WARRANT AGREEMENT
CONTOUR MEDICAL, INC., a Nevada corporation ("Company"), and AMERICAN
SECURITIES TRANSFER, INC. ("AST"), 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000, a Colorado corporation ("Warrant Agent"), agree as follows:
1. PURPOSE. The Company proposes to publicly offer and issue 119,225
units ("Units"), each Unit consisting of (i) two (2) shares of the Company's
$.0001 par value common stock ("Shares") and (ii) one warrant permitting the
purchase of one (1) Share ("Warrant").
2. WARRANTS. Each Warrant will entitle the registered holder of a
Warrant ("Warrant Holder") to purchase from the Company one (1) Share at $4.50
per Share ("Exercise Price"). A Warrant Holder may exercise all or any number
of Warrants resulting in the purchase of a whole number of Shares.
3. EXERCISE PERIOD. The Warrants may be exercised at any time during
the period commencing July 15, 1994, and ending at 3:00 p.m., Denver,
Colorado, time on July 15, 1996 ("Expiration Date"), except as changed by
Section 12 of this Agreement. After the Expiration Date, any unexercised
warrants will be void and all rights of Warrant Holders shall cease.
4. NON-DETACHABILITY. A Warrant Certificate may not be detached from a
Share certificate contained in a Unit until after July 1, 1994. Until such
time a Warrant Certificate may be split up, combined, exchanged or transferred
on the books of the Warrant Agent only together with a Share certificate.
After July 1, 1994, a Warrant Certificate may be split up, combined, exchanged
or transferred on the books of the Warrant Agent.
5. CERTIFICATES. The Warrant Certificates shall be in registered form
only and shall be substantially in the form set forth in EXHIBIT A attached to
this Agreement. Warrant Certificates shall be signed by, or shall bear the
facsimile signature of, the President or a Vice President of the Company and
the Secretary or an Assistant Secretary of the Company and shall bear a
facsimile of the Company's corporate seal. If any person, whose facsimile
signature has been placed upon any Warrant Certificate as the signature of an
officer of the Company, shall have ceased to be such officer before such
Warrant Certificate is countersigned, issued and delivered, such Warrant
Certificate shall be countersigned, issued and delivered with the same effect
as if such person had not ceased to be such officer. Any Warrant Certificate
may be signed by, or made to bear the facsimile signature of, any person who
at the actual date of the preparation of such Warrant Certificate shall be a
proper officer of the Company to sign such Warrant Certificate even though
such person was not such an officer upon the date of this Agreement.
6. COUNTERSIGNING. Warrant Certificates shall be manually countersigned
by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent hereby is authorized to countersign and
deliver to, or in accordance with the instructions of, any Warrant Holder any
Warrant Certificates which is properly issued.
7. REGISTRATION OF TRANSFERS AND EXCHANGES. Subject to the provisions
of Section 4, the Warrant Agent shall from time to time register the transfer
of any outstanding Warrant Certificates upon records maintained by the Warrant
Agent for such purpose upon surrender of such Warrant Certificate to the
Warrant Agent for transfer, accompanied by appropriate instruments of transfer
in form satisfactory to the Company and the Warrant Agent and duly executed by
the Warrant Holder or a duly authorized attorney. Upon any such registration
of transfer, a new Warrant Certificate shall be issued in the name of and to
the transferee and the surrendered Warrant Certificate shall be cancelled.
8. EXERCISE OF WARRANTS.
(a) Any one Warrant or any multiple of one Warrant evidenced by any
Warrant Certificate may be exercised upon any single occasion on or after the
Exercise Date, and on or before the Expiration Date. A Warrant shall be
exercised by the Warrant Holder by surrendering to the Warrant Agent the
Warrant Certificate evidencing such Warrant with the exercise form on the
reverse of such Warrant Certificate duly completed and executed and delivering
to the Warrant Agent, by good check or bank draft payable to the order of the
Company, the Exercise Price for each Share to be purchased.
(b) Upon receipt of a Warrant Certificate with the exercise form
thereon duly executed together with payment in full of the Exercise Price for
the Shares for which Warrants are then being exercised, the Warrant Agent
shall requisition, from any transfer agent for the Shares, and upon receipt
shall make delivery of, certificates evidencing the total number of whole
Shares for which Warrants are then being exercised in such names and
denominations as are required for delivery to, or in accordance with the
instructions of, the Warrant Holder. Such certificates for the Shares shall
be deemed to be issued, and the person to whom such Shares are issued of
record shall be deemed to have become a holder of record of such Shares, as of
the date of the surrender of such Warrant Certificate and payment of the
Exercise Price, whichever shall last occur, provided that if the books of the
Company with respect to the Shares shall be deemed to be issued, and the
person to whom such Shares are issued of record shall be deemed to have become
a record holder of such Shares, as of the date on which such books shall next
be open (whether before, on or after the Expiration Date) but at the Exercise
Price, whichever shall have last occurred, to the Warrant Agent.
(c) If less than all of the Warrant evidenced by a Warrant
Certificate are exercised upon a single occasion, a new Warrant Certificate
for the balance of the Warrant not so exercised shall be issued and delivered
to, or in accordance with, transfer instructions properly given by the Warrant
Holder until the Expiration Date.
(d) All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled.
(e) Upon the exercise, or conversion of any warrant, the Warrant
Agent shall promptly deposit the payment into an escrow account established by
mutual agreement of the Issuer and the Warrant Agent at a federally insured
commercial bank. All funds deposited in the escrow account will be disbursed
on a weekly basis to the issuer once they have been determined by the Warrant
Agent to be collected funds. Once the funds are determined to be collected,
the Warrant Agent shall cause the share certificate(s) representing the
exercised warrants to be issued.
(f) Expenses incurred by American Securities Transfer, Inc. while
acting in the capacity as Warrant Agent shall be paid by the Company. These
expenses, including delivery of exercised share certificates to the
shareholder, will be deducted from the exercise fee submitted prior to
distribution of funds to the Issuer. A detailed accounting statement relating
to the number of shares exercised, names of registered warrant holder and the
net amount of exercised funds remitted shall be given to the Issuer with the
payment of each exercise amount.
(g) At the time of exercise of the warrant(s), the transfer fee is
to be paid by the warrant holder. In the event the shareholder must pay the
fee and fails to remit same, the fee will be deducted from the proceeds prior
to the distribution to the Company.
9. TAXES. The Company will pay all taxes attributable to the initial
issuance of Shares upon exercise of Warrants. The Company shall not, however,
be required to pay any tax which may be payable in respect to any transfer
involved in any issue of Warrant Certificates or in the issue of any
certificates of Shares in the name other than that of the Warrant Holder upon
the exercise of any Warrant.
10. MUTILATED OR MISSING WARRANT CERTIFICATES. If any Warrant
Certificate is mutilated, lost, stolen or destroyed, the Company and the
Warrant Agent may, on such terms as to indemnify or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated Warrant
Certificate, include the surrender thereof), and upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such mutilation, loss,
theft or destruction, issue a substitute Warrant Certificate of like
denomination and tenor as the Warrant Certificate so mutilated, lost, stolen
or destroyed. Applicants for substitute Warrant Certificates shall comply
with such other reasonable regulations and pay any reasonable charges as the
Company or the Warrant Agent may prescribe.
11. RESERVATION OF SHARES. For the purpose of enabling the Company to
satisfy all obligation to issue Shares upon exercise of Warrants, the Company
will at all times reserve and keep available free from preemptive rights, out
of the aggregate of its authorized but unissued shares, the full number of
shares which may be issued upon the exercise of Warrants will upon issue be
fully paid and nonassessable by the Company and free from all taxes, liens,
charges and security interests with respect to the issue thereof.
12. GOVERNMENTAL RESTRICTIONS. If any Shares issuable upon the exercise
of Warrants require registration or approval of any governmental authority,
the Company will endeavor to secure such registration or approval; provided
that in no event shall such Shares be issued, and the Company shall have the
authority to suspend the exercise of all Warrants, until such registration or
approval shall have been obtained; but all Warrants, the exercise of which is
requested during any such suspension, shall be exercisable at the Exercise
Price. If any such period of suspension continues past the Expiration Date,
all Warrants, the exercise of which have been requested on or prior to the
Expiration Date, shall be exercisable upon the removal of such suspension
until the close of business on the business day immediately following the
expiration of such suspension.
13. ADJUSTMENTS. If prior to the exercise of any Warrants the Company
shall have effected one or more stock split-ups, stock dividends or other
increases or reductions of the number of shares of its $.0001 par value common
stock outstanding without receiving compensation therefor in money, services
or property, the number of shares of common stock subject to the Warrant
granted shall, (i) if a net increase shall have been effected in the number of
outstanding shares of the Company's common stock, be proportionately
increased, and the cash consideration payable per share shall be
proportionately reduced, and, (ii) if a net reduction shall have been effected
in the number of outstanding shares of the Company's common stock, be
proportionately reduced and the cash consideration payable per share be
proportionately increased.
14. NOTICE TO WARRANT HOLDERS. Upon any adjustment as described in
Section 13, the Company within 20 days thereafter shall (i) cause to be filed
with the Warrant Agent a certificate signed by a Company officer setting forth
the details of such adjustment, the method of calculation and the facts upon
which such calculation is based, which certificates shall be conclusive
evidence of the correctness of the matters set forth therein, and (ii) cause
written notice of such adjustments to be given to each Warrant Holder as of
the record date applicable to such adjustment. Also, if the Company proposes
to enter into any reorganization, reclassification, sale of substantially all
of its assets, consolidation, merger, dissolution, liquidation or winding up,
the Company shall give notice of such fact at least 20 days prior to such
action to all Warrant Holders which notice shall set forth such facts as
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the kind and amount of the
shares or other securities and property deliverable upon exercise of the
Warrants. Without limiting the obligation of the Company hereunder to provide
notice to each Warrant Holder, failure of the Company to give notice shall not
invalidate corporate action taken by the Company.
15. NO FRACTIONAL WARRANTS OR SHARES. The Company shall not be required
to issue fractions of Warrants upon the reissue of Warrants, any adjustments
as described in Section 13 or otherwise; but the Company in lieu of issuing
any such fractional interest, shall round up or down to the nearest full
Warrant. If the total Warrants surrendered by exercise would result in the
issuance of a fractional share, the Company shall not be required to issue a
fractional share but rather the aggregate number of shares issuable will be
rounded up or down to the nearest full share.
16. RIGHTS OF WARRANT HOLDERS. No Warrant Holder, as such, shall have
any rights of a shareholder of the Company, either at law or equity, and the
rights of the Warrant Holders, as such, are limited to those rights expressly
provided in this Agreement or in the Warrant Certificates. The Company and
the Warrant Agent may treat the registered Warrant Holder in respect of any
Warrant Certificate as the absolute owner thereof for all purposes
notwithstanding any notice to the contrary.
17. WARRANT AGENT. The Company hereby appoints the Warrant Agent to act
as the agent of the Company and the Warrant Agent hereby accepts such
appointment upon the following terms and conditions by all of which the
Company and every Warrant Holder, by acceptance of his Warrants, shall be
bound:
(a) Statements contained in this Agreement and in the Warrant
Certificates shall be taken as statements of the Company. The Warrant Agent
assumes no responsibility for the correctness of any of the same except such
as described the Warrant Agent or for actions taken or to be taken by the
Warrant Agent.
(b) The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the Company's covenants contained in this
Agreement or in the Warrant Certificates.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Warrant
Holder in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with the opinion or the advice of such counsel,
provided the Warrant Agent shall have exercised reasonable care in the
selection and continued employment of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to
the Company or to any Warrant Holder for any action taken in reliance upon any
notice, resolution, waiver, consent, order, certificate or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution
of this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and all other charges of any kind in nature incurred by
the Warrant Agent in the execution of this Agreement and to indemnify the
Warrant Agent and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for this Agreement except as a result of
the Warrant Agent's negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more Warrant Holders shall furnish the
Warrant Agent with reasonable security and indemnity for any costs and
expenses which may be incurred in connection with such action, suit or legal
proceeding, but this provision shall not effect the power of the Warrant Agent
to take such action as the Warrant Agent may consider proper, whether with or
without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant Agent
without the possession of any of the Warrant Certificates or the production
thereof at any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall be brought in
its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the Warrant Holders as their respective rights or interests
may appear.
(g) The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Warrant Agent under this Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.
18. SUCCESSOR WARRANT AGENT. Any corporation into which the Warrant
Agent may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Warrant Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act of a party or the parties hereto. In any such event or if the
name of the Warrant Agent is changed, the Warrant Agent or such successor may
adopt the countersignature of the original Warrant Agent and may countersign
such Warrant Certificates either in the name of the predecessor Warrant Agent
or in the name of the successor Warrant Agent.
19. CHANGE OF WARRANT AGENT. The Warrant Agent may resign or be
discharged by the Company from its duties under this Agreement by the Warrant
Agent or the Company, as the case may be, giving notice in writing to the
other, and by giving a date when such resignation or discharge shall take
effect, which notice shall be sent at least 30 days prior to the date so
specified. If the Warrant Agent shall resign, be discharged, or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Warrant Agent. If the Company shall fail to make such appointment within
a period of 30 days after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Warrant Agent or by any
Warrant Holder or after discharging the Warrant Agent, then any Warrant Holder
may apply to the District Court for Denver County, Colorado, for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such Court, the
duties of the Warrant Agent shall be carried out by the Company. Any
successor Warrant Agent, whether appointed by the Company or by such Court,
shall be a bank or a trust company, in good standing, organized under
the laws of the State of Colorado or of the United States of America, having
its principal office in Denver, Colorado and having at the time of its
appointment as Warrant Agent, a combined capital and surplus of at least four
million dollars. After appointment, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without furhter act or deed and the
former Warrant Agent shall deliver and transfer to the successor Warrant Agent
any property at the time held by it thereunder, and execute and deliver any
furhter assurance, conveyance, act or deed necessary for effecting the
delivery or transfer. Failure to give any notice provided for in this section,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Warrant Agent or the appointment of the
successor Warrant Agent, as the case may be.
20. NOTICES. Any notice or demand authorized by this Agreement to be
given or made by the Warrant Agent or by any Warrant Holder to or upon the
Company shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as follows:
Any notice or demand authorized by this Agreement to be given or made by any
Warrant Holder or by the Company to or on the Warrant Agent shall be
sufficiently given or made if sent by mail, first class, certified or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company ) as follows:
American Securities Transfer, Inc.
0000 Xxxxxxxx Xxxxxx, #000
Xxxxxx, Xxxxxxxx 00000
Any distribution, notice or demand required or authorized by this Agreement to
be given or made by the Company or the Warrant Agent to or on the Warrant
Holders shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed to the Warrant Holders at
their last known addresses as they shall appear on the registration books for
the Warrant Certificates maintained by the Warrant Agent.
21. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of
any Warrant Holders in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Warrant Agent may
deem necessary or desirable.
22. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
23. TERMINATION. This Agreement shall terminate at the close of
business on the Expiration Date or such earlier date upon which all Warrants
have been exercised; provided, however, that if exercise of the Warrants is
suspended pursuant to Section 12 and such suspension continues past the
Expiration Date, this Agreement shall terminate at the close of business on
the business day immediately following the expiration of such suspension. The
provisions of Section 17 shall survive such termination.
24. GOVERNING LAW. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Colorado and for all purposes shall be construed in accordance with the laws
of said State.
25. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to given any person or corporation other than the Company, the
Warrant Agent and the Warrant Holders any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the Warrant Holders.
26. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original and all such counterparts shall together constitute but one and
the same instrument.
Date: June 30, 1994
Contour Medical, Inc.
A Nevada Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
SEAL
ATTEST
/s/ X. X. Xxxxxxxxxxxx
X. X. Xxxxxxxxxxxx, Secretary
American Securities Transfer, Inc.
A Colorado Corporation
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Vice President
SEAL
ATTEST:
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx, Secretary
