EXHIBIT A
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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER. THIS WARRANT (THIS
"WARRANT") AND THE WARRANTS OF EVEN DATE HEREWITH (TOGETHER WITH THIS WARRANT,
THE "WARRANTS") ARE ISSUED SUBJECT TO THE TERMS OF (A) A SECURITIES PURCHASE
AGREEMENT, DATED JULY 9, 1998 ("SECURITIES PURCHASE AGREEMENT"), BY AND BETWEEN
ORTHOLOGIC CORP. AND THE HOLDER OF THIS WARRANT AND (B) A REGISTRATION RIGHTS
AGREEMENT, DATED JULY 9, 1998 ("REGISTRATION RIGHTS AGREEMENT"), BY AND BETWEEN
ORTHOLOGIC CORP. AND THE HOLDER OF THIS WARRANT.
Warrant to Purchase
____________ Shares
WARRANT TO PURCHASE COMMON STOCK
of
ORTHOLOGIC CORP.
THIS CERTIFIES that ________________________ or any subsequent holder
hereof (the "Holder"), has the right to purchase from OrthoLogic Corp., a
Delaware corporation (the "Company"), up to ___________ fully paid and
nonassessable shares of the Company's Common Stock, par value $0.0005 per share
(the "Common Stock"), subject to adjustment as provided herein, at a price equal
to the Exercise Price (as defined below), at any time beginning on the date on
which this Warrant is issued (the "Issue Date") and ending at 5:00 p.m., eastern
time, on July 13, 2003 (the "Expiration Date"). This Warrant is issued, and all
rights hereunder shall be, subject to all of the conditions, limitations and
provisions set forth herein and in the Securities Purchase Agreement.
1. Exercise.
(a) Right to Exercise; Exercise Price. The Holder shall have the right
to exercise this Warrant at any time and from time to time up to and including
the Expiration Date as to all or any part of the shares of Common Stock covered
hereby (the "Warrant Shares"). The "Exercise Price" payable by the Holder in
connection with the exercise of this Warrant shall be $5.50.
(b) Exercise Notice. In order to exercise this Warrant, the Holder
shall send by facsimile transmission, at any time prior to 11:59 p.m., eastern
time, on the date on which the Holder wishes to effect such exercise (the
"Exercise Date"), to the Company and to its designated transfer agent for the
Common Stock (the "Transfer Agent") a copy of the notice of exercise in the form
attached hereto as Exhibit A (the "Exercise Notice") stating the number of
Warrant Shares as to which such exercise applies and the calculation therefor.
The Holder shall thereafter deliver to the Company the original Exercise Notice,
the original Warrant and the Exercise Price. In the case of a dispute as to the
calculation of the Exercise Price or the number of Warrant Shares issuable
hereunder, the Company shall promptly issue to the Holder the number of Warrant
Shares that are not disputed and shall submit the disputed calculations to the
Company's independent accountant within one (1) business day following the
Exercise Date. The Company shall cause such accountant to calculate the Exercise
Price and/or the number of Warrant Shares issuable hereunder and to notify the
Company and the Holder of the results in writing no later than two (2) business
days following the day on which it received the disputed calculations. Such
accountant's calculation shall be deemed conclusive absent manifest error. The
fees of any such accountant shall be borne by the party whose calculations were
most at variance with those of such accountant.
(c) Cancellation of Warrant. This Warrant shall be canceled upon its
exercise and the Holder shall be entitled to receive, as soon as practicable
after the Exercise Date, a new Warrant or Warrants (containing terms identical
to this Warrant) representing any unexercised portion of this Warrant.
2. Delivery of Warrant Shares Upon Exercise. Upon receipt of a Exercise
Notice pursuant to paragraph 1 above, the Company shall, (A) in the case of a
Cashless Exercise (as defined below), no later than the close of business on the
third (3rd) business day following the Exercise Date set forth in such Exercise
Notice, (B) in the case of a Cash Exercise (as defined below) no later than the
close of business on the earlier to occur of (i) the third (3rd) business day
following the Exercise Date set forth in such Exercise Notice and (ii) such
later date on which the Company shall have received payment of the Exercise
Price, and (C) with respect to Warrant Shares which are disputed as described in
paragraph 1(b) above, and required to be delivered by the Company pursuant to
the accountant's calculations described therein, the third (3rd) business day
following the date on which the Company has received the notice from its
accountants described in such paragraph 1(b) (the "Delivery Date"), issue and
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deliver or caused to be delivered to the Holder the number of Warrant Shares as
shall be determined as provided herein. Warrant Shares delivered to the Holder
shall not contain any restrictive legend as long as the sale of such Warrant
Shares is covered by an effective Registration Statement (as defined in the
Registration Rights Agreement) or may be made pursuant to Rule 144(k) under the
Securities Act of 1933, as amended, or any successor rule or provision.
3. Failure to Deliver Warrant Shares.
(a) Exercise Default. In the event that the Company fails for
any reason (other than by operation of paragraph 4 below) to deliver to a Holder
certificates representing the number of Warrant Shares specified in the
applicable Exercise Notice on or before the seventh (7th) business day following
the Delivery Date therefor (an "Exercise Default"), the Company shall pay to
such Holder payments ("Exercise Default Payments") in the amount of (i) (N/365)
multiplied by (ii) the aggregate Exercise Price for the Warrant Shares which are
the subject of such Exercise Default multiplied by (iii) the lower of
twenty-four percent (24%) and the maximum rate permitted by applicable law,
where "N" equals the number of days elapsed between the original Delivery Date
for such Warrant Shares and the date on which all of such Warrant Shares are
issued and delivered to such Holder. Amounts payable under this subparagraph
3(a) shall be paid to the Holder in immediately available funds on or before the
fifth (5th) business day of the calendar month immediately following the
calendar month in which such amount has accrued.
(b) Reduction of Exercise Price. In the event that a Holder
has not received certificates representing the Warrant Shares by the tenth
(10th) Business Day following an Exercise Default, such Holder may, upon written
notice to the Company, regain on such business day the rights of a Holder of
this Warrant, or part thereof, with respect to the Warrant Shares that are the
subject of such Exercise Default, and the Exercise Price for such Warrant Shares
shall be reduced by one percent (1%) for each day beyond such 10th business day
in which the Exercise Default continues. In such event, such Holder shall retain
all of such Holder's rights and remedies with respect to the Company's failure
to deliver such Warrant Shares (including without limitation the right to
receive the cash payments specified in subparagraph 3(a) above).
(c) Buy-in. Nothing herein shall limit a Holder's right to
pursue actual damages for the Company's failure to issue and deliver Warrant
Shares in connection with an exercise on the applicable Delivery Date
(including, without limitation, damages relating to any purchase of shares of
Common Stock by such Holder to make delivery on a sale effected in anticipation
of receiving Warrant Shares upon exercise, such damages to be in an amount equal
to (A) the aggregate amount paid by such Holder for the shares of Common Stock
so purchased minus (B) the aggregate amount of net proceeds, if any, received by
such Holder from the sale of the Warrant Shares issued by the Company pursuant
to such exercise), and such Holder shall have the right to pursue all remedies
available to it at law or in equity (including, without limitation, a decree of
specific performance and/or injunctive relief).
(d) Holder of Record. Each Holder shall, for all purposes, be
deemed to have
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become the holder of record of Warrant Shares on the Exercise Date of this
Warrant, irrespective of the date of delivery of such Warrant Shares. Nothing in
this Warrant shall be construed as conferring upon the Holder hereof any rights
as a stockholder of the Company.
4. Exercise Limitations.
In no event shall a Holder be permitted to exercise this Warrant, or
part thereof, with respect to Warrant Shares in excess of the number of such
shares, upon the issuance of which, (x) the number of shares of Common Stock
beneficially owned by such Holder and its affiliates (other than shares of
Common Stock issuable upon exercise of the Warrants or the exercise or
conversion of securities which contain a limitation similar to the limitation
contained herein) plus (y) the number of shares of Common Stock issuable upon
such exercise, would be equal to or exceed (z) 4.99% of the number of shares of
Common Stock then issued and outstanding. As used herein, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules thereunder. To the extent that the
limitation contained in this paragraph 4 applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by a Holder)
shall be in the sole discretion of such Holder, and the submission of an
Exercise Notice shall be deemed to be such Holder's determination that this
Warrant is exercisable pursuant to the terms hereof, and the Company shall have
no obligation whatsoever to verify or confirm the accuracy of such
determination. Nothing contained herein shall be deemed to restrict the right of
a Holder to exercise this Warrant, or part thereof, at such time as such
exercise will not violate the provisions of this Section 4.
5. Payment of the Exercise Price. The Holder may pay the Exercise Price
in either of the following forms or, at the election of Holder, a combination
thereof:
(a) Cash Exercise: by delivery of immediately available funds.
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(b) Cashless Exercise: by surrender of this Warrant to the Company
together with a notice of cashless exercise, in which event the Company shall
issue to the Holder the number of Warrant Shares determined as follows:
X = Y x (A-B)/A
where: X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.
A = the average of the Closing Bid Prices of the Common Stock
for the five (5) Trading Days immediately prior to (but not
including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 under the Securities Act of 1933, as amended, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
been commenced, on the Closing Date (as defined in the Securities Purchase
Agreement).
6. Anti-Dilution Adjustments.
(a) Stock Dividend. If the Company shall at any time declare a dividend
payable in shares of Common Stock, then the Holder hereof, upon exercise of this
Warrant after the record date for the determination of Holders of Common Stock
entitled to receive such dividend, shall be entitled to receive, in addition to
the number of shares of Common Stock as to which this Warrant is exercised, such
additional shares of Common Stock as such Holder would have received had this
Warrant been exercised immediately prior to such record date and the Exercise
Price will be proportionately adjusted.
(b) Recapitalization or Reclassification. If the Company shall at any
time effect a recapitalization, reclassification or other similar transaction of
such character that the shares of Common Stock shall be changed into or become
exchangeable for a larger or smaller number of shares, then upon the effective
date thereof, the number of shares of Common Stock which the Holder hereof shall
be entitled to purchase upon exercise of this Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization,
reclassification or similar transaction, and the Exercise Price shall be, in the
case of an increase in the number of shares, proportionally decreased and, in
the case of decrease in the number of shares, proportionally increased. The
Company shall give the Warrant Holder the same notice at the same time it
provides such notice to holders of Common Stock of any transaction described in
this Section 6(b).
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(c) Distributions. If the Company shall at any time distribute to
holders of Common Stock cash, evidences of indebtedness or other securities or
assets (other than cash dividends or distributions payable out of earned surplus
or net profits for the current or a preceding year) then, in any such case, the
Holder of this Warrant shall be entitled to receive, upon exercise of this
Warrant, with respect to each share of Common Stock issuable upon such exercise,
the amount of cash or evidences of indebtedness or other securities or assets
which such Holder would have been entitled to receive with respect to each such
share of Common Stock as a result of the happening of such event had this
Warrant been exercised immediately prior to the record date or other date fixing
shareholders to be affected by such event.
(d) Notice of Consolidation or Merger. In the event of a merger,
consolidation, business combination, tender offer, exchange of shares,
recapitalization, reorganization, redemption or other similar event, as a result
of which shares of Common Stock of the Company shall be changed into the same or
a different number of shares of the same or another class or classes of stock or
securities or other assets of the Company or another entity or there is a sale
of all or substantially all the Company's assets (a "Corporate Change"), then
this Warrant shall be exercisable into such class and type of securities or
other assets as the Holder would have received had the Holder exercised this
Warrant immediately prior to such Corporate Change; provided, however, that
Company may not affect any Corporate Change unless (i) it first shall have given
thirty (30) business days' notice to the Holder hereof of any Corporate Change
and makes a public announcement of such event at the same time that it gives
such notice and (ii) it requires the resulting successor or acquiring entity (if
not the Corporation) to assume by written instrument the obligations of the
Corporation hereunder and under the Securities Purchase Agreement and the
Registration Rights Agreement.
(e) Exercise Price as Adjusted. As used in this Warrant, the term
"Exercise Price" shall mean the purchase price per share specified in paragraph
1 of this Warrant, until the occurrence of an event stated in subsection (a),
(b) or (c) of this paragraph 6, and thereafter shall mean said price as adjusted
from time to time in accordance with the provisions of each such subsection. No
such adjustment under this paragraph 6 shall be made unless such adjustment
would change the Exercise Price at the time by two percent (2%) or more;
provided, however, that all adjustments not so made shall be deferred and made
when the aggregate thereof would change the Exercise Price at the time by $.01
or more. No adjustment made pursuant to any provision of this paragraph 6 shall
have the effect of increasing the total consideration payable upon exercise of
this Warrant in respect of all the Common Stock as to which this Warrant may be
exercised.
(f) Adjustments: Additional Shares, Securities or Assets. In the event
that at any time, as a result of an adjustment made pursuant to this Section 6,
the Holder of this Warrant shall, upon exercise of this Warrant, become entitled
to receive shares and/or other securities or assets (other than Common Stock)
then, wherever appropriate, all references herein to shares of Common Stock
shall be deemed to refer to and include such shares and/or other securities or
assets; and thereafter the number of such shares and/or other securities or
assets shall be subject to adjustment from time to time in a manner and upon
terms as nearly equivalent as practicable to the provisions of this paragraph 6.
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7. Fractional Interests. No fractional shares or scrip representing
fractional shares shall be issuable upon the exercise of this Warrant, but on
exercise of this Warrant, the Holder hereof may purchase only a whole number of
shares of Common Stock. If, on exercise of this Warrant, the Holder hereof would
be entitled to a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share shall be disregarded and
the number of shares of Common Stock issuable upon exercise shall be rounded up
or down to the nearest whole number of shares of Common Stock.
8. Transfer of this Warrant. The Holder may sell, transfer, assign,
pledge or otherwise dispose of this Warrant, in whole or in part, as long as (A)
such sale or other disposition is made pursuant to pursuant to an effective
registration statement or an exemption to the registration requirements of the
Securities Act of 1933, as amended, and applicable state laws and (B) such sale
or other disposition is made to an accredited investor (as such term is defined
in Regulation D under the Securities Act). Upon such transfer or other
disposition, the Holder shall deliver a written notice to Company, substantially
in the form of the Transfer Notice attached hereto as Exhibit B (the "Transfer
Notice"), indicating the person or persons to whom this Warrant shall be
transferred and, if less than all of this Warrant is transferred or this Warrant
is transferred in parts, the number of Warrant Shares to be covered by the part
of this Warrant to be transferred to each such person. Within three (3) business
days of receiving a Transfer Notice and the original of this Warrant, the
Company shall deliver to the each transferee designated by the Holder a Warrant
or Warrants of like tenor and terms for the appropriate number of Warrant
Shares.
9. Benefits of this Warrant.
Nothing in this Warrant shall be construed to confer upon any
person other than the Holder of this Warrant any legal or equitable right,
remedy or claim under this Warrant and this Warrant shall be for the sole and
exclusive benefit of the Holder of this Warrant.
10. Loss, theft, destruction or mutilation of Warrant.
Upon receipt by the Company of evidence of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft or
destruction) of indemnity reasonably satisfactory to the Company, and upon
surrender of this Warrant, if mutilated, the Company shall execute and deliver a
new Warrant of like tenor and date.
11. Notice or Demands.
Except as otherwise provided herein, any notice, demand or
request required or permitted to be given pursuant to the terms of this Warrant
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with an original to follow) on or before
5:00 p.m., eastern time, on a business day or, if such day is not a business
day, on the next
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succeeding business day, (ii) on the next business day after timely delivery to
a nationally-recognized overnight courier and (iii) on the third business day
after deposit in the U.S. mail (certified or registered mail, return receipt
requested, postage prepaid), addressed as follows:
If to the Company:
OrthoLogic Corp.
0000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: President
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx
One East Camelback
Xxxxxxx, Xxxxxxx 00000
Attn: P. Xxxxxx Xxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
and if to the Holder, to such address as shall be designated by the Holder in
writing to the Company.
12. Applicable Law.
This Warrant is issued under and shall for all purposes be
governed by and construed in accordance with the laws of the state of New York,
without giving effect to conflict of law provisions thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the
9th day of July, 1998.
ORTHOLOGIC CORP.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
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EXHIBIT A to WARRANT
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EXERCISE NOTICE
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The undersigned Holder hereby irrevocably exercises the right to
purchase of the shares of Common Stock ("Warrant Shares") of OrthoLogic Corp., a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:
______ a Cash Exercise with respect to _________________ Warrant Shares; and/or
______ a Cashless Exercise with respect to _________________ Warrant Shares.
2. Payment of Exercise Price. In the event that the Holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the Holder shall pay the sum of $________________ to the
Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the Holder
_____________ Warrant Shares in accordance with the terms of the Warrant.
Date: ______________________
____________________________________
Name of Registered Holder
By: _______________________________
Name:
Title:
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EXHIBIT B to WARRANT
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TRANSFER NOTICE
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FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells,
assigns and transfers unto the person or persons named below the right to
purchase shares of the Common Stock of OrthoLogic Corp.
evidenced by the attached Warrant.
Date: ______________________
____________________________________
Name of Registered Holder
By: ________________________________
Name:
Title:
Transferee Name and Address:
____________________________________
____________________________________
____________________________________
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