Document:

exv10w1

Exhibit 10.1

SECOND AMENDMENT AGREEMENT

     SECOND AMENDMENT AGREEMENT, dated June 3, 2008 (this “Agreement”), is among Zila, Inc., a
Delaware corporation (the “Company”), Visium Balanced Offshore Fund, Ltd., Visium Balanced Fund,
LP, Visium Long Bias Offshore Fund, Ltd. and Visium Long Bias Fund, LP (the “Visium Entities”),
Atlas Master Fund, Ltd. (“Atlas”), Balyasny Asset Management, L.P., (“BAM” and, collectively with
the Visium Entities and Atlas, the “Investors”), and Balyasny Asset Management, L.P., as collateral
agent (the “Agent”).

W I T N E S S E T H:

     WHEREAS, the Company entered into a Purchase Agreement, dated as of November 13, 2006 (the
“Note Purchase Agreement”), with the investors party thereto pursuant to which, among other things,
the Company issued (i) an aggregate of 9,100,000 shares of the Company’s common stock, par value
$0.001 per share (the “Common Stock”), (ii) $12,075,000 in aggregate principal amount of the
Company’s 12% Convertible Notes (the “Convertible Notes”) convertible into shares of the Company’s
Common Stock, at a conversion price of $1.75, (iii) Warrants (the “Initial Warrants”) to acquire an
aggregate of up to 5,403,000 shares of Common Stock at an exercise price of $2.21 per share and
(iv) Warrants (the “Additional Warrants”) to acquire an aggregate of up to 3,105,000 shares of
Common Stock at an exercise price of $2.21 per share; and

     WHEREAS, pursuant to the terms of the Note Purchase Agreement, the Visium Entities acquired
(i) $5,000,000.25 in aggregate principal amount of the Convertible Notes, (ii) Initial Warrants to
acquire an aggregate of 428,569 shares of Common Stock and (iii) Additional Warrants to acquire an
aggregate of 1,285,712 shares of Common Stock; and

     WHEREAS, the Company entered into a Purchase Agreement, dated as of November 13, 2006 (the
“Secured Note Purchase Agreement”), with the investors party thereto pursuant to which, among other
things, the Company issued (i) an aggregate of $12,000,001.20 in principal amount of the Company’s
6% Senior Secured Convertible Notes (the “Secured Notes”) convertible into shares of Common Stock
(the “Note Conversion Shares”) at a conversion price of $2.20 and (ii) Warrants (the “Secured Note
Warrants”) to acquire an aggregate of up to 1,909,089 shares of Common Stock at an exercise price
of $2.21 per share; and

     WHEREAS, pursuant to the terms of the Secured Note Purchase Agreement, (A) the Visium Entities
acquired (i) $7,500,000.20 in aggregate principal amount of the Secured Notes and (ii) Secured Note
Warrants to acquire an aggregate of 1,193,180 shares of Common Stock and (B) Atlas acquired (i)
$4,500,001 in aggregate principal amount of the Secured Notes and (ii) Secured Note Warrants to
acquire an aggregate of 715,909 shares of Common Stock; and

     WHEREAS, in connection with the Secured Note Purchase Agreement, the Company, the Investors
and the Agent entered into a Pledge and Security Agreement, dated as of November 28, 2006 (the
“Security Agreement”); and

     WHEREAS, effective August 13, 2007, the Company entered into an Amendment

 

 

Agreement (the “Amendment Agreement”) with the Investors providing for, among other things,
(i) the repurchase of 932,832 Note Conversion Shares; (ii) the repurchase of 227,270 Secured Note
Warrants; and (iii) an amendment and restatement of the Secured Notes (references to the “Secured
Notes” shall mean such notes as amended and restated on August 13, 2007); and

     WHEREAS, the parties hereto believe it is in their respective best interests to amend the
Secured Notes as provided herein and to take the other actions set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be
legally bound, the parties hereto agree as follows:

     Section 1. Note Amendment. Effective upon the execution and delivery of this Agreement, the
Secured Notes shall be amended and restated as provided in Exhibit A attached hereto (the
“Amended and Restated Notes”) (the “Note Amendment”). The Investors hereby irrevocably consent to
the Note Amendment. Promptly following the date hereof, the Investors Visium Entities and Atlas
shall surrender their Secured Notes to the Company for cancellation and, upon receipt of such
Secured Notes, the Company shall issue the Amended and Restated Notes to the Visium Entities and
Atlas in the respective principal amounts specified in the Secured Notes being surrendered.

     Section 2. Amendment Fee; Waiver. Simultaneous with the execution and delivery of this
Agreement by the parties hereto, the Company shall pay to the Investors an amendment fee of
$1,200,000 (the “Amendment Fee”). The Amendment Fee shall be paid by the issuance of an aggregate
of 4,626,595 newly issued, fully paid and nonassessable shares of Common Stock (the “Amendment
Shares”). The Amendment Shares shall be allocated among the Investors as set forth on the
signature pages to this Agreement. Each of the Investors hereby irrevocably waives any
antidilution adjustment it would otherwise be entitled to receive under any Company securities as a
result of the issuance of the Amendment Shares as provided hereby.

     Section 3. Warrant Surrender. Simultaneous with the execution and delivery of this Agreement
by the parties hereto, the Investors shall surrender to the Company for cancellation Initial
Warrants, Additional Warrants and Secured Note Warrants to acquire an aggregate of 3,396,100 shares
of Common Stock held by them (the “Surrendered Warrants”). The Surrendered Warrants being
surrendered by each of the Investors are set forth on the signature pages to this Agreement.

     Section 4. Deposit Account Control Agreements. The Company shall use its commercially
reasonable efforts, and shall cause each Subsidiary Guarantor (as defined in the Security
Agreement) to use its commercially reasonable efforts, to enter into Deposit Account Control
Agreements in customary form (with such changes therein or modifications thereto as the Investors
may reasonably approve, such approval not to be unreasonably withheld or delayed) (the “Control
Agreements”) with each depository institution holding funds of the Company or any Subsidiary
Guarantor (a “Depositary”). Not later than 20 days after the date hereof (the “Deadline”), the
Company shall, and shall cause each Subsidiary Guarantor to, have entered into Control Agreements
with each Depositary. In the event that, after the date hereof, the Company or any Subsidiary
Guarantor wishes to establish a new account with any Depository which has not previously executed a
Control Agreement, it shall be a condition

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precedent to such establishment that the Depositary enter into a Control Agreement before
receiving any funds of the Company or a Subsidiary Guarantor. From and after the Deadline, in no
event shall the Company or any Subsidiary Guarantor deposit funds with any Depositary that has not
executed a Control Agreement. The failure of the Company to have Control Agreements in place with
each Depositary holding funds of the Company or a Subsidiary Guarantor by the Deadline and the
failure of the Company to otherwise comply with the terms of this Section 4 shall constitute
additional “Events of Default” under the Amended and Restated Notes.

     Section 5. Registration Rights. The parties acknowledge that the Company has fully performed
its obligations under Sections 4(a) and (b) of the Amendment Agreement and shall have no further
obligations under such Sections 4(a) and (b); provided, however, that nothing in this sentence
shall affect the Company’s obligations under the New Registration Rights Agreement (as defined in
the Amendment Agreement). Simultaneous with the execution and delivery of this Agreement by the
parties hereto, the Company and the Investors shall execute and deliver a Registration Rights
Agreement (the “Registration Rights Agreement”) in the form attached hereto as Exhibit B
(this Agreement, the Amended and Restated Notes, the Control Agreements and the Registration Rights
Agreement are collectively referred to herein as the “Transaction Documents”).

     Section 6. Financial Reports. Not later than the close of business on each Wednesday, the
Company shall provide to the Investors “flash reports” in the form currently prepared by the
Company for use by the Company’s senior management showing weekly cash flow, income and balance
sheet information and other information utilized by senior management in operating the Company for
the prior week (the “Flash Reports”). The Flash Reports shall be delivered to each Investor in
accordance with the instructions contained in Exhibit C attached hereto. Each Investor
acknowledges that the information contained in the Flash Reports may constitute material nonpublic
information regarding the Company and shall use the information in such Flash Reports only for the
purpose of assuring compliance by the Company with its obligations under the Transaction Documents
and the other Deal Documents (as such term is defined in the Amended and Restated Notes). Each
Investor shall preserve the confidentiality of the information contained in the Flash Reports and
shall assure that such information is not used in a manner that would violate applicable securities
laws or that would cause the Company to violate such laws, including Rule 10b-5 and Regulation FD.
Any Investor shall have the right to suspend or waive, with respect to itself only, the right to
receive the Flash Reports as provided herein by providing written notice to the Company to such
effect.

     Section 7. Company Representations. The Company hereby represents and warrants to each of the
Investors as follows:

     (a) The Company is duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full power and authority to execute and deliver this Agreement and the
other Transaction Documents and to perform its obligations hereunder and thereunder, all of which
have been duly authorized by all requisite corporate action. The Transaction Documents have, or
will be, duly authorized, executed and delivered by the Company and constitute, or will constitute,
valid and binding agreements of the Company, enforceable against the Company in accordance with
their terms.

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     (b) Neither the execution and delivery of the Transaction Documents by the Company nor the
performance by the Company of its obligations hereunder and thereunder will (i) contravene any
provision contained in the Certificate of Incorporation or Bylaws of the Company, (ii) violate or
result in a breach (with or without the lapse of time, the giving of notice or both) of or
constitute a default under (A) any material contract, agreement, commitment, indenture, mortgage,
lease, pledge, note, license, permit or other instrument or obligation or (B) any judgment, order,
decree, law, rule or regulation or other restriction of any governmental authority, in each case to
which the Company is a party or by which the Company is bound or to which any of its assets or
properties are subject, (iii) result in the creation or imposition of any material lien, claim,
charge, mortgage, pledge, security interest, equity, restriction or other encumbrance
(collectively, “Encumbrances”) on any of the assets or properties of the Company or any subsidiary,
or (iv) result in the acceleration of, or permit any person to accelerate or declare due and
payable prior to its stated maturity, any obligation of the Company or any subsidiary.

     (c) No notice to, filing with, or authorization, registration, consent or approval of any
governmental authority or other person is necessary for the execution, delivery or performance of
the Transaction Documents or the consummation of the transactions contemplated hereby and thereby
by the Company.

     Section 8. Investor Representations. Each of the Investors hereby, severally and not jointly,
represents and warrants to the Company (as to itself only) as follows:

     (a) It is duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation and has full power and authority to execute and deliver this Agreement
and the other Transaction Documents to which it is a party and to perform its obligations
hereunder, all of which have been duly authorized by all requisite corporate, partnership or
limited liability company action, as applicable. This Agreement and the Transaction Documents to
which it is intended to be a party has been, or will be, duly authorized, executed and delivered by
it and constitute, or will constitute, its valid and binding agreements, enforceable against it in
accordance with their terms.

     (b) Neither the execution and delivery of this Agreement or the other Transaction Documents to
which it is intended to be a party by it nor the performance by it of its obligations hereunder and
thereunder will (i) contravene any provision contained in its organizational documents, (ii)
violate or result in a breach (with or without the lapse of time, the giving of notice or both) of
or constitute a default under (A) any material contract, agreement, commitment, indenture,
mortgage, lease, pledge, note, license, permit or other instrument or obligation or (B) any
judgment, order, decree, law, rule or regulation or other restriction of any governmental
authority, in each case to which it is a party or by which it is bound or to which any of its
assets or properties are subject, or (iii) result in the creation or imposition of any material
Encumbrances on the Secured Notes.

     (c) No notice to, filing with, or authorization, registration, consent or approval of any
governmental authority or other person is necessary for the execution, delivery or performance of
this Agreement or the other Transaction Documents to which it is intended to be a party or the
consummation of the transactions contemplated hereby and thereby by it.

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     (d) It is the legal owner of the Surrendered Warrants held by it free and clear of any
Encumbrances, except those created pursuant to the agreements referenced in the recitals and those
imposed generally by applicable securities laws. There are no voting trust arrangements,
shareholder agreements or other agreements granting any option, warrant, proxy or right of first
refusal with respect to the Surrendered Warrants held by it to any person or entity. It has the
absolute and unrestricted right, power and capacity to surrender the Surrendered Warrants to the
Company as contemplated hereby free and clear of any Encumbrances (except for restrictions imposed
generally by applicable securities laws).

     (e) Such Investor does not currently have any short position in the Common Stock. For at least
the last thirty (30) days prior to the date hereof, neither such Investor nor any affiliate of such
Investor which (x) had knowledge of the transactions contemplated hereby, (y) has or shares
discretion relating to such Investor’s investments or trading or information concerning such
Investor’s investments, including in respect of the Common Stock, or (z) is subject to such
Investor’s review or input concerning such affiliate’s investments or trading (collectively,
“Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any short sale (as
defined in Rule 200(a) of Regulation SHO), whether or not against the box, established any “put
equivalent position” (as defined in Rule 16a-1(h) under the Securities Exchange Act of 1934, as
amended) with respect to the Common Stock, borrowed or pre-borrowed any shares of Common Stock,
granted any other right (including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or derived any significant
part of its value from the Common Stock, entered into any direct or indirect stock pledge, forward
sales contract, swap, or similar arrangement (including on a total return basis), sales or other
transactions through non-U.S. broker dealers or foreign regulated brokers, or otherwise sought to
hedge its position in the securities of the Company (each, a “Prohibited Transaction”). For ninety
(90) days after the date of this Agreement, such Investor shall not, and shall cause its Trading
Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction nor any sale,
assignment, pledge, hypothecation, put, call, or other transfer of any of the Common Stock or other
securities acquired hereunder; provided, however, that the prohibitions of this sentence shall only
apply with respect to one-half of such Investor’s Amendment Shares. Such Investor acknowledges
that the representations, warranties and covenants contained in this clause (e) are being made for
the benefit of the Investors as well as the Company and that each of the other Investors shall have
an independent right to assert any claims against such Investor arising out of any breach or
violation of the provisions of this clause (e).

     Section 9. Further Assurances. Subject to the terms and conditions herein provided, each of
the parties hereto shall take, or cause to be taken, all action, and to do, or cause to be done,
all things reasonably necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement and the other
Transaction Documents. In the event that at any time hereafter any further action is necessary to
carry out the purposes of this Agreement or the other Transaction Documents, the parties hereto
shall take all such action without any further consideration therefor.

     Section 10. Equitable Remedies. Each of the parties hereto acknowledges that the other
parties hereto would suffer immediate and irreparable harm for which an adequate remedy would not
be available at law as a result of any breach of this Agreement or the other Transaction Documents.
Accordingly, in the event of any breach, or threatened breach, of the provisions of

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this Agreement or any other Transaction Document, each party hereto shall be entitled to an
order of specific performance or other injunctive relief against the breaching party in addition to
any other rights and remedies to which they may be entitled, whether at law or in equity, and each
party hereby irrevocably and unconditionally consents to the entry of an order providing such
relief in the event of any breach or threatened breach of the terms hereof by such party. No party
shall be required to post any bond or other security in connection with any such action for
specific performance or other injunctive relief.

     Section 11. Successors and Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the other parties hereto. The provisions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.

     Section 12. Counterparts; Faxes. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement may also be executed via facsimile, which shall be deemed an
original.

     Section 13. Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.

     Section 14. Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed
given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one Business Day after
delivery to such carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten days’ advance
written notice to the other party:

If to the Company:

Zila, Inc.

5227 North 7th Street

Phoenix, Arizona 85014-2800

Attention: Corporate Secretary

Fax: (602) 230-8418

If to the Investors or the Agent:

to the addresses set forth on the signature pages hereto.

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     Section 15. Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the Investors.

     Section 16. Severability. Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof but shall be
interpreted as if it were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which renders any
provision hereof prohibited or unenforceable in any respect.

     Section 17. Entire Agreement. This Agreement and the other agreements referenced herein
constitute the entire agreement among the parties hereof with respect to the subject matter hereof
and thereof and supersede all prior agreements and understandings, both oral and written, between
the parties with respect to the subject matter hereof and thereof.

     Section 18. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the State of New York
without regard to the choice of law principles thereof. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York located in New York
County and the United States District Court for the Southern District of New York for the purpose
of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably
consents to the jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

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     Section 19. Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor under this Agreement are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the obligations of any other
Investor under this Agreement or the other Transaction Documents. Nothing contained herein, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Investors are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by this Agreement or the other Transaction Documents. Each
Investor acknowledges, except as provided in the Security Agreement, that no other Investor has
acted as agent for such Investor in connection herewith and that no Investor will be acting as
agent of such Investor in connection with monitoring its investment in the Company or enforcing its
rights under this Agreement or the other Transaction Documents. Each Investor shall be entitled to
independently protect and enforce its rights, including, without limitation, the rights arising out
of this Agreement and the other Transaction Documents and it shall not be necessary for any other
Investor to be joined as an additional party in any proceeding for such purpose.

     Section 20. No Strict Construction. Each of the parties hereto acknowledge that this
Agreement has been prepared jointly by the parties hereto, and shall not be strictly construed
against any party.

     Section 21. Expenses. Each of the parties hereto shall bear their own costs and expenses in
connection with the preparation and negotiation of the Transaction Documents except that the
Company will pay on demand the reasonable fees and expenses of counsel to the Investors incurred in
connection with the preparation and negotiation of the Transaction Documents and the Payment In
Kind Share Registration Opinion, not to exceed $10,000 in the aggregate. In the event that legal
proceedings are commenced by any party to this Agreement against another party to this Agreement in
connection with this Agreement or the other Transaction Documents, the party or parties which do
not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the
prevailing party in such proceedings.

[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	ZILA, INC.

 	 
	 	By:  	 /s/ Gary V. Klinefelter
 	 
	 	Name:	 Gary V. Klinefelter 	 
	 	Title:	 Vice President and Secretary 	 
	 

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	 	 	ATLAS MASTER FUND, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Scott Schroeder
 

	 	 
	 	 	Name: Scott Schroeder	 	 
	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	Amendment Shares: 233,880	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	Surrendered Warrants: 165,308
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Balyasny Asset Management, L.P.	 	 
	 	 	181 West Madison	 	 
	 	 	Suite 3600	 	 
	 	 	Chicago, Illinois 60602	 	 
	 
	 	 	 	 	 	 
	 	 	BALYASNY ASSET MANAGEMENT, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Adam Finger
 

	 	 
	 	 	Name: Adam Finger	 	 
	 	 	Title: General Counsel/Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	Amendment Shares: 771,099	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	Surrendered Warrants: 671,005
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Balyasny Asset Management, L.P.	 	 
	 	 	181 West Madison	 	 
	 	 	Suite 3600	 	 
	 	 	Chicago, Illinois 60602	 	 

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	 	 	VISIUM BALANCED OFFSHORE FUND, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jacob Gottlieb
 

	 	 
	 	 	Name: Jacob Gottlieb	 	 
	 	 	Title: Chief Investment Officer	 	 
	 
	 	 	 	 	 	 
	Amendment Shares: 1,456,599	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	Surrendered Warrants: 1,029,536
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Visium Asset Management, LLC	 	 
	 	 	950 Third Avenue	 	 
	 	 	New York, New York 10022	 	 
	 
	 	 	 	 	 	 
	 	 	VISIUM LONG BIAS FUND, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jacob Gottlieb
 

	 	 
	 	 	Name: Jacob Gottlieb	 	 
	 	 	Title: Chief Investment Officer	 	 
	 
	 	 	 	 	 	 
	Amendment Shares: 269,427	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	Surrendered Warrants: 190,433
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Visium Asset Management, LLC	 	 
	 	 	950 Third Avenue	 	 
	 	 	New York, New York 10022	 	 
	 
	 	 	 	 	 	 
	 	 	VISIUM LONG BIAS OFFSHORE FUND, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jacob Gottlieb
 

	 	 
	 	 	Name: Jacob Gottlieb	 	 
	 	 	Title: Chief Investment Officer	 	 
	 
	 	 	 	 	 	 
	Amendment Shares: 1,020,883	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	Surrendered Warrants: 721,568
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Visium Asset Management, LLC	 	 
	 	 	950 Third Avenue	 	 
	 	 	New York, New York 10022	 	 

11

 

	 	 	 	 	 	 	 
	 	 	VISIUM BALANCED FUND, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jacob Gottlieb
 

	 	 
	 	 	Name: Jacob Gottlieb	 	 
	 	 	Title: Chief Investment Officer	 	 
	 
	 	 	 	 	 	 
	Amendment Shares: 874,707	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	Surrendered Warrants: 618,250
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Visium Asset Management, LLC	 	 
	 	 	950 Third Avenue	 	 
	 	 	New York, New York 10022	 	 
	 
	 	 	 	 	 	 
	 	 	AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	Balyasny Asset Management, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Adam Finger
 

	 	 
	 	 	Name: Adam Finger	 	 
	 	 	Title: General Counsel/Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	Balyasny Asset Management, L.P.	 	 
	 	 	181 West Madison	 	 
	 	 	Suite 3600	 	 
	 	 	Chicago, Illinois 60602	 	 

12ex10_1.htm

    

    Exhibit
10.1

    

    

    HIBBETT
SPORTS, INC.

    AMENDED
(1996) STOCK PLAN FOR OUTSIDE DIRECTORS

    

    

    1.           Purpose

    

    The purpose of the Hibbett Sports, Inc.
(1996) Stock Plan for Outside Directors (the "Plan") is to promote the interests
of Hibbett Sports, Inc. (the "Company") and its stockholders by increasing the
proprietary interest of outside directors in the growth and performance of the
Company by granting such directors options to purchase shares of Common Stock,
par value $.01 per share (the "Shares") of the Company.

    

    2.           Administration

    

    The Plan shall be administered by the
Company's Board of Directors (the "Board").  Subject to the provisions
of the Plan, the Board shall be authorized to interpret the Plan, to establish,
amend, and rescind any rules and regulations relating to the Plan and to make
all other determinations necessary or advisable for the administration of the
Plan; provided, however, that the Board shall have no discretion with respect to
the selection of directors to receive options, the number of Shares subject to
any such options (other than as specifically set forth in section 5(b)-(c)), the
purchase price thereunder or the timing of grants of options under the
Plan.  The determinations of the Board in the administration of the
Plan, as described herein, shall be final and conclusive.  The
Secretary of the Company shall be authorized to implement the Plan in accordance
with its terms and to take such actions of a ministerial nature as shall be
necessary to effectuate the intent and purposes thereof.  The
validity, construction and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware.

    

    3.           Eligibility

    

    The class of individuals eligible to
receive grants of options under the Plan shall be the "Eligible
Directors".  For purposes of this Plan, an "Eligible Director" shall
be a member of the Board who is not an employee of the Company, Saunders Karp
& Megrue, L.P., or any affiliate of either of them; provided, however, that
members of the Board who are employees and affiliates of Saunders Karp &
Megrue, L.P. shall become Eligible Directors for purposes of this Plan as of May
13, 2003, and any grants made hereunder with respect to the fiscal year ended
January 31, 2004 shall be pro-rated accordingly.  Any holder of an
option granted hereunder shall hereinafter be referred to as a
"Participant".

    

    4.           Shares
Subject to the Plan

    

    Subject to adjustment as provided in
Section 6, an aggregate of 150,000 Shares shall be available for issuance under
the Plan.  The Shares deliverable upon the exercise of options may be
made available from authorized but unissued Shares or treasury
Shares.  If any option granted under the Plan shall terminate for any
reason without having been exercised, the Shares subject to, but not delivered
under, such option shall be available for issuance under the Plan.

    

    5.           Grant,
Terms and Conditions of Options

    

    (a)  Subject to the
consummation of the initial public offering of the Company's Common Stock, each
Eligible Director on the Effective Date (as defined in Section 10) will be
granted on such date an option to purchase 5,000 Shares.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Each Eligible Director elected
following the Effective Date (as defined in Section 10) shall be granted an
option to purchase 10,000 Shares upon his initial election to the Board;
provided, however, that the Board may establish by resolution a lesser number of
Shares subject to Options to be granted upon initial election, but in no event
shall the Board have discretion to increase such number above
10,000.

    

    (c)  On the last day of each
fiscal year of the Company (each an "Applicable Fiscal Year")(beginning with the
fiscal year commencing on a date following the Effective Date), each Eligible
Director who was initially elected to the Board before such date shall be
granted an option pursuant to subsection (i) or (ii) of this Section 5(c), as
the case may be:

    

    (i)  Each Eligible Director
who was initially elected to the Board after the first day of such Applicable
Fiscal Year shall be granted an option.  The number of shares of
Common Stock covered be each such Option shall be 5,000 multiplied by a
fraction, the numerator of which shall be the number of calendar days that have
elapsed between the date of initial election of such Eligible Director and the
last day of such Applicable Fiscal Year but not to exceed 365, and the
denominator of which shall be 365; or

    

    (ii)  Each Eligible Director
who was initially elected to the Board on or before the first day of such
Applicable Fiscal Year shall be granted an option. The number of shares of
Common Stock covered by each such Option shall be 5,000; provided, however, that
the Board may establish by resolution a lesser number of Shares subject to
Options to be granted to Eligible Directors for each Applicable Fiscal Year, but
in no event shall the Board have discretion to increase such number above
5,000.

    

    (d)  The options granted will
be nonstatutory stock options not intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") and shall have the
following terms and conditions:

    

    (i)  Price.  The
purchase price per Share deliverable upon the exercise of each option shall be
100% of the Fair Market Value per Share on the date the option is
granted.  For purposes of the Plan, Fair Market Value with respect to
the exercise price of options granted under Section 5(a) hereof shall be the
price at which Shares are sold to the public pursuant to the initial public
offering.  For all other purposes hereunder, unless otherwise
determined by the Board, Fair Market Value shall be the closing price of the
Shares for the date of determination or if there were no sales on such date, the
most recent prior date on which there were sales, as reported in the Wall Street
Journal, or if the Wall Street Journal does not report such closing price, such
closing price reported by a newspaper or trade journal selected by the
Board.  Repricing of options granted under this Article 5 after the
date of grant shall not be permitted.

    

    (ii)  Payment.  Options may
be exercised only upon payment of the purchase price thereof in
full.  Such payment shall be made in cash.

    

    (iii)  Exercisability and
Term of Options.  Options shall vest and become exercisable
immediately, and shall be exercisable until ten (10) years from the date of
grant.

    

    (iv)  Termination of Service
as Eligible Director.  Upon termination of a Participant's service as
a director of the Company for any reason, all outstanding options held by such
Eligible Director, to the extent then exercisable, shall be exercisable in whole
or in part for a period of ten (10) years from the date of grant, provided that
in no event shall the options be exercisable beyond the period provided for in
paragraph (iii) above.

    

    (v)   Nontransferability
of Options.  No option may be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by a Participant otherwise than by
will or the laws of descent and distribution, and during the lifetime of the
Participant to whom an option is granted it may be exercised only by the
Participant or by the Participant's guardian or legal representative.
Notwithstanding the foregoing, options may be transferred pursuant to
a   qualified domestic relations order.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (vi)  Option
Agreement.  Each option granted hereunder shall be evidenced by an
agreement with the Company which shall contain the terms and provisions set
forth herein and shall otherwise be consistent with the provisions of the
Plan.

    

    6.           Adjustment
of and Changes in Shares

    

    In the event of a stock split, stock
dividend, extraordinary cash dividend, subdivision or combination of the Shares
or other change in corporate structure affecting the Shares, the number of
Shares authorized by the Plan shall be increased or decreased proportionately,
as the case may be, and the number of Shares subject to any outstanding option
shall be increased or decreased proportionately, as the case may be, with
appropriate corresponding adjustment in the purchase price per Share
thereunder.  However, in such event, no change shall be made to the
maximum formula amounts set forth in Section 5.

    

    7.           No
Rights of Shareholders

    

    Neither a Participant nor a
Participant's legal representative shall be, or have any of the rights and
privileges of, a shareholder of the Company in respect of any Shares purchasable
upon the exercise of any option, in whole or in part, unless and until
certificates for such Shares shall have been issued.

    

    8.           Plan
Amendments

    

    The Plan may be amended by the Board as
it shall deem advisable or to conform to any change in any law or regulation
applicable thereto; provided, that the Board may not, without the authorization
and approval of shareholders of the Company:  (i) increase the number
of Shares which may be purchased pursuant to options hereunder, either
individually or in the aggregate, except as permitted by Section 6, (ii) change
the requirement of Section 5(b) that option grants be priced at Fair Market
Value, except as permitted by Section 6, or (iii) modify in any respect the
class of individuals who constitute Eligible Directors.

    

    9.           Listing
and Registration.

    

    Each Share shall be subject to the
requirement that if at any time the Board shall determine, in its discretion,
that the listing, registration or qualification of the Shares upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Shares, no such Share
may be disposed of unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any condition not
acceptable to the Board.

    

    10.           Effective
Date and Duration of Plan

    

    The Plan shall become effective on the
closing of the initial public offering of the Company's Common Stock (the
"Effective Date"), subject to the consummation of such offering.  In
the event such public offering is not consummated, all options previously
granted hereunder shall be canceled and all rights of Eligible Directors with
respect to such options shall thereupon cease.  The Plan shall
terminate the day following the tenth Annual Shareholders Meeting at which
Directors are elected succeeding such initial public offering, unless the Plan
is extended or terminated at an earlier date by Shareholders or is terminated by
exhaustion of the Shares available for issuance hereunder.

    

    

    End
of Exhibit 10.1

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