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NEW YORK HEALTH CARE, INC
WARRANT TO PURCHASE COMMON STOCK
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (I) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (III) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE
EXERCISABLE ON OR BEFORE
5:00 P M , NEW YORK TIME, FEBRUARY 24, 2010
No W- ____ Warrants
NEW YORK HEALTH CARE, INC
REDEEMABLE WARRANT
1 This warrant certificate (the "Warrant Certificate") certifies that [ ]
or registered assigns, is the registered holder of warrants to purchase, at any
time until 5:00 P M New York City time on February 24, 2010 (the "Expiration
Date"), up to [ ] fully-paid and non-assessable shares, subject to adjustment in
accordance with Article 7 hereof (the "Warrant Shares"), of the common stock,
par value per $ 01 share (the "Common Shares"), of New York Health Care, Inc , a
New York corporation (the "Company"), subject to the terms and conditions set
forth herein The warrants represented by this Warrant Certificate and any
warrants resulting from a transfer or subdivision of the warrants represented by
this Warrant Certificate shall sometimes hereinafter be referred to,
individually, as a "Warrant" and, collectively, as the "Warrants " This Warrant
Certificate is one of a series of Warrant Certificates being issued as part of a
private offering (the "Private Placement") pursuant to the Company's
Confidential Private Offering Memorandum, dated September 14, 2004, as amended
and supplemented by Supplements No 1 and 2 thereto
2 Exercise of Warrants Each Warrant is initially exercisable to purchase
one Warrant Share at an initial exercise price of $0 78 per Warrant Share,
subject to adjustment as set forth in Article 7 hereof, payable in cash or by
check to the order of the Company, or any combination of cash or check Upon
surrender of this Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Warrant Shares purchased, at the Company's
principal offices (currently located at 0000 XxXxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx
00000) the registered holder hereof (the "Holder" or "Holders") shall be
entitled to receive a certificate or certificates for the Warrant Shares so
purchased The purchase rights represented by this Warrant Certificate are
exercisable at the option of the Holder, in whole or in part (but not as to
fractional Common Shares) In the case of the purchase of less than all the
Warrant Shares purchasable under this Warrant Certificate, the Company shall
cancel this Warrant Certificate upon its surrender and shall execute and deliver
a new Warrant Certificate of like tenor for the balance of the Warrant Shares
purchasable thereunder
3 Issuance of Certificates Upon the exercise of the Warrants and
compliance by the holder thereof with all applicable securities laws and the
conditions specified in the legend on the top of the first page of this Warrant,
certificates for the Warrant Shares purchased pursuant to such exercise shall be
issued without charge to the Holder, including, without limitation, any tax
which may be payable in respect of such issuance, and such certificates shall
(subject to the provisions of Article 4 hereof) be issued in the name of, or in
such names as may be directed by, the Holder thereof; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificates
in a name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Warrant Certificates and, upon exercise of the Warrants, the
certificates representing the Warrant Shares shall be executed on behalf of the
Company by the manual or facsimile signature of those officers required to sign
such certificates under applicable law
All Warrant Certificates shall bear and, upon exercise of the Warrants, in
part or in whole, certificates representing the Warrant Shares shall bear a
legend substantially similar to the following:
"The securities represented by this certificate and/or the securities
issuable upon exercise thereof have not been registered under the Securities Act
of 1933, as amended ("Act"), and may not be offered or sold except (i) pursuant
to an effective registration statement under the Act, (ii) to the extent
applicable, pursuant to Rule 144 under the Act (or any similar rule under such
Act relating to the disposition of securities), or (iii) upon the delivery by
the holder to the Company of an opinion of counsel, reasonably satisfactory to
counsel to the issuer, stating that an exemption from registration under such
Act is available "
4 Restriction on Transfer of Warrants The Holder of this Warrant
Certificate, by its acceptance, covenants and agrees that the Warrants and the
Warrant Shares issuable upon exercise of the Warrants are being acquired as an
investment and not with a view to the distribution thereof and acknowledges that
any transfer of this Warrant or exercise thereof can only be made after the
Holder has executed such documents as demonstrates to the Company that such
assignment or exercise is being made in compliance with applicable securities
laws
5 Registration Rights The Holder shall be entitled to all of the rights
and subject to all of the obligations set forth in the Subscription Agreement
between the Holder and the Company
6 Price
(a) Initial and Adjusted Exercise Price The initial exercise price of
each Warrant shall be $0 78 per Warrant Share The adjusted exercise price shall
be the price which shall result from time to time from any and all adjustments
of the initial exercise price in accordance with the provisions of Article 7
hereof
(b) Exercise Price The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context
7 Adjustments of Exercise Price, Redemption Target Price and Number of
Warrant Shares
(a) Dividends and Distributions In case the Company shall at any time
after the date hereof pay a dividend in Common Shares or make a distribution in
Common Shares, then upon such dividend or distribution, the Exercise Price and
the Redemption Target Price (as hereinafter defined)in effect immediately prior
to such dividend or distribution shall be reduced to a price determined by
dividing an amount equal to the total number of Common Shares outstanding
immediately prior to such dividend or distribution multiplied by the Exercise
Price or the Redemption Target Price, as the case may be, in effect immediately
prior to such dividend or distribution, by the total number of Common Shares
outstanding immediately after such issuance or sale For purposes of any
computation to be made in accordance with the provisions of this Section 7 a,
the Common Shares issuable by way of dividend or distribution shall be deemed to
have been issued immediately after the opening of business on the date following
the date fixed for determination of stockholders entitled to receive such
dividend or distribution
(b) Subdivision and Combination In case the Company shall at any time
subdivide or combine the outstanding Common Shares, the Exercise Price and the
Redemption Target Price shall forthwith be proportionately decreased in the case
of subdivision or increased in the case of combination
(c) Adjustment in Number of Warrant Shares Upon each adjustment of the
Exercise Price pursuant to the provisions of this Article 7, the number of
Warrant Shares issuable upon the exercise of each Warrant shall be adjusted to
the next highest full Common Share by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares issuable upon exercise of the Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price
(d) Reclassification, Consolidation, Merger, etc In case of any
reclassification or change of the outstanding Common Shares (other than a change
in nominal value to no nominal value, or from no nominal value to nominal value,
or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding Common Shares, except a change as a result of a
subdivision or combination of such shares or a change in nominal value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holder shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holder were the owner of the Warrant Shares
issuable upon exercise of the Warrants immediately prior to any such events at a
price equal to the product of (i) the number of Warrant Shares issuable upon
exercise of the Warrants and (ii) the Exercise Price in effect immediately prior
to the record date for such reclassification, change, consolidation, merger,
sale or conveyance as if such Holder had exercised the Warrants
(e) Determination of Outstanding Shares The number of Common Shares at
any one time outstanding shall include the aggregate number of shares issued or
issuable upon the exercise of outstanding options, rights and warrants and upon
the conversion or exchange of outstanding convertible or exchangeable
securities
8 Exchange and Replacement of Warrant Certificates This Warrant
Certificate is exchangeable without expense, upon the surrender hereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant
Certificate, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof
9 Elimination of Fractional Interests The Company shall not be required
to issue certificates representing fractions of Common Shares and shall not be
required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of Common Shares
10 Reservation of Shares The Company covenants and agrees that it will
at all times reserve and keep available out of its authorized share capital,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of Common Shares as shall be equal to the number of Warrant Shares
issuable upon the exercise of the Warrants, for issuance upon such exercise, and
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all Warrant Shares issuable upon such exercise shall be duly and validly issued,
fully paid, nonassessable and not subject to the preemptive rights of any
shareholder
11 Notices to Warrant Holders Nothing contained in this Agreement shall
be construed as conferring upon the Holder or Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
(a) the Company shall take a record of the holders of its Common Shares
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common Shares any
additional Common Shares or other shares of capital stock of the Company or
securities convertible into or exchangeable for Common Shares or other shares of
capital stock of the Company, or any option, right or warrant to subscribe
therefor;
(c) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation or merger) or a sale of all or substantially all
of its property, assets and business as an entirety shall be proposed; or
(d) the Company or an affiliate of the Company shall propose to issue any
rights to subscribe for Common Shares or any other securities of the Company or
of such affiliate to all the stockholders of the Company;
then, in any one or more of said events, the Company shall give written notice
of such event at least twenty (20) days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale
12 Redemption of Warrants The Warrants are redeemable by the Company, in
whole or in part, on not less than thirty (30) days' prior written notice (the
"Notice Period") at a price of $ 01 per Warrant at any time; provided that (i)
the average closing sale price (or the average of the closing bid and asked
prices for any trading day on which no sales occur) of the Common Stock for any
period of ten (10) consecutive trading days ending within 30 days prior to the
day on which the Company gives notice of redemption (the "Call Date") is greater
than $2 00 per share (subject to adjustment as provided in Article 6 hereof)(the
"Redemption Target Price") and (ii) the Warrant Shares are publicly tradable
during the entire Notice Period, pursuant to a registration statement filed with
and declared and remaining effective by, the Securities and Exchange Commission
under the Securities Act of 1933 Holders of the Warrants will have exercise
rights until the close of business on the date fixed for redemption
13 Notices All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
personally delivered, delivered by courier or sent by registered or certified
mail (return receipt requested, postage prepaid), facsimile transmission or
overnight courier:
(a) If to a registered Holder of the Warrants, to the address of such
Holder as shown on the Warrant register of the Company; or
(b) If to the Company, to the address set forth in Article 1 of this
Agreement or to such other address as the Company may designate by notice to the
Holders
14 Successors All the covenants and provisions of this Agreement by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder
15 Governing Law
(a) Choice of Law This Warrant Certificate shall be deemed to have been
made and delivered in the State of New York and shall be governed as to
validity, interpretation, construction, effect and in all other respects by the
substantive laws of the State of New York, without giving effect to the choice
of laws rules thereof
(b) Jurisdiction and Service of Process The Company and the Holder each
(a) agrees that any legal suit, action or proceeding arising out of or relating
to this Warrant Certificate, or any other agreement entered into between the
Company and the Holder pursuant to the Private Placement shall be instituted
exclusively in the New York State Supreme Court, County of New York or in the
United States District Court for the Southern District of New York, (b) waives
any objection which the Company or such Holder may have now or hereafter based
upon forum non conveniens or to the venue of any such suit, action or
proceeding, and (c) irrevocably consents to the jurisdiction of the New York
State Supreme Court, County of New York and the United States District Court for
the Southern District of New York in any such suit, action or proceeding The
Company and the Holder each further agrees (a) to accept and acknowledge service
of any and all process which may be served in any such suit, action or
proceeding in the New York State Supreme Court, County of New York or in the
United States District Court for the Southern District of New York and (b) that
service of process upon the Company mailed by certified mail to it at its
address, or to the Holder at its address, shall be deemed in every respect
effective service of process upon the Company or the Holder, as the case may be,
in any suit, action or proceeding FURTHER, BOTH THE COMPANY AND THE HOLDER
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION TO ENFORCE THE TERMS OF THIS WARRANT
CERTIFICATE AND IN CONNECTION WITH ANY DEFENSE, COUNTERCLAIM OR CROSSCLAIM
ASSERTED IN ANY SUCH ACTION
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, as of this day of ____________ 2005
NEW YORK HEALTH CARE, INC
By:
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Name:
Title:
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ________ Warrant Shares and
herewith tenders in payment for such Warrant Shares cash or a check payable to
the order of ________________ in the amount of $_________, all in accordance
with the terms hereof The undersigned requests that a certificate for such
Warrant Shares be registered in the name of ______________________, whose
address is _____________________________________________________, and that such
certificate be delivered to __________________, whose address is
_________________-______ Unless noted to the contrary below, the undersigned
hereby represents to the Company that the undersigned is an "accredited
investor" within the meaning of Regulation D of the Securities Act of 1933
Dated:
Signature:
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(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate )
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(Insert Social Security or Other
Identifying Number of Holder)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate )
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto
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(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________,
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution
Dated: Signature:
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(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
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(Insert Social Security or Other
Identifying Number of Assignee)
