EXHIBIT 4.1
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE COMMON STOCK
Date of Issuance: May __, 2005 Warrant to Purchase An Aggregate
of ______ shares of Common Stock
FOR VALUE RECEIVED, IHEALTH, INC., a Delaware corporation (the
"Corporation"), hereby certifies that __________ or his registered assigns is
entitled to subscribe for and purchase, during the Exercise Period (as
hereinafter defined), up to ___________ (_______) shares (subject to adjustment
as hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable Common Stock of the Corporation, at an exercise price per share
equal to $.15 per share (the "Exercise Price"), with the Exercise Price being
subject to adjustment in the circumstances set forth below.
Section 1.
Exercise of Warrant
-------------------
1.1 Exercise Period. The Holder may exercise this Warrant, in whole or
in part (but not as to fractional shares), at any time and time to time
commencing on the date hereof and ending at 5:00 p.m., Eastern Time, on the
third anniversary of the date hereof (the "Exercise Period").
1.2 Exercise Procedure.
a. This Warrant may be exercised in whole or in part at any
time during the Exercise Period, provided however, if the last day of the
Exercise Period is a day on which federal or state chartered banking
institutions located in the State of Florida are authorized by law to close,
then the last day of the Exercise Period shall be deemed to be the next
succeeding day which shall not be such a day, by presentation and surrender to
the Corporation at its principal office of this Warrant accompanied by the form
of Exercise Agreement attached hereto as Exhibit 1 signed by the Holder and upon
payment of the Exercise Price for the Common Stock purchased thereby, by
cashier's check or by wire transfer of immediately available funds.
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b. Certificates for the shares of Common Stock purchased upon
exercise of this Warrant will be delivered by the Corporation to the Holder
within five (5) business days after the Exercise Date. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Corporation will prepare a new Warrant representing the rights formerly
represented by this Warrant that have not expired or been exercised. The
Corporation will, within such five (5) day period, deliver such new Warrant to
the Holder at the address set forth in this Warrant.
c. The shares of Common Stock issuable upon the exercise of
this Warrant will be deemed to have been transferred to the Holder on the
Exercise Date, and the Holder will be deemed for all purposes to have become the
record holder of such Common Stock on the Exercise Date.
d. The issuance of certificates for shares of Common Stock
upon the exercise of this Warrant will be made without charge to the Holder of
any issuance tax in respect thereof or any other cost incurred by the
Corporation in connection with such exercise and related transfer of the shares;
provided, however, that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issuance and
delivery of any certificate or instrument in a name other than that of the
Holder of this Warrant, and that the Corporation shall not be required to issue
or deliver any such certificate or instrument unless and until the person or
persons requiring the issue thereof shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid.
e. Unless the Corporation shall have registered the shares of
Common Stock underlying this Warrant pursuant to the provisions of Section 6
hereof, the shares of Common Stock issuable upon the exercise of this Warrant
have not been registered under the Securities Act of 1933, as amended (the
"Act") and, accordingly, will be "restricted securities" as that term is defined
in the Act. The Corporation may insert the following or similar legend on the
face of the certificates evidencing shares of Common Stock if required in
compliance with state securities laws:
"These securities have not been registered under any state
securities laws and may not be sold or otherwise transferred
or disposed of except pursuant to an effective registration
statement under any applicable state securities laws, or an
opinion of counsel satisfactory to counsel to the Corporation
that an exemption from registration under any applicable state
securities laws is available."
1.3 Fractional Shares. If a fractional share of Common Stock would, but
for the provisions of Subsection 1.1, be issuable upon exercise of the rights
represented by this Warrant, the Corporation will, within 30 days after the
Exercise Date, deliver to the Holder a check payable to the Holder, in lieu of
such fractional share, in an amount equal to the market price of such fractional
share as determined by the last sale price of the Corporation's Common Stock as
reported on the Nasdaq Stock Market, Inc. or the principal exchange on which the
Corporation's Common Stock is then traded, as of the close of business on the
Exercise Date.
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Section 2.
Effect of Stock Dividends, Reorganization, Reclassification,
Consolidation, Merger or Sale
-----------------------------
2.1 Stock Dividends, Recapitalization or Reclassification of Common
Stock. In case the Corporation shall at any time prior to the exercise or
termination of this Warrant (i) pay a dividend or make a distribution of its
capital stock in shares of Common Stock to all holders of shares of Common
Stock, or (ii) effect a recapitalization or reclassification of such character
that its Common Stock shall be changed into or become exchangeable for a larger
or smaller number of shares, then, upon the effective date thereof, the number
of shares of Common Stock that the Holder of this Warrant shall be entitled to
purchase upon exercise hereof shall be increased or decreased, as the case may
be, in direct proportion to the increase or decrease in such number of shares of
Common Stock by reason of such stock dividend, recapitalization or
reclassification, and the Exercise Price of such dividend, recapitalized or
reclassified Common Stock shall, in the case of an increase in the number of
shares, be proportionately decreased and, in the case of a decrease in the
number of shares, be proportionately increased.
2.2 Consolidation, Merger or Sale. In case the Corporation shall at any
time prior to the exercise of this Warrant, or the expiration of the Exercise
Period, whichever first occurs, consolidate or merge with any other corporation
(unless the Corporation shall be the surviving entity) or transfer all or
substantially all of its assets to any other corporation preparatory to a
dissolution, then the Corporation shall, as a condition precedent to such
transaction, cause effective provision to be made so that the Holder of this
Warrant, upon the exercise thereof after the effective date of such transaction,
shall be entitled to receive the kind and amount of shares, evidences of
indebtedness, and/or other property receivable on such transaction by a holder
of the number of shares of Common Stock as to which the Warrant was exercisable
immediately prior to such transaction (without giving effect to any restriction
upon such exercise); and, in any such case, appropriate provision shall be made
with respect to the rights and interests of the Holder hereof to the effect that
the provisions of this Warrant shall thereafter be applicable (as nearly as may
be practicable) with respect to any shares, evidences of indebtedness, or other
securities or assets thereafter deliverable upon exercise of this Warrant.
2.3 Notice of Adjustment. Whenever the number of shares of Common Stock
purchasable upon exercise of this Warrant shall be adjusted as provided herein,
the Corporation shall file with its corporate records a certificate of its Chief
Financial Officer setting forth the computation and the adjusted number of
shares of Common Stock purchasable hereunder resulting from such adjustments,
and a copy of such certificate shall be mailed to the Holder. Any such
certificate or letter shall be conclusive evidence as to the correctness of the
adjustment or adjustments referred to therein and shall be available for
inspection by the holders of the Warrants on any day during normal business
hours.
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Section 3.
Reservation of Common Stock
---------------------------
The Corporation will at all time reserve and keep available such number
of shares of Common Stock as will be sufficient to permit the exercise in full
of this Warrant. Upon exercise of this Warrant pursuant to its terms, the Holder
will acquire fully paid and non-assessable ownership rights of the Common Stock,
free and clear of any liens, claims or encumbrances.
Section 4.
No Shareholder Rights or Obligations
------------------------------------
This Warrant will not entitle the Holder hereof to any voting rights or
other rights as a shareholder of the Corporation. Until the shares of Common
Stock issuable upon the exercise of this Warrant are recorded as issued on the
books and records of the Corporation's transfer agent, the Holder shall not be
entitled to any voting rights or other rights as a shareholder; provided,
however, that the Corporation shall use its bests efforts to ensure that, upon
receipt of the Exercise Agreement and payment of the Exercise Price, the
appropriate documentation necessary to effectuate the exercise of the Warrant
and the issuance of the Common Stock is accomplished as expeditiously as
possible. No provision of this Warrant, in the absence of affirmative action by
the Holder to purchase Common Stock, and no enumeration in this Warrant of the
rights or privileges of the Holder, will give rise to any obligation of such
Holder for the Exercise Price or as a stockholder of the Corporation.
Section 5.
Transferability
---------------
Neither this Warrant nor any rights hereunder are transferrable, in
whole or in part, without the prior written consent of the Corporation, which
such consent may not be forthcoming. In the event the Corporation should consent
to such transfer, this Warrant and the rights under shall be transferable upon
surrender of this Warrant with a properly executed Assignment in the form of
Exhibit 2 hereto at the principal offices of the Corporation, provided, however,
that the transferee must acknowledge to the Corporation in writing prior to such
transfer, in form and substance satisfactory to the Corporation, that such
transferee will be bound by the terms and conditions of Sections 3(b) through
3(f) of the Amendment to Sales Agreement of even date herewith by and between
the Corporation and the Holder. The Corporation has no obligation to recognize
any purported transfer of this Warrant, and the transferee is not entitled to
any rights under this Warrant, until such acknowledgment has been received by
the Corporation. This Warrant and the underlying shares of Common Stock may not
be offered, sold or transferred except in compliance with the Act, and any
applicable state securities laws, and then only against receipt of an agreement
of the person to whom such offer or sale or transfer is made to comply with the
provisions of this Warrant with respect to any resale or other disposition of
such securities; provided that no such agreement shall be required from any
person purchasing this Warrant or the underlying shares of Common Stock pursuant
to a registration statement effective under the Act. The Holder of this Warrant
agrees that, prior to the disposition of any security purchased on the exercise
hereof other than pursuant to an registration statement then
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effective under the Act, or any similar statute then in effect, the Holder shall
give written notice to the Corporation, expressing his intention as to such
disposition. Upon receiving such notice, the Corporation shall present a copy
thereof to its securities counsel. If, in the sole opinion of such counsel,
which such opinion shall not be unreasonably withheld, the proposed disposition
does not require registration of such security under the Act, or any similar
statute then in effect, the Corporation shall, as promptly as practicable,
notify the Holder of such opinion, whereupon the Holder shall be entitled to
dispose of such security in accordance with the terms of the notice delivered by
the Holder to the Corporation.
Section 6.
Registration Rights
-------------------
If the Corporation shall determine to proceed with the preparation and filing of
a registration statement under the Securities Act in connection with the
proposed offer and sale of any of its securities by it or any of its security
holders (other than a registration statement on Form ▇-▇, ▇-▇ or other limited
purpose form), then the Corporation will give written notice of its
determination to the Holder. Upon the written request from the Holder, the
Corporation will cause all shares of Common Stock issuable upon the exercise of
this Warrant to be included in such registration statement, all to the extent
requisite to permit the resale by the Holder of such shares of Common Stock
issuable upon the exercise of this Warrant.
Section 7.
Miscellaneous
-------------
7.1 Notices. Any notices, requests or consents hereunder shall be
deemed given, and any instruments delivered, two days after they have been
mailed by first class mail, postage prepaid, or upon receipt if delivered
personally or by facsimile transmission, as follows:
If to the Corporation: ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇, President
If to the Holder: ___________________________
___________________________
except that any of the foregoing may from time to time by written notice to the
other designate another address which shall thereupon become its effective
address for the purposes of this paragraph.
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7.2 Entire Agreement. This Warrant, including the exhibits and
documents referred to herein which are a part hereof, contain the entire
understanding of the parties hereto with respect to the subject matter and may
be amended only by a written instrument executed by the parties hereto or their
successors or assigns. Any paragraph headings contained in this Warrant are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Warrant.
7.3 Construction and Enforcement. This Warrant shall be governed by and
construed under the laws of the State of Florida, without regard to principles
of conflicts of laws and rules of such state. If it becomes necessary for any
party to institute legal action to enforce the terms and conditions of this
Warrant, and such legal action results in a final judgment in favor of such
party ("Prevailing Party"), then the party or parties against whom said final
judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred, including, but not limited to, all
attorneys' fees, court costs and other expenses incurred throughout all
negotiations, trials or appeals undertaken in order to enforce the Prevailing
Party's rights hereunder. Any suit, action or proceeding with respect to this
Warrant shall be brought in the state or Federal courts located in Broward
County in the State of Florida. The parties hereto hereby accept the exclusive
jurisdiction and venue of those courts for the purpose of any such suit, action
or proceeding. The parties hereto hereby irrevocably waive, to the fullest
extent permitted by law, any objection that any of them may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Warrant or any judgment entered by any court in respect thereof
brought in Broward County, Florida, and hereby further irrevocably waive any
claim that any suit, action or proceeding brought in Broward County, Florida,
has been brought in an inconvenient forum.
IN WITNESS WHEREOF, this Warrant has been duly executed and the
corporate seal affixed hereto, all as of the day and year first above written.
IHEALTH, INC.
By: _____________________________
▇▇▇▇▇ ▇. ▇▇▇▇, President
ATTEST:
________________________
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EXHIBIT 1
---------
EXERCISE AGREEMENT
------------------
To: Dated:
The undersigned record Holder, pursuant to the provisions set forth in
the within Warrant, hereby subscribed for and purchases shares of Common Stock
covered by such Warrant and hereby makes full cash payment of $ for such shares
at the Exercise Price provided by such Warrant.
(Signature)
(Print or type name)
(Address)
NOTICE: The signature of this Exercise Agreement must correspond with
the name as written upon the face of the within Warrant, or upon the Assignment
thereof, if applicable, in every particular, without alteration, enlargement or
any change whatsoever.
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EXHIBIT 2
---------
ASSIGNMENT
----------
FOR VALUE RECEIVED, ______________, the undersigned Holder hereby sell,
assigns, and transfer all of the rights of the undersigned under the within
Warrant with respect to the number of shares of Common Stock issuable upon the
exercise of such Warrant set forth below, unto the Assignee identified below,
and does hereby irrevocable constituted and appoint _____________ to effect such
transfer of rights on the books of the Corporation, with full power of
substitution:
Number of Shares
Name of Assignee Address of Assignee of Common Stock
---------------- ------------------- ---------------
Dated: ____________________
(Signature of Holder)
(Print or type name)
NOTICE: The signature of this Exercise Agreement must correspond with
the name as written upon the face of the within Warrant, or upon the Assignment
thereof, if applicable, in every particular, without alteration, enlargement or
any change whatsoever.
CONSENT OF ASSIGNEE
-------------------
I HEREBY CONSENT to abide by the terms and conditions of the within
Warrant.
Dated: ____________________
(Signature of Assignee)
(Print or type name)
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