribution of:

 

(i) cash,

 

(ii) any evidences of its indebtedness, any shares of stock of any class or any other securities or property of any nature whatsoever (other than cash, Common Stock Equivalents or Additional Shares of Common Stock), or

 

(iii) any warrants or other rights to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property of any nature whatsoever (other than cash, Common Stock Equivalents or Additional Shares of Common Stock),

 

then (1) the number of shares of Common Stock for which this Warrant is exercisable shall be adjusted to equal the product of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such adjustment multiplied by a fraction (A) the numerator of which shall be the Per Share Market Value of Common Stock at the date of taking such record and (B) the denominator of which shall be such Per Share Market Value minus the amount allocable to one share of Common Stock of any such cash so distributable and of the fair value (as determined in good faith by the Board of Directors of the Issuer and supported by an opinion from an investment banking firm mutually agreed upon by the Issuer and the Holder) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights so distributable, and (2) the Warrant Price then in effect shall be adjusted to equal (A) the Warrant Price then in effect multiplied by the number of shares

 

  

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of Common Stock for which this Warrant is exercisable immediately prior to the adjustment divided by (B) the number of shares of Common Stock for which this W arrant is exercisable immediately after such adjustment. A reclassification of the Common Stock (other than a change in par value, or from par value to no par value or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be deemed a distribution by the Issuer to the holders of its Common Stock of such shares of such other class of stock within the meaning of this Section 4(c) and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock within the meaning of Section 4(b).

 

(d)            Issuance of Additional Shares of Common Stock. In the event the Issuer shall at any time following the Original Issuance Date issue any Additional Shares of Common Stock (otherwise than as provided in the foregoing subsections (b) through (c) of this Section 4), at a price per share less than the Warrant Price then in effect or without consideration, then the Warrant Price upon each such issuance shall be adjusted to the price equal to the consideration per share paid for such Additional Shares of Common Stock; provided, however, that no such adjustment shall be made upon the issuance of up to $6,000,000 of such Additional Shares of Common Stock.

 

(e)            Issuance of Common Stock Equivalents. In the event the Issuer shall at any time following the Original Issuance Date take a record of the holders of its Common Stock for the purpose of entitling them to receive a distribution of, or shall in any manner (whether directly or by assumption in a merger in which the Issuer is the surviving corporation) issue or sell, any Common Stock Equivalents, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange shall be less than the Warrant Price in effect immediately prior to the time of such issue or sale, or if, after any such issuance of Common Stock Equivalents, the price per share for which Additional Shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less than the Warrant Price in effect at the time of such amendment or adjustment, then the Warrant Price then in effect shall be adjusted as provided in Section 4(d); provided, however, that no such adjustment shall be made upon the issuance of up to $6,000,000 of such of Common Stock Equivalents. No further adjustments of the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Price then in effect shall be made upon the actual issue of such Common Stock upon conversion or exchange of such Common Stock Equivalents.

 

(f)            Other Provisions applicable to Adjustments under this Section. The following provisions shall be applicable to the making of adjustments of the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Price then in effect provided for in this Section 4:

 

  

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(i)   Computation of Consideration. To the extent that any Additional Shares of Common Stock or any Common Stock Equivalents (or any warrants or other rights therefor) shall be issued for cash consideration, the consideration received by the Issuer therefor shall be the amount of the cash received by the Issuer therefor, or, if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the initial public offering price (in any such case subtracting any amounts paid or receivable for accrued interest or accrued dividends and without taking into account any compensation, discounts or expenses paid or incurred by the Issuer for and in the underwriting of, or otherwise in connection with, the issuance thereof). In connection with any merger or consolidation in which the Issuer is the surviving corporation (other than any consolidation or merger in which the previously outstanding shares of Common Stock of the Issuer shall be changed to or exchanged for the stock or other securities of another corporation), the amount of consideration therefore shall be, deemed to be the fair value, as determined reasonably and in good faith by the Board, of such portion of the assets and business of the nonsurviving corporation as the Board may determine to be attributable to such shares of Common Stock or Common Stock Equivalents, as the case may be. The consideration for any Additional Shares of Common Stock issuable pursuant to any warrants or other rights to subscribe for or purchase the same shall be the consideration received by the Issuer for issuing such warrants or other rights plus the additional consideration payable to the Issuer upon exercise of such warrants or other rights. The consideration for any Additional Shares of Common Stock issuable pursuant to the terms of any Common Stock Equivalents shall be the consideration received by the Issuer for issuing warrants or other rights to subscribe for or purchase such Common Stock Equivalents, plus the consideration paid or payable to the Issuer in respect of the subscription for or purchase of such Common Stock Equivalents, plus the additional consideration, if any, payable to the Issuer upon the exercise of the right of conversion or exchange in such Common Stock Equivalents. In the event of any consolidation or merger of the Issuer in which the Issuer is not the surviving corporation or in which the previously outstanding shares of Common Stock of the Issuer shall be changed into or exchanged for the stock or other securities of another corporation, or in the event of any sale of all or substantially all of the assets of the Issuer for stock or other securities of any corporation, the Issuer shall be deemed to have issued a number of shares of its Common Stock for stock or securities or other property of the other corporation computed on the basis of the actual exchange ratio on which the transaction was predicated, and for a consideration equal to the fair market value on the date of such transaction of all such stock or securities or other property of the other corporation. In the event any consideration received by the Issuer for any securities consists of property other than cash, the fair market value thereof at the time of issuance or as otherwise ap plicable shall be as determined in good faith by the Board. In the event Common Stock is issued with other shares or securities or other assets of the Issuer for consideration which covers both, the consideration computed as provided in this Section 4(f)(i) shall be allocated among such securities and assets as determined in good faith by the Board.

 

(ii)   When Adjustments to Be Made. The adjustments required by this Section 4 shall be made whenever and as often as any specified event requiring an adjustment shall occur, except that any adjustment of the number of shares of Common Stock for which this Warrant is exercisable that would otherwise be required may be postponed (except in the case of a subdivision or combination of shares of the Common Stock, as provided for in Section 4(b)) up to, but not beyond the date of exercise if such adjustment either by itself or with other adjustments not previously made adds or subtracts less than one percent (1%) of the shares of Common Stock for which this Warrant is exercisable immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum amount (except as aforesaid) which is postponed shall be carried forward and made as soon as such adjustment, together with other adjustments required by this Section 4 and not previously made, would result in a minimum adjustment or on the date of exercise. For the purpose of any adjustment, any

specified event shall be deemed to have occurred at the close of business on the date of its occurrence.

 

  

10

  

 

(iii)            Fractional Interests. In computing adjustments under this Section 4, fractional interests in Common Stock shall be taken into account to the nearest one one-hundredth (1/100th) of a share.

 

(iv)            When Adjustment Not Required. If the Issuer shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights and shall, thereafter and before the distribution to stockholders thereof, legally abandon its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled.

 

(g)            Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant.

 

(h)   Escrow of Warrant Stock. If after any property becomes distributable pursuant to this Section 4 by reason of the taking of any record of the holders of Common Stock, but prior to the occurrence of the event for which such record is taken, and the Holder exercises this Warrant, any shares of Common Stock issuable upon exercise by reason of such adjustment shall be deemed the last shares of Common Stock for which this Warrant is exercised (notwithstanding any other provision to the contrary herein) and such shares or other property shall be held in escrow for the Holder by the Issuer to be issued to the Holder upon and to the extent that the event actually takes place, upon payment of the current Warrant Price. Notwithstanding any other provision to the contrary herein, if the event for which such record was taken fails to occur or is rescinded, then such escrowed shares shall be cancelled by the Issuer and escrowed property returned.

 

5.   Notice of Adjustments . Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to a national or regional accounting firm reasonably acceptable to the Issuer and the Holder, provided that the Issuer shall have ten (10) days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty (30) days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The costs and expenses of the initial accounting firm shall be paid equally by the Issuer and the Holder and, in the case of an objection by the Issuer, the costs and expenses of the subsequent accounting firm shall be paid in full by the Issuer.

 

  

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6.            Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with any exercise hereof, but in lieu of such fractional shares, the Issuer shall round the number of shares to be issued upon exercise up to the nearest whole number of shares.

 

7.            Ownership Cap and Exercise Restriction. Notwithstanding anything to the contrary set forth in this Warrant, at no time may a Holder of this Warrant exercise this Warrant if the number of shares of Common Stock to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned by such Holder and its affiliates at such time, the number of shares of Common Stock which would result in such Holder and its affiliates beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess of 4.99% of the then issued and outstanding shares of Common Stock; provided, however , that upon a Holder of this Warrant providing the Issuer with sixty-one (61) days notice (pursuant to Section 13 hereof) (the "Waiver Notice") that such Holder would like to waive this Section 7 with regard to any or all shares of Common Stock issuable upon exercise of this Warrant, this Section 7 will be of no force or effect with regard to all or a portion of the Warrant referenced in the Waiver Notice until the date that the Holder notifies the Issuer (pursuant to Section 13 hereof) that the Holder revokes the Waiver Notice; provided, further, that during the sixty-one (61) day period prior to the expiration of the Term, the Holder may waive this Section 7 by providing a Waiver Notice at any time during such sixty-one (61) day period.

 

8.            [Reserved.]

 

9.            Definitions. For the purposes of this Warrant, the following terms have the following meanings:

 

"Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except: (i) securities issued (other than for cash) in connection with a merger, acquisition, or consolidation, (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to the date of the Purchase Agreement or issued pursuant to the Purchase Agreement (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Holder), (iii) the Warrant Stock, (iv) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the purpose of raising capital, (v) Common Stock issued or the issuance or grants of options to purchase Common Stock pursuant to the Issuer’s stock option plans and employee stock purchase plans outstanding as they exist on the date of the Purchase Agreement, and (vi) any warrants issued to the placement agent and its designees for the transactions contemplated by the Purchase Agreement.

 

“Board" shall mean the Board of Directors of the Issuer.

 

  

12

  

 

"Capital Stock" means and includes (i) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type.

 

"Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law.

 

“Closing Price” shall mean the closing price of the Common Stock, as recorded by the Principal Market, on a particular day.

 

"Common Stock" means the common stock, $0.0001 par value per share, of the Issuer and any other Capital Stock into which such stock may hereafter be changed.

 

"Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security.

 

"Convertible Securities" means evidences of indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities.

 

"Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign.

 

"Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders.

 

"Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant.

 

"Original Issue Date" means January 23, 2012.

 

"OTC Bulletin Board" means the over-the-counter electronic bulletin board.

 

"Other Common" means any other Capital Stock of th e Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount.

 

  

13

  

 

“Outstanding Common Stock” means, at any given time, the aggregate amount of outstanding shares of Common Stock, assuming full exercise, conversion or exchange (as applicable) of all options, warrants and other Securities which are convertible into or exercisable or exchangeable for, and any right to subscribe for, shares of Common Stock that are outstanding at such time.

 

"Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature.

 

"Per Share Market Value" means on any particular date (a) the last closing bid price per share of the Common Stock on such date on a registered national stock exchange on which the Common Stock is then listed, or if there is no such price on such date, then the closing price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not listed or traded then on any registered national stock exchange, the last closing bid price for a share of Common Stock in the over-the-counter market, as reported by the OTC Bulletin Board or by Pink Sheets LLC (or similar organization or agency succeeding to its functions of reporting prices) at the close of business on such date, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Holder; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights.

 

"Purchase Agreement" means the Common Stock Purchase Agreement dated as of the date hereof, between the Issuer and the GEM.

 

"Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities.

 

"Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect.

 

  

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"Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

 

"Term" has the meaning specified in Section 1 hereof.

 

"Trading Day" means (a) a day on which the Common Stock is traded on a national securities exchange, or (b) if the Common Stock is not traded on a national securities exchange, a day on which the Common Stock is quoted in the over-the-counter market as reported by the OTC Bulletin Board or Pink Sheets LLC (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a) or (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close.

 

"VWAP" means, for any date, the price determined by the first of the following clauses that applies: (a) the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on a national securities exchange or the OTC Bulletin Board as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the Common Stock is not then quoted for trading on a national securities exchange or the OTC Bulletin Board and if prices for the Common Stock are then reported by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Issuer.

 

"Voting Stock" means, as applied to the Capital Stock of any corporation, Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency.

 

"Warrant Price" initially means $1.00, provided, however, that if on March 31, 2012 the average per share Closing Price for the prior 15 Trading Days exceeds $1.00, then the “Warrant Price” shall be adjusted to an amount equal to 130% of such average per share Closing Price based on the 15 Trading Days preceding March 31, 2012, as such price may be adjusted from time to time as shall result from the adjustments specified in this Warrant, including Section 4 hereto.

 

"Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof.

 

"Warrant Stock" means Common Stock issuable upon exercise of this Warrant.

 

  

15

  

 

10.   Other Notices. In case at any time:

 

	
(A)  

	
the Issuer shall make any distributions to the holders of Common Stock; or

 

	
(B)  

	
the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or other rights; or

 

	
(C)  

	
there shall be any reclassification of the Capital Stock of the Issuer; or

 

	
(D)  

	
there shall be any capital reorganization by the Issuer; or

 

	
(E)  

	
there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly -owned Subsidiary); or

 

	
(F)  

	
there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock;

 

then, in each of such cases, the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding -up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty (20) days prior to the action in question and not less than ten (10) days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock.

 

11.   Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Holder.

 

  

16

  

 

12.            Governing Law ; Jurisdiction . This Warrant shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Warrant shall not be interpreted or construed with any presumption against the party causing this Warrant to be drafted. The Issuer and the Holder agree that venue for any dispute arising under this Warrant will lie exclusively in the state or federal courts located in California, and the parties irrevocably waive any right to raise forum non conveniens or any other argument that California is not the proper venue. The Issuer and the Holder irrevocably consent to personal jurisdiction in the state and federal courts of the state of California. The Issuer and the Holder consent to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 12 shall affect or limit any right to serve process in any other manner permitted by law. The Issuer and the Holder hereby agree that the prevailing party in any suit, action or proceeding arising out of or relating to this Warrant or the Purchase Agreement, shall be entitled to reimbursement for reasonable legal fees from the non-prevailing party. The parties hereby waive all rights to a trial by jury.

 

13.            Notices. Any notice, demand, request, waiver or other communication requiredor permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.The addresses for such communications shall be:

 

	If to the Issuer:	Max Sound Corporation
	 	2902 A Colorado Ave.
	 	Santa Monica, CA 90404
	 	Attn: John Blaisure
	 	 
	with copies (which copies	 
	shall not constitute notice) to:	Christine Melilli.
	 	Anslow + Jaclin LLP
	 	195 Route 9 South
	 	Manalapan, NJ 07726
	 	 
	If to the Holder:	590 Partners Capital, LLC
	 	c/o GEM
	 	 
27th Floor

	 	New York, NY 10022

 

  

17

  

 

	with copies (which copies	 
	shall not constitute notice) to:	Kramer Levin Naftalis & Frankel LLP
	 	1177 Avenue of the Americas
	 	New York, New York 10036
	 	Telephone Number: (212) 715-9100 
	 	Fax: (212) 715-8000
	 	Attention: Christopher S. Auguste, Esq.

 

Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other party hereto.

 

14.            Warrant Agent. The Issuer may, by written notice to each Holder of this Warrant, appoint an agent having an office in New York, New York for the purpose of issuing shares of Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

 

15.            Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

 

16.            Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock.

 

17.            Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein.

 

18.            Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

  

18

  

 

19.   Registration Rights. The Holder of this Warrant is entitled to the benefit of certain registration rights with respect to the shares of Warrant Stock issuable upon the exercise of this Warrant pursuant to that certain Registration Rights Agreement, of even date herewith, by and among the Issuer and the Holder (the “Registration Rights Agreement”) and the registration rights with respect to the shares of Warrant Stock issuable upon the exercise of this Warrant by any subsequent Holder may only be assigned in accordance with the terms and provisions of the Registration Rights Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

  

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IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written.

 

	 	MAX SOUND CORPORATION	 
	 	 	 	 
	 	
By: 

	/s/ Greg Halpern	 
	 	Name: Greg Halpern	 
	 	Title: Chief Financial Officer	 
	 	 	 	 

 

 

  

20

  

 

EXERCISE FORM

WARRANT

 

MAX SOUND CORPORATION

 

The undersigned , pursuant to the provisions of the within Warrant, hereby elects to purchase _____ shares of Common Stock of covered by the within Warrant.

 

	Dated:	 	 	Signature	 	 
	 	 	 	 	 	 
	 	 	 	Address	 	 
	 	 	 	 	 	 

 

Number of shares of Common Stock beneficially owned or deemed beneficially owned by the Holder on the date of Exercise:                                          

The undersigned is an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended.

 

The undersigned intends that payment of the Warrant Price shall be made as (check one): 

 

Cash Exercise                       

 

Cashless Exercise                       

 

If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $ by certified or official bank check (or via wire transfer) to the Issuer in accordance with the terms of the Warrant.

 

If the Holder has elected a Cashless Exercise, a certificate shall be issued to the Holder for the number of shares equal to the whole number portion of the product of the calculation set forth below, which is. The Company shall pay a cash adjustment in respect of the fractional portion of the product of the calculation set forth below in an amount equal to the product of the fractional portion of such product and the Per Share Market Value on the date of exercise, which product is .

 

X = Y - (A)(Y)

B

 

Where:

 

The number of Ordinary Shares to be issued to the Holder                                       (“X”).

 

The number of Ordinary Shares purchasable upon exercise of all of the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised                              (“Y”).

 

The Warrant Price                                     (“A”).

 

  

21

  

 

The Per Share Market Value of one Ordinary Share (“B”).

 

ASSIGNMENT

 

FOR VALUE RECEIVED,                       hereby sells, assigns and transfers unto                   the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint                      , attorney, to transfer the said Warrant on the books of the within named corporation.

 

	Dated:	 	 	Signature	 	 
	 	 	 	 	 	 
	 	 	 	Address	 	 
	 	 	 	 	 	 

 

PARTIAL ASSIGNMENT

 

FOR VALUE RECEIVED,                       hereby sells, assigns and transfers unto                                  the right to purchase   shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint                           , attorney, to transfer that part of the said Warrant on the books of the within named corporation.

 

	Dated:	 	 	Signature	 	 
	 	 	 	 	 	 
	 	 	 	Address	 	 
	 	 	 	 	 	 

 

FOR USE BY THE ISSUER ONLY:

 

This Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of , _____, shares of Common Stock issued therefor in the name of , Warrant No. W-_____ issued for ____ shares of Common Stock in the name of                      .

 

 

 

 

 

22ex10_3.htm

Exhibit 10.3

HILL-ROM HOLDINGS, INC.

 STOCK AWARD

(EFFECTIVE <<GRANT DATE>>)

1.           Purpose.  The purpose of the Hill-Rom Holdings, Inc. Stock Award (hereinafter called the “Award”), which is granted under the Hill-Rom Holdings, Inc. Stock Incentive Plan (the “Plan”), is to promote profitability and growth of Hill-Rom Holdings, Inc. (the “Company”) by offering an incentive payable in Company common stock to <<Name>> (the “Employee”) who contributes to such profitability and growth.

2.           Amount of Award.  Solely for purposes of this Award, the Company shall cause an account to be established in the name of the Employee (“Deferred Stock Account”), which shall be assumed to be invested in <<Units>> shares (“Initial Deferred Stock Award”) of common stock, no par value of the Company (“Common Stock”).  The Initial Deferred Stock Award represents the number of shares of Common Stock that would be earned if the performance goal described in Section 3 were attained at the “Target” performance level, as described in Section 3.  No actual shares of Common Stock shall be held in the Deferred Stock Account, and the number of hypothetical shares of Common Stock maintained in the Deferred Stock Account (“Deferred Stock”) shall be a book entry which states the number of shares of Common Stock the Employee would have a right to receive in accordance with the terms of this Award.  Any stock dividends, stock splits and other similar rights inuring to Common Stock shall be assumed to inure to the Deferred Stock, which may increase or decrease the number of shares of Deferred Stock in the Deferred Stock Account.  Notwithstanding anything herein to the contrary, no cash dividends paid on Common Stock by the Company shall be paid or credited to the account of the Employee with respect to any Deferred Stock in the Deferred Stock Account.

 

3.           Vested Deferred Stock.

(a)        Subject to Section 4, the shares of Deferred Stock in the Employee’s Deferred Stock Account will become non-forfeitable (“Vested Deferred Stock”) based on the Company’s total shareholder return (“TSR”) performance over a period beginning on October 1, 2011 and ending on September 30, 2014 (“Performance Period”) relative to the Peer Companies’ (as defined in Exhibit A) TSR during the Performance Period, as determined by the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”), in accordance with the following schedule:

	
Company’s Relative TSR

	
Percentage of Deferred Stock

	
Percentile Ranking

	
Becoming Vested Deferred Stock

	
Performance Level

	  
	  	  	  
	
Less than 25th percentile

	
   0%

	  
	  	  	  
	
25th percentile

	
 25%

	
Threshold

	  	  	  
	
60th percentile

	
100%

	
Target

 

  

  

  

 

If the Company’s TSR relative to the Peer Companies’ TSR during the Performance Period is above the 25th percentile but below the 60th percentile, the number of shares of Deferred Stock that become Vested Deferred Stock shall be determined by interpolation based on the schedule set forth above.  Subject to Section 4, any portion of the Deferred Stock that does not become Vested Deferred Stock in accordance with the schedule set forth above based on the Company’s TSR performance during the Performance Period shall be forfeited by Employee without the payment of any consideration or further consideration by the Company.

If the Company’s TSR relative to the Peer Companies’ TSR during the Performance Period is above the 60th percentile, (i) all of the Deferred Stock in the Employee’s Deferred Stock Account on September 30, 2014 shall become Vested Deferred Stock, and (ii) the Committee, in its discretion, may grant to Employee additional Deferred Stock equal to a percentage of the shares of Deferred Stock in the Employee’s Deferred Stock Account on September 30, 2014, determined according to the following schedule, with the appropriate percentage determined by interpolation as necessary:

	  	
Percentage of September 30, 2014

	  	
Deferred Stock Account Balance

	
Company’s Relative TSR

	
That May Be Granted

	
Percentile Ranking

	
As Additional Deferred Stock

	  	  
	
60th percentile

	
     0%

	  	  
	
65th percentile

	
    33%

	  	  
	
70th percentile

	
   67%

	  	  
	
75th percentile or above

	
 100%

Any additional Deferred Stock granted by the Committee shall immediately be Vested Deferred Stock as of the date of such grant by the Committee.  Any fractional shares of Vested Deferred Stock determined under this Section 3 shall be rounded up to the next whole share of Vested Deferred Stock.

(b)        TSR shall be based on the trailing 20-day average closing stock prices of the Company and the Peer Companies measured as of (and including the 20th day) the first and last business days of the Performance Period and including the effect of any dividends actually paid as if the dividends were invested in the stock of the Company or the Peer Company, as the case may be, and proportionately adjusted for stock splits, reorganizations or similar transactions occurring the during the Performance Period.

(c)        The Peer Companies are set forth in Exhibit A.  If a member of the Peer Companies is acquired by a third party during the Performance Period, such member shall no longer be a Peer Company.  If a member of the Peer Companies declares bankruptcy during the Performance Period, such member will remain a Peer Company for purposes of determining the Company’s relative TSR percentile ranking for the Performance Period, and such member's TSR shall be considered to be at the lowest ranking.

 

  

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4.           Employment Requirements.

(a)        Except as otherwise provided herein, upon the Employee’s termination of employment for any reason before the end of the Performance Period, any Deferred Stock maintained in the Deferred Stock Account which is not Vested Deferred Stock shall be forfeited by the Employee without the payment of any consideration or further consideration by the Company, and neither the Employee nor any successors, heirs, assigns, or legal representatives of the Employee shall thereafter have any further rights or interest in such forfeited Deferred Stock.  If the Employee remains continuously employed by the Company until the last day of the Performance Period, the number of shares of Deferred Stock that are determined by the Committee to be Vested Deferred Stock pursuant to Section 3 shall become Vested Deferred Stock, regardless of whether the Employee remains employed with the Company until the date of such determination. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and/or any of its Subsidiaries (as defined in the Plan) shall not be considered terminations of employment.  For purposes of this Agreement and the Plan, the Committee shall have absolute discretion to determine the date and circumstances of termination of the Employee’s employment, and its determination shall be final, conclusive and binding upon the Employee.  Notwithstanding anything herein to the contrary, the transfer of the Employee’s employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with a Distribution (as defined below) or disposition shall not constitute a termination of employment for purposes of this Agreement, and the Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein.  In particular, if the Employee transfers employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or in anticipation of a Distribution or disposition, such transfer of employment shall not constitute a termination of employment for purposes of this Agreement, and the Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein.

(b)        Notwithstanding the foregoing, any Deferred Stock maintained in the Deferred Stock Account shall become Vested Deferred Stock upon the termination of the Employee’s employment with the Company, one of its Subsidiaries or one of their respective divisions before the end of the Performance Period by reason of disability (as determined by the Committee) or death.  The Employee shall have no right to any additional shares of Deferred Stock, regardless of the Company’s TSR performance during the Performance Period.  In the event of the termination of Employee’s employment with the Company, one of its Subsidiaries or one of their respective divisions before the end of the Performance Period by reason of Retirement (as defined below), a pro rata portion (based on the number of days of Employee’s employment during the Performance Period) of the Deferred Stock that would have become Vested Deferred Stock in accordance with Section 3, if any, shall become Vested Deferred Stock at the end of the Performance Period, including any additional Deferred Stock that may be granted by the Committee under Section 3 if the Company’s TSR relative to the Peer Companies’ TSR during the Performance Period is above the 60th percentile.  For purposes of this paragraph, “Retirement” means a termination of employment after (i) the day after the first anniversary date of the effective date of this Award, and (ii) attaining age fifty-five (55) and completion of five (5) years of employment.

 

  

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(c)        Any Deferred Stock maintained in the Deferred Stock Account shall become Vested Deferred Stock upon the termination of the Employee’s employment by the Company for any reason other than on account of his death, disability, retirement or for Cause (as defined in the Employee’s employment agreement) or by Employee for Good Reason (as defined in the Employee’s employment agreement)(i) after the day after the first anniversary date of the effective date of this Award and (ii) after the occurrence, but before the second anniversary of (A) a Change in Control (as defined in Section 14.2 of the Plan), or (B) a sale, transfer or disposition of substantially all of the assets or capital stock of a Subsidiary (as defined in the Plan) or division of the Company or one of its Subsidiaries for whom the Employee is employed at the time of such Change in Control, sale, transfer, or disposition.  Notwithstanding anything herein to the contrary, the distribution by the Company to Company shareholders of any or all of the shares of common stock of any of its Subsidiaries (“Distribution”) shall not constitute an event causing Deferred Stock to become Vested Deferred Stock as described in the preceding sentence.

In consideration of the grant of this Award, the Employee hereby agrees and acknowledges that any provisions in an Employment Agreement and/or a Change in Control Agreement between the Employee and the Company related to the vesting of awards granted under the Plan shall not apply and have no effect with respect to this Award, and that the vesting of this Award upon a Change in Control shall be governed solely by this Agreement.

5.           Delivery of Shares.  The Company shall deliver to the Employee shares of Common Stock equal in number to the number of shares of Vested Deferred Stock.  The shares of Common Stock delivered to the Employee shall be from shares held by the Company as treasury stock or from shares of Common Stock acquired by the Company in the open market.  Subject to the Employee’s election to defer, all shares of Common Stock to be delivered to the Employee shall be delivered as soon as administratively possible after the day on which such shares become Vested Deferred Stock, but no later than March 15th of the calendar year immediately following the calendar year in which such shares become Vested Deferred Stock.  However, shares of Vested Deferred Stock delivered due to the Employee’s termination under Section 4(c) shall be delivered with ninety (90) days after the Employee’s termination provided that the Employee shall have no right to designate the calendar year in which the shares will be delivered.  Notwithstanding the foregoing, if shares become deliverable by reason of the Employee’s separation from service following a Change in Control and at the time of the Employee’s separation from service the Employee is a “specified employee” as defined in Code Section 409A, then the shares of Common Stock to be delivered shall be delivered on the date which is six months after the date of the Employee’s separation from service.

6.           Administration of the Award.  The Committee shall administer the Award.  The Committee shall have complete and full discretion in the administration and interpretation of the terms of the Award.

  

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7.           Right to Defer Payment of Award.

(a)        Election to Defer Award.  The Employee may elect to defer payment of the Award otherwise due on the date shares become Vested Deferred Stock by completing a written election and delivering such election to the Company at least one year prior to such date; provided however, that the completion of such written election and the delivery of such election may be at an earlier date as determined by the Committee or required by law to insure the validity of such deferral.  The Employee may not defer payment for a period that is shorter than five (5) years after the date the shares become Vested Deferred Stock.  At the end of the deferral period elected by the Employee (or within a certain period of time after the last day of the deferral period as determined by the Committee or required by law to insure the validity of the deferral), the Company, subject to Sections 9, 10 and 11, shall deliver to the Employee shares of Common Stock equal in number to the number of Vested Deferred Stock held in the Employee’s Deferred Stock Account.

(b)        Financial Hardship.  A withdrawal from the Employee’s Deferred Stock Account of Vested Deferred Stock shall be permitted prior to the termination of the deferral period in the event that the Employee experiences an “unforeseeable emergency” as such term in defined Section 409A(a)(2)(B)(ii) of the Internal Revenue Code of 1986, as amended (“Code”) and the regulations issued thereunder.  The Employee must apply to the Committee for an unforeseeable emergency withdrawal and demonstrate that the circumstances being experienced were not under the Employee’s control and constitute a real emergency, which is likely to cause a severe financial hardship.  The Committee shall have the authority to require such medical or other evidence as it may need to determine the necessity for the Employee’s withdrawal request.  If such application for withdrawal is permitted, the amount of such withdrawal shall be limited to an amount reasonably necessary to satisfy the emergency need, and the Committee must take into account any additional compensation available.  If the Employee makes a withdrawal, the amount of the Employee’s Deferred Stock Account under this Award shall be proportionately reduced to reflect the withdrawal.  Also, the withholding requirements described in Section 11 shall also be effected before the withdrawal.  Notwithstanding anything in this Section 4(b) to the contrary, any withdrawal for any unforeseeable emergency must comply with Code Section 409A(a)(2)(B).

8.           No Rights as Stockholder.  The Employee shall have no rights as a stockholder with respect to any shares of Common Stock covered by this Award until shares of Common Stock are delivered to the Employee.  Until such time, the Employee shall not be entitled to dividends (except where the Employee’s Deferred Stock Account is adjusted for stock dividends pursuant to Section 2) or to vote at meetings of the stockholders of the Company.

9.           Compliance With Securities Laws.  Prior to the receipt of any certificates for shares of Common Stock pursuant to this Award, the Employee (or the Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall enter into such additional written representations, warranties and Awards as the Company may reasonably request in order to comply with applicable securities laws or with this Award.

 

  

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10.         Stock Ownership Guidelines.  The Employee (or the Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall be bound by the “Stock Ownership Guidelines” of the Company as may be in effect from time to time.

11.         Withholding.  Any payment of Common Stock under this Award shall be subject to applicable federal and state withholding requirements.  Hence, unless the Employee delivers a check to the Company equal to the required withholding, the number of shares distributed shall be reduced to meet the Employee’s applicable withholding requirements.

12.         Designation of Beneficiary.  The Employee shall be permitted to provide to the Committee a beneficiary designation for receipt of his or her Award after death.  If the Employee fails to designate a beneficiary, or if the designated beneficiary predeceases the Employee, the Award shall be paid to the deceased Employee’s spouse, if living, or if such spouse is not living, to the deceased Employee’s estate.

13.         Adjustments.  In the event of any merger, reorganization, consolidation, sale of substantially all assets, recapitalization, stock dividend, stock split, spin-off, split-up, split-off, distribution of assets or other change in corporate structure occurring after the effective date of this Award affecting the Common Stock subject to this award, the Board of Directors of the Company shall adjust the number and kind of shares of Common Stock subject to this Award so as to maintain the proportionate number of shares subject to this award, and such adjustment shall be conclusive and binding upon the Employee and the Company.

14.         Non-Transferability.

(a)        The Deferred Stock, the Deferred Stock Account and the Vested Deferred Stock may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by a voluntary act of the Employee or any agent of the Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Company, its successors or any agent thereof.

(b)        No amounts payable under the Award shall be transferable by the Employee other than by his designation of a beneficiary pursuant to Section 12.  The amounts payable under the Award shall be exempt from the claims of creditors of the Employee and from all orders, decrees, levies and executions and any other legal process to the fullest extent that may be permitted by law.

15.         Amendments to Award.  The Award may only be modified upon the mutual agreement of the Company and the Employee.

16.         Source of Benefit Payments.  The payment of the Award to the Employee shall be paid solely from the general assets of the Company.  Until the actual delivery of the shares of Common Stock, the Employee shall not have any interest in any specific assets of the Company, including shares of Common Stock, under the terms of the Award.  The Award shall not be considered to create an escrow account, trust fund or other funding arrangement of any kind, or a fiduciary relationship between the Employee and the Company.  Until such time of payment, no shares of the Common Stock shall be set aside by the Company for the Award.

  

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17.         Successors and Assigns.

(a)        This Award is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee except by will or the laws of descent and distribution.  This Award shall inure to the benefit of and be enforceable by the Employee’s guardian and legal representatives.

(b)        This Award shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)        The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Award in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

18.         Award Subject to Plan.  This Award is subject to the terms of the Plan.  The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference.  In the event of a conflict between any terms and provisions contained herein and the terms or provisions of the Plan, the applicable terms or provisions of the Plan will govern and prevail.

19.         Governing Law.  This Award shall be governed by and construed in accordance with the internal laws of the State of Indiana without reference to principles of conflict of laws.  The captions of this Award are not part of the provisions hereof and shall have no force or effect.  This Award may not be amended or modified except by a written Award executed by the parties hereto or their respective successors and legal representatives.

20.         Severability.  The invalidity or unenforceability of any provision of this Award shall not affect the validity or enforceability of any other provision of this Award.

21.         No Waiver.  The failure of the Employee or the Company to insist upon strict compliance with any provision of this Award or the failure to assert any right the Employee or the Company may have under this Award shall not be deemed to be a waiver of such provision or right or any other provision or right of this Award.

 

  

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22.         Code Section 409A.  The Plan is intended to comply with, or otherwise be exempt from, Code Section 409A. The Plan shall be administered, interpreted, and construed in a manner consistent with Code Section 409A or an exemption therefrom.  Should any provision of the Plan be found not to comply with, or otherwise be exempt from, the provisions of Code Section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the Committee, and without the consent of the Employee, in such manner as the Committee determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Code Section 409A.  If any of the payments under this Agreement are subject to Code Section 409A and the Company determines that the Employee is a “specified employee” under Code Section 409A at the time of the Employee’s separation from service, then each such payment will not be made or commence until the date which is the first day of the seventh month after the Employee’s separation from service, and any payments that otherwise would have been paid during the first six months after the Employee’s separation from service will be paid in a lump sum on the first day of the seventh month after the Employee’s separation from service or upon the Employee’s death, if earlier.  Such deferral will be effected only to the extent required to avoid adverse tax treatment to the Employee, including (without limitation) the additional twenty percent (20%) federal tax for which the Employee would otherwise be liable under Code Section 409A(a)(l)(B) in the absence of such deferral.

 

23.         Entire Award.  The Employee and the Company acknowledge that this Award supersedes any prior agreement between the parties with respect to the subject matter of this Award.

24.         Counterparts.  This Award may be executed in counterparts, which together shall constitute one and the same original.

 

Effective Date:  __<< DATE>>_______________

HILL-ROM HOLDINGS, INC.

 

 

 

Accepted:                      _______________________________________

<<NAME>>

 

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Exhibit A

Peer Companies

 

	
Alere Inc.

	
Kinetic Concepts Inc.

	
Allscripts Healthcare Solutions Inc.

	
LifePoint Hospitals Inc.

	
Amerigroup Corp.

	
Lincare Holdings Inc.

	
Bard (C.R.) Inc.

	
Masimo Corp.

	
Bio-Rad Laboratories Inc. (Cl A)

	
Medicis Pharmaceutical Corp.

	
Carefusion Corp.

	
Mednax Inc.

	
Catalyst Health Solutions Inc.

	
Mettler-Toledo International Inc.

	
Charles River Laboratories International Inc.

	
Omnicare Inc.

	
Chemed Corp.

	
Owens & Minor Inc.

	
Community Health Systems Inc.

	
Perkinelmer Inc.

	
Cooper Companies Inc.

	
Perrigo Co.

	
Covance Inc.

	
Pharmaceutical Product Development Inc.

	
Dentsply International Inc.

	
Resmed Inc.

	
Edwards Lifesciences Corp.

	
Sirona Dental Systems Inc.

	
Endo Pharmaceuticals Holdings Inc.

	
Steris Corp

	
Gen-Probe Inc.

	
Techne Corp.

	
Health Management Associates Inc. Cl A

	
Teleflex Inc.

	
Health Net Inc.

	
Thoratec Corp.

	
Henry Schein Inc.

	
United Therapeutics Corp.

	
Hologic Inc.

	
Universal Health Services Inc. Cl B

	
Hospira Inc.

	
Varian Medical Systems Inc.

	
Idexx Labs Inc.

	
Vca Antech Inc.

	
Integra Lifesciences Hldgs

	
Vertex Pharmaceuticals Inc.

	
Intuitive Surgical Inc.

	
Wellcare Health Plans Inc.

	
Invacare Corp

	
West Pharmaceutical Svsc Inc.

	
Kindred Healthcare Inc.

	
Zimmer Holdings Inc.

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