THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
eCLICKMD, INC.
INVESTOR WARRANT
TO PURCHASE XXXXX SHARES
(SUBJECT TO ADJUSTMENT)
OF COMMON STOCK
(Void after XXXXXXX Date)
BRW No: 1
-----------
This certifies that for value XXXXXXXXXXXXXX or registered assigns
("Holder"), is entitled, subject to the terms set forth below, at any time from
and after XXXXXXX (the "Original Issuance Date") and before 5:00 p.m., Eastern
Time, on XXXXXXX (the "Exercise Period"), to purchase from eClickMD, Inc., a
Nevada corporation (the "Company"), XXXXX0 shares (subject to adjustment as
described herein), of the Common Stock, par value $0.001 per share (which
authorized class of shares is herein called the "Common Stock") of the Company,
as constituted on the Original Issuance Date, upon surrender hereof, at the
principal office of the Company referred to below, with a duly executed
subscription form in the form attached hereto as Exhibit A and simultaneous
payment therefor in lawful money of the United States or otherwise as
hereinafter provided, at the price per share equal to $XX.XX per share, as may
be adjusted as provided herein (the "Purchase Price"). The number and character
of such shares of Common Stock are subject to further adjustment as provided
below, and the term "Common Stock" shall include, unless the context otherwise
requires, the stock and other securities and property at the time receivable
upon the exercise of this Warrant. The term "Warrants" as used
herein shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
1. Exercise.
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(a) This Warrant may be exercised at any time or from time to time
from and after the Original Issuance Date and before 5:00 p.m., Eastern Time, on
XXXXXXXX, on any business day, for the full number of shares of Common Stock
called for hereby, by surrendering it at the principal office of the Company, at
0000 Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, with the subscription form
duly executed, together with payment in an amount equal to (a) the number of
shares of Common Stock called for on the face of this Warrant, as adjusted in
accordance with the preceding paragraph of this Warrant (without giving effect
to any further adjustment herein) multiplied (b) by the Purchase Price. Payment
of this amount may be made at Holder's choosing either (1) by payment in cash or
by corporate check, payable to the order of the Company, or (2) through a
cashless exercise. At any time during the Exercise Period, the Holder may, at
its option, exercise this Warrant on a cashless basis by exchanging this
Warrant, in whole or in part (a "Warrant Exchange"), into the number of shares
of Common Stock determined in accordance with this Section 1(a) by surrendering
this Warrant at the principal office of the Company or at the office of its
stock transfer agent, accompanied by a notice stating such Holder's intent to
effect such exchange, the number of Warrant Shares to be exchanged and the date
on which the Holder requests that such Warrant Exchange occur (the "Notice of
Exchange"). The Warrant Exchange shall take place on the date specified in the
Notice of Exchange or, if later, the date the Notice of Exchange is received by
the Company (the "Exchange Date"). Certificates for shares of Common Stock
issuable upon such Warrant Exchange and, if applicable, a new Warrant of like
tenor evidencing the balance of the shares of Common Stock remaining subject to
this Warrant, shall be issued as of the Exchange Date and delivered to the
Holder within three (3) days following the Exchange Date. In connection with any
Warrant Exchange, this Warrant shall represent the right to subscribe for and
acquire the number of Warrant Shares equal to (i) the number of Warrant Shares
specified by the Holder in its Notice of Exchange (the "Total Number") less (ii)
the number of Warrant Shares equal to the quotient obtained by dividing (A) the
product of the Total Number and the existing Exercise Price by (B) the Fair
Market Value. "Fair Market Value" shall have the meaning set forth in Section
1(b) below, except that for purposes hereof, the date of exercise, as used in
such Section III, shall mean the Exchange Date. This Warrant may be exercised
for less than the full number of shares of Common Stock at the time called for
hereby, except that the number of shares receivable upon the exercise of this
Warrant as a whole, and the sum payable upon the exercise of this Warrant as a
whole, shall be proportionately reduced. Upon a partial exercise of this Warrant
in accordance with the terms hereof, this Warrant shall be surrendered, and a
new Warrant of the same tenor and for the purchase of the number of such shares
not purchased upon such exercise shall be issued by the Company to Holder
without any charge therefor. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of such shares of record as of the close of business on such date.
Within two (2) business days after such date (the "Share Delivery Date"), the
Company shall issue and deliver to the person or persons entitled to receive the
same a certificate or certificates for the number of full shares of Common Stock
issuable upon such exercise, together with cash, in lieu of any fraction of a
share, equal to
-2-
such fraction of the then Fair Market Value on the date of exercise of one full
share of Common Stock.
(b) "Fair Market Value" shall mean, as of any date, (i) if shares of
the Common Stock are listed on a national securities exchange, the average of
the closing prices as reported for composite transactions during the ten (10)
consecutive trading days preceding the trading day immediately prior to such
date or, if no sale occurred on a trading day, then the mean between the closing
bid and asked prices on such exchange on such trading day; (ii) if shares of the
Common Stock are not so listed but are traded on the Nasdaq SmallCap Market
("NSCM"), the average of the closing prices as reported on the NSCM during the
ten (10) consecutive trading days preceding the trading day immediately prior to
such date or, if no sale occurred on a trading day, then the mean between the
highest bid and lowest asked prices as of the close of business on such trading
day, as reported on the NSCM; or if applicable, the Nasdaq National Market
("NNM"), or if not then included for quotation on the NNM or NSCM, the average
of the highest reported bid and lowest reported asked prices as reported by the
OTC Bulletin Board or the National Quotations Bureau, as the case may be, or
(iii) if the shares of the Common Stock are not then publicly traded, the fair
market price, not less than book value thereof, of the Common Stock as
determined in good faith by the independent members of the Board of Directors of
the Company (the "Board").
2. Shares Fully Paid; Payment of Taxes. All shares of Common Stock issued
upon the exercise of a Warrant shall be validly issued, fully paid and
non-assessable, and the Company shall pay all taxes and other governmental
charges (other than income taxes to the holder) that may be imposed in respect
of the issue or delivery thereof.
3. Transfer and Exchange. This Warrant and all rights hereunder are
transferable, in whole or in part, on the books of the Company maintained for
such purpose at its principal office referred to above by Holder in person or by
duly authorized attorney, upon surrender of this Warrant together with a
completed and executed assignment form in the form attached as Exhibit B,
payment of any necessary transfer tax or other governmental charge imposed upon
such transfer and an opinion of counsel reasonably acceptable the Company
stating that such transfer is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"). Upon any partial transfer,
the Company will issue and deliver to Holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that this
Warrant when endorsed in blank shall be deemed negotiable and that when this
Warrant shall have been so endorsed, the holder hereof may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on such books,
the Company may treat the registered Holder hereof as the owner for all
purposes.
This Warrant is exchangeable at such office for Warrants for the same
aggregate number of shares of Common Stock, each new Warrant to represent the
right to purchase such number of shares as the Holder shall designate at the
time of such exchange.
4. Anti-Dilution Provisions.
------------------------
-3-
(a) Adjustment for Dividends in Other Stock and Property
Reclassifications. In case at any time or from time to time the holders of the
Common Stock (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received, or, on or after the
record date fixed for the determination of eligible shareholders, shall have
become entitled to receive, without payment therefor,
(i) other or additional stock or other securities or property
(other than cash) by way of dividend,
(ii) any cash or other property paid or payable out of any
source other than retained earnings (determined in accordance with generally
accepted accounting principles), or
(iii) other or additional stock or other securities or
property (including cash) by way of stock-split, spin-off, reclassification,
combination of shares or similar corporate rearrangement, (other than (x)
additional shares of Common Stock or any other stock or securities into which
such Common Stock shall have been changed, (y) any other stock or securities
convertible into or exchangeable for such Common Stock or such other stock or
securities or (z) any Stock Purchase Rights, issued as a stock dividend or
stock-split, adjustments in respect of which shall be covered by the terms of
Sections 4(c), 4(d), 4(e) or 6, then and in each such case Holder, upon the
exercise hereof as provided in Section 1, shall be entitled to receive the
amount of stock and other securities and property (including cash in the cases
referred to in clauses (2) and (3) above) which such Holder would hold on the
date of such exercise if on the Original Issuance Date Holder had been the
holder of record of the number of shares of Common Stock called for on the face
of this Warrant, as adjusted in accordance with the first paragraph of this
Warrant, and had thereafter, during the period from the Original Issuance Date
to and including the date of such exercise, retained such shares and/or all
other or additional stock and other securities and property (including cash in
the cases referred to in clause (2) and (3) above) receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by Section 4(a) and Section 4(b).
(b) Adjustment for Reorganization, Consolidation and Merger. In case
of any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time receivable on the exercise of this
Warrant) after the Original Issuance Date, or in case, after such date, the
Company (or any such other corporation) shall consolidate with or merge into
another corporation or entity or convey all or substantially all its assets to
another corporation or entity, then and in each such case Holder, upon the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation, merger or conveyance, shall be entitled to
receive, in lieu of the stock or other securities and property receivable upon
the exercise of this Warrant prior to such consummation, the stock or other
securities or property to which such Holder would have been entitled upon such
consummation if Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in Sections 4(a), 4(b), 4(c) and 4(d);
in each such case, the terms of this Warrant shall be applicable to the shares
of stock or other securities or property receivable upon the exercise of this
Warrant after such consummation.
-4-
(c) Adjustment for Certain Dividends and Distributions. If the
Company at any time or from time to time makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event:
(i) the Purchase Price then in effect shall be decreased as of
the time of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, by multiplying the Purchase Price then in
effect by a fraction (A) the numerator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and (B) the denominator
of which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date as the case may be, plus the number of shares of
Common Stock issuable in payment of such dividend or distribution; provided,
however, that if such record date is fixed and such dividend is not fully paid
or if such distribution is not fully made on the date fixed therefor, the
Purchase Price shall be recomputed accordingly as of the close of business on
such record date, and thereafter the Purchase Price shall be adjusted pursuant
to this Section 4(c) as of the time of actual payment of such dividends or
distributions; and
(ii) the number of shares of Common Stock theretofore
receivable upon the exercise of this Warrant shall be increased, as of the time
of such issuance or, in the event such record date is fixed, as of the close of
business on such record date, in inverse proportion to the decrease in the
Purchase Price.
(d) Stock Split and Reverse Stock Split. If the Company at any time
or from time to time effects a reverse stock split or subdivision of the
outstanding Common Stock, the Purchase Price then in effect immediately before
that stock split or subdivision shall be proportionately decreased and the
number of shares of Common Stock theretofore receivable upon the exercise of
this Warrant shall be proportionately increased. If the Company at any time or
from time to time effects a reverse stock split or combines the outstanding
shares of Common Stock into a smaller number of shares, the Purchase Price then
in effect immediately before that reverse stock split or combination shall be
proportionately increased and the number of shares of Common Stock theretofore
receivable upon the exercise of this Warrant shall be proportionately decreased.
Each adjustment under this Section 4(d) shall become effective at the close of
business on the date the stock split, subdivision, reverse stock split or
combination becomes effective.
(e) No Impairment. The Company will not, by amendment of its Amended
and Restated Articles of Incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the Company but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holders of the Warrants
against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Company at its expense
-5-
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of a Warrant a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of any holder of a Warrant, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustments and readjustments,
(ii) Purchase Price at the time in effect, and (iii) the number of shares of
Common Stock and the amount, if any, of other property which at the time would
be received upon the exercise of the Warrant.
5. Notices of Record Date. In case:
----------------------
(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
the Warrants) for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right, or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation, or
(c) of any voluntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to each holder of a Warrant at the time outstanding a notice specifying,
as the case may be, (a) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (b) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is expected to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such stock or securities at the time receivable upon the exercise of the
Warrants) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up, such notice shall be mailed at least
twenty (20) days prior to the date therein specified.
6. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to it (in the exercise of reasonable discretion) of the ownership
of and the loss, theft, destruction or mutilation of any Warrant and (in the
case of loss, theft or destruction) of indemnity satisfactory to it (in the
exercise of reasonable discretion), and (in the case of mutilation) upon
surrender and cancellation thereof, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.
7. Reservation of Common Stock. The Company shall at all times reserve and
keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants.
-6-
8. Subscription Agreement and Registration Rights Agreement. This Warrant
has been issued pursuant to the Subscription Agreement by and between the
Company and the original holder hereof (the "Subscription Agreement"), and the
transferability of this Warrant and the Common Stock issuable upon the exercise
hereof are subject to the Subscription Agreement. In addition, the Holder of
this Warrant and the Common Stock issuable upon the exercise hereof are entitled
to have such Common Stock registered under the 1933 Act in accordance with the
Registration Rights Agreement referred to in the Subscription Agreement.
9. Notices. All notices and other communications from the Company to the
Holder of this Warrant shall be mailed by first class, registered or certified
mail, postage prepaid, to the address furnished to the Company in writing by the
last holder of this Warrant who shall have furnished an address to the Company
in writing.
10. Change; Modifications; Waiver. The terms of this Warrant may be
amended, waived or modified solely by agreement of the Company and Holders
owning no less than 66.66% of the then outstanding Warrants.
11. Headings. The headings in this Warrant are for purposes of convenience
in reference only, and shall not be deemed to constitute a part hereof.
12. Law Governing. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Agreement, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other party hereto of its
reasonable counsel fees and disbursements in an amount judicially determined.
Dated: June 7, 2002
eCLICKMD, INC.
By:
---------------------------------
Name:
Title:
-7-
EXHIBIT A
SUBSCRIPTION FORM
-----------------
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant and purchases _______ of the number of shares of Common Stock of
eClickMD, Inc., purchasable with this Warrant, and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant.
Dated:
------------------------------
------------------------------------
(Signature of Registered Owner
------------------------------------
(Street Address)
------------------------------------
(City / State / Zip Code)
EXHIBIT B
FORM OF ASSIGNMENT
------------------
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under the within Warrant, with respect to the number of shares
of Common Stock set forth below:
Name of Assignee Address Number of Shares
---------------- ------- ----------------
and does hereby irrevocably constitute and appoint __________________________
Attorney to make such transfer on the books of eClickMD, Inc., maintained for
the purpose, with full power of substitution in the premises.
Dated:
------------------------------
------------------------------------
(Signature)
------------------------------------
(Witness)
The undersigned Assignee of the Warrant hereby makes to eClickMD, Inc., as
of the date hereof, with respect to the Assignee, all of the representations and
warranties made by the Holder, and the undersigned Assignee agrees to be bound
by all the terms and conditions of the Warrant and the Registration Rights
Agreement, dated _________, 2002, by and among eClickMD, Inc., and the investors
listed on Schedule 1 thereto.
Dated:
------------------------------
------------------------------------
(Signature)
Summary of Investor Warrants Granted Based on Placement Agency Agreement
Dated 4//29/02:
Date: Warrant Holder Number of Shares Share Price Expiration
06/07/02 Gryphon Opportunities Fund I, LLC 30,000 $.075 6/7/07
06/07/02 Xxxxx Xxxx 12,500 $0.75 6/7/07
06/19/02 Gryphon Opportunities Fund I, LLC 74,000 $0.75 6/17/07
07/02/02 Gryphon Opportunities Fund I, LLC 50,000 $0.75 7/2/07
07/18/02 Gryphon Opportunities Fund I, LLC 43,280 $0.75 7/18/07
08/08/02 Gryphon Opportunities Fund I, LLC 50,950 $0.75 8/8/07
