EXHIBIT 10.11
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT") OR
APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT TO PURCHASE 1,000,000 SHARES OF COMMON STOCK
ROCKPORT HEALTHCARE GROUP, INC.
(a DELAWARE corporation)
00 XXXXX XXXXXX XXXX, XXXXX 000X
XXXXXXX, XXXXX 00000
Not Transferable or Exercisable Except
upon Conditions Herein Specified
ROCKPORT HEALTHCARE GROUP, INC., a DELAWARE corporation ("Company"), hereby
certifies that XXXXXX XXXXX, his registered successors and permitted assigns
registered on the books of the Company maintained for such purposes, as the
registered holder hereof ("Holder"), for value received, is entitled to purchase
from the Company the number of fully paid and non-assessable shares of Common
Stock of the Company, $.001 par value ("Shares" or "Common Stock"), stated above
at the purchase price per Share set forth in Section 1(b) below (the number of
Shares and Exercise Price being subject to adjustment as hereinafter provided)
upon the terms and conditions herein provided.
1. Exercise of Warrants.
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(a) Subject to subsection (b) of this Section 1, upon presentation
and surrender of this Warrant Agreement, with the attached Purchase Form duly
executed, at the principal office of the Company, or at such other place as the
Company may designate by notice to the Holder hereof, together with a certified
or bank cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased (or in the case of
exercise pursuant to Section 1(c)(i) or (ii), as set forth in such sections),
the Company shall deliver to the Holder hereof, as promptly as practicable,
certificates representing the Shares being purchased. This Warrant may be
exercised in whole or in part; and, in case of exercise hereof in part only, the
Company, upon surrender hereof, will deliver to the Holder a new Warrant
Agreement or Warrant
WARRANT AGREEMENT November 26, 2001
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Agreements of like tenor entitling the Holder to purchase the number of Shares
as to which this Warrant has not been exercised.
(b) This Warrant may be exercised at a price of $.345 per share
(the "Exercise Price"). The Warrant shall expire upon the close of business
November 25, 2011.
(c) The Exercise Price shall be payable at the time of exercise. The
Exercise Price may be paid in cash (by cashiers' check) or by: (i) surrender of
shares of Common Stock of the Company already owned by the Holder, having a
Market Price (as defined below) equal to the Exercise Price per share; or (ii)
upon surrender of the Warrant at the principal office of the Company together
with notice of election, in which event the Company shall issue Holder a number
of Shares computed using the following formula:
X = Y (A-B)/A
where: X = the number of Shares to be issued to Holder (not to exceed the
number of Shares set forth on the cover page of this Warrant
Agreement, as adjusted pursuant to the provisions of Section 6 of this
Warrant Agreement).
Y = the number of Shares for which the Warrant is being exercised.
A = the Market Price of one Share (for purposes of this Section 1(c)),
the "Market Price" shall be defined as the average of the closing bid
and asked prices on the exchange on which the Common Stock trades for
the five trading days prior to the date of exercise of this Warrant
Agreement; provided if the Common Stock does not trade on any
exchange, the Market Price shall equal the average of the closing bid
and asked prices in the over-the-counter market for the five trading
days prior to the date of exercise of this Warrant Agreement, as
reported by the National Association of Securities Dealers Automated
Quotation System; and, provided further, that if the common stock is
not quoted or listed by any organization, the fair value of the common
stock, as determined by the Board of Directors of the Company, whose
determination shall be conclusive, shall be used.
B = the Exercise Price.
2. Exchange and Transfer of Warrant.
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At any time prior to the exercise hereof, upon presentation and
surrender to the Company, this Warrant (a) may be exchanged, alone or with other
Warrants of like tenor registered in the name of the Holder, for another Warrant
or other Warrants of like tenor in the name of such Holder exercisable for the
same aggregate number of Shares as the Warrant or Warrants surrendered, but (b)
may not be sold, transferred, hypothecated, or assigned, in whole or in part,
without the prior written consent of the Company.
WARRANT AGREEMENT November 26, 2001
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3. Rights and Obligations of Warrant Holder.
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(a) The Holder of this Warrant Agreement shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or in
equity; provided, however, that in the event that any certificate representing
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the Shares is issued to the Holder hereof upon exercise of this Warrant, such
Holder shall, for all purposes, be deemed to have become the holder of record of
such Shares on the date on which this Warrant Agreement, together with a duly
executed Purchase Form, was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such Share certificate. The
rights of the Holder of this Warrant are limited to those expressed herein and
the Holder of this Warrant, by his acceptance hereof, consents to and agrees to
be bound by and to comply with all the provisions of this Warrant Agreement,
including, without limitation, all the obligations imposed upon the Holder
hereof by Sections 2 and 5 hereof. In addition, the Holder of this Warrant
Agreement, by accepting the same, agrees that the Company may deem and treat the
person in whose name this Warrant Agreement is registered on the books of the
Company maintained for such purposes as the absolute, true and lawful owner for
all purposes whatsoever, notwithstanding any notation of ownership or other
writing thereon, and the Company shall not be affected by any notice to the
contrary.
(b) No Holder of this Warrant Agreement shall be entitled to vote or
receive dividends or to be deemed the holder of Shares for any purpose, nor
shall anything contained in this Warrant Agreement be construed to confer upon
any Holder of this Warrant Agreement any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any action by the
Company, whether upon any recapitalization, issue of stock, reclassification of
stock, consolidation, merger, conveyance or otherwise, receive notice of
meetings or other action affecting stockholders (except for notices provided for
herein), receive dividends, subscription rights, or otherwise, until this
Warrant shall have been exercised and the Shares purchasable upon the exercise
thereof shall have become deliverable as provided herein; provided, however,
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that any such exercise on any date when the stock transfer books of the Company
shall be closed shall constitute the person in whose name the certificate for
those Shares are to be issued as the record holder thereof for all purposes at
the opening of business on the next succeeding day on which such stock transfer
books are open, and the Warrant surrendered shall not be deemed to have been
exercised, in whole or in part as the case may be, until the next succeeding day
on which stock transfer books are open for the purpose of determining
entitlement to dividends on the Company's common stock.
4. Shares Underlying Warrants.
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The Company covenants and agrees that all Shares delivered upon exercise of
this Warrant shall, upon delivery and payment therefor, be duly and validly
authorized and issued, fully paid and non-assessable, and free from all stamp
taxes, liens and charges with respect to the purchase thereof.
5. Disposition of Warrants or Shares.
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WARRANT AGREEMENT November 26, 2001
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(a) The Holder of this Warrant Agreement and any transferee hereof or
of the Shares issuable upon the exercise of the Warrant Agreement, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the Act
or State Acts and shall not be sold, pledged, hypothecated, or otherwise
transferred (whether or not for consideration) except upon the issuance to the
Company of an opinion of counsel favorable to the Company or its counsel or
submission to the Company of such evidence as may be satisfactory to the Company
or its counsel, in each such case, to the effect that any such transfer shall
not be in violation of the Act or the State Acts. It shall be a condition to
the transfer of this Warrant that any transferee of this Warrant deliver to the
Company his written agreement to accept and be bound by all of the terms and
conditions of this Warrant Agreement. The Holder acknowledges that the Company
has not granted any registration rights hereunder.
(b) The stock certificates of the Company that will evidence the
shares of Common Stock with respect to which this Warrant may be exercisable
will be imprinted with a conspicuous legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933
("ACT") OR THE SECURITIES LAWS OF ANY STATE ("STATE ACTS").
SUCH SECURITIES SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) AT
ANY TIME WHATSOEVER EXCEPT UPON REGISTRATION OR UPON
DELIVERY TO THE COMPANY OF AN OPINION OF ITS COUNSEL
SATISFACTORY TO THE COMPANY OR ITS COUNSEL THAT REGISTRATION
IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION OF SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY OR ITS
COUNSEL TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN
VIOLATION OF THE ACT, STATE ACTS OR ANY RULE OR REGULATION
PROMULGATED THEREUNDER."
6. Adjustments.
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The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below:
(a) If at any time after the date of this Warrant and so long as this
Warrant is outstanding, there is a stock split, stock dividend, subdivision, or
similar distribution with respect to the Common Stock, or a combination of the
Common Stock, then, in such event, the Exercise Price shall be adjusted in
accordance with (b) below.
(b) Immediately upon the effective date of any event requiring
adjustment pursuant to (a), the Company shall adjust the Exercise Price then in
effect (to the nearest whole cent) as follows:
WARRANT AGREEMENT November 26, 2001
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i) in the event such adjustment is caused by a forward stock
split, stock dividend, subdivision, or other similar distribution of
shares of Common Stock, the Exercise Price in effect, immediately
prior to the effective date of such event shall be decreased to an
amount which shall bear the same relation to the Exercise Price in
effect immediately prior to such event as the total number of shares
of Common Stock outstanding immediately prior to such event bears to
the total number of shares of Common Stock outstanding immediately
after such event;
ii) in the event such adjustment is caused by a combination of
shares of Common Stock, the Exercise Price in effect immediately prior
to the close of business on the effective date of such event shall be
increased to an amount which shall bear the same relation to the
Exercise Price in effect immediately prior to such event as the total
number of shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock outstanding
immediately after such event.
(c) Upon each adjustment of the Exercise Price pursuant to (b) above,
the Warrant outstanding prior to such adjustment in the Exercise Price shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of shares of Common Stock (calculated to the nearest hundredth) obtained
by (i) multiplying the number of shares of Common Stock issuable upon exercise
of the Warrant prior to adjustment of the number of shares of Common Stock by
the Exercise Price in effect prior to adjustment of the Exercise Price and (ii)
dividing the product so obtained by the Exercise Price in effect after such
adjustment of the exercise price.
(d) In case the Company (i) consolidates with or merges into any
other entity and is not the continuing or surviving entity of such consolidation
or merger, or (ii) permits any other entity to consolidate with or merge into
the Company and the Company is the continuing or surviving Company but, in
connection with such consolidation or merger, the Common Stock is changed into
or exchanged for common stock or other securities of any other entity or cash or
any other assets, or (iii) transfers all or substantially all of its properties
and assets to any other entity, or (iv) effects a reorganization or
reclassification of the equity of the Company in such a way that holders of
Common Stock shall be entitled to receive stock, securities, cash or assets with
respect to or in exchange for Common Stock, then, and in each such case, proper
provision shall be made so that, upon the exercise of this Warrant at any time
after the consummation of such consolidation, merger, transfer, reorganization
or reclassification, the Holder shall be entitled to receive (at the aggregate
Exercise Price in effect for Common Stock issuable upon such exercise of this
Warrant immediately prior to such consummation), in lieu of Common Stock
issuable upon such exercise of this Warrant prior to such consummation, the
stock and other securities, cash and assets to which such Holder would have been
entitled upon such consummation if such Holder had so exercised this Warrant
immediately prior thereto.
7. Loss or Destruction.
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WARRANT AGREEMENT November 26, 2001
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Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Agreement and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement or
bond satisfactory in form, substance and amount to the Company or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant
Agreement, the Company will execute and deliver, in lieu thereof, a new Warrant
Agreement of like tenor.
8. Survival.
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The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Agreement.
9. Notices.
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Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or United States
registered or certified mail, return receipt requested, postage prepaid (or
similar delivery if outside of the United States), and will be deemed to have
been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified on the cover page hereof,
and if to the Holder, it will be addressed to the registered Holder at its, his
or his address as it appears on the books of the Company.
WARRANT AGREEMENT November 26, 2001
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ROCKPORT HEALTHCARE GROUP, INC.
By:
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Title: President
HOLDER:
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By:
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XXXXXX XXXXX
WARRANT AGREEMENT November 26, 2001
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PURCHASE FORM
(To be signed only upon exercise of Warrant)
To ROCKPORT HEALTHCARE GROUP, INC.
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, * shares of Common Stock of ROCKPORT HEALTHCARE
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GROUP, Inc. and herewith makes payment of $ therefor, and
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requests that the certificate or certificates for such shares be issued in the
name of and delivered to the undersigned.
Dated:
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(Signature must conform in all respects to
name of holder as specified on the face of
the enclosed Warrant)
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(Address)
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(SSN#)
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(*) Insert here the number of shares called for on the face of the Warrant
without making any adjustment for additional Common Stock or any other
stock or other securities or property or cash which, pursuant to the
adjustment provisions of the Warrant Agreement pursuant to which the
Warrant was granted, may be delivered upon exercise.
WARRANT AGREEMENT November 26, 2001
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