WARRANT AGREEMENT
Agreement made as of __________ __, 1997, between Dental/Medical Diagnostic
Systems, Inc., a Delaware corporation with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Company"), and
American Stock Transfer & Trust Company, a ___________________ corporation with
offices at ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (herein called "Warrant Agent").
WHEREAS, the Company is engaged in a public offering of Common Stock and
Warrants ("Public Offering") and in connection therewith, has determined to
issue and deliver up to (i) 1,725,000 (including up to 225,000 that may be
issued pursuant to the Underwriter's over-allotment option) Redeemable Common
Stock Purchase Warrants ("Public Warrants") to the public investors and (ii) an
aggregate of 150,000 Warrants to ▇.▇. ▇▇▇▇▇▇▇▇ & Co., Inc. ("MHM" or the
"Underwriter") or its respective designees ("Underwriter's Warrants" and
together with the Public Warrants, the "Warrant(s)"), each of such Warrants
evidencing the right of the holder thereof to purchase one share of common
stock, $.01 par value per share, of the Company's Common Stock ("Common Stock")
for $5.00; and
WHEREAS, the Company has filed with the Securities and Exchange Commission
a Registration Statement, No. 333-22507 on Form SB-2 ("Registration Statement")
for the registration, under the Securities Act of 1933, as amended, of, among
others, the Warrants and the Common Stock issuable upon exercise of the
Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange, redemption and exercise of the
Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the
Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are
necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the
valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the Warrant
Agent to act as agent for the Company for the Warrants, and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in accordance
with the terms and conditions set forth in this Agreement.
2. WARRANTS.
2.1. FORM OF WARRANT. Each Warrant certificate shall be issued in
registered form only, shall be in substantially the form of Exhibit A hereto,
the provisions of which are incorporated herein and shall be signed by, or bear
the facsimile signature of, the Chairman of the Board or President
and Secretary or Assistant Secretary of the Company and shall bear a facsimile
of the Company's seal. In the event the person whose facsimile signature has
been placed upon any Warrant certificate shall have ceased to be Chairman of the
Board or President and Secretary or Assistant Secretary of the Company before
such Warrant certificate is issued, it may be issued with the same effect as if
he had not ceased to be such at the date of issuance. The Warrants represented
by a Warrant certificate may not be exercised until such certificate has been
countersigned by the Warrant Agent as provided in Section 2.3 hereof.
2.2. EFFECT OF COUNTERSIGNATURE. Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant certificate shall be invalid
and of no effect.
2.3. EVENTS FOR COUNTERSIGNATURE. The Warrant Agent shall countersign a
Warrant certificate only upon the occurrence of either of the following events:
(i) if the Warrant certificate is to be issued in exchange or
substitution for one or more previously countersigned Warrant certificates, as
hereinafter provided, or
(ii) if the Company instructs the Warrant Agent to do so.
2.4. REGISTRATION.
2.4.1. WARRANT REGISTER. The Warrant Agent shall maintain books
("Warrant Register"), for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the Company.
2.4.2. REGISTERED HOLDER. Prior to due presentment for
registration of transfer of any Warrant certificate, the Company and the Warrant
Agent may deem and treat the person in whose name such Warrant certificate shall
be registered upon the Warrant Register ("registered holder"), as the absolute
owner of such Warrant and of each Warrant represented thereby (notwithstanding
any notation of ownership or other writing on the Warrant certificate made by
anyone other than the Company or the Warrant Agent), for the purpose of any
exercise thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
3. TERMS AND EXERCISE OF WARRANTS
3.1. WARRANT PRICE. Each Warrant certificate shall, when countersigned by
the Warrant Agent, entitle the registered holder thereof, subject to the
provisions of such Warrant certificate and of this Warrant Agreement, to
purchase from the Company the number of shares of Common Stock stated therein,
at the price of $5.00 per whole share, subject to the adjustments provided in
Section 4 hereof. The term "Warrant Price" as used in this Warrant Agreement
refers to the price per share at which Common Stock may be purchased at the time
a Warrant is exercised.
3.2. DURATION OF WARRANTS. Subject to Section 3.3.6 hereof, a Warrant may
be exercised only during the period ("Exercise Period") commencing on
___________ ___, 1998, and terminating on the earlier of ___________ ___, 2002,
or the date fixed for redemption of the Warrant as provided in Section 6 of this
Agreement ("Expiration Date"). Each Warrant not
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exercised on or before its expiration date shall become void, and all rights
thereunder and all rights in respect thereof under this Agreement shall cease at
the close of business on its Expiration Date. The Company in its sole
discretion may extend the duration of the Warrants by delaying the Expiration
Date.
3.3. EXERCISE OF WARRANTS.
3.3.1. PAYMENT. A Warrant, when countersigned by the Warrant
Agent, may be exercised by the registered holder thereof by surrendering the
certificate representing such Warrant, at the office of the Warrant Agent, or at
the office of its successor as Warrant Agent, in the Borough of Manhattan, City
and State of New York, with the subscription form, as set forth on the Warrant
certificate and in substantially the form of Exhibit A hereto, duly executed,
and by paying in full, in lawful money of the United States, in cash, good
certified check or bank draft payable to the order of the Company, the Warrant
Price for each full share of Common Stock as to which the Warrant is exercised
and any and all applicable taxes due in connection with the exercise of the
Warrant, the exchange of the Warrant for the Common Stock, and the issuance of
the Common Stock.
3.3.2. ISSUANCE OF CERTIFICATES. As soon as practicable after the
exercise of any Warrant and the clearance of the funds in payment of the Warrant
Price, the Company shall issue to the registered holder of such Warrant a
certificate or certificates for the number of full shares of Common Stock to
which he is entitled, registered in such name or names as may be directed by
him, and if such Warrant shall not have been exercised in full, a new
countersigned Warrant certificate for the number of shares as to which such
Warrant shall not have been exercised. Notwithstanding the foregoing, the
Company shall not be obligated to deliver any securities pursuant to the
exercise of a Warrant unless a registration statement under the Securities Act
of 1933 with respect to the securities is effective. Warrants may not be
exercised by, or securities issued to, any registered holder in any state in
which such exercise would be unlawful.
3.3.3. VALID ISSUANCE. All shares of Common Stock issued upon the
proper exercise of a Warrant in conformity with this Agreement shall be validly
issued.
3.3.4. DATE OF ISSUANCE. Each person in whose name any such
certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
the Warrant certificate was surrendered and payment of the Warrant Price was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
3.3.5. WARRANT SOLICITATION AND WARRANT SOLICITATION FEE.
a. The Company has engaged the Underwriter, on a non-exclusive
basis, as its agent for the solicitation of the exercise of the Warrants. The
Company, at its cost, will (i) assist the Underwriter with respect to such
solicitation, if requested by the Underwriter and (ii) provide the Underwriter,
and direct the Company's transfer and warrant agent to deliver to the
Underwriter, lists of the record, and to the extent known, beneficial owners of
the Company's Warrants. Accordingly, the Company hereby instructs the Warrant
Agent to cooperate with the Underwriter in every respect in connection with the
Underwriter's solicitation activities, including,
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but not limited to, providing to the Underwriter, at the Company's cost, a list
of record and beneficial holders of the Warrants and circulating a prospectus or
offering circular disclosing the compensation arrangements referenced in Section
3.3.5(b) hereinbelow to holders of the Warrants at the time of exercise of the
Warrants. In addition to the conditions set forth in Section 3.3.5(b)
hereinbelow, the Underwriter shall only accept payment of the warrant
solicitation fee provided in Section 3.3.5(b) if it has provided bona fide
services in connection with the exercise of the Warrants. In addition to
soliciting, either orally or in writing, the exercise of Warrants by a Warrant
holder, such services may also include disseminating information, either orally
or in writing, to Warrant holders about the Company or the market for the
Company's securities, or assisting in the processing of the exercise of
Warrants.
b. In each instance in which a Warrant is exercised, the Warrant
Agent shall promptly give written notice of such exercise to the Company and the
Underwriter ("Warrant Agent's Exercise Notice"). If, upon the exercise of any
Warrant more than one year from the Effective Date, (i) the market price of the
Company's Common Stock is greater than the Warrant Price, (ii) disclosure of
compensation arrangements was made both at the time of the original offering and
at the time of exercise (by delivery of the Prospectus or as otherwise required
by applicable law, rule or regulation), (iii) the exercise of the Warrant was
solicited by the Underwriter, (iv) the Warrant was not held in a discretionary
account, and (v) the solicitation of the exercise of the Warrant was not in
violation of Regulation M (as such rule or any successor rule may be in effect
as of such time of exercise) promulgated under the Securities Exchange Act of
1934, then the Warrant Agent, simultaneously with the distribution of proceeds
to the Company received upon exercise of the Warrant(s) so exercised, shall, on
behalf of the Company, pay from the proceeds received upon exercise of the
Warrant(s), a fee of 4% of the Warrant Price to the Underwriter, provided that
the Underwriter delivers to the Warrant Agent within ten (10) business days from
the date on which the Underwriter has received the Warrant Agent's Exercise
Notice, a certificate that the conditions set forth in the preceding clauses
(iii), (iv) and (v) have been satisfied. The Underwriter 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.
c. The provisions of this Section 3.3.5. may not be modified,
amended or deleted without the prior written consent of the Underwriter.
4. ADJUSTMENTS.
4.1. STOCK DIVIDENDS - SPLIT-UPS. If after the date hereof, and subject to
the provisions of Section 4.5 below, the number of outstanding shares of Common
Stock is increased by a stock dividend payable in shares of Common Stock or by a
split-up of shares of Common Stock or other similar event, then, on the
effective date thereof, the number of shares issuable on exercise of each
Warrant shall be increased in proportion to such increase in outstanding shares
and the then applicable Warrant Price shall be correspondingly decreased.
4.2. AGGREGATION OF SHARES. If after the date hereof, and subject to the
provisions of Section 4.5, the number of outstanding shares of Common Stock is
decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the effective date of such
consolidation, combination or reclassification, the number of shares issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in
outstanding shares and the then applicable Warrant Price shall be
correspondingly increased.
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4.3. REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. If after the date
hereof any capital reorganization or reclassification of the Common Stock of the
Company, or consolidation or merger of the Company with another corporation, or
the sale of all or substantially all of its assets to another corporation or
other similar event shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful and
fair provision shall be made whereby the Warrant holders shall thereafter have
the right to purchase and receive, upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, such shares of stock, securities, or
assets as may be issued or payable with respect to or in exchange for the number
of outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the Warrant holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Warrant Price
and of the number of shares purchasable upon the exercise of the Warrants) shall
thereafter be applicable, as nearly as may be in relation to any share of stock,
securities, or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation, merger, or sale unless prior to
the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing such
assets, shall assume by written instrument executed and delivered to the Warrant
Agent the obligation to deliver to the Warrant holders such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase.
4.4. NOTICES OF CHANGES IN WARRANT. Upon every adjustment of the Warrant
Price or the number of shares issuable on exercise of a Warrant, the Company
shall give written notice thereof to the Warrant Agent, which notice shall state
the Warrant Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares purchasable at such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Upon the occurrence of any event
specified in Sections 4.1., 4.2., or 4.3., then, in any such event, the Company
shall give written notice in the manner set forth above of the record date for
such dividend, distribution, or subscription rights, or the effective date of
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Such notice shall also specify the date as
of which the holders of Common Stock of record shall participate in such
dividend, distribution, or subscription rights, or shall be entitled to exchange
their Common Stock for stock, securities, or other assets deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such event.
4.5. NO FRACTIONAL SHARES. Notwithstanding any provision contained in this
Warrant Agreement to the contrary, the Company shall not issue fractional shares
upon exercise of Warrants. If, by reason of any adjustment made pursuant to
this Section 4, the holder of any Warrant would be entitled, upon the exercise
of such Warrant, to receive a fractional interest in a share, the number of
shares of Common Stock to be received shall be rounded off to the nearest whole
number.
4.6. FORM OF WARRANT. The form of Warrant need not be changed because of
any adjustment pursuant to this Section 4, and Warrants issued after such
adjustment may state the
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same Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement. However, the Company may at any
time in its sole discretion make any change in the form of Warrant that the
Company may deem appropriate and that does not affect the substance thereof, and
any Warrant thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant or otherwise, may be in the form as so
changed.
5. TRANSFER AND EXCHANGE OF WARRANTS.
5.1. REGISTRATION OF TRANSFER. The Warrant Agent shall register the
transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of a Warrant certificate for transfer, properly
endorsed with signatures properly guaranteed and accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Warrant certificate
representing an equal aggregate number of Warrants shall be issued and the old
Warrant certificate shall be canceled by the Warrant Agent. The Warrant
certificate so canceled shall be delivered by the Warrant Agent to the Company
from time to time upon request.
5.2. PROCEDURE FOR SURRENDER OF WARRANTS. Warrant certificates may be
surrendered to the Warrant Agent, together with a written request for exchange,
and thereupon the Warrant Agent shall issue in exchange therefor one or more new
Warrant certificates as requested by the registered holder of the Warrant
certificates so surrendered, representing an equal aggregate number of Warrants;
provided, however, that in the event that a Warrant certificate surrendered for
transfer bears a restrictive legend, the Warrant Agent shall not cancel such
Warrant certificate and issue new Warrant certificates in exchange therefor
until the Warrant Agent has received an opinion of counsel for the Company
stating that such transfer may be made and indicating whether the new Warrant
certificates must also bear a restrictive legend.
5.3. FRACTIONAL WARRANTS. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant. The number of
Warrants to be delivered shall be rounded off to the nearest whole number.
5.4. SERVICE CHARGES. No service charge shall be made for any exchange or
registration of transfer of Warrants.
5.5. WARRANT EXECUTION AND COUNTERSIGNATURE. The Warrant Agent is hereby
authorized to countersign and to deliver, in accordance with the terms of this
Agreement, the Warrants required to be issued pursuant to the provisions hereof,
and the Company, whenever required by the Warrant Agent, will supply the Warrant
Agent with Warrant certificates duly executed on behalf of the Company for such
purpose.
6. REDEMPTION.
6.1. REDEMPTION. Not less than all of the outstanding Warrants may be
redeemed, at the option of the Company, after they become exercisable and prior
to the Expiration Date, at the office of the Warrant Agent, upon the notice
referred to in Section 6.2., at the price of $.01 per Warrant ("Redemption
Price"), provided that (a) the last sale price of the Common Stock has been at
least one hundred and ninety percent (190%) of the then effective exercise price
of the Public Warrants on each of the ten (10) consecutive trading days ending
on the third business day prior
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to the date on which notice of redemption is given, the satisfaction of which
condition shall be certified by the Company and (b) the Company has obtained the
prior written consent of the Underwriter. The provisions of this Section 6.1
may not be modified, amended or deleted without the prior written consent of the
Underwriter.
6.2. DATE FIXED FOR, AND NOTICE OF, REDEMPTION. In the event the Company
shall elect to redeem all or any part of the outstanding Warrants, the Company
shall fix a date for the redemption. Notice of redemption shall be mailed by
first class mail, postage prepaid, by the Company or the Company's agent at its
direction not less than 30 days from the date fixed for redemption to the
registered holders of the outstanding Warrants to be redeemed at their last
address as they shall appear on the registration books. Any notice mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the registered holder received such notice.
6.3. EXERCISE AFTER NOTICE OF REDEMPTION. The outstanding Warrants may be
exercised in accordance with Section 3 of this Agreement at any time after
notice of redemption shall have been given by the Company pursuant to
Section 6.2. hereof and prior to the date fixed for redemption. On and after
the redemption date, the record holder of the outstanding Warrants shall have no
further rights except to receive, upon surrender of the outstanding Warrants,
the redemption price.
6.4. OUTSTANDING WARRANTS ONLY. The Company understands that the
redemption rights provided for by this Section 6 apply only to outstanding
Warrants. To the extent a person holds rights to purchase Warrants, such
purchase rights shall not be extinguished by redemption. However, once such
purchase rights are exercised, the Company may redeem the Warrants issued upon
such exercise provided that the criteria for redemption is met. The provisions
of this Section 6.4 may not be modified, amended or deleted without the prior
written consent of the Underwriter.
7. OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS.
7.1. NO RIGHTS AS STOCKHOLDER. A Warrant does not entitle the registered
holder thereof to any of the rights of a stockholder of the Company, including,
without limitation, the right to receive dividends, or other distributions,
exercise any preemptive rights to vote or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election of
directors of the Company or any other matter.
7.2. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANTS. If any Warrant
certificate is lost, stolen, mutilated, or destroyed, the Company and the
Warrant Agent may on such terms as to indemnity or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated Warrant
certificate, include the surrender thereof), issue a new Warrant certificate of
like denomination, tenor, and date as the Warrant certificate so lost, stolen,
mutilated, or destroyed. Any such new Warrant certificate shall constitute a
substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant certificate shall be at any time
enforceable by anyone.
7.3. RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Warrants issued pursuant to this Agreement.
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7.4. REGISTRATION OF COMMON STOCK. The Company agrees that prior to the
date that the Warrants become exercisable it shall file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement, if
possible, or a new registration statement, under the Securities Act of 1933, and
it shall take such action as is necessary to qualify for sale, in those states
in which the Warrants were initially offered by the Company, the Common Stock
issuable upon exercise of the Warrants. In either case, the Company shall cause
the same to become effective prior to the date that the Warrants become
exercisable and shall maintain the effectiveness of such registration statement
and keep current a prospectus thereunder and maintain such qualification until
the expiration of the Public Warrants and the Underwriter's Warrants in
accordance with the provisions of this Agreement. The provisions of this
Section 7.4 may not be modified, amended or deleted without the prior written
consent of the Underwriter.
8. CONCERNING THE WARRANT AGENT AND OTHER MATTERS.
8.1. PAYMENT OF TAXES. The Company will from time to time promptly pay all
taxes and charges that may be imposed upon the Company or the Warrant Agent in
respect of the issuance or delivery of shares of Common Stock upon the exercise
of Warrants, but the Company shall not be obligated to pay any transfer taxes in
respect of the Warrants or such shares.
8.2. RESIGNATION, CONSOLIDATION, OR MERGER OF WARRANT AGENT.
8.2.1. APPOINTMENT OF SUCCESSOR WARRANT AGENT. The Warrant Agent,
or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities (other than those incurred
prior to such resignation or discharge) hereunder after giving sixty (60) days'
notice in writing to the Company. If the office of the Warrant Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such resignation or incapacity by the Warrant
Agent or by a holder of Warrants (who shall, with such notice, submit his
Warrant for inspection by the Company), then the holder of any Warrant may apply
to the Supreme Court of the State of New York for the County of New York for the
appointment of a successor Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be a corporation organized,
existing and in good standing and authorized under the laws of the state in
which it was incorporated to exercise corporate trust powers, shall maintain an
office in the Borough of Manhattan, City and State of New York for the transfer
of the Warrants and, if not incorporated in the State of New York, shall be
authorized to do business in the State of New York as a foreign corporation, and
subject to supervision or examination by federal or state authority and shall be
authorized to serve as Warrant Agent for the Warrants under the Securities
Exchange Act of 1934, as amended. After appointment, any successor Warrant
Agent shall be vested with all the authority, powers, rights, immunities,
duties, and obligations of its predecessor Warrant Agent with like effect as if
originally named as Warrant Agent hereunder, without any further act or deed;
but if for any reason it becomes necessary or appropriate, the predecessor
Warrant Agent shall execute and deliver, at the expense of the Company, an
instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request
of any successor Warrant Agent the Company shall make, execute, acknowledge, and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
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8.2.2. NOTICE OF SUCCESSOR WARRANT AGENT. In the event a successor
Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.
8.2.3. MERGER OR CONSOLIDATION OF WARRANT AGENT. Any corporation
into which the Warrant Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the
Warrant Agent shall be a party, if it shall be eligible to serve as Warrant
Agent under Section 8.2.1, shall be the successor Warrant Agent under this
Agreement without any further act.
8.3. FEES AND EXPENSES OF WARRANT AGENT.
8.3.1. REMUNERATION. The Company agrees to pay the Warrant Agent
reasonable remuneration for its services as such Warrant Agent hereunder and
will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2. FURTHER ASSURANCES. The Company agrees to perform, execute,
acknowledge, and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances as may
reasonably be required by the Warrant Agent for the carrying out or performing
of the provisions of this Agreement.
8.4. LIABILITY OF WARRANT AGENT.
8.4.1. RELIANCE ON COMPANY STATEMENT. Whenever in the performance
of its duties under this Warrant Agreement, the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a statement signed by the
President of the Company and delivered to the Warrant Agent. The Warrant Agent
may rely upon such statement for any action taken or suffered in good faith by
it pursuant to the provisions of this Agreement.
8.4.2. INDEMNITY. The Warrant Agent shall be liable hereunder only
for its own negligence or willful misconduct. The Company agrees to indemnify
the Warrant Agent and save it harmless against any and all liabilities,
including judgments, costs and reasonable counsel fees, for anything done or
omitted by the Warrant Agent in the execution of this Agreement except as a
result of the Warrant Agent's negligence, willful misconduct, or bad faith.
8.4.3. EXCLUSIONS. The Warrant Agent shall have no responsibility
with respect to the validity of this Agreement or with respect to the validity
or execution of any Warrant (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Warrant; nor shall it be responsible to
make any adjustments required under the provisions of Section 4. hereof or
responsible for the manner, method, or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment;
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Warrant or as to whether any shares
of Common Stock will when issued be valid and fully paid and nonassessable.
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8.5. ACCEPTANCE OF AGENCY. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account for, and
pay to the Company, all moneys received by the Warrant Agent for the purchase of
shares of the Company's Common Stock through the exercise of Warrants.
9. MISCELLANEOUS PROVISIONS.
9.1. SUCCESSORS. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns.
9.2. NOTICES. Any notice, statement or demand authorized by this Warrant
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant to or by the Company shall be sufficiently given or made if sent by
certified mail, or private courier service, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent), as
follows:
DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
TROOP ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Any notice, statement or demand authorized by this Agreement to be given or made
by the holder of any Warrant or by the Company to or on the Warrant Agent shall
be sufficiently given or made if sent by certified mail or private courier
service, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company), as follows:
AMERICAN STOCK TRANSFER & TRUST COMPANY
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
9.3. APPLICABLE LAW; JURISDICTION. The validity, interpretation, and
performance of this Agreement and of the Warrants shall be governed in all
respects by the law of the State of New York, without giving effect to
principles of conflicts of law. The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York
or the United States District Court for the Southern District of New York, and
irrevocably submits, to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenience forum. Any such
process or summons to be served upon the Company may be served by transmitting a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth
10
in Section 9.2 hereof. Such mailing shall be deemed personal service and shall
be legal and binding upon the Company in any action, proceeding or claim.
9.4. PERSONS HAVING RIGHTS UNDER THIS AGREEMENT. Nothing in this Agreement
expressed and nothing that may be implied from any of the provisions hereof is
intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the parties hereto and the registered holders of the
Warrants and, for the purposes of Sections 3.3.5, 6.1 through 6.4 and 7.4
hereof, the Underwriter, any right, remedy, or claim under or by reason of this
Warrant Agreement or of any covenant, condition, stipulation, promise, or
agreement hereof. The Underwriter shall each be deemed to be a third-party
beneficiary of this Agreement with respect to such Sections. All covenants,
conditions, stipulations, promises, and agreements contained in this Warrant
Agreement shall be for the sole and exclusive benefit of the parties hereto (and
the Underwriter to the extent set forth above) and their successors and assigns
and of the registered holders of the Warrants.
9.5. EXAMINATION OF THE WARRANT AGREEMENT. A copy of this Agreement shall
be available at all reasonable times at the office of the Warrant Agent in the
Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Warrant. The Warrant Agent may require any such holder
to submit his or her Warrant for inspection by it.
9.6. COUNTERPARTS. This Agreement 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.
9.7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and are not part of this Warrant Agreement and shall not affect the
interpretation thereof.
11
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto under their respective corporate seals as of the day and year first above
written.
Attest: DENTAL/MEDICAL DIAGNOSTIC
SYSTEMS, INC.
By:
----------------------------- ----------------------------
Name: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Title: Chairman and Chief
Executive Officer
AMERICAN STOCK TRANSFER & TRUST
COMPANY
Attest:
By:
---------------------------- ----------------------------
Name: Name:
Title: Title:
12
WARRANT CERTIFICATE
PURCHASE OF COMMON STOCK __________________________
VOID AFTER 5:00 P.M. -- ON NUMBER OF WARRANTS
AMERICAN BANKNOTE COMPANY
__________________
__________________
▇▇▇-▇▇▇-▇▇▇▇
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DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC. CUSIP
THIS CERTIFIES THAT, for value received
, or registered assigns ("Registered Holder") is the owner of the number of
warrants ("Warrants") specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth
in this Certificate and in the Warrant Agreement (as hereinafter defined),
one fully paid and nonassessable share (subject to adjustment as hereinafter
provided) of the Common Stock, par value $.01 per share ("Common Stock") of
Dental/Medical Diagonstic Systems, Inc. a Delaware corporation ("Company"),
at any time commencing ________________ and before 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 office of American Stock Transfer & Trust Company, as warrant agent,
or its successor ("Warrant Agent") accompanied by payment of the $__________
("Purchase Price") per Warrant, subject to adjustment as hereinafter
provided, in lawful money of the United States in cash, or by good certified
or official bank check payable to the order of the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms set forth in the
Warrant Agreement ("Warrant Agreement") dated as of ______________, by and
between the Company and the Warrant Agent, to all the terms and provisions of
which the Registered Holder, by acceptance of this Warrant Certificate, hereby
assents. 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. Reference is made to the Warrant Agreement for a
more complete statement of the rights and limitations of the rights of the
Registered Holder hereof, the rights and duties of the Warrant Agent and the
rights and obligations of the Company thereunder. Copies of the Warrant
Agreement are on file at the corporate trust office of the Warrant Agent.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on
_________________, or such earlier date as the Warrant 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 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.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder. The Company shall not be required upon the exercise of
the Warrants represented hereby to issue any fractions of shares, but shall
make an adjustment therefor in cash on the basis of the market value of any
such fractional interest (computed as provided in the Warrant Agreement). In
case this Warrant is exercised with respect to less than all of such shares,
a new Warrant certificate or certificates will be issued on such surrender
for the number of Warrants represented hereby which were not so exercised.
Prior to the exercise of any Warrant represented hereby, the 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 said Warrant Agreement. Prior to the due
presentment for registration of transfer of this Warrant Certificate, 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 notation of ownership or other writing hereon made by anyone other than a
duly authorized officer of the Company or the Warrant Agent), for all
purposes, and neither the Company nor the Warrant Agent shall be affected by
any notice to the contrary.
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.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of any Warrants 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
or a post-effective amendment to its existing registration statement and will
use its best efforts to cause the same to become effective and to keep it
current while any of the Warrants are outstanding and exercisable. The
Warrants represented hereby shall not be exercisable by a Registered Holder
in any state where such exercise would be unlawful.
Not less than all of the Warrants may be redeemed at the option of the
Company, subject to the terms of the Warrant Agreement, after the Warrants
become exercisable and prior to their expiration, by paying in cash, or
certified or bank check, therefor $.01 per Warrant, upon at least thirty (30)
days' written notice mailed to the Registered Holders. Such conditions
include that the last sales price on the Common Stock has been at least one
hundred and ninety percent (190%) of the then effective exercise price of the
Warrants, subject to adjustment as provided in the Warrant Agreement on each
of the ten (10) consecutive trading days during a period ending on the third
day prior to the date on which the notice of redemption is given. Each
Warrant not exercised on or before the date called for in such notice shall
become void, and all rights thereunder shall terminate.
If this Warrant shall be surrendered for exercise within any period
during which the transfer books for Common Stock or other securities
purchasable upon the exercise of this Warrant are closed for any purpose, the
Company shall not be required to make delivery of certificates for the
securities purchasable upon such exercise until the date of the reopening of
said transfer books.
The Company has agreed to pay a fee of 4% of the Purchase Price to ▇.▇.
▇▇▇▇▇▇▇▇ & Co., Inc. upon certain conditions as specified in the Warrant
Agreement upon the exercise of any Warrants represented hereby.
This Warrant Certificate and each Warrant represented hereby shall be
construed in accordance with and governed by the laws of the State of
New York.
This Warrant Certificate shall not be 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 herein.
Dated: DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
COUNTERSIGNED: ATTEST:
AMERICAN STOCK TRANSFER & TRUST COMPANY By:
BY: WARRANT AGENT
AUTHORIZED OFFICER ASSISTANT SECRETARY PRESIDENT
PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF WARRANT CERTIFICATE
TO: American Stock Transfer & Trust Company
▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The undersigned hereby exercises, according to the terms and conditions
thereof, the right to purchase ________________________ Shares of Common
Stock, evidenced by the within Warrant Certificate, and herewith makes
payment of the purchase price in full.
NAME:
------------------------------- ---------------------------------
PAYMENT ENCLOSED
ADDRESS:
---------------------------- ---------------------------------
SOCIAL SECURITY NO. of Warrant Holder
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The undersigned represents that the exercise of the within Warrant was
solicited by ▇.▇. ▇▇▇▇▇▇▇▇ & Co., Inc. If not solicited by ▇.▇. ▇▇▇▇▇▇▇▇ &
Co., Inc., please write "unsolicited" in the space below. Unless otherwise
indicated, it will be assumed that the exercise was solicited by ▇.▇.
▇▇▇▇▇▇▇▇ & Co., Inc.
-------------------------------------------------
(Write "Unsolicited" on above line if not
solicited by ▇.▇. ▇▇▇▇▇▇▇▇ & Co., Inc.)
DATED: SIGNATURE:
---------------------------- ------------------------------
TRANSFER FORM
For value received_________________________hereby sells, assigns and
transfers unto____________________________________________________________
(_______________________________________) Warrants to purchase Shares of
Common Stock represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint_____________________________________________
Attorney to transfer such Warrants on the books of the within named Company with
full power of substitution in the premises.
DATED:
-------------------------------
Notice:
------------------------------------------
The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular.
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Social Security Number of Assignee
or other identifying number
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AMERICAN BANKNOTE COMPANY PRODUCTION COORDINATOR-▇▇▇▇▇▇ ▇.
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PROOF OF APRIL __, 1997
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