LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") dated this 12th day of August, 1998,
effective for all purposes as of the 7th day of May, 1998, is made by and
between XXXX XXXX FINANCE COMPANY LIMITED, a company formed under the laws of
Hong Kong ("Lender") whose address is do R A F Financial Corporation, 0000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000 and GLOBAL MED TECHNOLOGIES,
INC., a Colorado corporation ("Borrower") whose address is 00000 Xxxx Xxxxxx
Xxxxxx, Xxxxx X000, Xxxxxxxx, Xxxxxxxx 00000.
RECITALS
A. Borrower and Lender entered into that certain Loan Commitment ("Loan
Commitment") whereby Lender has agreed to commit to make a loan ("Loan") as
described in Section 1.01 of this Agreement; and
B. Lender and Borrower desire to formalize the terms of the Loan in
accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreement contained herein and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, Lender and
Borrower hereby covenant and agree as follows:
ARTICLE 1.
THE LOAN
1.1. Agreement to Borrow and Lend. Subject to all of the terms, provisions,
conditions, covenants and agreements contained in this Agreement, Lender agrees
to make available to Borrower a Loan in the maximum principal amount of up to
$1,500,000.00 ("Maximum Loan Amount"). The Loan may be drawn in amounts of not
less than $250,000.00 as and when required by Borrower.
1.2. Promissory Note. The Loan will be evidenced by one or more Promissory
Notes ("Notes") substantially in the form attached hereto as Exhibit A and
incorporated herein by reference, executed by Borrower and delivered to Lender,
which in the aggregate do not exceed the Maximum Loan Amount. The outstanding
principal balance of each Note shall bear interest at the rate of twelve (12%)
per annum. Interest shall accrue and be paid monthly on the last day of each
month during the term of the Notes. If not sooner paid, the entire outstanding
principal balance of the Notes, together with all accrued but unpaid interest
thereon, all additional interest and all other sums due thereunder, shall be due
and payable in full on April 15, 1999.
1.3. Loan Fee and Other Costs. Pursuant to the Loan Commitment, Borrower
issued to Lender a Warrant to Purchase Common Shares relating to 6,000,000
shares of Borrower's common stock, a copy of which is attached hereto as Exhibit
B and incorporated herein by reference ("Warrants"). Notwithstanding any
provision herein or in any of the Notes or Warrants to the contrary, Lender may
apply any amounts due hereunder or under any of the Notes toward the purchase of
common stock pursuant to the Warrants issued hereunder by giving Borrower
written notice of its intent to do so.
1.4. Use of Proceeds. The Borrower represents, warrants, covenants,
acknowledges and agrees to and with Lender that the proceeds of the Loan shall
be used by Borrower solely for business or investment purposes and shall not be
used for personal, family, household or agricultural purposes.
1.5. Relationship of the Parties. The relationship between Borrower and
Lender is that of a borrower and a lender only and neither of these parties is,
nor shall hold themselves out to be, the agent, employee, joint venturer or
partner of the other party.
1.6. Security. The Loan and each of the Notes shall be unsecured.
1.7. Loan Documents. As used herein, the term "Loan Documents" shall refer
to this Agreement, the Notes, the Warrants and any other documents or
instruments executed by any person in connection with the Loan.
ARTICLE 2.
MANAGEMENT OF BORROWER
2.1. Borrower's Board of Directors. In accordance with the terms of the
Loan Commitment, Borrower and its Board of Directors have taken the following
actions:
a. Increased the number of members to the Borrower's Board of
Directors to nine.
b. Appointed five members selected by Lender and/or Fronteer Capital,
Inc. ("Fronteer"), a company affiliated with the Lender, to the Borrower's
Board of Directors.
For so long as any amounts remain due hereunder or under any other Loan
Documents, including the Notes, Borrower and its Board of Directors shall
support in any election of directors by the shareholders of Borrower, those
members appointed to the Board of Directors that were selected by Lender or
Fronteer. Further, Lender and/or Fronteer shall have the right
2
to select a replacement director for any member of the Borrower's Board of
Directors that was selected by either Lender of Fronteer who resigns or
otherwise fails to serve as a director.
2.2. Employment Agreements with Management and Key Employees. The Board of
Directors of Borrower has taken all steps necessary, and has delivered to Lender
proof thereof, to modify and amend all employment or similar agreements with
those persons constituting Borrower's management personnel and key employees, as
determined in the sole discretion of Lender, to provide that upon a default of
Borrower under any of the Loan Documents, such management personnel or key
employee's employment with Borrower may be terminated at will by Borrower,
without any liability to Borrower or Lender other than to pay unpaid wages or
salary and vacation pay accrued to such management personnel or key employee
through the date of such termination of employment.
2.3. Resignation Letters of the Members of the Board of Directors,
Management Personnel and Key Employees. Upon execution of this Agreement, each
current member of the Board of Directors of Borrower, other than any such member
appointed by Lender or Fronteer, and each management personnel or key employee
of Borrower, shall deliver to Lender his or her letter of resignation, which
letters of resignation shall be held in escrow by Lender, subject to all of the
terms and conditions of this Agreement.
ARTICLE 3.
BORROWER'S REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties. Borrower hereby represents and
warrants to Lender as follows:
a. Borrower is duly incorporated and is validly existing and in good
standing under the laws of the State of Colorado and Borrower has all
requisite power and authority to conduct its business, to own its
properties and to execute, deliver and perform all of its obligations under
the Loan Documents.
b. The execution, delivery and performance of the Loan Documents by
the Borrower have been authorized by all necessary corporate actions and do
not and will not contravene any legal or contractual restriction binding on
the Borrower or any of the property and assets thereof.
c. The Loan Documents constitute, and any other agreement required
hereby will constitute, when executed and delivered by Borrower to Lender,
legal, valid and binding obligations of Borrower, enforceable in accordance
with their terms. The execution and delivery by Borrower of the Loan
Documents and consummation of all the transactions contemplated thereby, do
not and will not conflict with, or be
3
in contravention of, any law, order, rule or regulation applicable to
Borrower or any agreement or instrument to which Borrower is a party.
d. There is no legal action, suit, proceeding or investigation by or
before any governmental instrumentality or other agency, now pending,
threatened against or affecting the Borrower, or which questions or would
bring into question the validity of the Loan Documents.
e. Other than pro forma financial reports, all balance sheets, income
statements, financial statements, operating statements and other financial
data pertaining to Borrower that have been delivered (or will be delivered)
to Lender by or on behalf of Borrower are or will be accurate and complete
in all material respects and accurately present or will present the
financial condition of the person or entity to which they pertain as of
their respective dates and there has been no material change with respect
thereto.
ARTICLE 4.
BORROWER'S COVENANTS
4.1. Covenants of Borrower. So long as the Loan shall remain unpaid,
Borrower covenants and agrees as follows:
a. For so long as any amounts remain due under any of the Notes or
other Loan Documents, Borrower:
i. shall not increase the number of members to serve on the
Borrower's Board of Directors above nine; and
ii. shall support those members to the Borrower's Board of
Directors selected by Lender and/or Fronteer in any election of
directors by the shareholders of Borrower.
b. Without the express written consent of Lender, which consent may be
withheld for any purpose, Borrower shall not enter into any contracts,
agreements, leases, instruments or other documents of any kind or nature,
with any third party, other than such contracts, agreements, leases,
instruments or other such documents entered into in the normal course of
Borrower's business and which do not, in the aggregate, exceed a monetary
obligation on behalf of the Borrower in excess of $250,000.00.
4
c. Upon the request of Lender, or in accordance with the Warrants,
Borrower shall register any common stock of the Borrower issued to Lender
in accordance with the Warrants or issued as Conversion Shares in
accordance with Section 6.2.b.iii below.
d. Upon the request of Lender, Borrower shall use its best efforts to
obtain a letter of resignation from each member of the Board of Directors
who was elected or appointed to replace any member of the Board of
Directors of Borrower who had previously executed and delivered to Lender a
letter of resignation in accordance with Section 2.3 of this Agreement. and
deliver such letter of resignation to Lender to be held in escrow in
accordance with Section 2.3 of this Agreement.
e. Without Lender's prior written consent, Borrower shall not
authorize or otherwise permit any stock splits; reverse stock splits; stock
dividends; issuance of common shares of the Borrower below the exercise
price of the common shares to be issued pursuant to the Warrants, other
than the issuance of the Conversion Shares; mergers or consolidations;
recapitalization of Borrower; or the sale of any assets of Borrower other
than sales of assets in the normal course of Borrower's business.
f. Borrower shall not, without the prior written consent of Lender,
grant or permit any security interest in any of the assets of Borrower to
anyone, including, but not limited to, purchase money security interests to
trade creditors.
g. Borrower will, at its expense, furnish to Lender promptly and upon
request such instruments including, without limitation, other instruments
in addition to those specifically provided for herein, and take all further
actions as Lender may reasonably require from time to time in order to
fully comply with the terms of this Agreement.
h. Borrower will maintain and preserve its corporate existence, as
applicable, under the laws of every jurisdiction in which it does business.
i. Financial statements of Borrower which have been audited by a
certified public accountant, and income tax returns for the Borrower are to
be provided to Lender as soon as reasonably possible after the end of each
fiscal year during the term of the Loan.
j. Borrower will immediately notify Lender of any event or
circumstance which reasonably could be deemed to have a materially adverse
effect on Borrower's financial condition or Borrower's ability to perform
its agreements and obligations under the Loan Documents.
5
k. Borrower shall notify Lender in writing prior to the time there is
any change of name, identity or business structure of Borrower, including
the addition of any trade names.
ARTICLE 5.
OTHER AGREEMENTS
5.1. Other Agreements. In addition to the other agreements contained in the
Loan Documents, the parties hereto agree as follows:
a. Any and all monies received by lender from Borrower, whether prior
or subsequent to or as a result of a default hereunder shall be applied by
Lender first to any interest due under any of the Notes, but thereafter may
be applied by Lender to any of the amounts due under the Notes or other
Loan Documents, in any order selected by lender, notwithstanding any
contrary provision of the Loan Documents.
b. In the event that a default shall exist under any of the Loan
Documents, Lender shall be authorized to proceed with any and all remedies
available to Lender thereunder or under this Agreement.
c. To the extent not previously waived, Borrower hereby knowingly,
intentionally and voluntarily waives, relinquishes and forgoes any and all
rights which it may have to the marshalling by Lender of the assets of
Borrower. Borrower acknowledges that such waiver is made with and pursuant
to the advice of competent legal counsel.
d. A default under any of the Loan Documents, including a default
under any of the Notes, shall constitute a default under each other Loan
Document, including each other Note, and shall entitle Lender to pursue any
and all remedies under each or any of the Loan Documents.
e. Borrower hereby irrevocably authorizes Lender to correct without
notice any clerical errors or omissions that may be present in the Loan
Documents executed in connection with the Loan. Borrower further
understands that such corrections shall not result in any increase in the
amount of the obligation that it must repay to Lender, or any change of
essential terms of repayment of the loan obligation. Borrower further
consents in advance to the correction of any errors or omissions as
outlined herein and acknowledge that it understands such correction
procedure and agrees to such correction procedure, without prior notice and
without the necessity of written authorization or approval.
6
ARTICLE 6.
DEFAULT AND REMEDIES
6.1. Events of Default. The occurrence of any one or more of the following
events or the existence of one or more of the following conditions shall
constitute an event of default under this Agreement:
a. Nonpayment. Borrower shall fail to pay when due, after the
expiration of all cure periods, any installment of principal or interest
due under any of the Notes, whether due on the date provided for therein or
by acceleration or otherwise, or Borrower shall fail to pay when due any
other amounts due under any of the Loan Documents.
b. Other Defaults. The occurrence of any of the following events:
i. any representation or warranty made in writing to Lender by
Borrower herein or in any other Loan Document, or in the Loan
Commitment, or otherwise in connection with the making of the Loan
shall prove at any time to have been incorrect in any material respect
when made; or
ii. the breach, default or violation by Borrower of any
obligation, agreement or covenant contained in the Notes, this
Agreement, or any other Loan Documents executed by Borrower; or
iii. any default under any obligation or duty Borrower may have
to Fronteer; or
iv. any material provision of any of the Loan Documents shall at
any time for any reason cease to be in full force and effect or shall
be declared to be null and void; or
v. any litigation or proceeding is pending which may materially
adversely affect the ability of Borrower to perform its obligations
under the Loan Documents; or
vi. Borrower's failure to comply with any other covenants or
agreements contained in any of the Loan Documents and not herein
specifically referenced, unless the same is cured within any
applicable grace periods.
7
6.2. Remedies.
a. Upon the occurrence of any event of default hereunder as above
provided, and at any time thereafter, all principal, interest and other
amounts payable under the Loan Documents shall, at the option of Lender,
become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by Borrower.
Lender may proceed with every remedy available at law or in equity or
provided for in the Loan Documents or in any other document executed in
connection with the Loan, in such order or sequence as Lender may determine
in its sole discretion, including concurrently, independently, or
successively, and all expenses incurred by Lender in connection with any
remedy shall be deemed indebtedness of Borrower to Lender including, but
not limited to, reasonable attorneys' fees incurred by Lender.
b. In addition to any other right or remedy Lender may have hereunder
or under any of the Notes or other Loan Documents, Lender may pursue any or
all of the following additional remedies, to wit:
i. Demand the resignation of any or all of the members of the
Board of Directors of Borrower, other than those members appointed by
Lender and/or Fronteer, and if such members refuse to resign, deliver
to the Borrower the letters of resignation held by Lender in escrow in
accordance with Section 2.3 or Section 4.1.d of this Agreement, and
thereafter Lender shall have the right to appoint such resigned or
terminated member's replacement to the Board of Directors; and
ii. Demand the resignations of any or all of the management
personnel of the Borrower and/or any and all of the key employees of
Borrower, and if such management personnel or key employees refuse to
resign, deliver to the Borrower the letters of resignation held by
Lender in escrow in accordance with Section 2.3 of this Agreement;
provided that nothing herein shall be deemed a representation or
covenant of Borrower that such letters of resignation are enforceable;
and
iii. Convert any or all of the amounts due under any of the Notes
into common stock of the Borrower ("Conversion Shares") at an exercise
price of $0.05 per share. Lender shall make such standard investment
representations to show an exemption from registration exists for the
issuance of such Conversion Shares.
8
ARTICLE 7.
GENERAL PROVISIONS
7.1. Notices. All notices, communications and materials to be given or
delivered pursuant to the Loan Documents shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing to the address of the appropriate party set forth in the header hereof
or at such other address as shall be changed in accordance with the notice
provisions of this Section 7.1.
7.2. Amendments. No provision or term of the Loan Documents may be amended,
modified, revoked, supplemented, waived or otherwise changed except by a written
instrument duly executed by Borrower and Lender and designated as such.
7.3. Severability. Whenever possible, each provision of the Loan Documents
shall be interpreted so as to be effective and valid under Colorado law. Should
any provision, covenant or agreement contained herein be deemed invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions of this Agreement shall not be impaired thereby, nor
shall the validity, legality or enforceability of any such defective provision
be in any way affected or impaired in any other jurisdiction.
7.4. Successors and Assigns Bound; Assignment. The covenants and agreements
contained herein shall bind Borrower, its successors and assigns. This Agreement
may not be assigned by Borrower without the prior written consent of Lender.
Subject to the foregoing restriction, this Agreement shall inure to the benefit
of Lender, its successors and assigns.
7.5. No Third Party Benefits. This Agreement is made for the sole benefit
of Borrower and Lender and their respective successors and assigns, and no other
person or persons shall have any rights or remedies under or by reason of this
Agreement.
7.6. Headings. The captions and headings of the paragraphs in the Agreement
are for convenience only and are not used to interpret or define the provisions
of the Agreement.
7.7. Governing Law. This Agreement and the Loan Documents or any other
documents executed in connection with the Loan shall be governed by and
interpreted in accordance with the laws of the State of Colorado.
7.8. Conflict. Should any provision of any other Loan Documents conflict
with any provision of this Agreement, the provision selected by Lender, in its
sole discretion, shall govern and shall be controlling.
7.9. Limitation of Liability. LENDER SHALL NOT HAVE ANY LIABILITY WITH
RESPECT TO, AND THE BORROWER HEREBY WAIVES, RELEASES AND
9
AGREES NOT TO XXX FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
SUFFERED BY THE BORROWER IN CONNECTION WITH ANY LOAN DOCUMENTS OR CLAIM RELATED
THERETO.
7.10. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.
DATED: 12 August 98
--------------
BORROWER:
GLOBAL MED TECHNOLOGIES, INC.,
Attest: a Colorado corporation
By: /s/ Xxx Xxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------- -------------------------------
Title: Asst. Secy Title: CEO
-------------------- -----------------------------
LENDER:
XXXX XXXX FINANCE
COMPANY LIMITED,
a company formed under the
laws of Hong Kong
By:
-------------------------------
Title:
------------------------------
10
EXHIBIT A
PROMISSORY NOTE
PROMISSORY NOTE
U.S. $______________ Denver, Colorado
_________ 199__
FOR VALUE RECEIVED, GLOBAL MED TECHNOLOGIES, INC., a Colorado corporation
("Maker"), promises to pay to the order of XXXX XXXX FINANCE COMPANY LIMITED, a
company formed under the laws of Hong Kong, having an address at c/o R A F
Financial Corporation, 0000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000,
or its successors or assigns (sometimes referred to herein as "Holder"), the
principal sum of _______________________________ DOLLARS (U.S. $_______________)
with interest from the date hereof at the rate TWELVE percent (12%) per annum,
payable in accordance with terms hereof.
All payments of interest shall be due and payable on the last day of each
month based on the accrued interest for that month.
The principal sum due, together with all accrued but unpaid interest shall
be due, if not sooner paid, on April 15, 1999.
All payments shall be payable to Holder at the address set forth above, or
at such other place as Holder hereof may designate from time to time in writing.
All payments shall be first applied to the payment of interest due hereunder,
then to the payment of any other sums payable hereunder and finally to the
principal amount then remaining unpaid.
The indebtedness evidenced by this Note may be prepaid in whole or in part
without notice, penalty or premium.
If any payment due hereunder is not received by Holder on or before the
seventh (7th) day after such payment is due, then Maker shall be deemed in
default hereunder. In the event Maker shall default in any of the payments due
hereunder or any other obligations owed to Holder or their successors or
assigns, the full amount remaining unpaid hereunder, together with all accrued
and unpaid default interest thereon shall, at the option of the Holder, be
accelerated and become immediately due and payable.
This Note is given pursuant to the terms of that certain Loan Agreement
between Maker and Holder dated ______________, 1998. A default under the Loan
Agreement shall be deemed a default hereunder. Further, in the event of default,
Holder shall, in addition to exercising all rights hereunder, be entitled to
exercise all rights set forth in the Loan Agreement.
Maker waives delinquency in collection, demand for payment, presentment for
payment, protest, notice of protest, notice of dishonor and all duties or
obligations of Holder to effect, protect, perfect, retain or enforce any
security for payment of this Note or to proceed
against any collateral before otherwise enforcing this Note. This Note shall be
binding upon Maker, its successors and assigns.
Maker unconditionally guarantees prompt satisfaction when due, whether by
acceleration or otherwise, of the entire outstanding principal balance and all
accrued and unpaid interest, and amounts of any additional advancements of this
Note, and further agrees to immediately pay to Holder hereof, upon demand, all
losses, costs and expenses (including attorneys' fees) incurred by Holder for
collection and enforcement of this Note in the event of default or otherwise.
Each individual executing this Note represents and warrants that he or she
duly is authorized to execute and deliver this Note on behalf of the person or
entity for which he or she is so executing and that this Note is binding upon
the undersigned Maker in accordance with its terms, except to the extent that
enforcement of remedies is limited by applicable bankruptcy, insolvency, and
other laws affecting the enforcement of creditors' rights generally.
This Note shall be interpreted and enforced in accordance with the laws of
the State of Colorado. In the event of default, Maker consents to the
enforcement of this Note in the District Court for the City and County of
Denver, Colorado, and waives any rights to contest venue or jurisdiction of that
court.
MAKER:
GLOBAL MED TECHNOLOGIES, INC.
By:____________________________
Title:_________________________
Attest:
By:_____________________
Title:__________________
2
EXHIBIT B
WARRANT TO PURCHASE COMMON SHARES
Void After 3:30 P.M., Mountain Time, on April 13, 2008
WARRANT TO PURCHASE COMMON SHARES
GLOBAL MED TECHNOLOGIES, INC.
This is to Certify That, FOR VALUE RECEIVED, XXXX XXXX FINANCE COMPANY
LIMITED, Lippo Protective Tower, 1Oth Floor, 000-000 Xxxxxxxxxx Xxxx, Xxx Xxxx,
Xxxx Xxxx ("Holder"), is entitled to purchase, subject to the provisions of this
Warrant, from GLOBAL MED TECHNOLOGIES, INC. ("Company"), a Colorado corporation,
at any time until 3:30 P.M., Mountain Time, on April 13, 2008 ("Expiration
Date"), 6,000,000 Common Shares of the Company at a purchase price of $0.25 per
common share during the period this Warrant is exercisable. The number of Common
Shares to be received upon the exercise of this Warrant and the price to be paid
for a Common Share may be adjusted from time to time as hereinafter set forth.
The purchase price of a Common Share in effect at any time and as adjusted from
time to time is hereinafter sometimes referred to as the "Exercise Price." This
Warrant is or may be one of a series of warrants identical in form issued by the
Company to purchase an aggregate of 6,000,000 Common Shares of the Company and
the term "Warrants" as used herein means all such Warrants (including this
Warrant). The Common Shares, as adjusted from time to time, underlying the
Warrants are hereinafter sometimes referred to as "Warrant Shares" and include
all Common Shares that have been issued upon the exercise of the Warrants and
all unissued Common Shares underlying the Warrants.
(a) Exercise of Warrant. This Warrant may be exercised in whole or in
minimum amounts which at the time of exercise would require Holder to deliver to
the Company cash or value of at least $250,000 at any time or from time to time
until the Expiration Date or if the Expiration Date is a day on which banking
institutions are authorized by law to close, then on the next succeeding day
which shall not be such a day, by presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, with the Purchase
Form annexed hereto duly executed and accompanied by payment of the Exercise
Price for the number of shares specified in such Form, together with all federal
and state taxes applicable upon such exercise. The Company agrees not to merge,
reorganize or take any action that would terminate this Warrant unless
provisions are made as part of such merger, reorganization or other action which
would provide the holders of this Warrant with an equivalent of this Warrant as
specified in Section (i) hereof. The Company agrees to provide notice to the
Holder that any tender offer is being made for the Company's Common Shares no
later than three business days after the day the Company becomes aware that any
tender offer is being made for the outstanding Common Shares of the Company. If
this Warrant should be exercised in part only, the Company shall, upon surrender
of this Warrant for cancellation, execute and deliver a new Warrant evidencing
the right of the Holder to purchase the balance of the Common Shares purchasable
hereunder. Upon receipt by the Company of this Warrant at the office of the
Company or at the office of the Company's stock transfer agent, in proper form
for exercise and accompanied by the Purchase Form and the Exercise Price, the
Holder shall be deemed to be the holder of record of the Common Shares issuable
upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such Common
Shares shall not then be actually delivered to the Holder.
(b) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Warrant such number of Common Shares as shall be required for issuance or
delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a Common Share called for upon any exercise hereof,
the Company shall, upon receipt by the Company or the Company's stock transfer
agent of the Exercise Price on such fractional share, pay to the Holder an
amount in cash equal to such fraction multiplied by the current market value of
such fractional share, determined as follows:
(1) If the Common Shares are listed on a national securities
exchange or a foreign exchange, are admitted to unlisted trading
privileges on such an exchange, or are listed for trading on a trading
system of the National Association of Securities Dealers, Inc. ("NASD")
such as The Nasdaq SmallCap Market ("SCM") or the Nasdaq National
Market ("NNM") or the OTC Bulletin Board, then the current value shall
be the last reported sale price of the Common Shares on such an
exchange or system on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on such day, the
average of the closing bid prices for the Common Shares for such day on
such exchange or such system shall be used; or
(2) If the Common Shares are not so listed on such exchange or
system or admitted to unlisted trading privileges, the current value
shall be the average of the last reported bid prices reported by the
National Quotation Bureau, Inc. on the last business day prior to the
date of the exercise of this Warrant; or
(3) If the Common Shares are not so listed or admitted to
unlisted trading privileges and if bid prices are not so reported, the
current value shall be an amount, not less than book value, determined
in such reasonable manner as may be prescribed by the board of
directors of the Company.
(d) Exchange, Assignment or Loss of Warrant. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, for
other Warrants of different denominations entitling the Holder thereof to
purchase (under the same terms and conditions as provided by this Warrant) in
the aggregate the same number of Common Shares purchasable hereunder. This
Warrant may not be sold, transferred, assigned, or hypothecated except in
compliance with federal and state securities laws. Any transfer or assignment
shall be made by surrender of this Warrant to the Company or at the office of
its stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and with funds sufficient to pay any transfer
2
tax; whereupon the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants which carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any warrants issued in substitution for or
replacement of this Warrant, or into which this Warrant may be divided or
exchanged. Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Subject to such right
of indemnification, any such new Warrant executed and delivered shall constitute
an additional contractual obligation on the part of the Company, whether or not
this Warrant so lost, stolen, destroyed, or mutilated shall be at any time
enforceable by anyone.
(e) Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) Adjustment Provisions.
(1) Adjustments of the Exercise Price.
(A) If the Company subdivides its outstanding Common
Shares into a greater number of Common Shares, the Exercise
Price in effect immediately prior to such subdivision shall be
proportionately reduced. Conversely, if the Company combines
its outstanding Common Shares into a lesser number of Common
Shares, the Exercise Price in effect immediately prior to such
combination shall be proportionally increased. In case of a
subdivision or combination, the adjustment of the Exercise
Price shall be made as of the effective date of the applicable
event. A distribution on Common Shares, including a
distribution of Convertible Securities, to shareholders of the
Company on a pro rata basis shall be considered a subdivision
of Common Shares for the purposes of this subsection (l)(A) of
this Section, except that the adjustment will be made as of
the record date for such distribution and any such
distribution of Convertible Securities shall be deemed to be a
distribution of the Common Shares underlying such Convertible
Securities.
(B) If the Company shall at any time distribute or
cause to be distributed to its shareholders, on a pro rata
basis, cash, assets, or securities of any entity other than
the Company, then the Exercise Price in effect immediately
3
prior to such distribution shall automatically be reduced by
an amount determined by dividing (x) the amount (if cash) or
the value (if assets or securities) of the holders' of
Warrants (as such term is defined in the first paragraph
hereof) pro rata share of such distribution determined
assuming that all holders of Warrants had exercised their
Warrants on the day prior to such distribution, by (y) the
number of Common Shares issuable upon the exercise of
Warrants (as such term is defined in the first paragraph
hereof) by the holders thereof on the day prior to such
distribution.
(3) No Adjustment for Small Amounts. Anything in this Section (f) to
the contrary notwithstanding, the Company shall not be required to give effect
to any adjustment in the Exercise Price unless and until the net effect of one
or more adjustments, determined as above provided, shall have required a change
of the Exercise Price by at least one cent, but when the cumulative net effect
of more than one adjustment so determined shall be to change the actual Exercise
Price by at least one cent, such change in the Exercise Price shall thereupon be
given effect.
(4) Number of Shares Adjusted. Upon any adjustment of the Exercise
Price, the Holder of this Warrant shall thereafter (until another such
adjustment) be entitled to purchase, at the new Exercise Price, the number of
Common Shares, calculated to the nearest full share, obtained by multiplying the
number of Common Shares initially issuable upon exercise of this Warrant by the
Exercise Price specified in the first paragraph hereof and dividing the product
so obtained by the new Exercise Price.
(5) Definitions.
(A) Whenever reference is made in this Section (f) to the
distribution of Common Shares, the term "Common Shares" shall mean the
Common Shares of the Company authorized as of the date hereof and any
other class of stock ranking on a parity with such Common Shares.
However, subject to the provisions of Section (i) hereof, Common Shares
issuable upon exercise hereof shall include only Common Shares of the
class designated as Common Shares of the Company as of the date hereof.
(B) Whenever reference is made in this Section (f) to the
distribution of Convertible Securities, the term "Convertible
Securities" shall mean options or warrants or rights for the purchase
of Common Shares of the Company or for the purchase of any stock or
other securities convertible into or exchangeable for Common Shares of
the Company.
4
(6) AntiDilution Provisions.
(A) Adjustments of Exercise Price. If the Company should at any time or
from time to time hereafter issue or sell any of its Common Shares without
consideration or for a consideration per share less than the Exercise Price in
effect immediately prior to the time of such issue or sale, then forthwith upon
such issue or sale, the Exercise Price shall be automatically adjusted to a
price (computed to the nearest cent) determined by dividing (i) the sum of (x)
the number of Common Shares outstanding immediately prior to such issue or sale
multiplied by the Exercise Price in effect immediately prior to such issue or
sale, and (y) the consideration, if any, received by the Company upon such issue
or sale, by (ii) the total number of Common Shares outstanding immediately after
such issue or sale. For purposes of this Section (6)(A), the following
provisions (i) and (ii) shall also be applicable:
(i) Rights, Options, or Warrants. In case at any time
hereafter the Company shall in any manner grant any right to subscribe
for or to purchase, or any option or warrant for the purchase of Common
Shares or for the purchase of any stock or securities convertible into
or exchangeable for Common Shares (such convertible or exchangeable
stock or securities being hereinafter referred to as the "Underlying
Convertible Securities") and if the minimum price per share for which
Common Shares are issuable, pursuant to such rights, options, warrants
or upon conversion or exchange of such Underlying Convertible
Securities (determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the granting
of such rights, options, or warrants plus the minimum aggregate amount
of additional consideration payable to the Company upon the exercise of
such rights, options, or warrants under the terms of such rights,
options, or warrants at the time of making such computation, plus, in
the case of such Underlying Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the
conversion or exchange thereof under the terms of such Underlying
Convertible Securities at the time of making such computation, by (ii)
the total maximum number of Common Shares issuable pursuant to such
rights, options, or warrants or upon the conversion or exchange of the
total maximum amount of such Underlying Convertible Securities issuable
upon the exercise of such rights, options, or warrants under the terms
of such rights, options, warrants or Underlying Convertible Securities
at the time of making such computation) shall be less than the Exercise
Price in effect immediately prior to the time of the granting of such
rights or options, then the total maximum number of Common Shares
issuable pursuant to such rights, options, warrants or upon conversion
or exchange
5
of the total maximum amount of such Underlying Convertible Securities
issuable upon the exercise of such rights, options, or warrants under
the terms of such rights, options, warrants or Underlying Convertible
Securities at the time of making such computation shall (as of the
date of granting of such rights, options, or warrants) be deemed to be
outstanding and to have been issued for sale price per share as so
determined; provided, that no further adjustment of the Exercise Price
shall be made upon the actual issue of Common Shares so deemed to have
been issued unless the price per share received by the Company upon
the actual issuance of Common Shares so deemed to be issued differs
from the price per share which was last used to adjust the Exercise
Price or unless by the terms of such rights, options or warrants or
Underlying Convertible Securities the price per share which the
Company will receive upon any such issuance of Common Shares differs
from the price per share which was last used to adjust the Exercise
Price, in either of which events the Exercise Price shall be adjusted
upon the occurrence of either such event to reflect the new price per
share of Common Stock; and further provided, that, upon the expiration
of such rights (including rights to convert or exchange), options or
warrants (a) the number of shares of Common Stock deemed to have been
issued and outstanding by reason of the fact that they were issuable
pursuant to such rights, options, or warrants (including rights to
convert or exchange) that were not exercised, shall no longer be
deemed to be issued and outstanding, and (b) the Exercise Price shall
forthwith be adjusted to the price which would have prevailed had all
adjustments been made on the basis of the issue only of the Common
Shares actually issued upon the exercise of such rights, options, or
warrants or upon conversion or exchange of such Underlying Convertible
Securities. Such adjustments upon expiration shall have no effect on
Warrants exercised prior to such expiration.
(ii) Convertible Securities. If the Company shall in any manner
issue or sell any Convertible Securities other than the rights,
options, or warrants described in Section 6(A)(i) hereof and if the
minimum price per share for which Common Shares are issuable upon
conversion or exchange of such Convertible Securities (determined by
dividing (i) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof under
the terms of such Convertible Securities at the time of making such
computation, by (ii) the total maximum number of Common Shares
issuable upon the conversion or exchange of all such Convertible
Securities under the terms of such Convertible Securities at the time
of making such computation)
6
shall be less than the Exercise Price in effect immediately prior to
the time of such issue or sale, then the total maximum number of
Common Shares issuable upon conversion or exchange of all such
Convertible Securities at the time of making such computation shall
(as of the date of the issue or sale of such Convertible Securities)
be deemed to be outstanding and to have been issued for said price per
share as so determined; provided, that no further adjustment of the
Exercise Price shall be made upon the actual issue of Common Shares so
deemed to have been issued unless the price per share received by the
Company upon the actual issuance of Common Shares so deemed to be
issued differs from the price per share which was last used to adjust
the Exercise Price or unless by the terms of such Convertible
Securities the price per share which the Company will receive upon any
such issuance of Common Shares differs from the price per share which
was last used to adjust the Exercise Price, in either of which events
the Exercise Price shall be adjusted upon the occurrence of either
such event to reflect the new price per share of Common Shares; and,
further provided that if any such issue or sale of such Convertible
Securities is made upon exercise of any right to subscribe for or to
purchase or any option to purchase any such Convertible Securities for
which an adjustment of the Exercise Price has been or is to be made
pursuant to the provisions of Section 6(A)(i) then no further
adjustment of the Exercise Price shall be made by reason of such issue
or sale unless the price per share received by the Company upon the
conversion or exchange of such Convertible Securities when actually
issued differs from the price per share which was last used to adjust
the Exercise Price or unless by the terms of such Convertible
Securities the price per share which the Company will receive upon any
such issuance of Common Shares upon conversion or exchange of such
Convertible Securities differs from the price per share which was last
used to adjust the Exercise Price, in either of which events the
Exercise Price shall be adjusted upon the occurrence of either of such
events to reflect the new price per share of Common Shares; and,
further provided, that, upon the termination of the right to convert
or to exchange such Convertible Securities for Common Shares, (a) the
number of Common Shares deemed to have been issued and outstanding by
reason of the fact that they were issuable upon conversion or exchange
of any such Convertible Securities, which were not so converted or
exchanged, shall no longer be deemed to be issued and outstanding, and
(b) the Exercise Price shall forthwith be adjusted to the price which
would have prevailed had all adjustments been made on the basis of the
issue only of the number of Common Shares actually issued upon
conversion or exchange of such Convertible Securities. Such
adjustments upon expiration shall have no effect on Warrants exercised
prior to such expiration.
7
(B) Determination of Issue Price. In case any Common
Shares or Convertible Securities shall be issued for cash, the
consideration received therefor, which shall be the gross
sales price for such security without deducting therefrom any
commission or other expenses paid or incurred by the Company
for any underwriting of, or otherwise in connection with, the
issuance thereof, shall be deemed to be the amount received by
the Company therefor. In case any Common Shares or Convertible
Securities shall be issued for a consideration part or all of
which shall be other than cash, then, for the purpose of this
Section (6), the Board of Directors of the Company shall
determine the fair value of such consideration, irrespective
of accounting treatment, and such Common Shares or Convertible
Securities shall be deemed to have been issued for an amount
of cash equal to the value so determined by the Board of
Directors. The reclassification of securities other than
Common Shares into securities including Common Shares shall be
deemed to involve the issuance for a consideration other than
cash of such Common Shares immediately prior to the close of
business on the date fixed for the determination of security
holders entitled to receive such Common Shares. In case any
Common Shares or Convertible Securities shall be issued
together with other stock or securities or other assets of the
Company for consideration, the Board of Directors of the
Company shall determine what part of the consideration so
received is to be deemed to be consideration for the issue of
such Common Shares or Convertible Securities.
(C) Determination of Date of Issue. In case the
Company shall take a record of the holders of Common Shares
for the purpose of entitling them (i) to receive a dividend or
other distribution payable in Common Shares or in Convertible
Securities or (ii) to subscribe for or purchase Common Shares
or Convertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the Common
Shares deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or
the date of the granting of such right of subscription or
purchase, as the case may be.
(D) Treasury Shares. For the purpose of this Section
(f), Common Shares at any relevant time owned or held by, or
for the account of, the Company shall not be deemed
outstanding.
(g) Officer's Certificate. Whenever the Exercise Price shall be adjusted as
required by the provisions of Section (f) hereof, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office, and with its stock transfer and warrant agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided
and setting forth in reasonable detail the facts requiring such adjustment. Each
such officer's certificate shall be made available at all reasonable times for
inspection by the Holder
8
and the Company shall, forthwith after each such adjustment, deliver a copy of
such certificate to the Holder.
(h) Notices to Holders. So long as this Warrant shall be outstanding and
unexercised (i) if the Company shall pay any dividend or make any distribution
upon the Common Shares or (ii) if the Company shall offer to the holders of
Common Shares for subscription or purchase by them any shares of stock of any
class or any other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then, in any such case, the Company shall
cause to be delivered to the Holder, at least 10 days prior to the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Shares of record shall be
entitled to exchange their Common Shares for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up.
(i) Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding Common
Shares of the Company (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of an issuance of
Common Shares by way of dividend or other distribution or of a subdivision or
combination), or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding Common
Shares of the class issuable upon exercise of this Warrant) or in case of any
sale or conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company shall cause effective
provision to be made so that the Holder shall have the right thereafter, by
exercising this Warrant, to purchase the kind and amount of shares of stock and
other securities and property which the Holder would have received upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance had this Warrant been exercised prior to the consummation of
such transaction. Any such provision shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. The foregoing provisions of this Section (i) shall
similarly apply to successive reclassifications, capital reorganizations and
changes of Common Shares and to successive consolidations, mergers, sales or
conveyances. In the event the Company spins off a subsidiary by distributing to
the shareholders of the Company as a dividend or otherwise the stock of the
subsidiary, the Company shall reserve for the life of this Warrant, shares of
the subsidiary to be delivered to the Holders of the Warrants upon exercise to
9
the same extent as if they were owners of record of the Warrant Shares on the
record date for distribution of the shares of the subsidiary.
(j) Registration Under the Securities Act of 1933.
(1) On or before September 30, 1998, the Company will file and
cause to become effective a registration statement under the Securities
Act of 1933, as amended (the "Act"), registering the Warrants and the
Warrant Shares; provided however, that so long as the Company has used
its reasonable best efforts to file such registration statement and
responded to any comments relating thereto in a timely manner, the
Company will not be in default of its obligations relating to such
filing if the registration statement does not become effective by
September 30, 1998.
(2) The Company shall:
(A) Supply to each selling Holder a copy of the
registration statement and a reasonable number of copies of
the preliminary, final and other prospectus in conformity with
requirements of the Act and the Rules and Regulations
promulgated thereunder and such other documents as the Holders
shall reasonably request.
(B) The Company shall bear the complete cost and
expense (other than any selling commissions relating to the
sale of the Warrants and Warrant Shares, which shall be paid
by the sellers thereof) of such registrations or
qualifications except those filed under subsection (j)(3)
which shall be at the Holder(s) cost and expense.
(C) Keep effective such registration statement until
all of the registered Warrant Shares issued by the Company
either before or after the effective date of such registration
statement have been publicly sold under such registration
statement.
(D) Use its best efforts to register or qualify the
Warrants and Warrant Shares for sale in those states requested
by the person selling the Warrants or Warrant Shares; provided
that, the Company shall not be required to register or qualify
the Warrants and Warrant Shares for sale in any state in which
the sale of the Warrants or Warrant Shares by the person
selling the Warrants or Warrant Shares would be exempt from
having to be registered or qualified in such state. The
determination of whether or not such an exemption exists shall
be made by counsel for the Company and such determination
shall be provided in writing to the person desiring to sell
Warrants or Warrant Shares in a state.
10
(E) Indemnify and hold harmless each such Holder and each
underwriter, within the meaning of the Act, who may purchase from or
sell for any such Holder, any Warrants or Warrant Shares, from and
against any and all losses, claims, damages, and liabilities
(including but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing, defending or settling
any claim) arising from (i) any untrue or alleged untrue statement of
a material fact contained in any registration statement furnished
pursuant to clause (A) of this subsection, or any prospectus included
therein or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading (unless such untrue statement or
omission or such alleged untrue statement or omission was based upon
information furnished or required to be furnished in writing to the
Company by such Holder or underwriter expressly for use therein),
which indemnification shall include each person, if any, who controls
any such Holder or underwriter within the meaning of the Act;
provided, however, that the Company shall not be so obligated to
indemnify any such Holder or underwriter or controlling person unless
such Holder and underwriter shall at the same time indemnify the
Company, its directors, each officer signing any registration
statement or any amendment to any registration statement and each
person, if any, who controls the Company within the meaning of the
Act, from and against any and all losses, claims, damages and
liabilities (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing, defending
or settling any claim) arising from (i) any untrue or alleged untrue
statement of a material fact contained in any registration statement
or prospectus furnished pursuant to Clause (A) of this subsection, or
(ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, but the indemnity of such Holder, underwriter
or controlling person shall be limited to liability based upon
information furnished, or required to be furnished, in writing to the
Company by such Holder or underwriter or controlling person expressly
for use therein. The Company shall not be liable for amounts paid in
settlement of any such litigation if such settlement was effected
without the consent of the Company. The indemnity agreement of the
Company herein shall not inure to the benefit of any such underwriter
(or to the benefit of any person who controls such underwriter) on
account of any losses, claims, damages, liabilities (or actions or
proceedings in respect thereof) arising from the sale of any of such
Warrants or Warrant Shares by such underwriter to a person if such
underwriter failed to send or give a copy of the prospectus furnished
pursuant to Clause (A) of this subsection, as the same may then be
supplemented or amended (if such supplement or amendment shall have
been furnished to the Holders pursuant to said Clause (A)), to such
person with or prior to the written confirmation of the sale involved.
11
(3) As a condition to the Company's obligation in subsection
(j)(l) hereof, each Holder shall supply such information as the Company
may reasonably require from such Holder, or any underwriter for such
Holders, for inclusion in such registration statement or posteffective
amendment.
(4) The Company's agreements with respect to the Warrants and
Warrant Shares in this Section will continue in effect regardless of
the exercise or surrender of this Warrant.
(5) Any notices or certificates by the Company to the Holder
and by the Holder to the Company shall be deemed delivered if in
writing and delivered personally or sent by certified mail, return
receipt requested, to the Holder, addressed to the Holder at the
Holder's address as set forth on the Warrant or stockholder register of
the Company, or, if the Holder has designated, by notice in writing to
the Company, any other address, to such other address, and, if to the
Company, addressed to it at 00000 Xxxx Xxxxxx Xxxxxx, Xxxxx X-000,
Xxxxxxxx, Xxxxxxxx 00000-0000. The Company may change its address by
written notice to the Holder.
(k) Transfer to Comply with the Securities Act of 1933. The Company may
cause the following legend, or one similar thereto, to be set forth on the
Warrants and on each certificate representing Warrant Shares or any other
security issued or issuable upon exercise of this Warrant not theretofore
distributed to the public or sold to underwriters for distribution to the public
pursuant to Section (j) hereof, unless legal counsel for the Company is of the
opinion as to any such certificate that such legend, or one similar thereto, is
unnecessary:
"The securities represented by this certificate may not be offered for
sale, sold or otherwise transferred except pursuant to an effective
registration statement made under the Securities Act of 1933 (the
"Act") and under any applicable state securities law, or pursuant to an
exemption from registration under the Act and under any applicable
state securities law, the availability of which is to be established to
the satisfaction of the Company."
(1) Exchange Provisions.
(1) For purposes of this Section (1), this Warrant shall be
deemed to represent the same number of Warrants as there are Warrant
Shares underlying this Warrant. For example, if there are 10,000
Warrant Shares underlying this Warrant, then for purposes of this
Section (1) the Holder shall be deemed to hold 10,000 Warrants.
(2) For purposes of this Section (1), the following terms
shall have the following meanings:
12
(A) "Current Market Value of a Warrant Share" shall be the
value of a Warrant Share as determined under Section (c)(1) or (2)
hereof except that the time of the determination thereunder shall be
the last business day prior to the day the Company receives a notice
from the Holder under this Section (1).
(B) "Warrant Value" shall mean the Current Market Value of a
Warrant Share minus or less the Exercise Price payable under this
Warrant as of the close of business on the last business day prior to
the day the Company receives a notice from the Holder under this
Section (1).
(3) The Holder shall have the right to exchange, in a cashless
transaction, all or part of the Holder's Warrants for Common Shares issued by
the Company at anytime prior to the Expiration Date of such Warrants by
providing written notice ("Notice") to the Company. Such Notice shall set forth
the number of Warrants which the Holder elects to exchange for Common Shares.
(4) Within 10 days after receipt of such Notice by the Company, the
Company shall issue the number of Common Shares of the Company to the Holder
which is determined by dividing the Warrant Value of the Warrants being
exchanged by the Current Market Value of a Warrant Share as of the date the
Notice is received by the Company.
(5) The Holder shall surrender the Warrant which the Holder is
exchanging for Common Shares upon receipt thereof. If the entire Warrant is
being exchanged by the Holder for Common Shares, the Company shall cancel the
entire Warrant. If less than the entire Warrant is being exchanged for Common
Shares, the Company shall issue a new Warrant to the Holder representing the
portion of this Warrant which was not exchanged for Common Shares.
13
(m) Applicable Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the state of Colorado.
Dated Effective April 20, 1998.
GLOBAL MED TECHNOLOGIES, INC.
By:_____________________________
Xxxxxxx X. Xxxxx, Chairman of the Board
and Chief Executive Officer
14
PURCHASE FORM
-------------
Dated: _____________, 19______
The undersigned hereby irrevocably elects to exercise the Warrant to the
extent of purchasing _________________ shares of Common Shares and hereby makes
payment of $_____________________ in payment of the actual exercise price
thereof.
INSTRUCTIONS FOR REGISTRATION OF SHARES
---------------------------------------
Name:
---------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address:
------------------------------------------------------------------------
Signature:
----------------------------------------------------------------------
ASSIGNMENT FORM
---------------
Dated: ______________ 19______
FOR VALUE RECEIVED,_____________________________________________________________
hereby sells, assigns and transfers unto________________________________________
Name:
---------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address:
------------------------------------------------------------------------
the right to purchase Common Shares represented by this Warrant to the extent of
Common Shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint, attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Signature:
--------------------------------------
