EXHIBIT 4.2
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PROSPECT MEDICAL HOLDINGS, INC.
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
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WARRANT AGREEMENT
Dated as of ________________, 1998
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WARRANT AGREEMENT, dated this ____ day of __________, 1998, by and among
PROSPECT MEDICAL HOLDINGS, INC., a Delaware corporation (the "Company"), and
AMERICAN STOCK TRANSFER AND TRUST COMPANY, as Warrant Agent (the "Warrant
Agent").
W I T N E S S E T H:
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WHEREAS, in connection with (i) the offering to the public of up to
3,000,000 shares of Common Stock (as defined in Section 1) and 3,000,000
redeemable common stock purchase warrants (the "Warrants"), each Warrant
entitling the holder thereof to purchase one additional share of Common
Stock, (ii) the over-allotment option to purchase up to an additional 450,000
shares of Common Stock and/or 450,000 Warrants (the "Over-allotment Option"),
and (iii) the sale to Security Capital Trading, Inc. (the "Representative")
of warrants (the "Representative's Warrants") to purchase up to 300,000
shares of Common Stock and/or 300,000 Warrants, the Company will issue up to
4,050,000 Warrants (subject to increase as provided in the Representative's
Warrant Agreement); and
WHEREAS, the Company desires to provide for the issuance of certificates
representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants,
the issuance of certificates representing the Warrants, the exercise of the
Warrants and the rights of the holders thereof.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms
and provisions of the Warrants and the certificates representing the Warrants
and the respective rights and obligations thereunder of the Company, the
Representative, the holders of certificates representing the Warrants and the
Warrant Agent, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:
(a) "Act" shall mean the Securities Act of 1933, as amended.
(b) "Common Stock" shall mean the authorized common stock of the
Company of any class or series, whether now or hereafter authorized, which
has the right to participate in the voting and in the distribution of
earnings and assets of the Company without limit as to amount or percentage.
(c) "Commission" shall mean the Securities and Exchange Commission.
(d) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor) at which at any particular time its business in New York, New
York, shall be administered, which office is located on the date hereof at 00
Xxxx Xxxxxx.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(f) "Exercise Date" shall mean, subject to the provisions of Section
5(b) hereof, as to any Warrant, the date on which the Warrant Agent shall
have received both the Warrant Certificate representing such Warrant, with
the exercise form thereon duly executed by the Registered Holder thereof or
his attorney duly authorized in writing, and (ii) payment in cash or by
official bank or certified check made payable to the Warrant Agent for the
account of the Company, of the amount in lawful money of the United States of
America equal to the applicable Purchase Price in good funds.
(g) "Initial Warrant Exercise Date" shall mean _____________ __, 1999
[the first anniversary of the effective date of the Registration Statement].
(h) "Initial Warrant Redemption Date" shall mean _______________ __,
1999 [the first anniversary of the effective date of the Registration
Statement].
(i) "NASD" shall mean the National Association of Securities Dealers,
Inc.
(j) "Nasdaq" shall mean the Nasdaq Stock Market.
(k) "Purchase Price" shall mean, subject to modification and adjustment
as provided in Section 8 hereof, $8.40 per share of Common Stock purchased
pursuant to exercise of the Warrants; subject to the Company's right, in its
sole discretion, to decrease the Purchase Price for a period of not less than
30 days on not less than 30 days' prior written notice to the Registered
Holders and the Representative.
(l) "Redemption Date" shall mean the date (which may not occur before
the Initial Warrant Redemption Date) fixed for the redemption of the Warrants
in accordance with the terms hereof.
(m) "Redemption Price" shall mean the price at which the Company may,
at its option, redeem the Warrants, in accordance with the terms hereof,
which price shall be $0.10 per Warrant, subject to adjustment from time to
time pursuant to the provisions of Section 9 hereof.
(n) "Registered Holder" shall mean the person in whose name any
certificate representing the Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6 hereof.
(o) "Registration Statement" shall mean the Form S-1 Registration
Statement filed by the Company with the Commission relating to the Warrants.
(p) "Representative's Warrant Agreement" shall mean the agreement dated
as of _______________ ___, 1998 [the date of the Prospectus] between the
Company and the
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Representative relating to and governing the terms and provisions of the
Representative's Warrants.
(q) "Transfer Agent" shall mean American Stock Transfer and Trust
Company, or its authorized successor.
(r) "Underwriting Agreement" shall mean the underwriting agreement
dated __________ __, 1998 [the date of the Prospectus] between the Company
and the several underwriters listed on Exhibit A thereto relating to the
purchase for resale to the public of 3,000,000 shares of Common Stock and
3,000,000 Warrants.
(s) "Warrant Certificate" shall mean a certificate representing the
Warrants substantially in the form annexed hereto as Exhibit A.
(t) "Warrant Expiration Date" shall mean, unless the Warrants are
redeemed as provided in Section 9 hereof prior to such date, 5:00 p.m. (New
York time), on ______________ __, 2003 [the day immediately preceding the
fifth anniversary of the effective date of the Registration Statement], or
the Redemption Date as defined herein, whichever date is earlier; provided
that if such date shall in the State of New York be a holiday or a day on
which banks are authorized to close, then 5:00 p.m. (New York time) on the
next following day which, in the State of New York, is not a holiday or a day
on which banks are authorized to close. Upon five business days' prior
written notice to the Registered Holders, the Company shall have the right to
extend the Warrant Expiration Date.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase at the Purchase
Price therefor from the Initial Warrant Exercise Date until the Warrant
Expiration Date one share of Common Stock upon the exercise thereof in
accordance with the terms hereof, subject to modification and adjustment as
provided in Section 8 hereof.
(b) Upon execution of this Agreement, Warrant Certificates representing
the number of Warrants sold pursuant to the Underwriting Agreement shall be
executed by the Company and delivered to the Warrant Agent.
(c) Upon execution of the Representative's Warrant Agreement, Warrant
Certificates representing all or a portion of 300,000 Warrants shall be
executed by the Company and issued and delivered to the Representative. Upon
exercise of the Representative's Warrants with respect to up to an additional
300,000 Warrants as provided for in the Representative's Warrant Agreement,
Warrant Certificates representing up to an additional 300,000 Warrants
(subject to modification and adjustment as provided in the Representative's
Warrant Agreement), shall be executed by the Company and issued and delivered
to the Representative.
(d) From time to time, up to the Warrant Expiration Date or the
Redemption Date, whichever date is earlier, the Warrant Agent shall
countersign and deliver Warrant Certificates in required denominations of one
or whole number multiples thereof to the person entitled thereto in
connection with any transfer or exchange permitted under this Agreement.
Except as provided
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herein, no Warrant Certificates shall be issued except (i) Warrant
Certificates initially issued hereunder pursuant to Section 2(b) hereof and
those issued on or after the Initial Warrant Exercise Date, upon the exercise
of fewer than all Warrants held by the exercising Registered Holder, (ii)
Warrant Certificates issued upon any transfer or exchange of Warrants, (iii)
Warrant Certificates issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7 hereof, (iv) Warrant
Certificates issued pursuant to Section 2(c) hereof and the Representative's
Warrant Agreement, and (v) at the option of the Company, Warrant Certificates
in such form as may be approved by its Board of Directors, to reflect any
adjustment or change in the Purchase Price, the number of shares of Common
Stock purchasable upon exercise of the Warrants or the Redemption Price
therefor made pursuant to Section 8 hereof.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A (the provisions of which are hereby incorporated herein)
and may have such letters, numbers or other marks of identification or
designation and such legends, summaries or endorsements printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Warrants may
be listed, or to conform to usage. The Warrant Certificates shall be dated
the date of issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed Warrant
Certificates) and issued in registered form. Warrants shall be numbered
serially with the letter W on the Warrants.
(b) Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Chief Executive Officer, President or any Vice
President and by its Chief Financial Officer or an Assistant Chief Financial
Officer or its Secretary or an Assistant Secretary, by manual signatures or
by facsimile signatures printed thereon, and shall have imprinted thereon a
facsimile of the Company's seal. Warrant Certificates, other than Warrant
Certificates issued to the Representative pursuant to Section 2(c) hereof and
the Representative's Warrant Agreement, shall be manually countersigned by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer of the Company
before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates, nevertheless, may be countersigned by the Warrant
Agent, issued and delivered with the same force and effect as though the
person who signed such Warrant Certificates had not ceased to be such officer
of the Company. After countersignature by the Warrant Agent, Warrant
Certificates shall be delivered by the Warrant Agent to the Registered Holder
promptly and without further action by the Company, except as otherwise
provided by Section 4(a) hereof.
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SECTION 4. EXERCISE.
(a) Warrants in denominations of one or whole number multiples thereof
may be exercised by the Registered Holder thereof commencing at any time on
or after the Initial Warrant Exercise Date, but not after the Warrant
Expiration Date, upon the terms and subject to the conditions set forth
herein and in the applicable Warrant Certificate. A Warrant shall be deemed
to have been exercised immediately prior to the close of business on the
Exercise Date and the person entitled to receive the securities deliverable
upon such exercise shall be treated for all purposes as the holder, upon
exercise thereof, as of the close of business on the Exercise Date. If
Warrants in denominations other than whole number multiples thereof shall be
exercised at one time by the same Registered Holder, the number of full
shares of Common Stock which shall be issuable upon exercise thereof shall be
computed on the basis of the aggregate number of full shares of Common Stock
issuable upon such exercise. As soon as practicable on or after the Exercise
Date and in any event within five business days after such date, if one or
more Warrants have been exercised, the Warrant Agent on behalf of the Company
shall cause to be issued to the person or persons entitled to receive the
same a Common Stock certificate or certificates for the shares of Common
Stock deliverable upon such exercise, and the Warrant Agent shall deliver the
same to the person or persons entitled thereto. Upon the exercise of any one
or more Warrants, the Warrant Agent shall promptly notify the Company in
writing of such fact and of the number of securities deliverable upon such
exercise and shall cause the payment of an amount in cash or by check made
payable to the order of the Company, equal to the Purchase Price for such
securities, to be deposited promptly in the Company's designated bank
account.
(b) The Company shall not be required to issue fractional shares on the
exercise of Warrants. Warrants may only be exercised in such multiples as
are required to permit the issuance by the Company of one or more whole
shares. If one or more Warrants shall be presented for exercise in full at
the same time by the same Registered Holder, the number of whole shares which
shall be issuable upon such exercise thereof shall be computed on the basis
of the aggregate number of shares purchasable on exercise of the Warrants so
presented. If any fraction of a share would, except for the provisions
provided herein, be issuable on the exercise of any Warrant (or specified
portion thereof), the Company shall pay an amount in cash equal to such
fraction multiplied by the then current market value of a share of Common
Stock, determined as follows:
(1) If the Common Stock is listed, or admitted to unlisted trading
privileges, on a national securities exchange, or is traded on Nasdaq, the
current market value of a share of Common Stock shall be the closing sale
price of the Common Stock at the end of the regular trading session on the
last business day prior to the date of exercise of the Warrants on whichever
of such exchanges or Nasdaq had the highest average daily trading volume for
the Common Stock on such day; or
(2) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed, quoted or
reported for trading on Nasdaq, but is traded in the over-the-counter market,
the current market value of a share of Common Stock shall be the average of
the last reported bid and asked prices of the Common Stock reported by the
National
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Quotation Bureau, Inc. on the OTC Electronic Bulletin Board operated by
Nasdaq on the last business day prior to the date of exercise of the
Warrants; or
(3) If the Common Stock is not listed, admitted to unlisted
trading privileges on any national securities exchange, or listed, quoted or
reported for trading on Nasdaq, and bid and asked prices of the Common Stock
are not reported by the National Quotation Bureau, Inc. on the OTC Electronic
Bulletin Board operated by Nasdaq, the current market value of a share of
Common Stock shall be an amount, not less than the book value thereof as of
the end of the most recently completed fiscal quarter of the Company ending
prior to the date of exercise, determined by the members of the Board of
Directors of the Company exercising good faith and using customary valuation
methods.
SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon exercise of Warrants, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be issuable upon
exercise of the Warrants shall, at the time of issuance and delivery thereof
in accordance with the terms hereof and of the Warrant Certificates, be duly
and validly issued and fully paid and nonassessable and free from all
preemptive or similar rights, taxes, liens and charges with respect to the
issue thereof, and that upon issuance such shares shall be listed on each
securities exchange, if any, on which the other shares of outstanding Common
Stock of the Company are then listed.
(b) The Company covenants that if any securities to be reserved for the
purpose of exercise of Warrants hereunder require registration with, or
approval of, any governmental authority under any federal securities law
before such securities may be validly issued or delivered upon such exercise,
then the Company will file a registration statement under the federal
securities laws or a post-effective amendment to a then effective
registration statement, use its reasonable best efforts to cause such filed
registration statement to become effective and to keep any such effective
registration statement current while any of the Warrants are outstanding, and
deliver a prospectus which complies with Section 10(a)(3) of the Act to the
Registered Holder exercising the Warrant (except, if in the opinion of
counsel to the Company, such registration is not required under the federal
securities law or if the Company receives a letter from the staff of the
Commission stating that it would not take any enforcement action if such
registration is not effected). The Company will use its reasonable best
efforts to obtain appropriate approvals or registrations under state "blue
sky" securities laws with respect to any such securities. However, Warrants
may not be exercised by, or shares of Common Stock issued to, any Registered
Holder in any state in which such exercise would be unlawful.
(c) The Company shall indemnify the Representative and each person, if
any, who controls the Representative within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred 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 from the registration statement or prospectus referred to in Section
5(b) hereof to the same extent and with the same effect (including
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the provisions regarding contribution) as the provisions pursuant to which
the Company has agreed to indemnify the Representative contained in Section 7
of the Underwriting Agreement.
(d) The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance
of Warrants, or the issuance or delivery of any shares of Common Stock upon
exercise of the Warrants; provided, however, that if shares of Common Stock
are to be delivered in a name other than the name of the Registered Holder of
the Warrant Certificate representing any Warrant being exercised, then no
such delivery shall be made unless the person requesting the same has paid to
the Warrant Agent the amount of transfer taxes or charges incident thereto,
if any.
(e) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to (i) register the transfer of Warrant Certificates and (ii)
requisition from time to time certificates representing shares of Common
Stock or other securities required upon exercise of the Warrants, and the
Company will comply with all such requisitions.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants or may be
transferred in whole or in part. Warrant Certificates to be exchanged shall
be surrendered to the Warrant Agent at the Corporate Office, and, upon
satisfaction of the terms and provisions hereof, the Company shall execute
and the Warrant Agent shall countersign, issue and deliver in exchange
therefor the Warrant Certificate or Certificates which the Registered Holder
making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at the Corporate Office, books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and the transfer thereof in accordance with
customary practice. Upon due presentment for registration of transfer of any
Warrant Certificate at such office, the Company shall execute and the Warrant
Agent shall countersign and issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates representing an equal
aggregate number of Warrants.
(c) With respect to all Warrant Certificates presented for registration
of transfer, or for exchange or exercise, the subscription or exercise form,
as the case may be, on the reverse thereof shall be duly endorsed or be
accompanied by a written instrument or instruments of transfer and
subscription, in form satisfactory to the Company and the Warrant Agent, duly
executed by the Registered Holder thereof or his attorney-in-fact duly
authorized in writing.
(d) A service charge may be imposed by the Warrant Agent and charged to
the Registered Holder for any exchange or registration of transfer of Warrant
Certificates. In addition, the Company may require payment by such Holder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange
in case of mutilated Warrant Certificates shall be promptly canceled by the
Warrant Agent and thereafter retained by the Warrant Agent until termination
of this Agreement.
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(f) Prior to due presentment for registration of transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any notice
to the contrary.
SECTION 7. LOSS OR MUTILATION.
Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate and (in the case of loss, theft or
destruction) of indemnity satisfactory to them, and (in case of mutilation)
upon surrender and cancellation thereof, the Company shall execute and the
Warrant Agent shall (in the absence of notice to the Company and/or the
Warrant Agent that a new Warrant Certificate has been acquired by a bona fide
purchaser) countersign and deliver to the Registered Holder in lieu thereof a
new Warrant Certificate of like tenor representing an equal aggregate number
of Warrants. Applicants for a substitute Warrant Certificate shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Warrant Agent may prescribe.
SECTION 8. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES OF COMMON
STOCK DELIVERABLE.
(a) Except as hereinafter provided, in the event the Company shall, at
any time or from time to time after the date hereof and prior to the Warrant
Expiration Date, issue or sell any shares of Common Stock for a consideration
per share less than the Purchase Price or issue any shares of Common Stock as
a stock dividend to the holders of Common Stock, or subdivide or combine the
outstanding shares of Common Stock into a greater or lesser number of shares
(any such issuance, subdivision or combination being herein called a "Change
of Shares"), then, and thereafter upon each further Change of Shares, the
Purchase Price for the Warrants (whether or not the same shall be issued and
outstanding) in effect immediately prior to such Change of Shares shall be
changed to a price (including any applicable fraction of a cent to the
nearest cent) determined by dividing (i) the sum of (a) the total number of
shares of Common Stock outstanding immediately prior to such Change of
Shares, multiplied by the Purchase Price in effect immediately prior to such
Change of Shares and (b) the consideration, if any, received by the Company
upon such sale, issuance, subdivision or combination, by (ii) the total
number of shares of Common Stock outstanding immediately after such Change of
Shares; provided, however, that in no event shall the Purchase Price be
adjusted pursuant to this computation to an amount in excess of the Purchase
Price in effect immediately prior to such computation, except in the case of
a combination of outstanding shares of Common Stock.
For the purposes of any adjustment to be made in accordance with this
Section 8(a), the following provisions shall be applicable:
(A) In case of the issuance or sale of shares of Common Stock (or of
other securities deemed hereunder to involve the issuance or sale of shares
of Common Stock) for a consideration part or all of which shall be cash, the
amount of the cash portion of the consideration therefor deemed to have been
received by the Company shall be (i) the subscription price, if shares of
Common Stock
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are offered by the Company for subscription, or (ii) the gross public
offering price (before deducting therefrom any compensation paid or discount
allowed in the sale, underwriting or purchase thereof by underwriters or
dealers or others performing similar services, or any expenses incurred in
connection therewith), if such securities are sold to underwriters or dealers
for public offering without a subscription offering, or (iii) the gross
amount of cash actually received by the Company for such securities, in any
other case.
(B) In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company, and otherwise than on the
exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of
other securities deemed hereunder to involve the issuance or sale of shares
of Common Stock) for a consideration part or all of which shall be other than
cash, the amount of the consideration therefor other than cash deemed to have
been received by the Company shall be the value of such consideration as
determined in good faith by the Board of Directors of the Company, using
customary valuation methods and on the basis of prevailing market values for
similar property or services.
(C) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record
date for the determination of shareholders entitled to receive such dividend
or other distribution and shall be deemed to have been issued without
consideration.
(D) The reclassification of securities of the Company other than shares
of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to receive
such shares, and the value of the consideration allocable to such shares of
Common Stock shall be determined as provided in subsection (B) of this
Section 8(a).
(E) The number of shares of Common Stock at any one time outstanding
shall be deemed to include the aggregate maximum number of shares issuable
(subject to readjustment upon the actual issuance thereof) upon the exercise
of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(b) Upon each adjustment of the Purchase Price pursuant to this Section
8, the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be the number derived by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment by the Purchase
Price in effect prior to such adjustment and dividing the product so obtained
by the applicable adjusted Purchase Price.
(c) In case the Company shall at any time after the date hereof issue
options, rights or warrants to subscribe for shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock,
for a consideration per share (determined as provided in Sections 8(a) and
8(b) and as provided below) less than the Purchase Price in effect
immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, or without consideration
(including the issuance of any such securities by way of dividend or other
distribution), the Purchase Price for the Warrants (whether or not the same
shall be issued and
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outstanding) in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, as the
case may be, and the number of shares of Common Stock purchasable upon the
exercise of such Warrants, shall be reduced to a price determined by making
the computation in accordance with the provisions of Sections 8(a) and 8(b)
hereof, provided that:
(A) The aggregate maximum number of shares of Common Stock
issuable or that may become issuable under such options, rights or warrants
(assuming exercise in full even if not then currently exercisable or
currently exercisable in full) shall be deemed to be issued and outstanding
at the time such options, rights or warrants were issued, for a consideration
equal to the minimum exercise price per share provided for in such options,
rights or warrants at the time of issuance, plus the consideration, if any,
received by the Company for the grant of such options, rights or warrants;
provided, however, that upon the expiration or other termination of such
options, rights or warrants, if any thereof shall not have been exercised,
the number of shares of Common Stock deemed to be issued and outstanding
pursuant to this subsection (A) (and for the purposes of subsection (E) of
Section 8(a) hereof) shall be reduced by the number of shares as to which
options, warrants and/or rights shall have expired, and such number of shares
shall no longer be deemed to be issued and outstanding, and the Purchase
Price then in effect shall forthwith be readjusted and thereafter be the
price that it would have been had adjustment been made on the basis of the
issuance only of the shares actually issued plus the shares remaining
issuable upon the exercise of those options, rights or warrants as to which
the exercise rights shall not have expired or terminated unexercised.
(B) The aggregate maximum number of shares of Common Stock
issuable or that may become issuable upon conversion or exchange of any
convertible or exchangeable securities (assuming conversion or exchange in
full even if not then currently convertible or exchangeable in full) shall be
deemed to be issued and outstanding at the time of issuance of such
securities, for a consideration equal to the consideration received by the
Company for such securities, plus the minimum consideration, if any,
receivable by the Company upon the conversion or exchange thereof; provided,
however, that upon the termination of the right to convert or exchange such
convertible or exchangeable securities (whether by reason of redemption or
otherwise), the number of shares of Common Stock deemed to be issued and
outstanding pursuant to this subsection (B) (and for the purposes of
subsection (E) of Section 8(a) hereof) shall be reduced by the number of
shares as to which the conversion or exchange rights shall have expired or
terminated unexercised, and such number of shares shall no longer be deemed
to be issued and outstanding, and the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the price that it would have been
had adjustment been made on the basis of the issuance only of the shares
actually issued plus the shares remaining issuable upon conversion or
exchange of those convertible or exchangeable securities as to which the
conversion or exchange rights shall not have expired or terminated
unexercised.
(C) If any change shall occur in the price per share provided for
in any of the options, rights or warrants referred to in subsection (A) of
this Section 8(c), or in the price per share or ratio at which the securities
referred to in subsection (B) of this Section 8(c) are convertible or
exchangeable, such options, rights or warrants or conversion or exchange
rights, as the case may be, to the extent not theretofore exercised, shall be
deemed to have expired or terminated on the date when such price change
became effective in respect of shares not theretofore issued pursuant to the
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exercise or conversion or exchange thereof, and the Company shall be deemed
to have issued upon such date new options, rights or warrants or convertible
or exchangeable securities.
(d) In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value or as a result of a subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation
(other than a merger with a subsidiary of the Company in which merger the
Company is the continuing corporation) and which does not result in any
reclassification or change of the then outstanding shares of Common Stock or
other capital stock issuable upon exercise of the Warrants (other than a
change in par value, or from par value to no par value, or from no par value
to par value or as a result of subdivision or combination) or in case of any
sale or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be,
shall make lawful and adequate provision whereby the Registered Holder of
each Warrant then outstanding shall have the right thereafter to receive on
exercise of such Warrant the kind and amount of securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of the number of securities issuable upon exercise of
such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance and shall forthwith file at the
Corporate Office a statement signed by its Chief Executive Officer, President
or a Vice President and by its Chief Financial Officer or an Assistant Chief
Financial Officer or its Secretary or an Assistant Secretary evidencing such
provision. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments
provided for in Sections 8(a), (b) and (c). The above provisions of this
Section 8(d) shall similarly apply to successive reclassifications and
changes of shares of Common Stock and to successive consolidations, mergers,
sales or conveyances.
(e) Irrespective of any adjustments or changes in the Purchase Price or
the number of shares of Common Stock purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Warrant
Certificates pursuant to Section 2(d) hereof, continue to express the
Purchase Price per share and the number of shares purchasable thereunder as
the Purchase Price per share and the number of shares purchasable thereunder
were expressed in the Warrant Certificates when the same were originally
issued.
(f) After each adjustment of the Purchase Price pursuant to this
Section 8, the Company will promptly prepare a certificate signed by the
Chairman, Chief Executive Officer or President, and by the Chief Financial
Officer or an Assistant Chief Financial Officer or the Secretary or an
Assistant Secretary, of the Company setting forth: (i) the Purchase Price as
so adjusted; (ii) the number of shares of Common Stock purchasable upon
exercise of each Warrant, after such adjustment; and (iii) a brief statement
of the facts accounting for such adjustment. The Company will promptly file
such certificate with the Warrant Agent and cause a brief summary thereof to
be sent by ordinary first class mail to each Registered Holder at his last
address as it shall appear on the registry books of the Warrant Agent. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity thereof except as to the holder to whom the Company
failed to mail such notice, or except as to the holder whose notice was
defective. The affidavit of an officer of the Warrant
11
Agent or the Secretary or an Assistant Secretary of the Company that such
notice has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(g) No adjustment of the Purchase Price shall be made as a result of or
in connection with the issuance or sale of shares of Common Stock if the
amount of said adjustment shall be less than $.10, provided, however, that in
such case, any adjustment that would otherwise be required then to be made
shall be carried forward and shall be made at the time of and together with
the next subsequent adjustment that shall amount, together with any
adjustment so carried forward, to at least $.10. In addition, Registered
Holders shall not be entitled to cash dividends paid by the Company prior to
the exercise of any Warrant or Warrants held by them.
(h) No adjustment of the Purchase Price or the number of shares of
Common Stock purchasable upon exercise of any Warrant shall be made as a
result of or in connection with: (A) the issuance or sale of shares of
Common Stock pursuant to options, warrants, stock purchase agreements or
convertible or exchangeable securities outstanding or in effect on the date
hereof and on the terms described in the final prospectus relating to the
public offering contemplated by the Underwriting Agreement; (B) the issuance,
grant or sale of options under an incentive stock option plan to purchase
shares of Common Stock in an aggregate amount not to exceed 166,000 shares;
(C) the issuance, grant or sale of options, rights or warrants to subscribe
for shares of Common Stock to a commercial lender in connection with a loan,
credit facility or other form of indebtedness; or (D) the issuance or sale of
shares of Common Stock in transactions involving acquisitions by the Company
or an affiliated physician organization of all or a portion of the assets or
equity ownership of unrelated business entities.
(i) Notwithstanding the foregoing, none of the provisions of this
Section 8 shall apply to any of the Warrants issued to the Representative
pursuant to the Representative's Warrant Agreement. All adjustments to the
exercise price of and the number and kind of securities covered by such
Warrants shall be exclusively as set forth in Section 8 of the
Representative's Warrant Agreement.
SECTION 9. REDEMPTION.
(a) Commencing on the Initial Warrant Redemption Date, the Company may,
on not less than 30 days' prior written notice, redeem all, but not less than
all, the Warrants at ten cents ($.10) per Warrant (subject to the same sorts
of adjustments as are set forth in Section 8 with respect to the Purchase
Price, predicated on a non-variable aggregate Redemption Price of $405,000),
provided, however, that before any such call for redemption of Warrants can
take place, the average closing bid price for the Common Stock as reported on
Nasdaq, if the Common Stock is then traded on Nasdaq, (or the closing sale
price, if the Common Stock is then traded on a national securities exchange)
shall have equaled or exceeded $18.00 per share for any twenty (20) trading
days within a period of thirty (30) consecutive trading days ending on the
fifth trading day prior to the date on which the notice to Registered Holders
contemplated hereby is given (subject to adjustment in the event of any stock
splits or other similar events as provided in Section 8 hereof).
(b) In case the Company shall exercise its right to redeem all of the
Warrants, it shall give or cause to be given notice to the Registered Holders
of the Warrants, by mailing to such Registered
12
Holders a notice of redemption, first class, postage prepaid, at their last
address as shall appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively presumed to have
been duly given whether or not the Registered Holder receives such notice.
Not less than five (5) business days prior to the mailing to the Registered
Holders of the Warrants of the notice of redemption, the Company shall
deliver or cause to be delivered to the Representative a similar notice
telephonically and confirmed in writing together with a list of the
Registered Holders (including their respective addresses and number of
Warrants beneficially owned) to whom such notice of redemption has been or
will be given.
(c) The notice of redemption shall specify (i) the Redemption Price,
(ii) the Redemption Date, which shall in no event be less than thirty (30)
days after the date of mailing of such notice, (iii) the place where the
Warrant Certificate shall be delivered and the Redemption Price shall be
paid, and (iv) that the right to exercise the Warrant shall terminate at 5:00
p.m. (New York time) on the business day immediately preceding the Redemption
Date. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such
redemption except as to a holder (a) to whom notice was not mailed or (b)
whose notice was defective. An affidavit of the Warrant Agent or the
Secretary or Assistant Secretary of the Company that notice of redemption has
been mailed shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m. (New
York time) on the business day immediately preceding the Redemption Date.
The Redemption Price payable to the Registered Holders shall be mailed to
such persons at their addresses of record.
SECTION 10. CONCERNING THE WARRANT AGENT.
(a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder, be deemed to make any
representations as to the validity or value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any securities or
other property delivered upon exercise of any Warrant or whether any stock
issued upon exercise of any Warrant is fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be
made any adjustment of the Purchase Price or the Redemption Price provided in
this Agreement, or to determine whether any fact exists which may require any
such adjustments, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in making the
same. It shall not (i) be liable for any recital or statement of fact
contained herein or for any action taken, suffered or omitted by it in
reliance on any Warrant Certificate or other document or instrument believed
by it in good faith to be genuine and to have been signed or presented by the
proper party or parties, (ii) be responsible for any failure on the part of
the Company to comply with any of its covenants and obligations contained in
this Agreement or in any Warrant Certificate, or (iii) be liable for any act
or omission in connection with this Agreement except for its own negligence,
bad faith or willful misconduct.
13
(c) The Warrant Agent may at any time consult with counsel satisfactory
to it (who may be counsel for the Company or for the Representative) and
shall incur no liability or responsibility for any action taken, suffered or
omitted by it in good faith in accordance with the opinion or advice of such
counsel.
(d) Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument signed
by the Chairman of the Board of Directors, Chief Executive Officer, President
or any Vice President (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any
action taken, suffered or omitted by it in accordance with such notice,
statement, instruction, request, direction, order or demand reasonably
believed by it to be genuine.
(e) The Company agrees to pay the Warrant Agent reasonable compensation
for its services hereunder and to reimburse it for its reasonable expenses
hereunder; the Company further agrees to indemnify the Warrant Agent and save
it harmless from and against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done or omitted by
the Warrant Agent in the execution of its duties and powers hereunder except
losses, expenses and liabilities arising as a result of the Warrant Agent's
negligence, bad faith or willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own negligence, bad faith or willful
misconduct), after giving 30 days' prior written notice to the Company. At
least 15 days prior to the date such resignation is to become effective, the
Warrant Agent shall cause a copy of such notice of resignation to be mailed
to the Registered Holder of each Warrant Certificate at the Company's
expense. Upon such resignation, or any inability of the Warrant Agent to act
as such hereunder, the Company shall appoint in writing a new warrant agent.
If the Company shall fail to make such appointment within a period of 15 days
after it has been notified in writing of such resignation by the resigning
Warrant Agent, then the Registered Holder of any Warrant Certificate may
apply to any court of competent jurisdiction for the appointment of a new
warrant agent. Any new warrant agent, whether appointed by the Company or by
such a court, shall be a bank or trust company having a capital and surplus,
as shown by its last published report to its stockholders, of not less than
$100,000,000 or a stock transfer company. After acceptance in writing of
such appointment by the new warrant agent is received by the Company, such
new warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant
Agent, without any further assurance, conveyance, act or deed; but if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and delivered by the
resigning Warrant Agent. Not later than the effective date of any such
appointment the Company shall file notice thereof with the resigning Warrant
Agent and shall forthwith cause a copy of such notice to be mailed to the
Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged, any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent or any new warrant agent shall be a successor warrant agent
under this Agreement without any further act, provided that such corporation
is eligible for appointment as
14
successor to the Warrant Agent under the provisions of the preceding
paragraph. Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed to the Company and to the
Registered Holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same
manner and to the same extent and with like effect as though it were not
Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a period of two years from the
date of exercise any Warrant Certificate received by it upon such exercise.
SECTION 11. MODIFICATION OF AGREEMENT.
The Warrant Agent and the Company may by supplemental agreement make any
changes or corrections in this Agreement (i) that they shall deem appropriate
to cure any ambiguity or to correct any defective or inconsistent provision
or manifest mistake or error herein contained; or (ii) that they may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Warrant Certificates; provided, however, that this Agreement
shall not otherwise be modified, supplemented or altered in any respect
except with the consent in writing of the Registered Holders representing not
less than 66-2/3% of the Warrants then outstanding; provided, further, that
no change in the number or nature of the securities purchasable upon the
exercise of any Warrant, or to increase the Purchase Price therefor or to
accelerate the Warrant Expiration Date, shall be made without the consent in
writing of the Registered Holder of the Warrant Certificate representing such
Warrant, other than such changes as are presently specifically prescribed by
this Agreement as originally executed. In addition, this Agreement may not
be modified, amended or supplemented without the prior written consent of the
Representative, other than to cure any ambiguity or to correct any provision
which is inconsistent with any other provision of this Agreement or to make
any such change that is necessary or desirable and which shall not adversely
affect the interests of the Representative and except as may be required by
law.
SECTION 12. NOTICES.
All notices, requests, consents and other communications hereunder shall
be in writing and shall be deemed to have been made when delivered or mailed
first-class registered or certified mail, postage prepaid, as follows: if to
the Registered Holder of a Warrant Certificate, at the address of such holder
as shown on the registry books maintained by the Warrant Agent; if to the
Company, at 000 X. Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxx, M.D., Chief Executive Officer, or at such other
address as may have been furnished to the Warrant Agent in writing by the
Company; and if to the Warrant Agent, at the Corporate Office. Copies of any
notice delivered pursuant to this Agreement shall also be delivered to
Security Capital Trading, Inc., ________________________, New York, New York,
_____________________, Attention: General Counsel, or at such other address
as may have been furnished to the Company and the Warrant Agent in writing.
15
SECTION 13. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to conflicts of laws.
SECTION 14. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Representative, the Warrant Agent and their respective
successors and assigns and the holders from time to time of Warrant
Certificates or any of them. Nothing in this Agreement is intended or shall
be construed to confer upon any other person any right, remedy or claim, at
equity or in law, or to impose upon any other person any duty, liability or
obligation.
SECTION 15. TERMINATION.
This Agreement shall terminate at the close of business on the Warrant
Expiration Date or such earlier date upon which all Warrants have been
exercised or redeemed, except that the Warrant Agent shall account to the
Company for cash held by it and the provisions of Section 10 hereof shall
survive such termination.
SECTION 16. COUNTERPARTS.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
[CONTINUES ON NEXT PAGE]
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
[SEAL]
PROSPECT MEDICAL HOLDINGS, INC.
By: ________________________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
AMERICAN STOCK TRANSFER AND
TRUST COMPANY, as Warrant Agent
By: ________________________________
Name:
Title:
17
EXHIBIT A
---------
VOID AFTER _________, 2003
WARRANTS
CERTIFICATE OF
REDEEMABLE WARRANT TO
PURCHASE ONE SHARE OF COMMON STOCK
PROSPECT MEDICAL HOLDINGS, INC.
CUSIP ______
THIS CERTIFIES THAT, FOR VALUE RECEIVED, _____________________________
or registered assigns (the "Registered Holder") is the owner of the number of
Redeemable Warrants (the "Warrants") specified above. Each Warrant initially
entitles the Registered Holder to purchase, subject to the terms and
conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common Stock,
$.01 par value, of Prospect Medical Holdings, Inc., a Delaware corporation
(the "Company"), at any time between _______________, 1999 (the "Initial
Warrant Exercise Date"), and the Expiration Date (as hereinafter defined)
upon the presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the corporate
office of American Stock Transfer and Trust Company, as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $8.40 (the
"Purchase Price"), subject to adjustment as provided in Section 8 of the
Warrant Agreement, in lawful money of the United States of America in cash or
by check made payable to the Warrant Agent for the account of the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated
_________________, 1998 [date of the Prospectus], between the Company and the
Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock
subject to purchase upon the exercise of each Warrant represented hereby are
subject to modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case
of the exercise of less than all the Warrants represented hereby, the Company
shall cancel this Warrant Certificate upon the surrender hereof and shall
execute and deliver a new Warrant Certificate or Warrant Certificates of like
tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on the
date which is immediately preceding the fourth anniversary of the Initial
Warrant Exercise Date. If each such date shall in the State of New York be a
holiday or a day on which the banks are authorized to close, then the
Expiration Date shall mean 5:00 p.m. (New York time) on the next following
day which in the State of New York is not a holiday or a day on which banks
are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such
securities is effective or an exemption thereunder is available. The Company
has covenanted and agreed that, to the extent required by applicable federal
securities laws, it will file a registration statement under the Federal
securities laws or a post-effective amendment to a then effective
registration statement, use its reasonable best efforts to cause such filed
registration statement to become effective and to keep any such effective
registration statement current while any of the Warrants are outstanding, and
deliver a prospectus which complies with Section 10(a)(3) of the Act to the
Registered Holder exercising this Warrant. This Warrant shall not be
exercisable by a Registered Holder in any state where such exercise would be
unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the Corporate Office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an
equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment and payment of
any tax or other charge imposed in connection therewith or incident thereto,
for registration of transfer of this Warrant Certificate at such office, a
new Warrant Certificate or Warrant Certificates representing an equal
aggregate number of Warrants will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, at a redemption price of $0.10 per
Warrant (subject to adjustment as provided in the Warrant Agreement), at any
time commencing after ______________, 1999
[the first anniversary of the effective date of the Registration Statement],
provided that the average closing bid price for the Common Stock as reported
by Nasdaq (or the closing sale price, if the Common Stock is then traded on a
national securities exchange), shall have equaled or exceeded $18.00 per
share for any twenty (20) trading days within a period of thirty (30)
consecutive trading days ending on the fifth trading day prior to the Notice
of Redemption, as defined below (subject to adjustment in the event of any
stock splits or other similar events). Notice of redemption (the "Notice of
Redemption") shall be given not later than the thirtieth day before the date
fixed for redemption, all as provided in the Warrant Agreement. On and after
the date fixed for redemption, the Registered Holder shall have no rights
with respect to the Warrants except to receive the redemption price upon
surrender of this Warrant Certificate.
2
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary, except as provided in
the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
conflicts of laws.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile by two of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: ________________________
PROSPECT MEDICAL HOLDINGS, INC.
[SEAL]
By: ______________________________
Name:
Title:
By: ______________________________
Secretary
COUNTERSIGNED:
AMERICAN STOCK TRANSFER AND
TRUST COMPANY, as Warrant Agent
By: ______________________________
Authorized Officer
3
SUBSCRIPTION FORM
-----------------
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
____________ Warrants represented by this Warrant Certificate, and to
purchase the securities issuable upon the exercise of such Warrants, and
requests that certificates for such securities shall be issued in the name of:
________________________________________
________________________________________
________________________________________
(please insert social security
or other identifying number)
and be delivered to
________________________________________
________________________________________
________________________________________
(please print or type name and address) and if such number of Warrants shall
not be all the Warrants evidenced by this Warrant Certificate, that a new
Warrant Certificate for the balance of such Warrants be registered in the
name of, and delivered to, the Registered Holder at the address stated below.
Dated:_________________
________________________________________
________________________________________
________________________________________
Address
________________________________________
Social Security or Taxpayer
Identification Number
________________________________________
Signature Guaranteed
ASSIGNMENT
----------
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, _____________________ , hereby sells, assigns and
transfers unto
________________________________________
________________________________________
________________________________________
________________________________________
(please print or type name and address
and insert social security or
other identifying number)
_______________________ of the Warrants represented by this Warrant Certificate,
and hereby irrevocably constitutes and appoints ___________________________
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: _______________ ________________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO
THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND
MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.
