NEW YORK HEALTH CARE, INC.
AND
CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
----------
REDEEMABLE WARRANT AGREEMENT
Dated as of _____________, 1996
AGREEMENT, dated as of this ________ day of ___________ , 1996, between NEW
YORK HEALTH CARE, INC., a New York corporation (the "Company"), and CONTINENTAL
STOCK TRANSFER AND TRUST COMPANY, as Warrant Agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, in connection with (i) the offering to the public pursuant to the
Prospectus (the "Prospectus") contained in the Company's Registration Statement
on Form SB-2 (Registration No. 333-08155) of up to 1,050,000 shares of the
Company's common stock, $.01 par value per share (the "Common Stock"), (ii) the
offering to the public pursuant to the Prospectus of up to 2,100,000 redeemable
warrants (the "Warrants"), with two Warrants entitling the holder thereof to
purchase one additional share of Common Stock, (iii) the over-allotment option
to purchase up to an additional 157,500 shares of Common Stock and/or 315,000
Warrants, (the "Over-allotment Option"), and (iv) the sale to RAS Securities
Corp. ("RAS"), its successors and assigns (the "Representative"), of warrants
(the "Representative's Warrants") to purchase up to 105,000 shares of Common
Stock and/or 210,000 Warrants, the Company will issue up to 2,625,000 Warrants
(subject to increase as provided in the Representative's Warrant Agreement and
herein); 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 and exchange of certificates representing the
Warrants and the exercise of the Warrants.
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, RAS, 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) "Common Stock" shall mean stock of the Company of any class
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.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor) at which at any particular time its principal business in
New York, New York, shall be administered, which office is located on the
date hereof at 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) "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 (i) the Warrant Certificate representing such Warrant,
with the exercise form thereon duly executed by the Registered Holder
hereof or his attorney duly authorized in writing, and (ii) payment in cash
or by 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.
(d) "Initial Warrant Exercise Date" shall mean _____________,1997.
(e) "Initial Warrant Redemption Date" shall mean _____________, 1998.
(f) "Purchase Price" shall mean, subject to modification and
adjustment as provided in Section 8, $4.00 per share and further subject to
the Company's right, in its sole discretion, to decrease the Purchase
Price.
(g) "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.
(h) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to
elect a majority of the Board of Directors of such corporation (regardless
of whether or not at the time stock of any other class or classes of such
corporation shall have or may have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned by the
Company or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
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(i) "Transfer Agent" shall mean Continental Stock Transfer and Trust
Company, or its authorized successor.
(j) "Underwriting Agreement" shall mean the underwriting agreement
dated _________ , 1996 between the Company and the Representative relating
to the purchase for resale to the public of 1,050,000, shares of Common
Stock and 2,100,000 Warrants plus an over-allotment option of 157,500
shares of Common Stock and/or 315,000 Warrants.
(k) "Representative's Warrant Agreement" shall mean the agreement
dated as of , 1996 between the Company and the Representative relating to
and governing the terms and provisions of the Representative's Warrants.
(l) "Warrant Certificate" shall mean a certificate representing each
of the Warrants substantially in the form annexed hereto as Exhibit A.
(m) "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 __________ , 2001, or, 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,
subject to the Company's right, prior to the Warrant Expiration Date, in
its sole discretion, to extend such Warrant Expiration Date on five
business days prior written notice to the Registered Holders.
(n) "Warrant Agent" shall mean Continental Stock Transfer and Trust
Company, or its authorized successor.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Two Warrants shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrants 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, subject to
modification and adjustment as provided in Section 8. The Warrants shall be
exercisable only in pairs.
(b) Upon execution of this Agreement, Warrant Certificates representing
2,100,000 Warrants to purchase up to an aggregate of 1,050,000 shares of Common
Stock (subject to
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modification and adjustment as provided in Section 8) shall be executed by the
Company and delivered to the Warrant Agent.
(c) Upon exercise of the Over-allotment Option, in whole or in part,
Warrant Certificates representing up to 315,000 Warrants to purchase up to an
aggregate of 157,500 shares of Common Stock (subject to modification and
adjustment as provided in Section 8) shall be executed by the Company and
delivered to the Warrant Agent.
(d) Upon exercise of the Representative's Warrants as provided therein,
Warrant Certificates representing all or a portion of 210,000 Warrants to
purchase up to an aggregate of 105,000 shares of Common Stock (subject to
modification and adjustment as provided in Section 8 hereof and in the
Representative's Warrant Agreement), shall be countersigned, issued and
delivered by the Warrant Agent upon written order of the Company signed by its
Chairman of the Board, President or a Vice President and by its Treasurer or an
Assistant Treasurer or its Secretary or an Assistant Secretary.
(e) From time to time, up to the Warrant Expiration Date, as the case may
be, 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. No Warrant Certificates shall be issued except (i) Warrant
Certificates initially issued hereunder, (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, (iv) Warrant Certificates issued pursuant to the
Representative's Warrant Agreement (including Warrants in excess of the
Representative's Warrants to purchase 105,000 shares of Common Stock and/or
210,000 Warrants issued as a result of the anti-dilution provisions contained in
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.
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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 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).
(b) Warrant Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or any Vice President and by its Treasurer or
an Assistant Treasurer 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 shall be
manually 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.
SECTION 4. Exercise.
(a) Warrants in denominations of two or whole number multiples thereof may
be exercised at any time commencing with the Initial Warrant Exercise Date, and
ending at the close of business on the Warrant Expiration Date, upon the terms
and subject to the conditions set forth herein (including the provisions set
forth in Sections 5 and 9 hereof) and in the applicable Warrant Certificate.
Warrants shall be deemed to have been exercised immediately prior to the close
of business on the Exercise Date, provided that the Warrant Certificate
representing such Warrants,
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with the exercise form thereon duly executed by the Registered Holder thereof or
his attorney duly authorized in writing, together with payment in cash or by
check made payable to the Warrant Agent for the account of the Company, of an
amount in lawful money of the United States of America equal to the applicable
Purchase Price has been received in good funds by the Warrant Agent. The person
entitled to receive the securities deliverable upon such exercise shall be
treated for all purposes as the holder of such securities as of the close of
business on the Exercise Date. As soon as practicable on or after the Exercise
Date and in any event within five business days after such date, 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 Warrants, the Warrant Agent shall promptly notify the Company in
writing of such fact and of the number of securities delivered upon such
exercise and, subject to subsection (b) below, shall cause all payments of an
amount in cash or by check made payable to the order of the Company, equal to
the Purchase Price, to be deposited promptly in the Company's bank account.
(b) At any time upon the exercise of any Warrants after one (1) year and
one day from the date hereof, the Warrant Agent shall, on a daily basis, within
two business days after such exercise, notify the Representative, and its
successors or assigns, of the exercise of any such Warrants and shall, on a
weekly basis (subject to collection of funds constituting the tendered Purchase
Price, but in no event later than five business days after the last day of the
calendar week in which such funds were tendered), remit to the Representative
(so long as the Representative solicited the exercise of such Warrants as
indicated upon the Subscription Form attached to the Warrant Certificate
tendered for exercise), an amount equal to five percent (5%) of the Purchase
Price of such Warrants being then exercised unless (1) the Representative shall
have notified the Warrant Agent that the payment of such amount with respect to
such Warrants is violative of the General Rules and Regulations promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
the rules and regulations of the National Association of Securities Dealers,
Inc. ("NASD") or applicable state securities of "blue sky" laws, or (2) the
Warrants are those underlying the Representative's Warrants, or (3) the market
price of the Common Stock on the
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subject Exercise Date is lower than the Purchase Price, or (4) the Warrants are
held in a discretionary account, or (5) the Warrants are exercised in an
unsolicited transaction, in any of which events the Warrant Agent shall pay such
amount to the Company; provided that the Warrant Agent shall not be obligated to
pay any amounts pursuant to this Section 4(b) during any week that such amounts
payable are less than $1,000 and the Warrant Agent's obligation to make such
payments shall be suspended until the amount payable aggregate $1,000, and
provided further, that, in any event, any such payment (regardless of amount)
shall be made not less frequently than monthly.
(c) The Company shall not be required to issue fractional shares upon 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 the New York Stock Exchange ("NYSE") or the American Stock
Exchange ("AMEX") or is traded on The Nasdaq National Market ("
Nasdaq/NM"), 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/NM 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 either the NYSE or the AMEX and is not traded on Nasdaq/NM,
but is quoted or reported on Nasdaq, the current market value of a share of
Common Stock shall be the average of the last reported closing bid and
asked prices (or the last sale price, if then reported by Nasdaq) of
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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 as quoted or
reported on Nasdaq, as the case may be; or
(3) If the Common Stock is not listed or admitted to unlisted trading
privileges on either of the NYSE or the AMEX, and is not traded on
Nasdaq/NM or quoted or reported on Nasdaq, but is listed or admitted to
unlisted trading privileges on the BSE or other national securities
exchange (other than the NYSE or the AMEX), 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 has the
highest average daily trading volume for the Common Stock on such day; or
(4) If the Common Stock is not listed or admitted to unlisted trading
privileges on any national securities exchange, or listed for trading on
Nasdaq/NM or quoted or reported 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 Quotation Bureau, Inc. on the last
business day prior to the date of exercise of the Warrants; or
(5) If the Common Stock is not listed or admitted to unlisted trading
privileges on any national securities exchange, or listed for trading on
Nasdaq/NM or quoted or reported on Nasdaq, and bid and asked prices of the
Common Stock are not reported by the National Quotation Bureau, Inc., 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 in accordance with generally accepted accounting
principles, consistently applied.
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 delivery thereof, be duly and validly issued and
fully
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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, use its best efforts to cause the same to become
effective and use its best efforts to keep such registration statement current
while any of the Warrants are outstanding and deliver a prospectus which
complies with Section 10(a)(3) of the Securities Act of 1933, as amended, (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
Securities and Exchange Commission (the "Commission") stating that it would not
take any enforcement action if such registration is not effected). The Company
will use its 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 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.
(d) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to 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.
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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 so exchanged shall be surrendered
to the Warrant Agent at its Corporate Office, and the Company shall execute and
the Warrant Agent shall countersign, issue and deliver in exchange therefor the
Warrant Certificate or Certificates which the Register Holder making the
exchange shall be entitled to receive.
b) The Warrant Agent shall keep, at such office, books in which, subject to
such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and the transfer thereof. Upon due presentment for registration of
transfer of any Warrant Certificate at such office, the Company shall execute
and the Warrant Agent shall 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 any 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 or transfer and subscription, in form
satisfactory to the Company and the Warrant Agent, duly executed by the
Registered Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates. However, the Company may require payment 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 shall
be promptly canceled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof of each Warrant represented
thereby (notwithstanding any notations of ownership or writing thereon made by
anyone other than the Company or the Warrant Agent) for all purposes and shall
not be affected by any notice to the contrary.
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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 countersign and deliver in lieu thereof a new
Warrant Certificate 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)(i) Except as hereinafter provided, in the event the Company shall, at
any time or from time to time after the date hereof, issue any shares of Common
Stock for a consideration per share less than the "Fair Market Value" (as
defined in Section 8(g)) 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.
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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 are offered by the Company for subscription, or (ii) the
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, in each case, without
deduction for any expenses incurred by the Company in connection with such
transaction.
(B) In case of the issuance or sale (other than as a dividend or other
distribution on any stock of the Company) 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 on the basis of a record of values of 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,
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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 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.
(ii) 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 two Warrants 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.
(b) 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 Section
8(a)(i) and as provided below) less than the Fair Market Value 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 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, shall be reduced to a price
determined by making the computation in accordance with the provisions of
Section 8(a)(i) hereof, provided that:
(A) The aggregate maximum number of shares of Common Stock, as
the case may be, 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
purchase 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 such options, rights or warrants;
provided, however, that upon the expiration or other termination of
such options, rights
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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)(i) 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)(i) 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(b), or in the price per share or ratio at which
the securities referred to in subsection (B) of this Section 8(b) are
convertible or
- 14 -
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 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.
(c) 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 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 of the Warrant Agent
a statement signed by its President or a Vice President and by its Treasurer or
an Assistant Treasurer 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 Section 8(a) and (b). The above provisions of this Section 8(c) shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
- 15 -
(d) 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(e) 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.
(e) After each adjustment of the Purchase Price pursuant to this
Section 8, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer 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 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 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.
(f) No adjustment of the Purchase Price shall be made as a result of
or in connection with (A) the issuance of shares of Common Stock underlying
the Warrants or the units issuable upon exercise of the Representative's
Warrants pursuant to the Representative's Warrant Agreement, or (B) 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.
- 16 -
(g) "Fair Market Value" shall mean the value of a share of Common
Stock as determined in accordance with the following provisions:
(1) If the Common Stock is listed or admitted to unlisted trading
privileges on the NYSE or the AMEX or is traded on the Nasdaq/NM, the
Fair Market Value of a share of Common Stock shall be equal to the
average of the closing sale price of the Common Stock during the
thirty (30) trading days immediately preceding the date of the event
which requires the determination of Fair Market Value on whichever of
such exchanges or Nasdaq/NM had the total highest daily trading volume
for the Common Stock during such thirty (30) day trading period.
(2) If the Common Stock is not listed or admitted to unlisted
trading privileges on either the NYSE or the AMEX and is not traded on
Nasdaq/NM, but is quoted or reported on Nasdaq, the Fair Market Value
of a share of Common Stock shall be the average of the last reported
closing bid and asked prices (or the last sale price, if then reported
on Nasdaq) of the Common Stock during the thirty (30) trading days
immediately preceding the date of event which requires the
determination of Fair Market Value.
(3) If the Common Stock is not listed or admitted to unlisted
trading privileges on either of the NYSE or the AMEX and is not traded
on Nasdaq/NM or quoted or reported on Nasdaq, but is listed or
admitted to unlisted trading privileges on the BSE or another national
securities exchange (other than the NYSE or the AMEX), the Fair Market
Value of a share of Common Stock shall be the average of the closing
sale price of the Common Stock during the thirty (30) trading days
immediately preceding the date of the event which requires the
determination of Fair Market Value.
(4) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for
trading on Nasdaq/NM or quoted or reported on Nasdaq, but is traded in
the over-the-counter market, the Fair Market Value of a share of
Common Stock shall be the average of the average of the last reported
bid and asked prices of the Common Stock reported by the National
Quotation Bureau, Inc. for the thirty (30) trading days immediately
preceding the date of the event which requires the determination of
Fair Market Value.
(5) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for
trading on Nasdaq/NM or quoted or reported on
- 17 -
Nasdaq, and bid and asked prices of the Common Stock are not reported
by the National Quotation Bureau, Inc., the Fair 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 requiring a determination of fair
market value, determined in accordance with general accepted
accounting principles, consistently applied.
SECTION 9. Redemption.
(a) Commencing on the Initial Warrant Redemption Date, the Company may, on
30 days' prior written notice redeem all the Warrants (other than the Warrants
underlying the Representative's Warrants, which shall not be redeemable except
as set forth in the Representative's Warrant Agreement) at five cents ($.05) per
Warrant, provided, however, that before any such call for redemption of Warrants
can take place the closing sale price of the Common Stock as quoted on the
principal market on which such shares shall then be trading, shall have, for
each of the twenty (20) consecutive trading days ending on the tenth (10th) day
prior to the date on which the notice contemplated by (b) and (c) below is
given, equalled or exceeded $6.00 per share (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 so redeemable, it shall give or cause notice to such effect to be given
to the Representative in the same manner that notice is required to be given by
the Representative's Warrant Agreement. The Representative may, at its option,
solicit exercises of the Warrants. In the event that the Representative does not
commence solicitation of exercises of the Warrants within thirty (30) days of
notice from the Company, the Company may give notice of redemption to the
Registered Holders of the Warrants by mailing to such Registered 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
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
- 18 -
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 date fixed for redemption, 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, (iv) that
the Representative is the Company's warrant solicitation agent and may receive
the commission contemplated by Section 4(b) hereof, and (v) that the right to
exercise the Warrant shall terminate at 5:00 p.m. (New York time) on the
business day immediately preceding the date fixed for redemption. The date fixed
for the redemption of the Warrants shall be 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.
(e) 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 the provisions regarding
contribution) as the provisions pursuant to which the Company has agreed to
indemnify the Underwriters contained in Section 7 of the Underwriting Agreement.
(f) Five business days prior to the Redemption Date, the Company shall
furnish to the Representative (i) an opinion of counsel to the Company, dated
such date and addressed to Representative, and (ii) a "cold comfort" letter
dated such date addressed to the Representative,
- 19 -
signed by the independent public accountants who have issued a report on the
Company's financial statements included in such registration statement, in each
case covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(g) The Company shall as soon as practicable after the Redemption Date, and
in any event within 15 months thereafter, make "generally available to its
security holders" (within the meaning of Rule 158 under the Act) an earnings
statement (which need not be audited) complying with Section 11(a) of the Act
and covering a period of at least 12 consecutive months beginning after the
Redemption Date.
(h) The Company shall deliver within five business days prior to the
Redemption Date copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to such registration statement and
permit the Representative to do such investigation, upon reasonable advance
notice, with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the NASD. Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as the
Representative shall reasonably request.
SECTION 10. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a ministerial capacity
for the Company and the Representative, 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.
- 20 -
(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 provided in this Agreement, or to determine
whether any fact exists which may require any such adjustment, or with respect
to the nature or extent of any such adjustment, 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
gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel satisfactory to
it (who may be counsel for the Company) 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, 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.
(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 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 gross
negligence 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 gross negligence or willful misconduct), after giving
30 days' prior written notice to the Company. At
- 21 -
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 the Company shall appoint in writing a new 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 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 $10,000,000 or a stock
transfer company doing business in Massachusetts or New York. 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 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
- 22 -
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; (ii) to reflect an increase in the
number of Warrants which are to be governed by this Agreement resulting from a
subsequent public offering of Company securities which includes warrants having
the same terms and conditions as the Warrants originally covered by or
subsequently added to this Agreement under this Section 11; or (iii) 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 that 66-2/3% of the Warrants then outstanding (including,
for this purpose Warrants issuable to the Representative pursuant to the
Representative's Warrants, whether or not 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, shall be
made without the consent in writing of the Registered Holder of the Warrant
Certificate, other than such changes as are 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.
- 23 -
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 postage prepaid, or delivered to a telegraph office for transmission
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 New York Health Care, Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx
00000, Attention: Xxxxx Xxxxx, President, 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 its Corporate Office. Copies of any notice delivered pursuant
to this Agreement shall be delivered to RAS at RAS Securities Corp., 0 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xx. Xxxxxx X. Xxxxxxxxx, or at such
other address as may have been furnished to the Company and the Warrant Agent in
writing.
SECTION 13. Construction.
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 Warrant Agent and their respective successors and assigns and the
holders from time to time of Warrant Certificates or any of them. Except as
hereinafter stated, nothing in this Agreement is intended or shall be construed
to confer upon any other person any right, remedy or claim or to impose upon any
other person any duty, liability or obligation. The Underwriters (as defined in
the Underwriting Agreement) are, and shall at all times irrevocably be deemed to
be, third-party beneficiaries of this Agreement, with full power, authority and
standing to enforce the rights granted to it hereunder.
- 24 -
SECTION 15. Counterparts.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the first date first above written.
NEW YORK HEALTH CARE, INC. CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
By:_____________________________ By: _____________________________
Xxxxx Xxxxx, President
- 25 -
EXHIBIT A
No. W _______ VOID AFTER _______________, 2001
________________ WARRANTS
REDEEMABLE WARRANT CERTIFICATE TO
PURCHASE ONE SHARE OF COMMON STOCK
NEW YORK HEALTH CARE, 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. Two Warrants initially
entitle 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 New York Health Care, Inc., a New York corporation (the "Company"), at
any time between ___________________, 1997 (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 Continental Stock
Transfer and Trust Company, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as Warrant
Agent, or its successor (the "Warrant Agent"), accompanied by payment of $4.00
per share, subject to adjustment (the "Purchase Price"), 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 Redeemable Warrant Agreement (the "Warrant Agreement"), dated
___________ , 1996, by and 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 Warrant represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and
- 26 -
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
___________ , 2001. 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) 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 it will file a registration statement under the Federal
securities laws, use its best efforts to cause the same to become effective, use
its best efforts to keep such registration statement current, if required under
the Act, 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
of 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 Warrants 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 $.05 per
Warrant, at any time commencing one year after the Initial Warrant Exercise
Date, provided that (i) the closing bid price for the Common Stock is reported
by The Nasdaq Stock Market, Inc. ("Nasdaq"), if the Common Stock is then traded
in the over-the-counter market or (ii) the closing sale price, if the Common
Stock is then traded on Nasdaq/NM or a national securities exchange, shall have
equalled or exceeded for each of the twenty (20) consecutive trading days ending
on the tenth (10) day prior to the Notice of Redemption, as defined below, $6.00
per share (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
- 27 -
after the date fixed for redemption, the Registered Holder shall have no rights
with respect to the Warrants except to receive the $.05 per Warrant upon
surrender of this Warrant Certificate.
Under certain circumstances, RAS Securities Corp. shall be entitled to
receive an aggregate of five percent (5%) of the Purchase Price of the Warrants
represented hereby.
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:__________________, 1996
[SEAL] NEW YORK HEALTH CARE, INC.
By: _____________________________
Xxxxx Xxxxx, President
By: _____________________________
Xxxxx Xxxxxxxxx, Secretary
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
as Warrant Agent
By: _____________________________
Name: ___________________________
Title: __________________________
- 28 -
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 name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
-------------------------
-------------------------
-------------------------
(please print or type name and address)
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.
- 29 -
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1 The exercise of these Warrants was
solicited by RAS Securities Corp.
2. The exercise of these Warrants was not
solicited.
Dated: _____________________________ X ______________________________
______________________________
______________________________
Address
______________________________
Social Security or Taxpayer
Identification Number
______________________________
Signature Guaranteed
______________________________
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ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ______________________________, hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
-------------------------
-------------------------
-------------------------
(please print or type name and address)
__________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints _________________
Attorney to transfer this Warrant Certificate on the of the Company, with full
power of substitution in the premises.
Dated: ______________________ X ________________________
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 A MEMBER OF THE MEDALLION STAMP PROGRAM.
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