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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED UNTIL A (1) REGISTRATION STATEMENT UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAW HAS BECOME EFFECTIVE WITH RESPECT THERETO,
OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE COMPANY TO THE
EFFECT THAT REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAW IS NOT
REQUIRED IN CONNECTION WITH THE PROPOSED TRANSFER.
Void after 5:00 p.m. New York Time, on September 7, 2007.
Warrant to Purchase 284,000 Shares of Class A Common Stock.
WARRANT TO PURCHASE CLASS A COMMON STOCK
OF
HEALTHCORE MEDICAL SOLUTIONS, INC.
This is to Certify That, FOR VALUE RECEIVED, Xxxx X. Xxxxx, or assigns
("Holder"), is entitled to purchase, subject to the provisions of this Warrant,
from HealthCore Medical Solutions, Inc., a Delaware corporation ("Company"),
284,000 fully paid, validly issued and nonassessable shares of Class A Common
Stock, par value $.01 per share, of the Company ("Class A Common Stock") at a
price of $1.00 per share at any time or from time to time during the period from
September 8, 1997 to September 7, 2007, as set forth under (a) below, but not
later than 5:00 p.m. New York City Time, on September 7, 2007. The number of
shares of Class A Common Stock to be received upon the exercise of this Warrant
and the price to be paid for each share of Class A Common Stock may be adjusted
from time to time as hereinafter set forth. The shares of Class A Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares" and the exercise price of
a share of Class A Common Stock in effect at any time and as adjusted from time
to time is hereinafter sometimes referred to as the "Exercise Price".
(a) EXERCISE OF WARRANT.
(1) This Warrant may be exercised in whole or in part at any time or from
time to time, on a cumulative basis and until September 7, 2007 as follows:
(a) warrants to purchase 142,000 shares of Class A Common Stock shall
become exercisable on September 8, 1997; and
(b) warrants to purchase 142,000 shares of Class A Common Stock shall
become exercisable upon the achievement by the Company, if any, of one or
more of the following conditions: (i) the Company's Minimum
Pretax Income (as defined in the Escrow Agreement between the Corporation
and the stockholders listed on the signature page thereto (the "Escrow
Agreement")) amounts to at least $3,800,000 for the fiscal year ending
September 30, 1998; (ii) the Company's Minimum Pretax Income amounts to at
least $5,500,000 for the fiscal year ending September 30, 1999; (iii) the
Company's Minimum Pretax Income amounts to at least $7,500,000 for the
fiscal year ending September 30, 2000; (iv) the Closing Price (as defined
in the Escrow Agreement) of the Class A Common Stock averages in excess of
$12.50 per share for 30 consecutive business days during the 18-month
period commencing on the date hereof or (v) the Closing Price of the Class
A Common Stock averages in excess of $16.50 per share for 30 consecutive
business days during the 18-month period commencing with the nineteenth
month from the date hereof;
provided, however, that if such day is a day on which banking institutions in
the State of New York are authorized by law to close, then on the next
succeeding day which shall not be such a day. This Warrant may be exercised by
presentation and surrender hereof to the Company at its principal office, or at
the office of its stock transfer agent, if any, with the Purchase Form annexed
hereto duly executed and accompanied by payment of the Exercise Price for the
number of Warrant Shares specified in such form. As soon as practicable after
each such exercise of the warrants, but not later than seven (7) days from the
date of such exercise, the Company shall issue and deliver to the Holder a
certificate or certificate for the Warrant Shares issuable upon such exercise,
registered in the name of the Holder or its designee. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
thereunder. Upon receipt by the Company of this Warrant at its office, or by the
stock transfer agent of the Company at its office, in proper form for exercise,
the Holder shall be deemed to be the holder of record of the shares of Class A
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 Class A Common Stock shall not then be physically
delivered to the Holder.
(2) At any time during the term of this Warrant, the Holder may, at its
option, exchange this Warrant, in whole or in part (a "Warrant Exchange"), into
the number of Warrant Shares determined in accordance with this Section (a)(2),
by surrendering this Warrant at the principal office of the Company or at the
office of its stock transfer agent, accompanied by a notice stating such
Holder's intent to effect such exchange, the number of Warrant Shares to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
shares issuable upon such Warrant Exchange and, if applicable, a new warrant of
like tenor evidencing the balance of the shares remaining subject to this
Warrant, shall be issued as of the Exchange Date and delivered to the Holder
within seven (7) days following the Exchange Date. In connection with any
Warrant Exchange, this Warrant shall represent the right to subscribe for and
acquire the number of Warrant Shares (rounded to the next highest integer) equal
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to (i) the number of Warrant Shares specified by the Holder in its Notice of
Exchange (the "Total Number") less (ii) the number of Warrant Shares equal to
the quotient obtained by dividing (A) the product of the Total Number and the
existing Exercise Price by (B) the current market value of a share of Class A
Common Stock. Current market value shall have the meaning set forth Section (c)
below, except that for purposes hereof, the date of exercise, as used in such
Section (c), shall mean the Exchange Date.
(b) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Class A Common Stock as shall be required for issuance and delivery upon
exercise of the Warrants.
(c) FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) If the Class A Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or
listed for trading on the Nasdaq National Market, the current market value
shall be the last reported sale price of the Class A Common Stock on such
exchange or market on the last business day prior to the date of exercise
of this Warrant or if no such sale is made on such day, the average closing
bid and asked prices for such day on such exchange or market; or
(2) If the Class A Common Stock is not so listed or admitted to
unlisted trading privileges, but is traded on the Nasdaq Small Cap Market,
the current Market Value shall be the average of the closing bid and asked
prices for such day on such market and if the Class A Common Stock is not
so traded, the current market value shall be the mean of the last reported
bid and asked prices reported by the National Quotation Bureau, Inc. on the
last business day prior to the date of the exercise of this Warrant; or
(3) If the Class A Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported,
the current market value shall be an amount, not less than book value
thereof as at the end of the most recent fiscal year of the Company ending
prior to the date of the exercise of the Warrant, determined in such
reasonable manner as may be prescribed by the Board of Directors of the
Company.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Class A
Common Stock purchasable hereunder. This Warrant is not transferable (other than
by will or pursuant to the laws of descent and distribution). Upon surrender of
this Warrant to the Company at its principal office or at the office of its
stock transfer agent, if any, with the
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Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other warrants which carry the same rights upon presentation
hereof at the principal office of the Company or at the office of its stock
transfer agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof. The term "Warrant" as used herein includes any Warrants into which this
Warrant may be divided or exchanged. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time and
the number and kind of securities purchasable upon the exercise of the Warrants
shall be subject to adjustment from time to time upon the happening of certain
events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Class A Common Stock in shares of
Class A Common Stock, (ii) subdivide or reclassify its outstanding shares
of Class A Common Stock into a greater number of shares, or (iii) combine
or reclassify its outstanding shares of Class A Common Stock into a smaller
number of shares, the Exercise Price in effect at the time of the record
date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it
shall equal the price determined by multiplying the Exercise Price by a
fraction, the denominator of which shall be the number of shares of Class A
Common Stock outstanding after giving effect to such action, and the
numerator of which shall be the number of shares of Class A Common Stock
outstanding immediately prior to such action. Such adjustment shall be made
successively whenever any event listed above shall occur.
(2) Whenever the Exercise Price payable upon exercise of each Warrant
is adjusted pursuant to Subsection (1) above, the number of Shares
purchasable upon exercise of this Warrant shall simultaneously be adjusted
by multiplying the number of Shares initially issuable upon exercise of
this Warrant by the Exercise Price in effect on the date hereof and
dividing the product so obtained by the Exercise Price, as adjusted.
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(3) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least five cents
($0.05) in such price; provided, however, that any adjustments which by
reason of this Subsection (3) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment required to be
made hereunder. All calculations under this Section (f) shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case
may be. Anything in this Section (f) to the contrary notwithstanding, the
Company shall be entitled, but shall not be required, to make such changes
in the Exercise Price, in addition to those required by this Section (f),
as it shall determine, in its sole discretion, to be advisable in order
that any dividend or distribution in shares of Class A Common Stock, or any
subdivision, reclassification or combination of Class A Common Stock,
hereafter made by the Company shall not result in any Federal Income tax
liability to the holders of Class A Common Stock or securities convertible
into Class A Common Stock (including Warrants).
(4) Whenever the Exercise Price is adjusted, as herein provided, the
Company shall promptly but no later than 20 days after any request for such
an adjustment by the Holder, cause a notice setting forth the adjusted
Exercise Price and adjusted number of Shares issuable upon exercise of each
Warrant, and, if requested, information describing the transactions giving
rise to such adjustments, to be mailed to the Holders at their last
addresses appearing in the Warrant Register, and shall cause a certified
copy thereof to be mailed to its transfer agent, if any. The Company may
retain a firm of independent certified public accountants selected by the
Board of Directors (who may be the regular accountants employed by the
Company) to make any computation required by this Section (f), and a
certificate signed by such firm shall be conclusive evidence of the
correctness of such adjustment.
(5) In the event that at any time, as a result of an adjustment made
pursuant to Subsection (1) above, the Holder of this Warrant thereafter
shall become entitled to receive any shares of the Company, other than
Class A Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Class A Common Stock
contained in Subsection (1) above.
(6) Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the similar Warrants
initially issuable pursuant to this Warrant.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted as
required by the provisions of the foregoing Section, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office and with its stock transfer agent, if any, an officer's certificate
showing the adjusted Exercise Price determined as herein provided, setting forth
in reasonable detail the facts requiring such adjustment, including a statement
of the number of additional shares of Class A Common Stock, if any, and such
other facts as shall be necessary to show the reason for and the manner of
computing such adjustment. Each
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such officer's certificate shall be made available at all reasonable times for
inspection by the holder or any holder of a Warrant executed and delivered
pursuant to Section (a) and the Company shall, forthwith after each such
adjustment, mail a copy by certified mail of such certificate to the Holder or
any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Class A Common Stock or (ii) if the Company shall offer to the holders
of Class A Common Stock for subscription or purchase by them any share of any
class or any other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen days prior the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Class A Common Stock or other
securities shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Class A Common Stock of the Company, or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger with
a subsidiary in which merger the Company is the continuing corporation and which
does not result in any reclassification, capital reorganization or other change
of outstanding shares of Class A Common Stock of the class issuable upon
exercise of this Warrant) or in case of any sale, lease or conveyance to another
corporation of the property of the Company as an entirety, the Company shall, as
a condition precedent to such transaction, cause effective provisions to be made
so that the Holder shall have the right thereafter by exercising this Warrant at
any time prior to the expiration of the Warrant, to purchase the kind and amount
of shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Class A Common
Stock which might have been purchased upon exercise of this Warrant immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance. Any such provision shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Warrant. The foregoing provisions of this Section (i) shall
similarly apply to successive reclassification, capital reorganizations and
changes of shares of Class A Common Stock and to successive consolidations,
mergers, sales or conveyances. In the event that in connection with any such
capital reorganization or reclassification, consolidation, merger, sale or
conveyance, additional shares of Class A Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Class A Common Stock, any such issue shall be
treated as an issue of Class A Common Stock covered by the provisions of
Subsection (1) of Section (f) hereof. A distribution in securities, rights to
acquire securities, or other property (except for cash dividends)
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made with respect to Class A Common Stock or other securities of the Company or
a successor corporation, to the extent that such distribution shall not be
covered by the provisions of Subsection (1) of Section (f) hereof, shall be
deemed to be a capital reorganization within the meaning of this Section (i).
(j) RESTRICTIVE LEGEND. Each Warrant Share, when issued, shall include a
legend in substantially the following form: THESE SHARES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") NOR UNDER ANY STATE
SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED
UNTIL A (1) REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAW HAS BECOME EFFECTIVE WITH RESPECT THERETO, OR (2) RECEIPT BY THE
COMPANY OF AN OPINION OF COUNSEL TO THE COMPANY TO THE EFFECT THAT REGISTRATION
UNDER THE ACT OR APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED IN CONNECTION
WITH THE PROPOSED TRANSFER.
(k) The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as my be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against impairment.
HEALTHCORE MEDICAL SOLUTIONS, INC.
By /s/ XXXXX X. XXXXXXXXXXX
-------------------------------
Xxxxx X. Xxxxxxxxxxx,
Chief Finanical Officer
and Chief Operating Officer
[SEAL]
Dated: September 8, 1997
Attest:
/s/ XXXXXX X. TORCHIC
-----------------------------
Secretary
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PURCHASE FORM
Dated ____________, 19__
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _______ shares of Class A Common Stock and hereby makes
payment of _______ in payment of the actual exercise price thereof.
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INSTRUCTIONS FOR REGISTRATION OF STOCK
Name _______________________________________
(Please typewrite or print in block letters)
Address ____________________________________
Signature __________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, ______________ hereby sells, assigns and transfers unto
Name _______________________________________
(Please typewrite or print in block letters)
Address ____________________________________
the right to purchase Class A Common Stock represented by this Warrant to the
extent of ______ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint ___________ as attorney, to transfer the same
on the books of the Company with full power of substitution in the premises.
Date ____________, 19__
Signature ___________________
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STOCK PURCHASE WARRANT
To Purchase Class A Common Stock of
HEALTHCORE MEDICAL SOLUTIONS, INC.
********************************************************************************
