EXHIBIT 10.3
Number W-1
NEITHER THIS WARRANT NOR THE STOCK FOR WHICH IT MAY BE EXERCISED HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"),
OR ANY OTHER FEDERAL OR STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF, EXCEPT AS PROVIDED IN ARTICLE III, UNLESS SO
REGISTERED OR UNLESS SOLD PURSUANT TO AN EXEMPTION THEREFROM.
MOBILE PET SYSTEMS, INC.
COMMON STOCK PURCHASE WARRANT
This certifies that, for value received, FINOVA CAPITAL CORPORATION,
a Delaware corporation, and any registered assignee ("Holder"), is entitled
to subscribe for and purchase from Mobile PET Systems, Inc. ("Company"), a
corporation organized and existing under the laws of the State of Delaware,
One Hundred Eighty Thousand (180,000) shares (subject to adjustment as set
forth in Article II below, "Warrant Shares") of Common Stock of the Company,
par value $.01 per share ("Common Stock"), at an Exercise Price per share as
defined below in Section 1.02 (subject to adjustment as set forth in Article
II below), at any time and from time to time beginning on the date hereof
("Original Issue Date"), and ending on March __, 2004 ("Expiration Date"),
upon written notice from the Holder to the Company ("Notice") and subject to
the terms provided herein.
Capitalized terms used herein, and not otherwise defined, shall have
the meanings specified in Article V. This Warrant is subject to the following
provisions, terms and conditions:
ARTICLE I.
EXERCISE; RESERVATION OF SHARES
Section 1.01 WARRANT EXERCISE. The rights represented by this Warrant may be
exercised by the Holder at any time and from time to time prior to the
Expiration Date, upon Notice, by the surrender at the principal office of the
Company of this Warrant together with a duly executed subscription in the
form annexed ("Subscription Form") and accompanied by payment, in certified
or immediately available funds, of the Exercise Price for the number of
Warrant Shares specified in the Subscription Form. The shares so purchased
shall be deemed to be issued to the Holder (unless contrary instructions are
provided on the Subscription Form) as the record owner of such shares as of
the close of business on the date on which this Warrant shall be exercised as
hereinabove provided. No fractional shares or script representing fractional
shares shall be issued upon the exercise of this Warrant, but the Company
shall pay the Holder an amount equal to the Market Value of such fractional
share of Common Stock in lieu of each fraction of a share otherwise called
for upon any exercise of this Warrant.
Section 1.02 EXERCISE PRICE. "Exercise Price" shall mean a price per
share equal to the lesser of (a) $2.50 per share or (b) the average of the
last reported sale prices of the Common Stock for the five (5) trading days
immediately preceding the Original Issue Date as shown by the principal
national securities exchange or quotation system on which the Common Stock is
then listed for trading.
Section 1.03 ALTERNATE METHOD OF PAYMENT. In addition to the method
of payment set forth in Section 1.01 above and in lieu of a cash payment
required thereunder, the Holder shall have the right to exercise the Warrant
in full or in part by surrendering this Warrant in the manner specified
herein above in exchange for the number of Warrant Shares equal to the
product of (a) the number of shares as to which the Warrant is being
exercised multiplied by (b) a fraction, the numerator of which is the Market
Value of the Common Stock less the Exercise Price, and the denominator of
which is Market Value.
Section 1.04 CERTIFICATES. Certificates for the shares purchased
pursuant to Section 1.01 shall be delivered to the Holder within a reasonable
time, not exceeding ten (10) business days, after the rights represented by
this Warrant shall have been so exercised, and a new Warrant in the name of
the Holder representing the rights, if any, that shall not have been
exercised prior to the Expiration Date with respect to this Warrant shall
also be delivered to such Holder within such time, with such new Warrant to
be identical in all other respects to this Warrant. The term "Warrant," as
used herein, includes any Warrants into which this Warrant may be divided or
combined and any subsequent Warrants issued upon the transfer or exchange or
reissuance upon loss hereof. Upon receipt by the Company of this Warrant,
together with the Exercise Price, if any, at its office, or by the stock
transfer agent of the Company, if any, at its office, in proper form for
exercise in accordance with the terms hereof, the Holder shall be deemed to
be the holder of record of the shares of Common Stock issuable upon such
exercise, notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to the Holder. The Company shall pay
any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on exercise of
this Warrant.
Section 1.05 RESERVATION OF SHARES. The Company represents,
warrants, covenants and agrees:
(a) That all shares of Common Stock that may be issued upon
exercise of this Warrant will, upon issuance, be validly issued,
fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof;
(b) That during the period the rights represented by this
Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of issue and delivery upon
exercise of the rights evidenced by this Warrant, a sufficient number
of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant; and
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(c) If the Common Stock is listed on any national
securities exchange or similar trading market, the shares of Common
Stock that may be issued upon exercise of this Warrant will, prior
to or on the date that a registration statement covering the Warrant
Shares is effective, also be listed on such exchange subject to
notice of issuance.
ARTICLE II.
ADJUSTMENTS
Section 2.01 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE.
(a) CAPITAL EVENTS. If any reorganization or
reclassification of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or
the sale of all or substantially all of its assets to another
corporation (in any instance, a "Capital Event") shall be effected in
such a way that holders of Common Stock shall be entitled to receive
stock, securities or assets (including cash) with respect to or in
exchange for their Common Stock, then, as a condition of such Capital
Event, lawful and adequate provisions shall be made whereby the
Holder hereof shall thereafter have the right to purchase and receive
upon the basis and upon the terms and conditions specified in this
Warrant and in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby, an amount of such shares of stock,
securities or assets (including cash) as may have been issued or payable
with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby had such Capital Event not taken
place.
(b) PRESERVATION OF VALUE. In the case of any Capital
Event, appropriate provision shall be made with respect to the rights
and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for
adjustment of the number of shares that may be issued upon exercise
of this Warrant and the Exercise Price hereof) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities or assets (including cash) thereafter deliverable upon the
exercise of the rights represented hereby.
(c) OBLIGATION EXPRESSLY ASSUMED. The Company shall not
effect any consolidation, merger or sale of all or substantially all
of its assets, unless prior to the consummation thereof the successor
corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation into or for the
securities of which the previously outstanding stock of the Company
shall be changed in connection with such consolidation or merger, or
the corporation purchasing such assets, as the case may be, shall
assume by written instrument executed and mailed or delivered to the
registered Holder at the last address of such Holder appearing on
the books of the Company, the obligation to deliver to such Holder,
upon exercise of this Warrant, such shares of stock,
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securities or assets (including cash) as, in accordance with the
foregoing provisions, such Holder may be entitled to purchase.
Section 2.02 SUBDIVISION OR COMBINATION OF STOCK. In the event that
the Company shall at any time subdivide or split its outstanding shares of
Common Stock into a greater number of shares, the number of Warrant Shares
subject to issuance upon exercise of this Warrant at the opening of business
on the day upon which such subdivision becomes effective shall be
proportionately increased. In the event that the outstanding shares of Common
Stock of the Company shall be combined into a smaller number of shares, the
number of shares subject to issuance upon exercise of this Warrant at the
opening of business on the day upon which such subdivision becomes effective
shall be proportionately decreased. Any such increase or decrease, as the
case may be, shall become effective immediately after the opening of business
on the day following the day upon which such subdivision or combination, as
the case may be, becomes effective.
Section 2.03 STOCK DIVIDENDS. In the event that the Company shall at
any time declare any dividend or distribution upon its Common Stock payable
in stock, the number of Warrant Shares subject to issuance upon exercise of
this Warrant shall be increased by the number (and the kind) of shares which
would have been issued to the holder of this Warrant if this Warrant were
exercised immediately prior to such dividend. Such increase shall become
effective immediately after the opening of business on the day following the
record date for such dividend or distribution.
Section 2.04 CASH OR OTHER NON-STOCK DIVIDENDS. In the event that
the Company shall at any time declare any dividend or distribution upon its
Common Stock payable in cash, assets or other property, (a "Non-Stock
Dividend") the number of Warrant Shares subject to issuance upon the exercise
of this Warrant shall be increased to a number obtained by multiplying (a)
the number of Warrant Shares for which this Warrant is exercisable
immediately prior to such dividend by (b) a fraction (i) the numerator of
which shall be the Market Value per share of Common Stock at the date of the
taking of the record holders of Common Stock entitled to such dividend or
distribution and (ii) the denominator of which shall be such Market Value per
share of Common Stock minus the Non-Stock Dividend paid per one share of
Common Stock as determined for purposes of accounting for such transaction on
the books of the Company. Such increase shall become effective immediately
after the opening of business on the day following the record date for such
dividend or distribution.
Section 2.05 ADDITIONAL COMMON STOCK, OPTIONS, CONVERTIBLE SECURITIES.
In the event the Company shall (a) issue any additional shares of Common
Stock (other than through a stock subdivision or split covered by Section
2.02 or a dividend upon the Company's Common Stock payable in stock covered
by Section 2.03) for a consideration (but in no event shall said
consideration be rendered except in cash) per share less than the Market Value
thereof, (b) grant any options or warrants for the purchase of Common Stock
where the Price per Share (as hereinafter defined) of Common Stock issuable
upon conversion, exchange or exercise is less than the Market Value thereof
immediately prior to the time of issuance or grant thereof ("Options"), or
(c) issue or sell any convertible securities that are convertible into or
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exchangeable for Common Stock at a Price per Share less than the Market Value
thereof immediately prior to the time of issuance or grant thereof
("Convertible Securities"), the number of Warrant Shares subject to issuance
upon exercise of this Warrant shall be increased to a number obtained by
multiplying (i) the number of Warrant Shares for which this Warrant is
exercisable immediately prior to such issuance, grant or sale by (ii) a
fraction (A) the numerator of which shall be the sum of the Outstanding
Section 2.05 Shares (as defined below) plus the Deemed Additional Shares
resulting from such issuance, grant, sale or payment and (B) the denominator
of which shall be the number of shares ("Outstanding Section 2.05 Shares") of
Common Stock exercisable or outstanding immediately prior to such issuance,
grant, sale or payment (as if all Options, warrants and rights to convert or
exchange Convertible Securities outstanding immediately prior to such
issuance, grant or sale had been exercised, whether or not actually
exercisable on such date). Such increase shall become effective immediately
after the opening of business on the day following such issuance, grant or
sale, as the case may be.
Section 2.06 PHANTOM STOCK AND SIMILAR COMPENSATION PLANS. In the
event the Company pays compensation to any employees, consultants or any
other person pursuant to any phantom stock option, stock appreciation right,
or other similar plan whereby the compensation paid is triggered by the
settlement of a right (the "Right") to receive the difference between (i) a
pre-established price per Share that is less than the Market Value of the
Common Stock immediately prior to the time of issuance or grant of the Right
and (ii) the Market Value per share of the Common Stock on the settlement
date of the Right, the number of Warrant Shares subject to issuance upon
exercise of this Warrant shall be increased to a number obtained by
multiplying (a) the number of Warrant Shares for which this Warrant is
exercisable immediately prior to the date such compensation is paid by (b) a
fraction (i) the numerator of which shall be the exercise price per share of
Common Stock on the date of grant and (ii) the denominator of which shall be
the exercise price per share of Common Stock on the date of grant minus the
amount of compensation paid allocable to one share of Common Stock. Such
increase shall become effective immediately after the opening of business on
the day following such grant.
Section 2.07 EQUITABLE ADJUSTMENT. In the event the Company shall
participate in any extraordinary corporate event or transaction not otherwise
provided for herein, including a so-called issuer self-tender, there shall be
made an equitable and proportionate adjustment in the number of shares
issuable upon exercise of this Warrant and the Exercise Price consistent with
the principles of other such adjustments provided for in this Article II.
Section 2.08 TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or
for the account of the Company or any subsidiary of the Company and the
disposition of any such shares shall be considered an issue or sale of Common
Stock for purposes of this Article II.
Section 2.09 ADJUSTMENT OF EXERCISE PRICE. Whenever the number of
shares of Common Stock that may be issued upon exercise of this Warrant is
adjusted and effective at the time such adjustment is effective, as provided
in Sections 2.01, 2.02 and 2.03 of this Article II, the Exercise Price shall
be adjusted (to the nearest whole cent) by multiplying each such Exercise
Price immediately prior to such adjustment by a fraction (x) the numerator of
which shall be the
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number of shares of Common Stock which may be issued upon the exercise of
each such Warrant immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter. The Company may retain a firm of
independent certified public accountants (which may not be the regular
accountants employed by the Company) to make any required computation, and a
certificate signed by such firm shall be conclusive evidence of the
correctness of such adjustment.
Section 2.10 COMMON STOCK BUY BACK. In the event the Company shall
commence a buy back program for the acquisition by the Company of Common
Stock, the Company agrees to purchase at Market Value all Warrant Shares from
the Holder, if the Holder so desires.
Section 2.11 RECORD DATE. In the event that the Company shall not
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend payable in Common Stock, then such record date
shall be deemed for the purposes of this Article II to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend.
Section 2.12 OFFICER'S CERTIFICATE. Whenever the Exercise Price
shall be adjusted as provided in this Article II, the Company shall forthwith
file with its Secretary and retain in the permanent records of the Company,
an officer's certificate showing the adjusted Exercise Price determined as
provided in this Article II, setting forth in reasonable detail the facts
requiring such adjustment, including a statement of the number of additional
or fewer shares of Common Stock, and such other facts as may be reasonably
necessary to show the reason for and the method of computing such adjustment.
Each such officer's certificate shall be made available at all reasonable
times for inspection by the Holder.
Section 2.13 NOTICE OF ADJUSTMENT. Upon any adjustment of the number
of shares that may be issued upon exercise of this Warrant or the Exercise
Price, the Company shall give notice thereof to the Holder, which notice
shall state the increase or decrease, if any, in the number of shares that
may be issued upon the exercise of this Warrant and the Exercise Price,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
Section 2.14 DEFINITION OF "COMMON STOCK". As used in this Article
II, the term "Common Stock" shall mean and include all of the Company's
authorized Common Stock of any class as constituted on the effective date
hereof, and shall also include any capital stock of any class of the Company
thereafter authorized that shall not be limited to a fixed sum or stated
value in respect of the rights of the holders thereof to participate in
dividends or the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company.
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ARTICLE III.
TRANSFER RESTRICTIONS; REGISTRATION RIGHTS
Section 3.01 SECURITIES LAW TRANSFER RESTRICTIONS. By taking and
holding this Warrant, the Holder (i) acknowledges that neither this Warrant
nor any shares of Common Stock that may be issued upon exercise of this
Warrant have been registered under the Securities Act or any applicable state
securities or blue sky law (collectively, "Securities Laws"); (ii) agrees not
to sell, transfer or otherwise dispose of this Warrant or any such shares of
Common Stock without such registration unless the sale, transfer or
disposition can be effected without such registration and in compliance with
the Securities Laws; and (iii) agrees not to transfer this Warrant or any
portion thereof or interest therein except to a Permitted Assignee. In the
event the Company desires to obtain an opinion from counsel that any
disposition described above in clause (ii) can be effected without
registration in compliance with the Securities Laws, the Company shall use
its best efforts to obtain such opinion promptly (and in no event more than
thirty (30) days) after notice of such intended disposition and the Company
shall bear all costs and expenses associated with obtaining such opinion.
Any certificate for shares of Common Stock issued upon exercise of this
Warrant shall bear an appropriate legend describing the foregoing
restrictions, unless such shares of Common Stock have been effectively
registered under the applicable Securities Laws.
Section 3.02 PROVISION OF INFORMATION BY HOLDER. The Holder shall
make available to the Company such written information, presented in form and
content satisfactory to the Company, as the Company may reasonably request,
from time to time, in order to make the determination provided for in Section
3.01.
ARTICLE IV.
REGISTRATION RIGHTS
The following provisions shall apply irrespective of whether the Holder holds
this Warrant or has exercised this Warrant and holds Warrant Shares, and
shall apply during the period beginning on the Original Issue Date and
continuing until the Expiration Date:
Section 4.01 PIGGYBACK REGISTRATIONS. Whenever the Company proposes
to register any of its securities under the Securities Act (whether for the
sale by the Company or by holders thereof) and the registration form to be
used can be used for the registration of the Warrant Shares (a "Piggyback
Registration"), the Company shall give prompt written notice (in any event
within ninety (90) days prior to filing of any such registration statement by
the Company) to all holders of Warrant Shares of its intention to effect such
a registration and shall include in such registration all Warrant Shares with
respect to which the Company has received written requests for inclusion,
such requests for inclusion must be made within forty-five (45) days after
the receipt of the Company's notice. The Registration Expenses, hereinafter
defined, of the holders of Warrant Shares shall be paid by the Company in all
Piggyback Registrations.
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Section 4.02 DEMAND REGISTRATIONS. At any time on or after the
Original Issue Date, the Holder may notify the Company in writing (a "Demand
Notice") demanding that the Company file with the SEC a registration
statement on an appropriate form (a "Demand Registration") registering all of
the Warrant Shares to permit the public offering and resale of the Warrant
Shares. Within thirty (30) days following a Demand Notice, the Company shall
file with the SEC such registration statement registering all of the Warrant
Shares for public offering and resale. The Company shall promptly respond to
any SEC comments on such registration statement and shall otherwise use its
best efforts to cause such registration statement to be declared effective at
the earliest possible date. The Registration Expenses, as hereinafter
defined, of the holders of Warrant Shares shall be shared equally by the
Company and FINOVA in all Demand Registrations.
Section 4.03 REGISTRATION PROCEDURES. Whenever the holders of
Warrant Shares have requested a Piggyback or Demand Registration, the Company
shall use its best efforts to effect the registration of such Warrant Shares
in accordance with the intended method of disposition thereof, and pursuant
thereto, the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Warrant
Shares, which registration statement shall state that the holders of
Warrant Shares covered thereby may sell such Warrant Shares under such
registration statement and use its best efforts to cause such
registration statement to become effective (provided that before
filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected
by the holders of a majority of the Warrant Shares covered by such
registration statement copies of all such documents proposed to be
filed, which documents shall be subject to the review of such counsel)
and to remain effective until the earlier of (i) the sale of such
Warrant Shares so registered and (ii) twelve (12) months after the
registration statement becomes effective in the case of a Piggyback
Registration or nine (9) months after the registration statement
becomes effective in the case of a Demand Registration;
(b) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period
described above in Section 4.03(a) and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Warrant Shares such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate
the disposition of the Warrant Shares owned by such seller;
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(d) if necessary, register or qualify the Warrant Shares
covered by such registration statement under the securities or blue sky
laws of such states as the Holders participating in the registration
shall reasonably request, maintain any such registration or qualification
current for the period described above in Section 4.03(a) above, and take
any and all other actions either necessary or advisable to enable such
Holders to consummate the public sale or other disposition of the Warrant
Shares in jurisdictions where such Holders desire to effect such sales or
other disposition;
(e) notify each seller of such Warrant Shares, at any
time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which
the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such
seller, the Company shall prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Warrant Shares, such prospectus shall not contain, to the Company's
knowledge, an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Warrant Shares to be listed on each
securities exchange on which similar securities issued by the Company are
listed;
(g) provide a transfer agent and registrar for all such
Warrant Shares not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other actions
as the holders of a majority of the Warrant Shares being sold or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Warrant Shares (including, without
limitation, effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of
Warrant Shares, any underwriter participating in any disposition pursuant
to such registration statement, and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement; and use its best efforts to cause such Warrant Shares covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the sellers thereof to consummate the disposition of such Warrant Shares;
and
(j) use its best effort to furnish, at the request of
any seller of the Warrant Shares or any underwriter of any distribution
of the Warrant Shares, an opinion of legal counsel to the Company,
covering such matters as are typically covered by opinions of issuer's
counsel in similar offerings under the Securities Act.
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Section 4.04. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance
of or compliance with this Warrant, including without limitation internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the
expense of any annual audit, the expense of any liability insurance and
the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are
then listed, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger
and delivery expenses, and fees and disbursements of counsel for the
Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other individuals or entities
retained by the Company (all such expenses being herein called
"Registration Expenses"), shall be borne by the Company.
(b) The Company shall reimburse the holders of Warrant
Shares covered by a registration for the fees and disbursements of
separate counsel chosen by the holders of such Warrant Shares.
Section 4.05 INDEMNIFICATION.
(a) The Company agrees to indemnify, to the extent
permitted by law, each holder of Warrant Shares, its officers and
directors and each individual or entity who controls such holder (within
the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement
of material fact contained in any registration statement, prospectus or
preliminary prospectus or 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, except insofar as the same
are caused by or contained in any information furnished in writing to the
Company by such holder expressly for use herein or by such holder's
failure to deliver a copy of the registration statement or prospectus or
any amendments or supplements thereto after the Company has furnished
such holder with a sufficient number of copies of the same. hi connection
with an underwritten offering, the Company shall indemnify such
underwriters, their officers and directors and each individual or entity
who controls such underwriters (within the meaning of the Securities Act)
to the same extent as provided above with respect to the indemnification
of the holders of Warrant Shares.
(b) In connection with any registration statement in
which a holder of Warrant Shares is participating, each such holder shall
furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such
registration statement or prospectus and to the extent permitted by law,
agrees and shall indemnify the Company, its directors and officers and
each individual or entity who controls the Company (within the meaning of
the Securities Act) against any
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losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact or any omission or
alleged omission of a material fact required to be stated in the
registration statement or prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission
is contained in any information or affidavit so furnished in writing by
such holder; provided that the obligation to indemnify shall be several,
not joint and several, among such holders of Warrant Shares and the
liability of each such holder of Warrant Shares shall be limited to the
net amount received by such holder from the sale of Warrant Shares
pursuant to such registration statement.
(c) Any individual or entity entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any
settlement made by the indemnified party without its consent (but such
consent shall not be unreasonably withheld). An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim shall
not be obligated to pay the fees and expenses of more than one counsel
for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.
Section 4.06 RULE 144 AND RULE 144A REPORTING. With a view to making
available the benefits of certain Securities Laws which may at any time
permit the sale of the Warrant Shares to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities
Act.
(b) File with the Securities and Exchange
Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(c) So long as a Holder owns any Warrant Shares,
furnish to such Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule
144, and of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of the Company, and such other reports
and documents of the Company, and such other reports and documents so
filed as a Holder may reasonably request in availing itself of any rule
or regulation of the Securities and Exchange Commission allowing such
Holder to sell any such securities without registration.
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(d) If the Company is no longer subject to Section
13 or 15(d) of the Exchange Act, to provide to the Holder or any
prospective purchaser of the Holder's Warrant or Warrant Shares, to the
extent available, the information required to be delivered under
Paragraph (d)(4) of Rule 000X ("Xxxx 000X")(xx any similar rule then in
effect) promulgated by the Securities and Exchange Commission under the
Securities Act in respect of a transaction qualifying for an exemption
under Rule 144A and it will take such further action as a Holder may
reasonably request, all to the extent required from time to time, to
enable such Holder to sell its Warrant or Warrant Shares without
registration under the Securities Act pursuant to Rule 144A.
ARTICLE IV.
DEFINITIONS
As used herein, the following terms shall have the meanings
specified below:
"DEEMED ADDITIONAL SHARES" shall mean (i) in the case of the
issuance of Common Stock for a consideration per share less than the
Market Value thereof, a number of shares of Common Stock equal to the
number obtained by subtracting (x) the number of shares of Common Stock
that would have been issued for the total consideration being paid in
connection with such issuance, if the price per share of the Common Stock
issued equalled the Market Value thereof immediately prior to such
issuance from (y) the number of shares of Common Stock so issued; or (ii)
in the case of the grant or issuance of an Option or Convertible
Security, a number of shares of Common Stock equal to the number obtained
by subtracting (x) the number of shares of Common Stock that would be
issuable under such exercise, conversion or exchange if the Price per
Share payable thereon equalled the Market Value of shares of Common Stock
immediately prior to such grant or issuance, from (y) the number of
shares of Common Stock issuable upon the exercise, conversion or exchange
thereof.
"INDEPENDENT APPRAISAL" shall mean an evaluation of the price that
would be paid if the Company were sold at that time on an orderly basis
as a going concern, which evaluation shall be made by an Independent
Financial Expert.
"INDEPENDENT FINANCIAL EXPERT" shall mean an independent financial
expert selected by the Company's Board of Directors on not less than ten (10)
days prior written notice to the Holder but shall not include any independent
financial expert to whom the Holder shall object in writing not later than
ten (10) days after the Board's delivery of notice of selection.
"MARKET VALUE" of a share of Common Stock of the Company shall be:
(i) if the Common Stock is listed on a national securities
exchange, the closing price of such Common Stock on the principal national
securities exchange on which such Common Stock is traded on the date for
which any determination of Market
12
Value is made for any purpose hereunder ("Determination Date"), or, if there
shall have been no sales on any such exchange on the Determination Date, the
average of the highest bid and lowest asked prices on such principal exchange
on such Determination Date; or
(ii) if the Common Stock is not listed on a national
securities exchange, the closing price on the NASD's National Market
System, or, if there shall have been no sales on the Determination Date
on the National Market System, the average of highest bid and lowest
asked prices on the Determination Date on the National Market System, as
applicable; or
(iii) if the Common Stock is not listed on a securities
exchange or the National Market System, the average of the representative
bid and asked prices of the Stock as of the close of trading on the
Determination Date as quoted in the NASDAQ System; or
(iv) if the Common Stock is not quoted in the NASDAQ System,
the average of the high and low bid and asked prices on the Determination
Date in the over-the-counter market as reported by the NASD Bulletin
Board, the National Quotation Bureau, Incorporated, or any similar
successor organization; or
(v) if the Common Stock is not listed on or traded in any
recognized securities market, such value as the Company and the Holder
may agree upon; or
(vi) if the Company and the Holder cannot agree on a value
for the Common Stock within thirty (30) days after the Company or the
Holder has made a written proposal with respect to such value to the
other party, the fair market value of the Stock as of the Determination
Date as determined by an Independent Appraisal. The fees and expenses
incurred by the Independent Financial Expert in rendering its Independent
Appraisal shall be paid by the Company. The determination of the Market
Value of the Common Stock shall be based solely upon the value of the
Company and shall be computed by dividing the amount that represents the
value of the Company by the number of outstanding shares of Common Stock.
In making such a valuation, items such as discounts for minority
interests, lack of marketability of the Common Stock or blockage shall
not be considered.
"PERMITTED ASSIGNEE" shall mean any individual or entity who receives
valid title and interest to this Warrant or any portion thereof and who
additionally accepts by written instrument each of the terms and conditions
that govern the ownership of this Warrant.
"PRICE PER SHARE" for shares of Common Stock issuable upon the
conversion of Convertible Securities or the exercise of Options shall be
determined by dividing (i) the sum of (A) the total amount of consideration,
if any, received or receivable by the Company as consideration for the
granting of such Options or the issuance of such Convertible Securities plus
(B) the minimum aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options or the conversion or exchange
of such Convertible Securities into Common Stock plus (C) in the case of all
such Options that relate to Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable upon the issuance of all
13
such Convertible Securities and upon conversion or exchange of all such
Convertible Securities into Common Stock, by (ii) the total number of shares
of Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities.
ARTICLE VI.
MISCELLANEOUS
Section 6.01 TRANSFERS. Subject to Article III, this Warrant and any
shares of any Stock obtained upon exercise of this Warrant may be
transferred, in whole or in part, at the principal office of the Company by
registration in the stock books of the Company maintained for such purpose
upon delivery to the Company of a duly executed assignment in the form
annexed ("Assignment Form"). The Company shall, without charge, execute and
deliver a Warrant in the name of each assignee named in the Assignment Form
and this Warrant shall promptly be canceled. This Warrant may be divided or
combined with other Warrants that carry the same rights upon presentation
hereof at the office of the Company together with the Assignment Form.
Section 6.02 NOTICES. Any notice or communication to be given
pursuant to this Warrant shall be in writing and shall be delivered in person
or by certified mail, return receipt requested, in the United States mail,
postage prepaid. Notices to the Company shall be addressed to the Company's
principal office. Notices to the Holder shall be addressed to the Holder's
address as reflected in the records of the Company. Notices shall be
effective upon delivery in person, or, if mailed, at midnight on the fifth
business day after mailing.
Section 6.03 ISSUE TAX. The issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge
to the Holder for any issuance tax in respect thereof, provided that the
Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a
name other than that of the Holder of the Warrant exercised.
Section 6.04 NO SHAREHOLDER RIGHTS. This Warrant shall not entitle
the Holder to any voting rights or other rights as a shareholder of the
Company.
Section 6.05 COMPANY NOTICE AND CURRENT INFORMATION. In the event (a)
the Company shall take a record of the holders of its Common Stock (or other
securities at the time receivable upon the exercise of the Warrant) for any
purpose; or (b) of any recapitalization of the Company's Common Stock; or (c)
of any voluntary or involuntary dissolution, liquidation or winding up of the
Company; then, and in each such case, the Company shall mail or cause to be
mailed to the Holder at the time outstanding a notice specifying, as the case
may be, (x) the date on which a record is to be taken, the purpose for which
the record date is being taken, the amount and character of the dividend,
distribution or right, if any; or (y) the date on which such
recapitalization, dissolution, liquidation or winding up is to take place,
and the time, if any, is to be fixed, as to which the holders of record of
Common Stock (or such other securities at the time receivable upon the
exercise of the Warrant) shall be entitled to exchange their shares of
14
Common Stock (or such other securities) for securities or other property
deliverable upon such recapitalization. Such notice shall be mailed at least
twenty (20) days prior to the date therein specified and the Warrant may be
exercised prior to said date during the term of the Warrant. Moreover, the
Company shall cause copies of all financial statements and reports, proxy
statements and other documents that are provided to its shareholders to be
sent by first class mail, postage prepaid, on the date of mailing to such
shareholders, to the Holder at the address reflected in the records of the
Company.
Section 6.06 GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of Arizona.
Section 6.07 HEADINGS; INTERPRETATION. The section headings used
herein are for convenience of reference only and are not intended to define,
limit or describe the scope or intent of any provision of this Warrant. When
used in this Warrant, the term "including" shall mean "including, without
limitation by reason or enumeration".
Section 6.08 SUCCESSORS. The covenants, agreements and provisions of
this Warrant shall bind the parties hereto and their respective successors
and permitted assigns.
IN WITNESS WHEREOF, the Company has caused this Warrant to be issued
effective as of the 8th day of April, 1999.
ATTEST: MOBILE PET SYSTEMS, INC.
By: Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxx
-------------------------------- -----------------------------------
Title: Secretary Title: President
----------------------------- --------------------------------
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SUBSCRIPTION FORM
TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for and purchases ______ shares of Common Stock of Mobile PET
Systems, Inc. that may be issued under this Warrant and herewith delivers the
sum of $________ in full payment of the Exercise Price for such shares, all
on the terms and conditions specified in this Warrant. Such shares are to be
registered in the name of the registered holder of this Warrant unless
contrary instructions are herein given certificates evidencing such shares
are to be delivered to it/him/her at the address reflected in the records of
the Company unless contrary instructions are herein given.
Register shares in the name of
-------------------------------------------------------------------------------
Deliver certificates to
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Dated:
----------------------------- ----------------------------------------
(Signature of Registered Owner)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
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ASSIGNMENT FORM
TO BE EXECUTED ONLY UPON ASSIGNMENT OF WARRANT
For value received, the undersigned registered owner,
_____________________________________ hereby sells, assigns and transfers unto
_______________________________________________, whose address is
__________________________________________, the right to purchase Common Stock
of Mobile PET Systems, Inc. represented by this Warrant to the extent of
_____ shares, as to which such right is exercisable and does hereby
irrevocably constitute and appoint _________________________________________,
Attorney-in-Fact, to transfer the same on the books of the Company with full
power of substitution in the premises. The assignee hereby agrees to assume
the obligations of the Warrant Holder contained in this Warrant to the extent
any such obligations are applicable to it. The registered owner and the
assignee each warrant and represent to Mobile PET Systems, Inc. that the
assignee is a Permitted Assignee as defined in the Warrant.
Dated:
----------------------------- ----------------------------------------
(Signature of Registered Owner)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
Dated:
-----------
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