EXHIBIT 4.2
THIS WARRANT AND THE ORDINARY SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR SIMILAR APPLICABLE LAWS
IN OTHER JURISDICTIONS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR SPO MEDICAL EQUIPMENT LTD SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
OR OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
WARRANT FOR THE PURCHASE OF COMMON SHARES OF STOCK
No. July 2006
FOR VALUE RECEIVED, SPO Medical Inc. (the "Company"), hereby certifies
that _____________, or a permitted assignee thereof (hereinafter, the "Holder"),
is entitled, to purchase from the Company, at any time or from time to time
commencing March ___, 2006, and prior to 5:00 P.M., New York time, on March
____, 2008, __________________Thousand (____,000) [ENTER 16,250 SHARES FOR EACH
$25,000 OF PRONCIPAL UNDER NOTE] fully paid and nonassessable shares of the
common stock of the Company purchasable at a per share purchase price equal to
the lesser of (i) $1.50, and (ii) thirty five percent (35%) less than the
initial offering price of Company Common Stock offered in an initial public
offering on any stock exchange during the term of this Warrant and prior to
exercise. (Hereinafter, (i) said shares of the stock of the Company, together
with any other equity securities which may be issued by the Company with respect
thereto or in substitution therefore, is referred to as "Shares," (ii) the
shares of the stock of the Company purchasable hereunder or under any other
Warrant (as hereinafter defined) are referred to as the "Warrant Shares," (iii)
the aggregate purchase price payable hereunder for the Warrant Shares is
referred to as the "Aggregate Warrant Price," (iv) the price payable hereunder
for each of the Warrant Shares is referred to as the "Per Share Warrant Price,"
(v) this Warrant, and all warrants hereafter issued in exchange or substitution
for this Warrant or such other warrants are referred to as the "Warrants". The
Per Share Warrant Price is subject to adjustment as hereinafter provided; in the
event of any such adjustment, the number of Warrant Shares shall be adjusted by
dividing the Aggregate Warrant Price by the Per Share Warrant Price in effect
immediately after such adjustment.
This Warrant is being issued in conjunction with Promissory Notes of the
Company for the sum of up to $500,000.
1. Exercise of Warrant.
This Warrant may be exercised, in whole at any time or in part from time
to time, commencing ___________, 2006, and prior to 5:00 P.M., New York
time, on __________, 2008, [ENTER DATE WHICH IS 24 MONTHS AFTER DATE OF
THIS WARRANT] by the Holder by the surrender of this Warrant (with the
subscription form at the end hereof duly executed) at the address set
forth in Subsection 8.1 hereof, together with proper payment of the
Aggregate Warrant Price, or the proportionate part thereof if this Warrant
is exercised in part. Payment for Warrant Shares shall be made by
certified or official bank check or wire transfer payable to the order of
the Company. If
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this Warrant is exercised in part, this Warrant must be exercised for a
number of whole shares of Common Stock, and the Holder is entitled to
receive a new Warrant Covering the Warrant Shares which have not been
exercised and setting forth the proportionate part of the Aggregate
Warrant Price applicable to such Warrant Shares. Upon such surrender of
this Warrant, the Company will (a) issue a certificate or certificates in
the name of the Holder for the largest number of whole Shares to which the
Holder shall be entitled and, if this Warrant is exercised in whole, in
lieu of any fractional Shares to which the Holder shall be entitled, pay
to the Holder cash in an amount equal to the fair value of such fractional
share (determined in such reasonable manner as the Board of Directors of
the Company shall determine), and (b) deliver the other securities and
properties receivable upon the exercise of this Warrant, or the
proportionate part thereof if this Warrant is exercised in part, pursuant
to the provisions of this Warrant.
2. Reservation of Warrant Shares.
The Company agrees that, prior to the expiration of this Warrant,
the Company will at all times have authorized and in reserve, and will
keep available, solely for issuance or delivery upon the exercise of this
Warrant, the Shares stock and other securities and properties as from time
to time shall be receivable upon the exercise of this Warrant, free and
clear of all restrictions on sale or transfer and free and clear of all
pre-emptive rights.
3. Protection Against Certain Dilutive Events.
3.1 In case of any capital reorganization or reclassification, or
any consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another entity of the
property of the Company as an entirety or substantially as an entirety, or
in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger
of a third corporation (including any exchange effected in connection with
a merger of a third corporation into the Company), the Holder of this
Warrant shall have the right thereafter to convert such Warrant into the
kind and amount of securities, cash or other property which he would have
owned or have been entitled to receive immediately after such
reorganization, reclassification, consolidation, merger, statutory
exchange, sale or conveyance had this Warrant been converted immediately
prior to the effective date of such reorganization, reclassification,
consolidation, merger, statutory exchange, sale or conveyance and in any
such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with respect to
the rights and interests thereafter of the Holder of this Warrant to the
end that the provisions set forth in this Section 3 shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securities or be, in relation to
any shares of stock or other securities or property thereafter deliverable
on the conversion of this Warrant. The above provisions of this Subsection
3.1 shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, statutory exchanges, sales or
conveyances. The issuer of any shares of stock or other securities or
property thereafter deliverable on the conversion of this Warrant shall be
responsible for all of the agreements and obligations of the Company
hereunder.
3.2 No adjustment in the Per Share Warrant Price shall be required
unless such adjustment would require an increase or decrease of at least
$0.05 per Share; provided, however, that any adjustments which by reason
of this Subsection 3.3 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment; provided
further, however, that adjustments shall be required and made in
accordance with the provisions of this Section 3 (other than this
Subsection 3.3) not later than such time as may be required in order to
preserve the
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tax-free nature of a distribution to the Holder of this Warrant or Shares
issueable upon exercise hereof. All calculations under this Section 3
shall be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be. Anything in this Section 3 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Per Share Warrant Price, in addition to those required by this Section
3, as it in its discretion shall deem to be advisable in order that any
stock dividend, subdivision of shares or distribution of rights to
purchase stock or securities convertible or exchangeable for stock
hereafter made by the Company to its shareholders shall not be taxable.
4. Fully Paid Stock; Taxes.
The Company agrees that the Shares represented by each and every
certificate for Warrant Shares delivered on the exercise of this Warrant
shall, at the time of such delivery, be validly issued and outstanding,
fully paid and nonassessable, and not subject to pre-emptive rights.
5. Limited Transferability.
The Holder of this Warrant, by acceptance hereof, acknowledges that
this Warrant this Warrant has not been registered under the United States
Securities Act of 1933, as amended, (the "Act") or similar applicable laws
in other jurisdictions and has been issued to the Holder for investment
and not with a view to the distribution of either the Warrant or the
Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any
other security issued or issuable upon exercise of this Warrant may be
sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act or similar applicable laws relating
to such security or an opinion of counsel satisfactory to the Company that
registration is not so required under the Act or similar applicable laws.
Each certificate for the Warrant, the Warrant Shares and any other
security issued or issuable upon exercise of this Warrant shall contain a
legend on the face thereof, in form and substance satisfactory to counsel
for the Company, setting forth the restrictions on transfer contained in
this Section.
6. Loss, etc., of Warrant.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor
and denomination.
7. Warrant Holder Not Shareholders.
Except as otherwise provided herein, this Warrant does not confer upon the
Holder any right to vote or to consent to or receive notice as a
shareholder of the Company, as such, in respect of any matters whatsoever,
or any other rights or liabilities as a shareholder, prior to the exercise
hereof.
8. Communication.
No notice or other communication under this Warrant shall be effective
unless, but any notice or other communication shall be effective and shall
be deemed to have been given if, the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:
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8.1 the Company at Attention: Xxxxxxx Braunold, 00000 Xxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
or such other address as the Company has designated in writing to
the Holder.
8.2 the Holder at such address as the Holder has designated in
writing to the Company.
9. Headings.
The headings of this Warrant have been inserted as a matter of convenience
and shall not affect the construction hereof.
10. Applicable Law.
This Warrant shall be governed by and construed in accordance with the law
of the State of New York without giving effect to the principles of
conflicts of law thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer this ___ day of _________ 2006.
SPO Medical Inc.
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Xxxxxxx Braunold, CEO
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SUBSCRIPTION
The undersigned, _________________, pursuant to the provisions of the foregoing
Warrant, hereby agrees to subscribe for and purchase _______________ common
Shares of the stock of SPO Medical Inc. covered by said Warrant, and makes
payment therefor in full at the price per share provided by said Warrant.
Dated: Signature:
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Address:
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