FORM OF WARRANT
Exhibit
10.4
FORM
OF WARRANT
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT
SUCH
REGISTRATION IS NOT REQUIRED.
ZYNEX
MEDICAL HOLDINGS, INC.
COMMON
STOCK PURCHASE WARRANT
1. Issuance;
Certain Definitions.
In
consideration of good and valuable consideration, the receipt of which
is hereby
acknowledged by ZYNEX
MEDICAL HOLDINGS, INC.,
a
Nevada corporation (the “Company”), _________ or registered assigns (the
“Holder”) is hereby granted the right to purchase at any time until 5:00 p.m.,
New York City time, on _____(the “Expiration Date”), _________ X 0.80
OR ______ fully paid and nonassessable shares of the Company’s Common
Stock, $0.001 par value per share (the “Common Stock”), at an initial exercise
price per share (the “Exercise Price”) of $0.39 per share, subject to further
adjustment as set forth herein. Capitalized terms not otherwise herein
defined
shall have the meanings ascribed to them in the Securities Purchase
Agreement
between the Company and the original Holder dated _______, as amended
from time
to time (the “Agreement”).
2. Exercise
of Warrant.
2.1 Method
of Exercise.
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(a)
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This
Warrant is exercisable in whole or in part at any time and
from time to
time. Such exercise shall be effectuated by submitting to
the Company
(either by delivery to the Company or by facsimile transmission
as
provided in Section 9 hereof) a completed and duly executed
Notice of
Exercise (substantially in the form attached to this Warrant)
as provided
in this paragraph. The date such Notice of Exercise is faxed
to the
Company shall be the “Exercise Date,” provided that the Holder of this
Warrant tenders this Warrant Certificate to the Company within
five (5)
business days thereafter. The Notice of Exercise shall be
executed by the
Holder of this Warrant and shall indicate the number of shares
then being
purchased pursuant to such exercise. Upon surrender of this
Warrant
Certificate, together with appropriate payment of the Exercise
Price for
the shares of Common Stock purchased, the Holder shall be
entitled to
receive a certificate or certificates for the shares of Common
Stock so
purchased.
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(b)
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The
Holder shall be deemed to be the holder of the shares issuable
to it in
accordance with the provisions of this Section 2.1 on the
Exercise
Date
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2.2 Limitation
on Exercise.
Notwithstanding the provisions of this Warrant, the Agreement or of
the other
Transaction Agreements, in no event (except (i) as specifically provided
in this
Warrant as an exception to this provision, (ii) while there is outstanding
a
tender offer for any or all of the shares of the Company’s Common Stock, or
(iii) at the Holder’s option, on at least sixty-five (65) days’ advance written
notice from the Holder) shall the Holder be entitled to exercise this
Warrant,
or shall the Company have the obligation to issue shares upon such
exercise of
all or any portion of this Warrant to the extent that, after such exercise
the
sum of (1) the number of shares of Common Stock beneficially owned
by the Holder
and its affiliates (other than shares of Common Stock which may be
deemed
beneficially owned through the ownership of the unexercised portion
of the
Warrants or other rights to purchase Common Stock), and (2) the number
of shares
of Common Stock issuable upon the exercise of the Warrants with respect
to which
the determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the
outstanding
shares of Common Stock (after taking into account the shares to be
issued to the
Holder upon such exercise). For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance
with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“1934
Act”), except as otherwise provided in clause (1) of such sentence. The
Holder,
by its acceptance of this Warrant, further agrees that if the Holder
transfers
or assigns any of the Warrants, such assignment shall be made subject
to the
transferee’s or assignee’s specific agreement to be bound by the provisions of
this Section 2.2 as if such transferee or assignee were the original
Holder
hereof.
3. Reservation
of Shares.
The
Company hereby agrees that at all times during the term of this Warrant
there
shall be reserved for issuance upon exercise of this Warrant such number
of
shares of its Common Stock as shall be required for issuance upon exercise
of
this Warrant (the “Warrant Shares”).
4. Mutilation
or Loss of Warrant.
Upon
receipt by the Company of evidence satisfactory to it of the loss,
theft,
destruction or mutilation of this Warrant, and (in the case of loss,
theft or
destruction) receipt of reasonably satisfactory indemnification, and
(in the
case of mutilation) upon surrender and cancellation of this Warrant,
the Company
will execute and deliver a duplicate Warrant and any such lost, stolen,
destroyed or mutilated Warrant shall thereupon become void.
5. Rights
of the Holder.
The
Holder shall not, by virtue hereof, be entitled to any rights of a
stockholder
in the Company, either at law or equity, and the rights of the Holder
are
limited to those expressed in this Warrant and are not enforceable
against the
Company except to the extent set forth herein.
6. Protection
Against Dilution and Other Adjustments.
6.1 Adjustment
Mechanism.
Any
adjustment of the Exercise Price required pursuant to this Section
6 shall
affect only the Exercise Price and shall not result in any change in
the
number
of
shares of Common Stock which may be purchased upon the exercise of
the Warrant
after any such adjustment, except as provided in Section 6.2.
6.2 Capital
Adjustments.
In case
of any stock split or reverse stock split, stock dividend, reclassification
of
the Common Stock, recapitalization, or like capital adjustment affecting
the
Common Stock of the Company prior to the exercise of this Warrant or
its
applicable portion, the provisions of this Section 6 shall be applied
as if such
capital adjustment event had occurred immediately prior to the exercise
date of
this Warrant and the original Exercise Price had been fairly allocated
to the
stock resulting from such capital adjustment; and in other respects
the
provisions of this Section shall be applied in a fair, equitable and
reasonable
manner so as to give effect, as nearly as may be, to the purposes
hereof.
7. Transfer
to Comply with the Securities Act; Registration Rights.
7.1 Transfer.
This
Warrant has not been registered under the Securities Act of 1933, as
amended,
(the “Act”) and has been issued to the Holder for investment and not with a view
to the distribution of either the Warrant or the Warrant Shares. Neither
this
Warrant nor any of the Warrant Shares or any other security issued
or issuable
upon exercise of this Warrant may be sold, transferred, pledged or
hypothecated
in the absence of an effective registration statement under the Act
relating to
such security or an opinion of counsel satisfactory to the Company
that
registration is not required under the Act. Each certificate for the
Warrant,
the Warrant Shares and any other security issued or issuable upon exercise
of
this Warrant shall contain a legend on the face thereof, in form and
substance
satisfactory to counsel for the Company, setting forth the restrictions
on
transfer contained in this Section.
7.2 Registration
Rights.
Reference is made to the Registration Rights Agreement. The Company’s
obligations under the Registration Rights Agreement and the other terms
and
conditions thereof with respect to the Warrant Shares, including, but
not
necessarily limited to, the Company’s commitment to file a registration
statement including the Warrant Shares, to have the registration of
the Warrant
Shares completed and effective, and to maintain such registration,
are
incorporated herein by reference.
8. Early
Termination.
8.1 Change
of Control.
In the
event of, at any time prior to the Expiration Date, the consolidation
or merger
of the Company with or into another corporation (other than a merger
or other
transaction solely to effect a reincorporation of the Company into
another
state), a transaction or series of transactions to which the Company
is party
and in which is in excess of fifty percent of the voting power of the
Company is
transferred, or the sale or other disposition of all or substantially
all the
properties and assets of the Company in its entirety to any other person
occurs
(a “Change of Control”), the Company shall provide to the Holder twenty (20)
days advance written notice of such consolidation, merger or sale or
other
disposition of the Company’s assets, and this Warrant shall terminate and have
no further force and effect unless exercised upon the occurrence of
such
consolidation, merger, or similar transaction, or sale or other disposition
of
the Company’s assets.
8.2 Trading
Price.
In the
event that the Company’s Common Stock trades on the Company’s Principal Trading
Market at a price equal to or greater than 200% of the Exercise Price
for any
ten consecutive trading days prior to the Expiration Date, the Company
shall
provide the Holder with written notice of such event and the Holder
shall have
30 days from the date of the notice to exercise this Warrant. If the
Holder
shall fail to exercise this Warrant prior to the expiration of the
30 day time
period, the Warrant shall terminate and have no further force and
effect.
9. Notices.
Any
notice or other communication required or permitted hereunder shall
be in
writing and shall be delivered personally, telegraphed, sent by facsimile
transmission or sent by certified, registered or express mail, postage
pre-paid.
Any such notice shall be deemed given when so delivered personally,
telegraphed,
telexed or sent by facsimile transmission, or, if mailed, four days
after the
date of deposit in the United States mails, as follows:
If
to the
Company, to:
ZYNEX
MEDICAL HOLDINGS, INC.
0000
Xxxxxxxxx, Xxxxx X-0
Littleton,
CO 80120
Attention:
Xxxxx X. Xxxxxxx
Facsimile:
(000) 000-0000
with
a
copy to:
Holland
& Xxxx LLP
000
Xxxxxxxxxxx Xxxxxx
Suite
3200
Denver,
CO 80202
Attn:
Xxxx X. Xxxx
Fax:
(000) 000-0000
If
to the
Holder, to the address listed in the Purchase Agreement.
Any
party
may give notice in accordance with this Section to designate to another
address
or person for receipt of notices hereunder.
10. Supplements
and Amendments; Whole Agreement.
This
Warrant may be amended or supplemented only by an instrument in writing
signed
by the parties hereto. This Warrant contains the full understanding
of the
parties with respect to the subject matter hereof and thereof and there
are no
representations, warranties, agreements or understandings other than
expressly
contained herein and therein.
11. Governing
Law.
This
Warrant shall be deemed to be a contract made under the laws of the
State of
Tennessee. The Company and each Holder hereby submit to the jurisdiction
of any
state court of competent jurisdiction in and for Denver, Colorado,
or in the
United States District
Court
for
the Colorado District sitting at Arapahoe County, Colorado in any action
or
proceeding arising out of or relating to this Agreement and agree that
all
claims in respect of the action or proceeding may be heard and determined
in any
such court; agree not to bring any action or proceeding arising out
of or
relating to this Agreement in any other court; waive any defense of
inconvenient
forum to the maintenance of any action or proceeding so brought and
waive any
bond, surety, or other security that might be required of any other
Party with
respect thereto; and agree that a final judgment in any action or proceeding
so
brought shall be conclusive and may be enforced by suit on the judgment
or in
any other manner provided by law or in equity.
12. Jury
Trial Waiver.
The
Company and the Holder hereby waive a trial by jury in any action,
proceeding or
counterclaim brought by either of the parties hereto against the other
in
respect of any matter arising out or in connection with this
Warrant.
13. Counterparts.
This
Warrant may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and
all such
counterparts shall together constitute but one and the same
instrument.
14. Descriptive
Headings.
Descriptive headings of the several Sections of this Warrant are inserted
for
convenience only and shall not control or affect the meaning or construction
of
any of the provisions hereof.
IN
WITNESS WHEREOF, the Company has executed this Warrant as of the _____day
of
______, 2006.
ZYNEX
MEDICAL HOLDINGS, INC.
By:
___________________________
Name:
_________________________
Title:
__________________________
NOTICE
OF EXERCISE
TO: ZYNEX
MEDICAL HOLDINGS, INC.
0000
Xxxxxxxxx, Xxxxx X-0
Littleton,
CO 80120
Attention:
Xxxxx X. Xxxxxxx
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1.
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The
undersigned hereby elects to purchase ______________ shares
(the
“Shares”)
of the _________________ Stock of Zynex Medical Holdings,
Inc. pursuant to
the terms of the attached Warrant, and tenders herewith payment
of the
purchase price in full.
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2.
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Please
issue a certificate or certificates representing the Shares
in the name of
the undersigned or in such other name as is specified
below:
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___________________________________________
(Print
Name)
Address:
__________________________________________
___________________________________________
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3.
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The
undersigned confirms that the Shares are being acquired for
the account of
the undersigned for investment only and not with a view to,
or for resale
in connection with, the distribution thereof and that the
undersigned has
no present intention of distributing or selling the
Shares.
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__________________________ ________________________________________________
(Date) (Signature)
________________________________________________
(Print
Name)
