EXHIBIT 4.4
WARRANT AGREEMENT
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AGREEMENT, dated as of June __, 2002, by and among VERTICAL HEALTH
SOLUTIONS INC., a Florida corporation (the "Company"), REGISTRAR & TRANSFER
COMPANY, a New Jersey corporation, as Warrant Agent (the "Warrant Agent"), and
XXXXXXX XXXXXXXX SECURITIES CORPORATION ("XXXXXXX" OR THE "UNDERWRITER").
W I T N E S S E T H
WHEREAS, in connection with a public offering pursuant to a registration
statement (the "Registration Statement") on Form SB-2 declared effective by the
Securities and Exchange Commission on June __, 2002, of up to 1,600,000 Warrants
(the "Warrants") (and up to 240,000 additional warrants covered by an
over-allotment option granted by the Company to Xxxxxxx) and 160,000 Warrants
underlying the Underwriter's Warrants granted pursuant to an underwriting
agreement (the "Underwriting Agreement") dated June __, 2002 between the Company
and the Underwriter, the Company will issue up to an aggregate of 2,000,000
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 holders of
certificates representing the Warrants and the Warrant Agent, the parties hereto
agree as follows:
1. SECTION Definitions. As used herein, the following terms shall have the
following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the authorized stock of the Company of any
class, whether now or hereafter authorized, which has the right to participate
in the distribution of earnings and assets of the Company without limit as to
amount or percentage, which at the date hereof consists of 48,000,000 shares of
Common Stock, $.001 par value per share.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or its
successor) at which at any particular time its principal business shall be
administered, which office is located on the date hereof at _________, Cranford,
New Jersey ______.
(c) "Exercise Date" shall mean, as to any Warrant, the date on which the
Warrant Agent shall have received both (a) 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 (b) payment in
cash, or by official bank or certified check made payable to the Company, of an
amount in lawful money of the United States of America equal to the applicable
Purchase Price.
(d) "Initial Warrant Exercise Date" shall mean, as to each Warrant,
June __, 2002.
(e) "Purchase Price" shall mean the price to be paid upon exercise of
each Warrant in accordance with the terms hereof, which price shall be $6.25 per
share, subject to adjustment from time to time pursuant to the provisions of
Section 9 hereof, and subject to the Company's right to reduce the Purchase
Price upon notice to all Warrant Holders.
(f) "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 $.10 per Warrant, subject to adjustment from time to time pursuant to
the provisions of Section 9.
(g) "Registered Holder" shall mean the person in whose name any certificate
representing Warrants shall be registered on the books maintained by the Warrant
Agent pursuant to Section 6.
(h) "Transfer Agent" shall mean Registrar and Transfer Company, as the
Company's transfer agent, or its authorized successor, as such.
(i) "Warrant Expiration Date" shall mean, with respect to each Warrant, 5:00
p.m. (New York, New York time) on June __, 2007, or the Redemption Date as
defined in Section 8, whichever 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, New York time) on the next following day which
in the State of New York is not a holiday nor a day on which banks are
authorized to close. Upon
notice to all Warrant Holders, the Company shall have the right to extend the
Warrant Expiration Date.
2. SECTION Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase one (1) share of
Common Stock upon the exercise thereof, in accordance with the terms hereof,
subject to modification and adjustment as provided in Section 9.
(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. Upon written order of the
Company signed by its President or Chairman or a Vice President and by its
Secretary or an Assistant Secretary, the Warrant Certificates shall be
countersigned, issued and delivered by the Warrant Agent in accordance with the
terms of the Underwriting Agreement.
(c) From time to time, up to the Warrant Expiration Date, the Transfer Agent
shall countersign and deliver stock certificates in required whole number
denominations representing up to an aggregate of 2,000,000 shares of Common
Stock, subject to adjustment as described herein, upon the exercise of Warrants
in accordance with this Agreement.
(d) From time to time, up to the Warrant Expiration Date, the Warrant Agent
shall countersign and deliver Warrant Certificates in required whole number
denominations to the persons entitled thereto in connection with any transfer or
exchange permitted under this Agreement; provided that no Warrant Certificates
shall be issued except to (i) those initially issued hereunder, (ii) those
issued on or after the Initial Warrant Exercise Date, upon the exercise of fewer
than all Warrants represented by any Warrant Certificate, to evidence any
unexercised Warrants held by the exercising Registered Holder, (iii) those
issued upon any transfer or exchange pursuant to Section 6; and (iv) those
issued in replacement of lost, stolen, destroyed or mutilated Warrant
Certificates pursuant to Section 7; at the option of the Company, 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 9.
3. SECTION Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A, 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, President or any Vice President and by its Secretary or
an Assistant Secretary, by mutual 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 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 may nevertheless 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
without further action by the Company, except as otherwise provided by Section
4(a).
4. SECTION Exercise
(a) Each Warrant may be exercised by the Registered Holder thereof 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. As soon as practicable on or
after the Exercise Date, the Warrant Agent shall notify the Company in writing
of the exercise of the Warrants and forward the proceeds thereof. Promptly
following, and in any event within five (5) days after receiving authorization
from the Company, the Warrant Agent, on behalf of the Company, shall cause to be
issued and delivered by the Transfer Agent, to the person or persons entitled to
receive the same, a certificate or certificates for the securities deliverable
upon such exercise (plus a Warrant Certificate for any remaining unexercised
Warrants of the Registered Holder). Notwithstanding the foregoing, in the case
of payment made in the form of a check drawn on an account of Xxxxxxx or such
other investment banks and brokerage houses as the Company shall approve in
writing to the Warrant Agent, certificates shall immediately be issued without
prior notice to the Company or any delay. Upon the exercise of any Warrant and
clearance of the funds received, the Warrant Agent shall promptly remit the
payment received for the Warrant to the Company or as the Company may direct in
writing.
(b) If, on the Exercise Date in respect of the exercise of any Warrant at
any time on or after the first anniversary of the date hereof (i) the market
price of the Company's Common Stock is greater than the then Purchase Price of
the Warrant, (ii) the exercise of the Warrant was solicited by a member of the
National Association of Securities Dealers, Inc. ("NASD"), (iii) the Warrant was
not held in a discretionary account, (iv) the disclosure of compensation
arrangements was made both at the time of the original offering and at the time
of exercise; (v) the solicitation of the exercise of the Warrant was not in
violation of Regulation M (as such rule or any successor rule as may be in
effect as of such time of exercise) promulgated under the Securities Exchange
Act of 1934, and (vi) Xxxxxxx is designated as the soliciting NASD member, then
the Warrant Agent, simultaneously with delivery of the Common Stock upon
exercise of the Warrants shall, on behalf of the Company, pay from the
proceeds received upon exercise of the Warrant(s), a fee of five (5%) percent of
the Purchase Price to Xxxxxxx. Within five days after the exercise, the Warrant
Agent shall send to Xxxxxxx a copy of the reverse side of each Warrant
exercised. Xxxxxxx shall reimburse the Warrant Agent, upon request, for its
reasonable expenses relating to compliance with this Section 4(b). In addition,
Xxxxxxx and the Company may at any time during business hours, examine the
records of the Warrant Agent, including its ledger of original Warrant
certificates returned to the Warrant Agent upon exercise of Warrants. The
provisions of this paragraph may not be modified, amended or deleted without the
prior written consent of Xxxxxxx and the Company.
5. SECTION 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 issuance
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 (assuming payment in full of the
Purchase Price in respect thereof), be duly and validly issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof (other than those which the Company shall promptly pay or
discharge) and that upon issuance such shares shall be listed on each national
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 in good faith and as expeditiously as reasonably possible, endeavor
to secure such registration or approval. The Company will use reasonable effort
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 upon exercise of the
Warrants; provided, however, that if the 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 requiring the same had paid to the Warrant Agent
the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to requisition the
Company's Transfer Agent from time to time for certificates representing shares
of Common Stock required upon exercise of the Warrants, and the Company will
authorize the Transfer Agent to comply with all such proper requisitions. The
Company will file with the Warrant Agent a
statement setting forth the name and address of the Transfer Agent of the
Company for shares of Common Stock issuable upon exercise of the Warrants,
unless the Warrant Agent and the Transfer Agent are the same entity.
6. SECTION Exchange and Registration of Transfer
(a) Warrant Certificates may be exchanged for other Warrant Certificates
representing an equal aggregate number of Warrants of the same class or may be
transferred in whole or in part. Warrant Certificates to be exchanged shall be
surrendered to the Warrant Agent at its Corporate Office, and upon satisfaction
of all 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 its 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 its regular practice.
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 of the same
class.
(c) With respect to all Warrant Certificates presented for registration or
transfer, or for exchange or exercise, the subscription form 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 or his
attorney-in-fact duly authorized in writing.
(d) A service charge may be imposed by the Warrant Agent 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 or resignation as Warrant Agent, or, with the prior written
consent of Xxxxxxx, disposed of or destroyed, at the direction of the Company.
(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. The Warrants, which are being publicly offered with shares of
Common Stock pursuant to the Underwriting Agreement, may be purchased separately
for the shares and will be transferable separately from the Common Stock
immediately upon issuance.
7. SECTION Loss or Mutilation. Upon receipt by the Company and the Warrant
Agent of evidence satisfactory to them of the ownership of and loss, theft,
destruction or mutilation of any Warrant Certificate and (in case of loss, theft
or destruction) of indemnity satisfactory to them, and (in the 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
Warrant Agent that the 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 comply with
such other reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe.
8. SECTION Redemption
(a) Commencing six months from the effective date of the Registration
Statement on not less than thirty (30) days prior written notice, the Warrants
may be redeemed, at the option of the Company, at a redemption price of $0.10
per Warrant (the "Redemption Price"), provided the closing bid price of the
Company's Common Stock on The Nasdaq Stock Market as reported by the National
Quotation Bureau, Incorporated (or the last sale price, if quoted on a national
securities exchange) exceeds $10.00 for at least 5 consecutive trading days
ending on the third business day prior to the date of the notice of redemption.
All Warrants must be redeemed if any of the Warrants are redeemed.
(b) In case the Company shall desire to exercise its right to so redeem the
Warrants, it shall request the Warrant Agent, or Xxxxxxx, if the date fixed for
redemption is on or after the first anniversary of the date hereof, to mail a
notice of redemption to each of the Registered Holders of the Warrants to be
redeemed, first class, postage prepaid, not later than the thirtieth (30th) day
before the date fixed for redemption, 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.
(c) The notice of redemption shall specify (i) the Redemption Price,
(ii) the date fixed for redemption, (iii) the place where the Warrant
Certificates shall be delivered and the redemption price paid, (iv) that Xxxxxxx
will assist each Registered Holder of a Warrant in connection with the exercise
thereof (if Xxxxxxx has conducted, or caused to be conducted, the mailing) and
(v) that the right to exercise the Warrant shall terminate at 5:00 p.m. (New
York, New York time) on the business day immediately preceding the date fixed
for redemption 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
of the Secretary or an Assistant Secretary of Xxxxxxx or 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 that has been called for redemption
shall terminate at 5:00 p.m. (New York, New York time) on the business day
immediately preceding the Redemption Date. On and after the Redemption Date,
Holders of the redeemed Warrants shall have no further rights except to receive,
upon surrender of the redeemed Warrant, the Redemption Price.
(e) From and after the date specified for redemption, the Company shall, at
the place specified in the notice of redemption, upon presentation and surrender
to the Company by or on behalf of the Registered Holder thereof of one or more
Warrants to be redeemed, deliver or cause to be delivered to or upon the written
order of such Holder a sum in cash equal to the Redemption Price of each such
Warrant. From and after the date fixed for redemption and upon the deposit or
setting aside by the Company of a sum sufficient to redeem all the Warrants
called for redemption, such Warrants shall expire and become void and all rights
hereunder and under the Warrant Certificates,
except the right to receive payment of the Redemption Price, shall cease.
9. SECTION Adjustment of Exercise Price and Number of Shares of Common
Stock or Warrants.
(a) Subject to the exceptions referred to in Section 9(g), in the event the
Company shall, at any time or from time to time after the date hereof, sell any
shares of Common Stock for a consideration per share less than the lesser of the
market price of a share of Common Stock as quoted on NASDAQ or then current
Purchase Price (except for securities issued in a bona fide financing) or issue
any shares of Common Stock as a stock dividend to the holders of Common Stock,
or subdivides or combines the outstanding shares of Common Stock into a greater
or lesser number of shares (any such sale, issuance, subdivision or combination
being herein called a "Change or Shares"), then, and thereafter upon each
further Change of Shares, the applicable Purchase Price in effect immediately
prior to such Change of Shares shall be changed to a price (including any
applicable fraction of a cent) determined by multiplying the Purchase Price in
effect immediately prior thereto by a fraction, the numerator of which shall be
the sum of (a) the total number of shares of Common Stock outstanding
immediately prior to such Change of Shares and (b) the number of shares of
Common Stock which the aggregate consideration received by the Company upon such
sale, issuance, subdivision or combination (determined in accordance with
subsection f(vi) below) could have purchased at the then current Purchase Price,
and the denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such Change of Shares.
Upon each adjustment of the applicable Purchase Price pursuant to this
Section 9, the total number of shares of Common Stock purchasable upon the
exercise of each Warrant shall (subject to the provisions contained in Section
9(b)) be such number of shares (calculated to the nearest tenth) purchasable at
the applicable Purchase Price immediately prior to such adjustment multiplied by
a fraction, the numerator of which shall be the applicable Purchase Price in
effect immediately prior to such adjustment and the denominator of which shall
be the applicable Purchase Price in effect immediately after such adjustment.
(b) The Company may elect, upon any adjustment of the applicable Purchase
Price hereunder, to adjust the number of Warrants outstanding, in lieu of
adjusting the number of shares of Common Stock purchasable upon the exercise of
each Warrant as
hereinabove provided, so that each Warrant outstanding after such adjustment
shall represent the right to purchase one share of Common Stock. Each Warrant
held of record prior to such adjustment of the number of Warrants shall become
that number of Warrants (calculated to the nearest tenth) determined by
multiplying the number one by a fraction, the numerator of which shall be the
applicable Purchase Price in effect immediately prior to such adjustment and the
denominator of which shall be the applicable Purchase Price in effect
immediately after such adjustment. Upon each such adjustment of the number of
Warrants, the Redemption Price in effect immediately prior to such adjustment
also shall be adjusted by multiplying such Redemption Price by a fraction, the
numerator of which shall be the Purchase Price in effect immediately after such
adjustment and the denominator of which shall be the Purchase Price in effect
immediately prior to such adjustment. Upon each adjustment of the number of
Warrants pursuant to this Section 9, the Company shall, as promptly as
practicable, cause to be distributed to each Registered Holder of Warrant
Certificates on the date of such adjustment Warrant Certificates evidencing,
subject to Section 10, the number of additional Warrants, if any, to which such
Holder shall be entitled as a result of such adjustment or, at the option of the
Company, cause to be distributed to such Holder in substitution and replacement
for the Warrant Certificates held by him prior to the date of adjustment (and
upon surrender thereof, if required by the Company) new Warrant Certificates
evidencing the number of Warrants to which such Holder shall be entitled after
such adjustment.
(c) In case of any reclassification, capital reorganization or other change
of outstanding shares of Common Stock, or in case of any consolidation or merger
of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock), or in case of any sale or conveyance to
another corporation of the property of the Company as, or substantially as, an
entirety (other than a sale/leaseback, mortgage or other financing transaction),
the Company shall cause effective provision to be made so that each holder of a
Warrant then outstanding shall have the right thereafter, by exercising such
Warrant, to purchase the kind and number of shares of stock or other securities
or property (including cash) receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock that might have been purchased
upon exercise of such Warrant, immediately prior to such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance. Any such provision
shall include provision for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 9. The
foregoing provisions shall similarly apply to successive reclassifications,
capital reorganizations and other changes of outstanding shares of Common Stock
and to successive consolidations, mergers, sales or conveyances.
(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(f), continue to express the applicable Purchase Price per share, the number of
shares purchasable thereunder and the Redemption Price therefor as the Purchase
Price per share, and the number of shares purchasable thereunder and the
Redemption Price therefor as were expressed in the Warrant Certificates when the
same were originally issued.
(e) After each adjustment of the Purchase Price pursuant to this Section 9,
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 applicable Purchase
Price as so adjusted, (ii) the number of shares of Common Stock purchasable upon
exercise of each Warrant after such adjustment, and, if the Company shall have
elected to adjust the number of Warrants, the number of Warrants to which the
registered holder of each Warrant shall then be entitled, and the adjustment in
Redemption Price resulting therefrom, 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 Xxxxxxx and to each registered holder of Warrants 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 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) For purposes of Section 9(a) and 9(b) hereof, the following provisions
(i) to (vi) shall also be applicable:
i) ( The number of shares of Common Stock outstanding at any given time
shall include shares of Common Stock owned or held by or for the account of the
Company and the
sale or issuance of such treasury shares or the distribution of any such
treasury shares shall not be considered a Change of Shares for purposes of said
sections.
ii) ( No Adjustment of the Purchase Price shall be made unless such
adjustment would require an increase or decrease of at least $0.10 in such
price; provided that any adjustments which by reason of this clause (ii) are not
required to be made shall be carried forward and shall be made at the time of
and together with the next subsequent adjustment which, together with any
adjustment(s) so carried forward, shall require an increase or decrease of at
least $0.10 in the Purchase Price then in effect hereunder.
iii) ( In case of (1) the sale by the Company solely for cash of any rights
or warrants to subscribe for or purchase, or any options for the purchase of,
Common Stock or any securities convertible into or exchangeable for Common Stock
without the payment of any further consideration other than cash, if any (such
convertible or exchangeable securities being herein called "Convertible
Securities"), or (2) the issuance by the Company, without the receipt by the
Company of any consideration therefor, of any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Common Stock or Convertible
Securities, in each case, if (and only if) the consideration payable to the
Company upon the exercise of such rights, warrants or options shall consist
solely of cash, whether or not such rights, warrants or options, or the right to
convert or exchange such Convertible Securities, are immediately exercisable,
and the price per share for which Common Stock is issuable upon the exercise of
such rights, warrants or options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (x) the minimum aggregate
consideration payable to the Company upon the exercise of such rights, warrants
or options, plus the consideration received by the Company for the issuance or
sale of such rights, warrants or options, plus, in the case of such Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
other than such Convertible Securities, payable upon the conversion or exchange
thereof, by (y) the total maximum number of shares of Common Stock issuable upon
the exercise of such rights, warrants or options or upon the conversion or
exchange of such Convertible Securities issuable upon the exercise of such
rights, warrants or options) is less than the then current Purchase Price
immediately prior to the date of the issuance or sale of such rights, warrants
or options, then the total maximum number of shares of Common Stock issuable
upon the exercise of such rights, warrants or options or upon the conversion or
exchange of such Convertible Securities (as of the date of the issuance or sale
of such rights, warrants or options) shall be deemed to be outstanding
shares of Common Stock for purposes of Sections 9(a) and 9(b) hereof and shall
be deemed to have been sold for cash in an amount equal to such price per share.
iv) ( In case of the sale by the Company solely for cash of any Convertible
Securities, whether or not the right of conversion or exchange thereunder is
immediately exercisable, and the price per share for which Common Stock is
issuable upon the conversion or exchange of such Convertible Securities
(determined by dividing (x) the total amount of consideration received by the
Company for the sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, other than such Convertible
Securities, payable upon the conversion or exchange thereof, by (y) the total
maximum number of shares of Common Stock issuable upon the conversion or
exchange of such Convertible Securities) is less than the then Purchase Price
immediately prior to the date of the sale of such Convertible Securities, then
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of such Convertible Securities (as of the date of the sale of such
Convertible Securities) shall be deemed to be outstanding shares of Common Stock
for purposes of Sections 9(a) and 9(b) hereof and shall be deemed to have been
sold for cash in an amount equal to such price per share.
v) ( If the exercise or purchase price provided for in any right, warrant
or option referred to in clause (iii) above, or the rate at which any
Convertible Securities referred to in clause (iii) or (iv) above are convertible
into or exchangeable for Common Stock, shall change at any time (other than
under or by reason of provisions designed to protect against dilution), the
Purchase Price then in effect hereunder shall forthwith be readjusted to such
Purchase Price as would have been obtained (1) had the adjustments made upon the
issuance or sale of such rights, warrants, options or Convertible Securities
been made upon the basis of the issuance of only the number of shares of Common
Stock theretofore actually delivered (and the total consideration received
therefor) upon the exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities, (2) had adjustments been
made on the basis of the Purchase Price as adjusted under clause (1) for all
transactions (which would have affected such adjusted Purchase Price) made after
the issuance or sale of such rights, warrants, options or Convertible
Securities, and (3) had any such rights, warrants, options or Convertible
Securities then still outstanding been originally issued or sold at the time of
such change. On the expiration of any such right, warrant or option or the
termination of any such right to convert or exchange any such Convertible
Securities, the Purchase Price then in effect hereunder shall forthwith be
readjusted to such Purchase Price as
would have been obtained (a) had the adjustments made upon the issuance or sale
of such rights, warrants, options or Convertible Securities been made upon the
basis of the issuance of only the number of shares of Common Stock theretofore
actually delivered (and the total consideration received therefor) upon the
exercise of such rights, warrants or options or upon the conversion or exchange
of such Convertible Securities and (b) had adjustments been made on the basis of
the Purchase Price as adjusted under clause (a) for all transactions (which
would have affected such adjusted Purchase Price) made after the issuance or
sale of such rights, warrants, options or Convertible Securities.
vi) ( In case of the sale for cash of any shares of Common Stock, any
Convertible Securities, any rights or warrants to subscribe for or purchase, or
any options for the purchase of, Common Stock or Convertible Securities, the
consideration received by the Company therefore shall be deemed to be the gross
sales price therefor without deducting therefrom any expense paid or incurred by
the Company or any underwriting discounts or commissions or concessions paid or
allowed by the Company in connection therewith.
(g) No adjustment to the Purchase Price or to the number of shares of Common
Stock purchasable upon the exercise of each Warrant will be made, however:
i) ( upon the grant or exercise of any other options which may hereafter be
granted or exercised under any employee, financial consultant or director
benefit plan of the Company as described in the Registration Statement or as may
be adopted by the Company in the future; or
ii) ( upon the sale or exercise of the Warrants, including without
limitation the sale or exercise of any of the Warrants underlying the Warrant
Purchase Option; or
iii) ( upon the sale of any shares of Common Stock in the public offering
pursuant to the Registration Statement, including, without limitation, shares
sold upon the exercise of any over-allotment option granted to Xxxxxxx in
connection with such offering; or
iv) ( upon the issuance or sale of Common Stock or Convertible Securities
upon the exercise of any rights or warrants to subscribe for or purchase, or any
options for the purchase of, Common Stock or Convertible Securities, whether or
not such rights, warrants or options were outstanding on the date of the
original sale of the Warrants or were thereafter issued or sold;
v) ( upon the issuance or sale of Common Stock upon conversion or exchange
of any Convertible Securities outstanding on the date of the original sale of
the Warrants, whether or not any adjustment in the Purchase Price was made or
required to be made upon the issuance or sale of such Convertible Securities and
whether or not such Convertible Securities were outstanding on the date of
original sale of the Warrants or were thereafter issued or sold; or
(vi) upon the issuance or sale of Common Stock or Convertible Securities
issued in connection with a bona fide financing determined commercially
reasonable under the circumstances by the Company's Board of Directors.
(vii) upon any amendment to or change in the terms of any rights or warrants
to subscribe for or purchase, or options for the purchase of, Common Stock or
Convertible Securities or in the terms of any Convertible Securities, including,
but not limited to, any extension of any expiration date of any such right,
warrant or option, any change in any exercise or purchase price provided for in
any such right, warrant or option, any extension of any date through which any
Convertible Securities are convertible into or exchangeable for Common Stock or
any change in the rate at which any Convertible Securities are convertible into
or exchangeable for Common Stock (other than rights, warrants, options or
Convertible Securities issued or sold after the close of business on the date of
the original issuance of the Warrants (i) for which an adjustment in the
Purchase Price then in effect was theretofore made or required to be made, upon
the issuance or sale thereof, or (ii) for which such an adjustment would have
been required had the exercise or purchase price of such rights, warrants or
options at the time of the issuance or sale thereof or the rate of conversion or
exchange of such Convertible Securities, at the time of the sale of such
Convertible Securities, or the issuance or sale of rights or warrants to
subscribe for or purchase, or options for the purchase of, such Convertible
Securities, been the price or rate as changed, in which case the provisions of
Section 9(f)(v) hereof shall be applicable if, but only if, the exercise or
purchase price thereof, as changed, or the rate of conversion or exchange
thereof, as changed, consists solely of cash or requires the payment of
additional consideration, if any, consisting solely of cash or requires the
payment of additional consideration, if any, consisting solely of cash and the
Company did not receive any consideration other than cash, if any, in connection
with such change).
(h) As used in this Section 9, the term "Common Stock" shall mean and
include the Company's Common Stock authorized on the date of the original
issuance of the Warrants
and shall also include any capital stock of any class of the Company thereafter
authorized which shall not be limited to a fixed sum or percentage in respect of
the rights of the holders thereof to participate in dividends and in the
distribution of assets upon the voluntary liquidation, dissolution or winding up
of the Company; provided, however, that the shares issuable upon exercise of the
Warrants shall include only shares of such class designated in the Company's
Certificate of Incorporation as Common Stock on the date of the original
issuance of the Warrants or (i), in the case of any reclassification, change,
consolidation, merger, sale or conveyance of the character referred to in
Section 9(c) hereof, the stock, securities or property provided for in such
section or (ii), in the case of any reclassification or change in the
outstanding shares of Common Stock issuable upon exercise of the Warrants as a
result of a subdivision or combination or consisting of a change in par value,
or from par value to no par value, or from no par value to par value, such
shares of Common Stock as so reclassified or changed.
(i) Any determination as to whether an adjustment in the Purchase Price in
effect hereunder is required pursuant to Section 9, or as to the amount of any
such adjustment, if required, shall be binding upon the holders of the Warrants
and the Company if made in good faith by the Board of Directors of the Company.
(j) If and whenever the Company shall grant to the holders of Common Stock,
as such, rights or warrants to subscribe for or to purchase, or any options for
the purchase of, Common Stock or securities convertible into or exchangeable for
or carrying a right, warrant or option to purchase Common Stock, the Company
shall concurrently therewith grant to each of the then Registered Holders of the
Warrants all of such rights, warrants or options to which each such holder would
have been entitled if, on the date of determination of stockholders entitled to
the rights, warrants or options being granted by the Company, such holder were
the holder of record of the number of whole shares of Common Stock then issuable
upon exercise (assuming, for purposes of this Section 9(j), that the exercise of
Warrants is permissible during periods prior to the Initial Warrant Exercise
Date) of his Warrants. Such grant by the Company to the holders of the Warrants
shall be in lieu of any adjustment which otherwise might be called for pursuant
to this Section 9.
10. SECTION Fractional Warrants and Fractional Shares.
(a) If the number of shares of Common Stock purchasable upon the exercise of
each Warrant is adjusted pursuant to Section 9 hereof, the Company shall
nevertheless not be required to issue fractions of shares, upon exercise of the
Warrants or otherwise, or to distribute certificates that evidence fractional
shares. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of such fractional share,
determined as follows:
i) ( If the Common Stock is listed on a National Securities Exchange or
admitted to unlisted trading privileges on such exchange or listed for trading
on the Nasdaq National or SmallCap Markets, the current value shall be the last
reported sale price of the Common Stock on such exchange on the last business
day prior to the date of exercise of the Warrant, or if no such sale is made on
such day, the average of the closing bid and asked prices for such day on such
exchange; or
ii) ( If the Common Stock is not listed or admitted to unlisted trading
privileges, the current value shall be the mean of the last reported bid and
asked prices reported by the National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of the Warrant; or
iii) ( If the Common Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the current value shall
be an amount determined in such reasonable manner as may be prescribed by the
Board of Directors of the Company.
11. SECTION Warrant Holders Not Deemed Stockholders. No holder of Warrants
shall, as such, be entitled to vote or to receive dividends or be deemed the
holder of Common Stock that may at any time be issuable upon exercise of such
Warrants for any purpose whatsoever, nor shall anything contained herein be
construed to confer upon the holder of Warrants, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance or reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger or conveyance or otherwise), or to receive
notice of meetings, or to receive dividends or subscription rights, until such
Holder shall have exercised such Warrants and been issued shares of Common Stock
in accordance with the provisions hereof.
12. SECTION Rights of Action. All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Warrants, and
any Registered Holder of a Warrant, without consent of the Warrant Agent or of
the holder of any other Warrant, may, in his own behalf and for his own benefit,
enforce against the Company his right to exercise his Warrants for the purchase
of shares of Common Stock in the manner provided in the Warrant Certificates and
this Agreement.
13. SECTION Agreement of Warrant Holders. Every holder of a Warrant, by
his acceptance thereof, consents and agrees with the Company, the Warrant Agent
and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of the Warrant
Agent by the Registered Holder thereof in person or by his attorney duly
authorized in writing and only if the Warrant Certificates representing such
Warrants are surrendered at the office of the Warrant Agent, duly endorsed or
accompanied by a proper instrument of transfer satisfactory to the Warrant Agent
and the Company in their sole discretion, together with payment of any
applicable transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the person in whose
name the Warrant Certificate is registered as the holder and as the absolute,
true and lawful owner of the Warrants represented thereby for all purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice or
knowledge to the contrary, except as otherwise expressly provided in Section 7
hereof.
14. SECTION Cancellation of Warrant Certificates. If the Company shall
purchase or acquire any Warrant or Warrants, the Warrant Certificate or Warrant
Certificates evidencing the same shall thereupon be delivered to the Warrant
Agent and canceled by it and retired. The Warrant Agent shall also cancel Common
Stock following exercise of any or all of the Warrants represented thereby or
delivered to it for transfer, split-up, combination or exchange.
15. SECTION Concerning the Warrant Agent. 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 many representations as to the validity, 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.
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 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 facts 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 or willful misconduct.
The Warrant Agent may at any time consult with counsel satisfactory to it
(who may be counsel for the Company or for the Underwriters) 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.
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, President, any Vice President, its Secretary, or
Assistant Secretary, (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 believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable compensation for its
services hereunder and to reimburse it for its reasonable expenses hereunder; it
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 negligence or willful misconduct.
In the event of a dispute under this Agreement between the Company and the
Underwriters regarding proceeds received by the Warrant Agent from the exercise
of the Warrants, the Warrant Agent shall have the right, but not the obligation,
to bring an interpleader action to resolve such dispute.
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 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 a new
warrant agent in writing. 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 Ten Million ($10,000,000.00) Dollars, 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.
Any corporation into which the Warrant Agent or any new warrant agent may
be converted or merged or 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 trust business of the 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 Holder of each Warrant Certificate.
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 effects 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.
16. SECTION Modification of Agreement. Subject to the provisions of
Section 4(b), 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 of Warrant Certificates
representing not less than 50% of the Warrants then outstanding; and provided,
further, that no change in the number or nature of the securities purchasable
upon the exercise of any Warrant, or the Purchase Price therefor, or the
acceleration of 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 specifically prescribed by this
Agreement as originally executed.
17. SECTION 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 0000 000xx Xxxxxx Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxx,
Attention: President, or at such other address as may have been furnished to the
Warrant Agreement in writing by the Company; if to the Warrant Agent, at
Registrar & Transfer Company, ; if to Xxxxxxx, at 00 Xxxxx Xxxx Xxxxxx Xxxxxxxx,
Xxxxxxx 00000.
18. SECTION Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without reference to
principles of conflict of laws.
19. SECTION Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Company, the Warrant Agent and the Underwriters, and their
respective successors and assigns, and the holders from time to time of the
Warrant Certificates. Nothing in this Agreement is intended or shall be
construed to confer upon any other person any right, remedy or claim, in equity
or at law, or to impose upon any other person any duty, liability or obligation.
20. SECTION Termination. This Agreement shall terminate at the close of
business on the Expiration Date of all the Warrants of such earlier date upon
which all Warrants have been exercised, except that the Warrant Agent shall
account to the Company for cash held by it and the provisions of Section 15
hereof shall survive such termination.
21. SECTION Counterparts. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed as of the date first above written.
VERTICAL HEALTH SOLUTIONS, INC.
By:
-----------------------------------
Authorized Officer
REGISTRAR AND TRANSFER COMPANY
By:
-----------------------------------
Authorized Officer
XXXXXXX XXXXXXXX SECURITIES CORPORATION
By:
-----------------------------------
Authorized Officer
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
No. W ________ (_____) Warrants
VOID AFTER ___________, 2007
REDEEMABLE COMMON STOCK WARRANT CERTIFICATE
FOR PURCHASE OF COMMON STOCK OF
VERTICAL HEALTH SOLUTIONS, INC.
This certifies that FOR VALUE RECEIVED _______________________ or
registered assigns (the "Registered Holder") is the owner of the number of
Redeemable Common Stock Purchase 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,
$.001 par value, of Vertical Health Solutions, Inc., a Florida corporation (the
"Company"), at any time between ______________, 2002 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 Registrar and Transfer Company as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $6.25 per share (the
"Purchase Price") in lawful money of the United States of America in cash or by
official bank or certified check made payable to the Warrant Agent.
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 as of
______________, 2002, by and among the Company, the Warrant Agent and Xxxxxxx
Davidson Securities Companies.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or 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 shares of Common Stock 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 3:00 p.m. (New York, New York
time) on _______________, 2007, or such earlier date as the Warrants shall be
redeemed. If 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 be 3:00
p.m. (New York, New York time) the next day which in the State of New York is
not a holiday nor a day in 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, with respect to such securities is effective. The
Company has covenanted and agreed that it will file a registration statement and
will use its best efforts to cause the same to become effective and to keep such
registration statement current while any of the Warrants are outstanding. 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 together with any tax or other
governmental charge imposed in connection therewith, 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.
Commencing ________________, 2002, this Warrant may be redeemed at the
option of the Company, at a Redemption Price of $.10 per Warrant, provided the
closing bid price of the Company's Common Stock on the Nasdaq SmallCap Market as
reported by the National Quotation Bureau, Incorporated (or the last sale price,
if quoted on a national securities exchange) exceeds $10.00 for at least 5
consecutive trading days ending on the third business
day prior to the date of the notice of redemption. Notice of redemption shall be
given not later than the thirtieth (30th) 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
this Warrant except to receive the $0.10 per Warrant upon surrender of this
Certificate.
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.
The Company has agreed to pay a fee of five percent (5%) of the
Purchase Price upon certain conditions as specified in the Warrant Agreement
upon the exercise of this Warrant.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
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 (2) of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated:
---------------
VERTICAL HEALTH SOLUTIONS INC.
---------------------- By:
-----------------------------------
Chairman
---------------------- By:
-----------------------------------
Secretary
[seal]
Countersigned:
REGISTRAR AND TRANSFER COMPANY
By: ___________________________
Authorized Officer
[FORM OF REVERSE OF WARRANT CERTIFICATE]
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
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
[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.
The undersigned represents that the exercise of the within Warrant was
solicited by a member of the National Association of Securities Dealers, Inc.
("NASD"). If not solicited by an NASD member, please write "unsolicited" in the
space below. Unless
otherwise indicated by listing the name of another NASD member firm, it will be
assumed that the exercise was solicited by Maidstone Financial, Inc.
---------------------------------------
Name of NASD Member if other than
Xxxxxxx Xxxxxxxx Securities Corporation
Dated:
-------------------- ---------------------------------------
Signature
---------------------------------------
Xxxxxx Xxxxxxx
---------------------------------------
Xxxx, Xxxxx and Zip Code
---------------------------------------
Taxpayer ID Number
Signature Guaranteed:
---------------------------------------
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned 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 books of the Company, with
full power of substitution in the premises.
Dated: --------------------
Signature Guaranteed:
---------------------------------------
THE SIGNATURE MUST BE GUARANTEED BY A MEDALLION BANK.
