NO. ___ EXHIBIT 4.2
EXHIBIT B
NEITHER THIS WARRANT, NOR THE SHARES OF COMMON STOCK FOR WHICH IT IS
EXERCISABLE, HAVE BEEN REGISTERED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND THIS WARRANT HAS BEEN
ISSUED IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH LAWS FOR TRANSACTIONS NOT
INVOLVING ANY PUBLIC OFFERING. THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED, PLEDGED OR DISPOSED OF IN ANY MANNER
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH LAWS COVERING
SUCH TRANSACTION OR, IN THE ABSENCE THEREOF, AN OPINION OF BUYER'S COUNSEL
ACCEPTABLE TO THE COMPANY'S COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED AND
ALL CONDITIONS NECESSARY FOR THE AVAILABILITY OF ANY EXEMPTIONS FROM SUCH
REGISTRATION REQUIREMENTS HAVE BEEN SATISFIED.
FORM OF
▇▇▇▇▇▇ HEALTHCARE INC.
STOCK PURCHASE WARRANT
This is to certify that, the Holder (as defined below) is entitled upon
the due exercise hereof to purchase from ▇▇▇▇▇▇ Healthcare Inc. a Texas
Corporation (the "Company") up to _____ of the authorized but unissued shares
(subject to adjustment as provided herein) of the $.0 1 par value Common Stock
of the Company at a price per share as specified in Paragraph (1)(ii) of the
Private Securities Subscription Agreement dated ____________, 1998 (subject to
adjustment as provided herein) and to exercise the other rights, power and
privileges hereinafter provided, all on the terms and subject to the conditions
specified herein.
SECTION 1. CERTAIN DEFINITIONS. Unless the context otherwise requires,
the following terms as used in this Warrant shall have the following meanings:
"Common Stock" shall mean the Company's $.01 par value per share
Common Stock or any stock into which such stock shall have been changed or any
stock resulting from reclassification of such stock.
"Company" shall mean ▇▇▇▇▇▇ Healthcare Inc., a Texas corporation,
and its successors and assigns.
"Exercise Date" has the meaning set forth in Section 3 hereof.
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"Exercise Price" shall mean the price specified in Paragraph
(1)(ii) of the Private Securities Subscription Agreement dated ___________, 1998
hereof, as the same shall be adjusted from time to time pursuant to the
provisions of this Warrant.
"Expiration Date" shall mean ___________, 2003.
"Fair Market Value" shall mean (i) the last sales price for a
share of Common Stock as officially reported on the principal national
securities exchange, quotation system, or domestic over-the-counter market on
which the Common Stock is at the time listed or traded at the time of
determination of such Fair Market Value or (ii) if such Common Stock is not at
such time listed on a national securities exchange, quotation system or domestic
over-the-counter market, the fair market value as determined by the Board of
Directors of the Company in good faith after review of all relevant factors.
"Holder" or "Warrant Holder" shall mean _________________, and
its successors and registered assigns of this Warrant.
"Subscription Agreement" shall mean that certain Private
Securities Subscription Agreement dated as of ______________, 1998 relating to
the purchase of Series A Convertible Preferred Stock into shares of Common Stock
as the same may be amended and modified from time to time, and "Preferred Stock"
shall mean any of the preferred stock issued thereunder.
"Warrant" means this Warrant dated as of _____________, 1998
issued to a Holder hereby and all warrants issued upon the transfer or division
of or in substitution for such Warrant.
SECTION 2. EXERCISE PRICE. The Exercise Price shall be $_______ and
shall be paid in cash or wired funds.
SECTION 3. EXERCISE. Prior to the Expiration Date, this Warrant may be
exercised by the Holder, as to all or less than all of the shares of Common
Stock covered hereby, by surrender of this Warrant at the Company's principal
office (for all purposes of this Warrant, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ or such other address as the Company may advise the registered
Holder hereof by notice given by certified or registered mail) with the form of
election to subscribe attached hereto as Exhibit A duly executed and upon tender
of payment to the Company of the Exercise Price for shares so purchased in cash
or by wired funds. Upon the date of such receipt by the Company (herein called
the "Exercise Date"), this Warrant shall be deemed to have been exercised and
the person exercising the same shall become a holder of record of shares of
Common Stock (or of the other securities or property to which he or it is
entitled upon such exercise) purchased hereunder for all purposes, and a
certificate or certificates for such shares so purchased shall be delivered to
the Holder or its transferee within a reasonable time (not exceeding 10 days)
after this Warrant shall have been exercised as set forth hereinabove. In the
event that this Warrant is exercised in part, the Company will execute and
deliver a new Warrant of like tenor exercisable for the number of shares
remaining for which this Warrant may then be exercised. If this Warrant is not
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exercised on or prior to the Expiration Date, this Warrant shall become void and
all rights of the Holder hereunder shall cease.
SECTION 4. TAXES. The Company shall pay all expenses in connection with,
and all transfer taxes and other governmental charges that may be imposed with
respect to the issue or delivery of the shares of Common Stock covered hereby
unless such tax or charge is imposed by law upon the Holder, in which case such
taxes or charges shall be paid by the Holder. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Common Stock issuable
upon exercise of this Warrant in any name other than that of the Holder, and in
such case the Company shall not be required to issue or deliver any stock
certificate until such tax or the charge has been paid or it has been
established to the satisfaction of the Company that no such tax or other charge
is due.
SECTION 5. WARRANT REGISTER. The Company shall at all times while any
portion of this Warrant remains outstanding and exercisable keep and maintain at
its principal office a register (the "Warrant Register") in which the
registration, transfer and exchange of this Warrant shall be recorded. The
Warrant Register shall contain the names and addresses of the Holder or Holders.
Any Holder of this Warrant or any portion thereof may change his or her address
as shown on the Warrant Register by written notice to the Company requesting
such change. Any notice or written communication required or permitted to be
given to the Holder may be delivered or given by mail to such Holder as shown on
the Warrant Register and at the address shown on the Warrant Register. The
Company shall not at any time, except upon the dissolution, liquidation or
winding up of the Company, close such register so as to result in preventing or
delaying the exercise or transfer of this Warrant. If at any time, the Company
shall appoint an agent (the "Warrant Agent") to maintain such register, the
Company shall promptly give notice by certified or registered mail to the
registered Holder hereof of the name of such Warrant Agent and of the place or
places at which this Warrant may be presented for transfer, exchange or
exercise. The terms of the agreement between the Company and any Warrant Agent
at any time in effect will be in conformity with the terms of this Warrant.
SECTION 6. TRANSFER. The Company shall register the transfer of any
Warrant upon records to be maintained by the Company for that purpose, upon
surrender of this Warrant, with the form of transfer authorization attached
hereto as Exhibit B duly filled in and signed, to the Company at the office
specified herein. Upon any such registration of transfer, a new Warrant, in
substantially the form of this Warrant, evidencing the Warrant rights so
transferred, shall be issued to the transferee and a new Warrant, in similar
form, evidencing the remaining Warrant rights not so transferred, if any, shall
be issued to the then registered Holder thereof. The Holder understands that
this Warrant has not been and will not be registered under the Securities Act of
1933, as amended (the "Securities Act") and that the Warrant and the shares of
Common Stock issuable upon exercise hereof may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of in the absence of an
effective registration statement under the Securities Act, relating to such
Warrant or shares; provided, however that this Warrant and the shares of Common
Stock issuable upon exercise hereof may be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of if the holder obtains a
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written opinion of counsel acceptable to the Company to the effect that the
proposed sale, assignment, transfer, pledge or other encumbrance or disposition
is exempt from registration under the Securities Act, and all other applicable
securities laws.
SECTION 7. EXCHANGE. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal offices of the Company, together with the
form of transfer authorization attached hereto duly executed, for new warrants
of like tenor and date, in such denominations as the Holder shall designate at
the time of surrender for exchange, provided that the total number of shares of
Common Stock issuable upon the exercise of the Warrant shall not be changed as a
result thereof.
SECTION 8. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees that all shares which may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be fully paid and nonassessable, free from preemptive rights, and free from all
taxes, liens, encumbrances and charges with respect to the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue). The Company further covenants and agrees that during the period within
which the rights represented by this Warrant may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of
Common Stock to provide for the exercise in full of the rights represented by
this Warrant.
(b) As long as the Warrant remains outstanding, the Company shall
maintain an office or agency (which may be the principal executive office of the
Company) where the Warrant may be presented for exercise, registration of
transfer, exchange, division or combination as provided in this Warrant.
SECTION 9. ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS.
(a) In the event the Company should at any time or from time to time
after the date of issuance hereof fix a record date for the effectuation of a
split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof, then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Exercise
Price of this Warrant shall be appropriately decreased and the number of shares
of Common Stock issuable upon exercise of this Warrant shall be. increased in
proportion to such increase of outstanding shares.
(b) If the number of shares of Common Stock outstanding at any time
after the date hereof is decreased by a combination of the outstanding shares of
Common Stock, then, following
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the record date of such combination, the Exercise Price for this Warrant shall
be appropriately increased and the number of shares of Common Stock issuable on
exercise hereof shall be decreased in proportion to such decrease in outstanding
shares.
SECTION 10. HOLDER'S RIGHTS. This Warrant shall not entitle the Holder
to any rights of a stockholder of the Company, except that should the Company,
during the period in which this Warrant is exercisable, declare a dividend upon
the Common Stock payable other than in cash out of earnings or surplus (computed
in accordance with generally accepted accounting principles consistently
applied) or other than in Common Stock or securities convertible into Common
Stock, then, thereafter, the Warrant Holder, upon exercise of this Warrant,
shall receive the number of shares of Common Stock purchasable upon such
exercise and, in addition and without further payment, the cash, stock or other
securities and/or other property which the Warrant Holder would have received by
way of dividends (otherwise than in cash out of earnings or earned surplus or in
Common Stock or securities convertible into Common Stock) and/or any other
distributions in respect of the Common Stock as if, continuously since the date
hereof, such Warrant Holder (a) had been the record holder of the number of
shares of Common Stock then being purchased, and (b) had retained all such cash,
stock and other securities (other than dividends in cash out of earnings or
earned surplus or in Common Stock or securities convertible into Common Stock)
and/or other property payable in respect of such Common Stock or in respect of
any stock or securities paid as dividends and originating directly or indirectly
from such Common Stock.
SECTION 11. NOTICE OF ADJUSTMENTS. If there shall be any adjustment as
provided in Section 9, the Company shall forthwith cause written notice thereof
to be sent by facsimile, overnight or registered mail, postage prepaid, to the
registered Holder of this Warrant at the address of such Holder shown on the
books of the Company. At the request of Holder and upon surrender of this
Warrant, the Company shall reissue this Warrant in a form conforming to such
adjustments.
SECTION 12. CASH IN LIEU OF FRACTIONAL SHARES. The Company shall not be
required to issue fractional shares upon the exercise of this Warrant. If, by
reason of any change made pursuant to Section 9 or 10 hereof, the Holder of this
Warrant would be entitled, upon the exercise of any rights evidenced hereby, to
receive a fractional interest in a share, the Company shall, upon such exercise,
purchase such fractional interest for an amount in cash equal to the fair market
value of such fractional interest, determined as of the Exercise Date.
SECTION 13. LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS. If this
Warrant is lost, stolen, mutilated, or destroyed, the Company will issue, in
exchange for and upon cancellation of the mutilated Warrant, or in substitution
for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the
form of this Warrant, of like tenor and representing the right to purchase the
equivalent number of the remaining shares of Common Stock issuable upon exercise
hereof, but, in the case of loss, theft or destruction, only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of this
Warrant and, if requested by the Company, an indemnification also satisfactory
to it (it being understood that the written agreement of the Holder shall be
sufficient
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indemnity), provided, in the case of mutilation, no indemnity shall be required
if this Warrant in identifiable form is surrendered to the Company for
cancellation.
SECTION 14. CHALLENGE TO GOOD FAITH DETERMINATION. Whenever the Board
shall be required to make a determination in good faith of the fair value of any
item under Section 9, such determination may be challenged in good faith by the
Holder, and any dispute shall be resolved by an investment banking firm of
recognized national standing in the United States selected by the Company and
acceptable to the Holder.
SECTION 15. CERTAIN LIMITATIONS. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction which, by reason
of any adjustment hereunder, would cause the current Exercise Price to be less
than the par value per share of Common Stock.
SECTION 16. NO IMPAIRMENT. The Company represents and warrants that
there are no restrictions in the Company's Articles of Incorporation or Bylaws
which prevent it from satisfying its obligation to issue the shares of Common
Stock issuable upon exercise of the Warrant. The Company shall not by any action
including, without limitation, amending its Articles of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, to avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, and will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder against impairment.
SECTION 17. APPLICABLE LAW; PAYMENTS. The validity, interpretation and
performance of this Warrant shall be governed by the laws of the State of Texas.
All payments shall be in U. S. Dollars by immediately available funds.
SECTION 18. SUCCESSORS AND ASSIGNS. This Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Company and the Holder.
SECTION 19. HEADINGS. Headings of the paragraphs in this Warrant are for
convenience and reference only and shall not, for any purpose, be deemed a part
of this Warrant.
SECTION 20. ARBITRATION. All disputes arising under this Agreement
(other than claims in equity) shall be resolved by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Company and the Holder in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. If the Company and
Holder cannot agree on an arbitrator within twenty (20) days, an arbitrator
shall be chosen by the American Arbitration Association. The arbitration shall
be held in such place in New York, New York, as may be specified by the
arbitrator (or any place agreed to by the Company, the Holder and the
arbitrator). The decision of the arbitrator shall be final and binding as to any
matters submitted under this Agreement;
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provided, however, if necessary, such decision and satisfaction procedure may be
enforced by either the Company or the Holder in any court of record having
jurisdiction over the subject matter or over any of the parties to this
Agreement. All reasonable out of pocket costs and expenses incurred in
connection with any such arbitration proceeding (including reasonable attorneys
fees) shall be borne by the party against which the decision is rendered, or, if
no decision is rendered, each party shall bears its respective costs and
expenses. If the arbitrator's decision is a compromise, the determination of
which party or parties bears the reasonable out-of-pocket costs and expenses
incurred in connection with any such arbitration proceeding shall be made by the
arbitrator on the basis of the arbitrator's assessment of the relative merits of
the parties' positions.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed under seal by its duly authorized officer this ____ day of
____________, 1998.
▇▇▇▇▇▇ HEALTHCARE INC.
By:____________________________
Name:__________________________
Title:_________________________
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EXHIBIT A
FORM OF SUBSCRIPTION
The undersigned, registered holder or assignee of such registered holder
of the within Warrant, hereby (1) subscribes for _________ shares (subject to
adjustment as provided herein) which the undersigned is entitled to purchase
under the terms of the within Warrant, (2) makes the full cash payment called
for by the within Warrant, and (3) directs that the shares issuable upon
exercise of said Warrant be issued as follows:
Name:_____________________________
By:_______________________________
Title:____________________________
Date:_____________________________
__________________________________
NOTICE: The name and signature on this subscription form must correspond with
the name as written upon the face of the within Warrant, or upon the assignment
form on the reverse thereof, in every particular, without alteration or
enlargement and must be guaranteed by a bank or by a firm having membership on a
registered national securities exchange in the United States.
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EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED __________________hereby sells, assigns, and transfers unto
________________, of ______________ the right to purchase ____________ shares
(subject to adjustment as provided herein) evidenced by the within Warrant, and
hereby irrevocably constitutes and appoints to transfer such right on the books
of the Company, with full power of substitution.
Date:_________________________, 19____
Name:__________________________
By:____________________________
Title:_________________________
Date:________________________________
_____________________________________
NOTICE: The name and signature on this assignment correspond with the name with
the name as written upon the face of the within upon any assignment form duly
executed pursuant to the within Warrant, in every particular, without alteration
or and must be guaranteed by a bank, or by a firm having on a registered
national securities exchange in the United States.
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