NEITHER THIS WARRANT NOR THE COMMON STOCK THAT MAY BE ACQUIRED UPON THE EXERCISE
HEREOF ("WARRANT SHARES"), AS OF THE DATE OF ISSUANCE HEREOF, HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE AND NEITHER THIS WARRANT NOR THE WARRANT SHARES
MAY BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND COMPLIANCE WITH
ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT
For the Purchase of
400,000 shares of Common Stock
of
HumaScan Inc.
(A Delaware Corporation)
1. Purchase Option.
THIS CERTIFIES THAT Scantek Medical, Inc. ("Holder"), as registered owner
of this Warrant, is entitled to subscribe for, purchase and receive, in whole or
in part, up to 400,000 shares ("Shares") of common stock ("Common Stock") of
HumaScan Inc. (the "Company") upon the terms and conditions set forth below. The
Shares are sometimes referred to herein as the "Securities." This Warrant is
initially exercisable at $4.725 per Share purchased; provided, however, that
upon the occurrence of any of the events specified in Section 6 hereof, the
rights granted by this Warrant, including the exercise price and the number of
shares of Common Stock to be received upon such exercise, shall be adjusted as
therein specified. The term "Exercise Price" shall mean the initial exercise
price or the adjusted exercise price, depending on the context.
2. Exercise.
2.1. Exercisability. The right to purchase 175,000 of the Shares vested
immediately upon the grant of this Warrant and shall expire at 5:00 p.m. on May
14, 2003. The right to purchase another 100,000 of the Shares shall vest on
September 30, 1998 and expire at 5:00 p.m. on September 29, 2003, the right to
purchase another 75,000 of the Shares shall vest on December 31, 1998 and expire
at 5:00 p.m. on December 30, 2003, and the right to purchase the remaining
50,000 Shares shall vest on March 31, 1999 and expire at 5:00 p.m. on March 30,
2004.
2.2. Exercise Form. In order to exercise this Warrant, the exercise form
attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price in cash or
by certified check or official bank check for the Shares being purchased.
2.3. Legend. Each certificate for Securities purchased under this Warrant
shall bear a legend as follows unless such Securities have been registered under
the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act"), or
applicable state law. The securities may not be offered for sale,
sold or otherwise transferred except pursuant to an effective
registration statement under the Act, or pursuant to an exemption
from registration under the Act and applicable state law."
2.4. Cashless Exercise
2.4.1. Determination of Amount. In lieu of the payment of the Exercise
Price in the manner required by Section 2.2, the Holder shall have the right
(but not the obligation) to pay the Exercise Price for the Securities being
purchased with this Warrant upon exercise by the surrender to the Company of any
exercisable but unexercised portion of this Warrant having a "Value" (as defined
below), at the close of trading on the last trading day immediately preceding
the exercise of this Warrant, equal to the Exercise Price multiplied by the
number of shares of Common Stock being purchased upon exercise ("Cashless
Exercise Right"). The sum of (a) the number of shares of Common Stock being
purchased upon exercise of the non-surrendered portion of this Warrant pursuant
to this Cashless Exercise Right and (b) the number of shares of Common Stock
underlying the portion of this Warrant being surrendered shall not in any event
be greater than the total number of shares of Common Stock purchasable upon the
complete exercise of this Warrant if the Exercise Price were paid in cash. The
"Value" of the portion of this Warrant being surrendered shall equal the
remainder derived from subtracting (a) the Exercise Price multiplied by the
number of shares of Common Stock underlying the portion of this Warrant being
surrendered from (b) the Market Price of the shares of Common Stock multiplied
by the number of shares of Common Stock underlying the portion of this Warrant
being surrendered. As used herein, the term "Market Price" at any date shall be
deemed to be the last reported sale price of the Common Stock on such date, or,
in case no such reported sale takes place on such day, the average of the last
reported sale prices for the immediately preceding three trading days, in either
case as officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading, or, if the Common Stock is not
listed or admitted to trading on any national securities exchange or if any such
exchange on which the Common Stock is listed is not its principal trading
market, the last reported sale price as furnished by the NASD through the Nasdaq
National Market or SmallCap Market, or, if applicable, the OTC Bulletin Board,
or if the Common Stock is not listed or admitted to trading on the Nasdaq
National Market or SmallCap Market or OTC Bulletin Board or similar
organization, as determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it.
2.4.2. Mechanics of Cashless Exercise. The Cashless Exercise Right may
be exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date by delivering the Warrant with a duly
executed exercise form attached hereto with the cashless exercise section
completed to the Company, exercising the Cashless Exercise Right and specifying
the total number of shares of Common Stock the Holder will purchase pursuant to
such Cashless Exercise Right.
3. Transfer Restrictions. This Warrant and the Securities underlying this
Warrant shall not be transferred unless and until (i) the Company has received
the opinion of counsel for the Holder that
2
this Warrant or the Securities, as the case may be, may be transferred pursuant
to an exemption from registration under the Act and applicable state law, the
availability of which is established to the reasonable satisfaction of the
Company, or (ii) a registration statement relating to such Warrant or
Securities, as the case may be, has been filed by the Company and declared
effective by the Securities and Exchange Commission ("Commission") and is in
compliance with applicable state law.
4. New Warrants to be Issued.
4.1. Partial Exercise or Transfer. Subject to the restrictions in Section 3
hereof, this Warrant may be exercised or assigned in whole or in part. In the
event of the exercise, conversion or assignment hereof in part only, upon
surrender of this Warrant for cancellation, together with the duly executed
exercise or assignment form and funds (except in the case of cashless exercise)
sufficient to pay any Exercise Price and/or transfer tax, the Company shall
cause to be delivered to the Holder without charge a new Warrant of like tenor
to this Warrant in the name of the Holder evidencing the right of the Holder to
purchase the aggregate number of Shares purchasable hereunder as to which this
Warrant has not been exercised or assigned.
4.2. Lost Certificate. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant and of
reasonably satisfactory indemnification, the Company shall execute and deliver a
new Warrant of like tenor and date. Any such new Warrant executed and delivered
as a result of such loss, theft, mutilation or destruction shall constitute a
substitute contractual obligation on the part of the Company.
5. Registration Rights.
5.1. Registration of Warrant Shares.
5.1.1. Grant of Right. The Company agrees to register all of the
Securities. The Company will file a registration statement covering the
Securities on or before November 16, 1998 and use its best efforts to have such
registration statement declared effective promptly thereafter.
5.1.2. Terms. The Company shall bear all fees and expenses attendant to
registering the Securities, but the Holder shall pay any and all underwriting
commissions and expenses and the fees and expenses of any legal counsel selected
by the Holder to represent them in connection with the sale of the Securities.
The Company agrees to qualify or register the Securities in such States as are
reasonably requested by the Holder; provided, however, that in no event shall
the Company be required to register the Securities in a State in which such
registration would cause (i) the Company to be obligated to register or license
to do business in such State or consent to general service of process in such
jurisdiction, or (ii) the principal stockholders of the Company to be obligated
to escrow their shares of capital stock of the Company. The Company shall cause
any registration statement filed pursuant to Section 5.1.1 to remain effective
until the earlier of (x) the first date on which all of the Securities covered
by such registration statement have been sold by the Holder or (y) the first
date on which all of the Securities are eligible for resale by the Holder
pursuant to the provisions of Rule 144(k) under the Act.
5.2. General Terms.
5.2.1. Indemnification. The Company shall indemnify the Holder and each
person, if any, who controls the Holder within the meaning of Section 15 of the
Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), against all loss, claim, damage, expense or liability
(including all reasonable attorneys' fees and other expenses reasonably incurred
3
in investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact in (i) the registration statement or the prospectus filed as
part of the registration statement (as from time to time each may be amended and
supplemented); (ii) in any post-effective amendment or amendments; or (iii) any
application or other document or written communication (in this Section 5.2
collectively called "application") executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to qualify the
Securities under the securities laws thereof or filed with the Commission, any
state securities commission or agency, Nasdaq or any securities exchange; or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon information furnished to the Company with
respect to the Holder by or on behalf of the Holder expressly for use in any
preliminary prospectus, the registration statement or the final prospectus, or
any amendment or supplement thereof, or in any application, as the case may be;
provided, further, that the indemnification hereunder shall not be applicable to
any preliminary prospectus if the untrue statement or alleged untrue statement
was contained in a preliminary prospectus and was corrected in the final
prospectus. The Holder, and its successors and assigns, shall indemnify the
Company and each director of the Company, each officer of the Company who signed
such registration statement and each controlling person of the Company (within
the meaning of Section 15 of the Act and Section 20(a) of the Exchange Act)
against all loss, claim, damage, expense or liability (including all reasonable
attorneys' fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become
subject under the Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of the Holder, or its successors or assigns, in
writing, for specific inclusion in such registration statement.
5.2.2. Exercise of Warrant. Nothing contained in this Warrant shall be
construed as requiring the Holder to exercise this Warrant prior to or after the
initial filing of any registration statement or the effectiveness thereof.
5.2.3. Underwriting Agreement. The Company shall enter into an
underwriting agreement with the managing underwriter selected by the Holder
whose Securities are being registered pursuant to Section 5.1. Such agreement
shall be reasonably satisfactory in form and substance to the Company, the
Holder and such managing underwriter, and shall contain such representations,
warranties and covenants by the Company and such other terms as are customarily
contained in agreements of that type used by the underwriter.
5.2.4. Documents to be Delivered by Holder. The Holder shall furnish to
the Company a completed and executed questionnaire provided by the Company
requesting information customarily sought of selling security holders.
6. Adjustments.
6.1. Adjustments to Exercise Price and Number of Securities. The Exercise
Price and the number of Shares underlying this Warrant shall be subject to
adjustment from time to time as hereinafter set forth:
6.1.1. Stock Dividends, Recapitalization, Reclassification, Split-Ups.
If after the date hereof, and subject to the provisions of Section 6.3 below,
the number of outstanding shares of Common Stock is increased by a stock
dividend payable in shares of Common Stock or by a split-up, recapitalization or
reclassification of shares of Common Stock or other similar event that
4
affects the corporate structure of the Company and the Common Stock of the
Company, as a class, then, on the effective date thereof, the number of Shares
issuable on exercise of this Warrant shall be increased in proportion to such
increase in outstanding shares.
6.1.2. Aggregation of Shares. If after the date hereof, and subject to
the provisions of Section 6.3, the number of outstanding shares of Common Stock
is decreased by a reverse stock split, consolidation, combination or
reclassification of shares of Common Stock or other similar event, then, upon
the effective date thereof, the number of shares of Common Stock issuable on
exercise of this Warrant shall be decreased in proportion to such decrease in
outstanding shares.
6.1.3. Adjustments in Exercise Price. Whenever the number of shares of
Common Stock issuable upon exercise of this Warrant is adjusted, as provided in
this Section 6.1, the Exercise Price shall be adjusted (to the nearest cent) by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of shares of Common
Stock purchasable upon the exercise of this Warrant immediately prior to such
adjustment, and (y) the denominator of which shall be the number of Shares so
purchasable immediately thereafter.
6.1.4. Replacement of Securities upon Reorganization, etc. In case of
any reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 hereof or which solely affects the
par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), or in the case of any sale or conveyance to
another corporation or entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Warrant shall have the right thereafter (until the expiration
of the right of exercise of this Warrant) to receive upon the exercise hereof,
for the same aggregate Exercise Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities or
property (including cash) receivable upon such reclassification, reorganization,
merger or consolidation, or upon a dissolution following any such sale or other
transfer, by a Holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Warrant immediately prior to such event; and if
any reclassification also results in a change in shares of Common Stock covered
by Section 6.1.1, then such adjustment shall be made pursuant to Sections 6.1.1,
6.1.2, 6.1.3 and this Section 6.1.4. The provisions of this Section 6.1.4 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.
6.2. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of Shares upon the exercise or
transfer of this Warrant, nor shall it be required to issue scrip or pay cash in
lieu of any fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up or down to
the nearest whole number of Shares or other securities, properties or rights.
7. Reservation. The Company shall at all times reserve and keep available out
of its authorized shares of Common Stock, solely for the purpose of issuance
upon exercise of this Warrant, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise of this
Warrant.
8. Certain Notice Requirements.
5
8.1. Holder's Right to Receive Notice. Nothing herein shall be construed as
conferring upon the Holder the right to vote or consent or to receive notice as
a shareholder for the election of directors or any other matter, or as having
any rights whatsoever as a shareholder of the Company.
8.2. Notice of Change in Exercise Price. The Company shall, promptly after
an event requiring a change in the Exercise Price pursuant to Section 6 hereof,
send notice to the Holder of such event and change ("Price Notice").
8.3. Transmittal of Notices. All notices, requests, consents and other
communications under this Warrant shall be in writing and shall be deemed to
have been duly made on the date of delivery if delivered personally or sent by
overnight courier, with acknowledgment of receipt to the party to which notice
is given, or on the fifth day after mailing if mailed to the party to whom
notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of the Warrant, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, to its principal executive
office.
9. Miscellaneous.
9.1. Amendments. All modifications or amendments of this Warrant shall
require the written consent of the party against whom enforcement of the
modification or amendment is sought.
9.2. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.
9.3. Entire Agreement. This Warrant constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
9.4. Binding Effect. This Warrant shall inure solely to the benefit of and
shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
9.5. Governing Law. This Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of laws.
9.6. Waiver, Etc. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Warrant shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Warrant or any provision hereof or the right of the Company or any Holder
thereafter to enforce each and every provision of this Warrant. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Warrant shall be effective unless set forth in a written instrument executed by
the party or parties against whom or which enforcement of such waiver is sought;
and no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
6
IN WITNESS WHEREOF, the Company has caused the within Warrant to be signed
by its duly authorized officer as of the 15th day of May, 1998.
HUMASCAN INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
7
Form to be used to exercise the Warrant:
HumaScan Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Date:_________________, _____
The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase ________ shares of Common Stock of HumaScan Inc. and hereby
makes payment of $____________ (at the rate of $___ per share) in payment of the
Exercise Price pursuant thereto. Please issue the Common Stock as to which this
Warrant is exercised in accordance with the instructions given below.
or
--
The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase ____________ shares of Common Stock of HumaScan Inc. by
surrender of the unexercised portion of the within Warrant (with a "Value" of
$_______ based on a "Market Price" of $___ per share of Common Stock). Please
issue the Common Stock in accordance with the instructions given below.
_______________________________
Signature
NOTICE: The signature to this form must correspond with the name as written
upon the face of the within Warrant in every particular without alteration or
enlargement or any change whatsoever.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name ____________________________________________________
(Print in Block Letters)
Address ____________________________________________________
8
Form to be used to assign the Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within
Warrant):
FOR VALUE RECEIVED,____________________________________ does hereby sell,
assign and transfer unto _______________________________ the right to purchase
_______________________ shares of common stock of HumaScan Inc. ("Company")
evidenced by the within Warrant and does hereby authorize the Company to
transfer such right on the books of the Company.
Dated:___________________, 19__
_______________________________
Signature
NOTICE: The signature to this form must correspond with the name as written
upon the face of the within Warrant in every particular without alteration or
enlargement or any change whatsoever.
9
