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STOCK PURCHASE WARRANT
This Warrant is issued as of the 30th day of June, 1999, by TRIANGLE
IMAGING GROUP, INC., a Florida corporation (the "Company"), to WATERSIDE CAPITAL
CORPORATION, a Virginia corporation ("WSCC"), or its registered assignee,
(together with WSCC the "Holder" or "Holders").
AGREEMENT:
1. ISSUANCE OF WARRANT; TERM.
1.1 For and in consideration of WSCC purchasing from
the Company 700 shares of its Series D Convertible Preferred Stock, par value
$1,000 per share (the "Preferred Stock"), pursuant to the terms of a Series D
Convertible Preferred Stock Purchase Agreement of even date (the "Agreement"),
and other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the Company grants to Holder the right to purchase 80,000
shares of the Company's common stock (the "Common Stock").
1.2 The shares of Common Stock issuable upon exercise
of this Warrant are referred to as the "Shares." For purposes of this Warrant
the term "fully diluted basis" will be determined in accordance with generally
accepted accounting principles.
1.3 20,000 of the Shares vest upon the execution of
this Warrant. The remaining Shares will vest at a rate of 12,000 shares on each
of the five anniversary dates of this Agreement provided that on such
anniversary date shares of Series D Convertible Preferred Stock remain
outstanding.
1.4 This Warrant will be exercisable in accordance
with the vesting provisions of Section 1.3 in whole or in part at any time and
from time to time from the date hereof until June 30, 2009.
2. EXERCISE PRICE. The exercise price (the "Exercise
Price") per share for which all or any of the Shares may be purchased under this
Warrant will be $1.15 per Share.
3. EXERCISE.
3.1 This Warrant may be exercised by the Holder (but
only on the following conditions ) as to all or any increment or increments of
100 Shares (or the balance of the Shares if less than such number), on delivery
of written notice of intent to exercise to the Company at the following address:
0000 XX 00xx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 or such other
address as the Company designates in a written notice to the Holder, together
with this Warrant and payment to the Company of the aggregate Exercise Price of
the Shares so purchased. The Exercise Price will be payable by certified check
or other certified funds. On exercise of this Warrant, the Company will as
promptly as practicable, and in any event within 15 days thereafter, execute and
deliver to the Holder a certificate or certificates for the total number of
whole Shares for which this Warrant is being exercised in such names and
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denominations as are requested by such Holder. If this Warrant is exercised with
respect to less than all of the Shares, the Holder is entitled to receive a new
Warrant covering the number of Shares in respect of which this Warrant has not
been exercised, and such new Warrant will in all other respects be identical to
this Warrant. The Holder will pay when due any and all state and federal issue
taxes payable in respect of the issuance of this Warrant or the issuance of any
Shares on exercise of this Warrant.
3.2 If the shares of the Company's Common Stock are
subdivided or combined into a greater or smaller number of shares of Common
Stock, the Target Price shall be proportionately adjusted by the ratio which the
total number of shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock to be outstanding
immediately after such event.
4. COVENANTS AND CONDITIONS. The above provisions are subject
to the following:
4.1 Neither this Warrant nor the Shares have been
registered under the Securities Act or any state securities laws ("Blue Sky
Laws"). This Warrant has been acquired for investment purposes and not with a
view to distribution or resale and may not be pledged, hypothecated, sold, made
subject to a security interest or otherwise transferred without (i) an effective
registration statement for such Warrant under the Securities Act and applicable
Blue Sky Laws or (ii) an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to the Company and its counsel, that registration is not
required under the Securities Act or under any applicable Blue Sky Laws (the
Company acknowledges that Williams, Mullen, Xxxxx & Xxxxxxx is acceptable
counsel). Transfer of the shares issued on the exercise of this Warrant will be
restricted in the same manner and to the same extent as the Warrant and the
certificates representing such Shares will bear substantially the following
legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE
TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER
THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS
SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR
(II) IN THE OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY, REGISTRATION UNDER THE ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED TRANSFER.
The Holders and the Company will execute such other documents and
instruments as counsel for the Company reasonably deems necessary to effect the
compliance of the issuance of this Warrant and any shares of Common Stock issued
on exercise hereof with applicable federal and state securities laws.
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4.2 All Shares issued on exercise of this Warrant
will, on issuance and payment therefor, be legally and validly issued and
outstanding, fully paid and nonassessable, free from all taxes, liens, charges
and preemptive rights, if any, with respect thereto or to the issuance thereof.
The Company will at all times reserve and keep available for issuance on the
exercise of this Warrant such number of authorized but unissued shares of Common
Stock as will be sufficient to permit the exercise in full of this Warrant.
4.3 Except for stock option grants to officers,
directors, employees and consultants to the Company and the sale of any shares
of the Company's capital stock to employees of the Company pursuant to any
direct stock purchase program, the Company will not sell any shares of the
Company's capital stock at a price below the Fair Market Value of such shares
(as defined in Section 8), without the prior written consent of the Holder. If
the Company sells shares of the Company's capital stock in violation of this
Section 4.3, the number of shares issuable on exercise of this Warrant will be
equal to the product obtained by multiplying the number of shares issuable under
this Warrant before such sale by the quotient obtained by dividing (i) the Fair
Market Value of the Shares issued in violation of this Section 4.3 by (ii) the
price at which such Shares were sold.
4.4 Any Holder or subsequent transferee of the
Warrant or the Shares shall not, and any employee, officer, director, or
affiliates of any such Holder or subsequent transferee shall not, lend, sell or
cause to be lent or sold any of the shares of Company Common Stock underlying
the Warrant during the term of the Warrant or any Shares during any applicable
restricted holding period required under federal or state securities laws
effective upon exercise of the Warrant absent registration of the Warrant or
Shares under the Act, or upon delivery of an opinion of counsel acceptable to
the Company that such registration is not required in connection with such
proposed transfer.
5. TRANSFER OF WARRANT. Subject to the provisions of Section
4, this Warrant may be transferred by the Holder on presentation of this Warrant
to the Company along with an opinion of counsel acceptable to the Company that
such transfer complies with all applicable state and federal securities laws, if
requested by the Company, with written instructions for such transfer. On such
presentation for transfer, the Company will promptly execute and deliver a new
Warrant or Warrants in the form hereof in the name of the assignee or assignees
and in the denominations specified in such instructions. The Company will pay
all expenses incurred by it in connection with the preparation, issuance and
delivery of Warrants under this Section.
6. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise
provided, this Warrant does not confer on the Holder, as such, any right
whatsoever as a shareholder of the Company. Notwithstanding the foregoing, if
the Company offers to all of the Company's shareholders the right to purchase
any securities of the Company, then, for such purpose, all shares of Common
Stock that are subject to this Warrant shall be deemed to be outstanding and
owned by the Holder and the Holder shall be entitled to participate in such
rights offering. The Company will not grant any preemptive rights with respect
to any of its capital stock without the prior written consent of Holder. The
Company will not issue any additional securities, other than the Series D
Convertible Preferred Stock issued on even dated herewith, which entitle the
holder thereof to obtain any preference over holders of Common Stock on the
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dissolution, liquidation, winding-up, sale, merger, or reorganization of the
Company without the prior written consent of the Holder.
7. ADJUSTMENT ON CHANGES IN STOCK.
7.1 If all or any portion of this Warrant is
exercised after any stock split, stock dividend, recapitalization, combination
of shares of the Company or other similar event, occurring after the date
hereof, then the Holder exercising this Warrant will receive, for the aggregate
price paid on such exercise, the aggregate number and class of shares that the
Holder would have received if this Warrant had been exercised immediately before
such stock split, stock dividend, recapitalization, combination of shares or
other similar event. If any adjustment under this Section 7.1 would create a
fractional share of Common Stock or a right to acquire a fractional Share such
fractional Share be disregarded and the number of Shares subject to this Warrant
will be the next higher number of shares, rounding all fractions upward.
Whenever there is an adjustment under this Section 7.1, the Company will
forthwith notify the Holder of such adjustment, setting forth in reasonable
detail the event requiring the adjustment and the method by which such
adjustment was calculated.
7.2 If all or any portion of this Warrant is
exercised after any merger, consolidation, exchange of shares, separation,
reorganization or liquidation of the Company or other similar event, occurring
after the date hereof and, as a result of, shares of Common Stock are changed
into the same or a different number of shares of the same or another class or
classes of securities of the Company or another entity, then the Holder
exercising this Warrant will receive, for the aggregate price paid on such
exercise, that number of shares of Common Stock or other security for which the
Common Stock was exchanged determined by (i) dividing the aggregate price paid
on such exercise by the Exercise Price, and (ii) multiplying such quotient by
the exchange ratio applicable to such event. If any adjustment under this
Section 7.2 would create a fractional share of Common Stock or a right to
acquire a fractional share of Common Stock, such fractional share will be
disregarded and the number of shares subject to this Warrant will be the next
higher number of shares, rounding all fractions upward. Whenever there is an
adjustment pursuant to this Section 7.2, the Company will forthwith notify the
Holder of such adjustment, setting forth in reasonable detail the event
requiring the adjustment and the method by which such adjustment was calculated.
8. FAIR MARKET VALUE.
The Fair Market Value of each Share will be
determined as follows:
8.1 If the Company is at the time of valuation a
reporting company under the Securities Exchange Act of 1934, as amended, and its
shares of Common Stock are actively traded on the NASD OTC Bulletin Board,
Nasdaq SmallCap Market, Nasdaq NMS, AMEX, or NYSE, then the Fair Market Value of
such Shares shall be equal to, at any date, the average of the closing market
prices for 20 consecutive business days prior to the valuation date. If no sale
takes place on such day on any such exchange, the average of the closing bid and
asked prices on such day as so reported shall represent the closing market price
for that day.
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8.2 If 8.1 does not apply, then the Fair Market Value
of each Share will be the fair value as determined in good faith by the Board of
Directors. If the Holder objects to this valuation, then it shall have the right
to an appraisal conducted as follows:
8.2.1 The Company and the Holder will each
appoint an independent, experienced appraiser who is a member of a recognized
professional association of business appraisers. The two appraisers will
determine the value of the shares of Common Stock that would be issued on the
exercise of the Warrant, without taking into consideration that such shares
would constitute a minority interest, and would lack liquidity but assuming that
the sale would be between a willing buyer and a willing seller, both of whom
have full knowledge of the financial and other affairs of the Company, and
neither of whom is under any compulsion to sell or to buy.
8.2.2 If the highest of the two appraisals
is not more than 10% more than the lowest of the appraisals, the Fair Market
Value will be the average of the two appraisals. If the highest of the two
appraisals is 10% or more than the lowest of the two appraisals, then a third
appraiser shall be appointed by the two appraisers, and if they cannot agree on
a third appraiser, the American Arbitration Association will appoint the third
appraiser. The third appraiser, regardless who appoints him or her, must have
the substantially same qualifications as the first two appraisers.
8.2.3 The Fair Market Value after the
appointment of the third appraiser will be the mean of the three appraisals and
shall be the conclusive and binding upon the parties .
9. GOVERNING LAW. This warrant will be governed by the laws of
the State of Florida.
10. SEVERABILITY. If any provision(s) of this Warrant or the
application thereof to any person or circumstances is invalid or unenforceable
to any extent, the remainder of this Warrant and the application of such
provisions to other persons or circumstances, will not be affected and will be
enforced to the greatest extent permitted by law.
11. COUNTERPARTS. This Warrant may be executed in any number
of counterparts and be different parties to this Warrant in separate
counterparts, each of which when so executed will be deemed to be an original
and all of which taken together will constitute one and the same Warrant.
IN WITNESS, the parties have set their hands as of the date first above
written.
TRIANGLE IMAGING GROUP, INC., a Florida
corporation
By /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
WATERSIDE CAPITAL CORPORATION,
a Virginia corporation
By /s/ XXXXXX X. XxXXXXXX
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Xxxxxx X. XxXxxxxx
Its: Secretary/Treasurer
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