DOBI MEDICAL INTERNATIONAL, INC.
No._____ ____ Shares
WARRANT TO PURCHASE COMMON STOCK
VOID AFTER 5:30 P.M., EASTERN STANDARD
TIME, ON THE EXPIRATION DATE
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
FOR VALUE RECEIVED, DOBI MEDICAL INTERNATIONAL, INC., a Nevada
corporation initially operating under the corporate name of Lions Gate
Investment Limited (the "Company"), hereby agrees to sell upon the terms and on
the conditions hereinafter set forth, but no later than 5:30 p.m., Eastern
Standard Time, on the Expiration Date (as hereinafter defined) to
______________________, or registered assigns (the "Holder"), under the terms as
hereinafter set forth, _____________________ (__________) fully paid and
non-assessable shares of the Company's Common Stock, par value $.0001 per share
(the "Warrant Stock"), at a purchase price per share of One Dollar Fifty-Four
Cents ($1.54) (the "Warrant Price"), pursuant to this warrant (this "Warrant").
The number of shares of Warrant Stock to be so issued and the Warrant Price are
subject to adjustment in certain events as hereinafter set forth. The term
"Common Stock" shall mean, when used herein, unless the context otherwise
requires, the stock and other securities and property at the time receivable
upon the exercise of this Warrant.
This Warrant is one of a series of the Company's Warrants to purchase
Common Stock (collectively, the "Warrants"), issued pursuant to that certain
Confidential Private Placement Memorandum, dated October 22, 2003, as amended by
the First Supplement thereto, dated November 20, 2003 (the "Memorandum").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings attributed thereto in Section 10.
1. Exercise of Warrant.
(a) The Holder may exercise this Warrant according to its terms by
surrendering this Warrant to the Company at the address set forth in Section 11,
the subscription form attached hereto having then been duly executed by the
Holder, accompanied by cash, certified check or bank draft in payment of the
purchase price, in lawful money of the United States of America, for the number
of shares of the Warrant Stock specified in the subscription form, or as
otherwise provided in this Warrant prior to 5:30 p.m., Eastern Standard Time, on
__________ __, 2006 (the "Expiration Date").
(b) This Warrant may be exercised in whole or in part so long as
any exercise in part hereof would not involve the issuance of fractional shares
of Warrant Stock. If
exercised in part, the Company shall deliver to the Holder a new Warrant,
identical in form, in the name of the Holder, evidencing the right to purchase
the number of shares of Warrant Stock as to which this Warrant has not been
exercised, which new Warrant shall be signed by the Chairman, Chief Executive
Officer or President and the Secretary or Assistant Secretary of the Company.
The term Warrant as used herein shall include any subsequent Warrant issued as
provided herein.
(c) No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. The Company shall pay cash in lieu
of fractions with respect to the Warrants based upon the fair market value of
such fractional shares of Common Stock (which shall be the closing price of such
shares on the exchange or market on which the Common Stock is then traded) at
the time of exercise of this Warrant.
(d) In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Stock so purchased,
registered in the name of the Holder, shall be delivered to the Holder within a
reasonable time after such rights shall have been so exercised. The person or
entity in whose name any certificate for the Warrant Stock is issued upon
exercise of the rights represented by this Warrant shall for all purposes be
deemed to have become the holder of record of such shares immediately prior to
the close of business on the date on which the Warrant was surrendered and
payment of the Warrant Price and any applicable taxes 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 opening of business on the next succeeding date on which the stock transfer
books are open. Except as provided in Section 4 hereof, the Company shall pay
any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on exercise of this
Warrant.
2. Disposition of Warrant Stock and Warrant.
(a) The Holder hereby acknowledges that this Warrant and any Warrant
Stock purchased pursuant hereto are not being registered (i) under the Act on
the ground that the issuance of this Warrant is exempt from registration under
Section 4(2) of the Act as not involving any public offering or (ii) under any
applicable state securities law because the issuance of this Warrant does not
involve any public offering; and that the Company's reliance on the Section 4(2)
exemption of the Act and under applicable state securities laws is predicated in
part on the representations hereby made to the Company by the Holder that it is
acquiring this Warrant and will acquire the Warrant Stock for investment for its
own account, with no present intention of dividing its participation with others
or reselling or otherwise distributing the same, subject, nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control.
The Holder hereby agrees that it will not sell or transfer all or any
part of this Warrant and/or Warrant Stock unless and until it shall first have
given notice to the Company describing such sale or transfer and furnished to
the Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
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transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.
(b) If, at the time of issuance of the shares issuable upon exercise
of this Warrant, no registration statement is in effect with respect to such
shares under applicable provisions of the Act, the Company may at its election
require that the Holder provide the Company with written reconfirmation of the
Holder's investment intent and that any stock certificate delivered to the
Holder of a surrendered Warrant shall bear legends reading substantially as
follows:
"TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT PURSUANT TO WHICH
THESE SHARES WERE PURCHASED FROM THE COMPANY. COPIES OF THOSE
RESTRICTIONS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY,
AND NO TRANSFER OF SUCH SHARES OR OF THIS CERTIFICATE, OR OF ANY
SHARES OR OTHER SECURITIES (OR CERTIFICATES THEREFOR) ISSUED IN
EXCHANGE FOR OR IN RESPECT OF SUCH SHARES, SHALL BE EFFECTIVE
UNLESS AND UNTIL THE TERMS AND CONDITIONS THEREIN SET FORTH SHALL
HAVE BEEN COMPLIED WITH."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS
CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate "stop transfer"
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.
3. Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance upon the exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the exercise
price, be validly issued, fully paid and non-assessable, free from all taxes,
liens, charges and
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preemptive rights with respect to the issuance thereof, other than taxes,
if any, in respect of any transfer occurring contemporaneously with such
issuance and other than transfer restrictions imposed by federal and state
securities laws.
4. Exchange, Transfer or Assignment of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
5. Capital Adjustments. This Warrant is subject to the following
further provisions:
(a) Recapitalization, Reclassification and Succession. If any
recapitalization of the Company or reclassification of its Common Stock or any
merger or consolidation of the Company into or with a corporation or other
business entity, or the sale or transfer of all or substantially all of the
Company's assets or of any successor corporation's assets to any other
corporation or business entity (any such corporation or other business entity
being included within the meaning of the term "successor corporation") shall be
effected, at any time while this Warrant remains outstanding and unexpired,
then, as a condition of such recapitalization, reclassification, merger,
consolidation, sale or transfer, lawful and adequate provision shall be made
whereby the Holder of this Warrant thereafter shall have the right to receive
upon the exercise hereof as provided in Section 1 and in lieu of the shares of
Common Stock immediately theretofore issuable upon the exercise of this Warrant,
such shares of capital stock, securities or other property as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of shares of Common Stock immediately
theretofore issuable upon the exercise of this Warrant had such
recapitalization, reclassification, merger, consolidation, sale or transfer not
taken place, and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.
(b) Subdivision or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the number of shares of Warrant Stock purchasable upon
exercise of this Warrant and the Warrant Price shall be proportionately
adjusted.
(c) Stock Dividends and Distributions. If the Company at any time
while this Warrant is outstanding and unexpired shall issue or pay the holders
of its Common Stock, or take a record of the holders of its Common Stock for the
purpose of entitling them to
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receive, a dividend payable in, or other distribution of, Common Stock, then
(i) the Warrant Price shall be adjusted in accordance with Section 5(e) and (ii)
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall be adjusted to the number of shares of Common Stock that Holder would have
owned immediately following such action had this Warrant been exercised
immediately prior thereto.
(d) Stock and Rights Offering to Shareholders. If at any time after
the date of issuance of this Warrant, the Company shall issue or sell to all
holders of its Common Stock, or fix a record date for the purposes of entitling
all holders of its Common Stock to receive, (i) Common Stock or (ii) rights,
options or warrants entitling the holders thereof to subscribe for or purchase
Common Stock (or securities convertible or exchangeable into or exercisable for
Common Stock), in any such case, at a price per share (or having a conversion,
exchange or exercise price per share) that is less than the closing price per
share of the Company's Common Stock on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or traded on any such exchange, on the National Market or SmallCap Market
of the National Association of Securities Dealers Automated Quotations System
("Nasdaq"), or if not listed or traded on any such exchange or system, the
average of the bid and asked price per share on Nasdaq or, if such quotations
are not available, the fair market value per share of the Company's Common Stock
as reasonably determined by the Board of Directors of the Company (the "Closing
Price") on the date of such issuance or sale or on such record date then,
immediately after the date of such issuance or sale or on such record date, (x)
the Warrant Price shall be adjusted in accordance with Section 5(e), and (y) the
number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall be adjusted to that number determined by multiplying the number of shares
of Warrant Stock purchasable upon exercise of this Warrant immediately before
the date of such issuance or sale or such record date by a fraction, the
denominator of which will be the number of shares of Common Stock outstanding on
such date plus the number of shares of Common Stock that the aggregate offering
price of the total number of shares so offered for subscription or purchase (or
the aggregate initial conversion price, exchange price or exercise price of the
convertible securities or exchangeable securities or rights, options or
warrants, as the case may be, so offered) would purchase at such Closing Price,
and the numerator of which will be the number of shares of Common Stock
outstanding on such date plus the number of additional shares of Common Stock
offered for subscription or purchase (or into which the convertible or
exchangeable securities or rights, options or warrants so offered are initially
convertible or exchangeable or exercisable, as the case may be).
If the Company shall at any time after the date of issuance of
this Warrant distribute to all holders of its Common Stock any shares of capital
stock of the Company (other than Common Stock) or evidences of its indebtedness
or assets (excluding cash dividends or distributions paid from retained earnings
or current year's or prior year's earnings of the Company) or rights or warrants
to subscribe for or purchase any of its securities (excluding those referred to
in the immediately preceding paragraph) (any of the foregoing being hereinafter
in this paragraph called the "Securities"), then in each such case, the Company
shall reserve shares or other units of such securities for distribution to the
Holder upon exercise of this Warrant so that, in addition to the shares of the
Common Stock to which such Holder is entitled, such Holder will receive upon
such exercise the amount and kind of such Securities which such
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▇▇▇▇▇▇ would have received if the Holder had, immediately prior to the record
date for the distribution of the Securities, exercised this Warrant.
(e) Warrant Price Adjustment. Whenever the number of shares of
Warrant Stock purchasable upon exercise of this Warrant is adjusted, as herein
provided, the Warrant Price payable upon the exercise of this Warrant shall be
adjusted to that price determined by multiplying the Warrant Price immediately
prior to such adjustment by a fraction (i) the numerator of which shall be the
number of shares of Warrant Stock purchasable upon exercise of this Warrant
immediately prior to such adjustment, and (ii) the denominator of which shall be
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
immediately thereafter.
(f) Certain Shares Excluded. The number of shares of Common Stock
outstanding at any given time for purposes of the adjustments set forth in this
Section 5 shall exclude any shares then directly or indirectly held in the
treasury of the Company.
(g) Deferral and Cumulation of De Minimis Adjustments. The Company
shall not be required to make any adjustment pursuant to this Section 5 if the
amount of such adjustment would be less than one percent (1%) of the Warrant
Price in effect immediately before the event that would otherwise have given
rise to such adjustment. In such case, however, any adjustment that would
otherwise have been required to be made shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
or adjustments so carried forward, shall amount to not less than one percent
(1%) of the Warrant Price in effect immediately before the event giving rise to
such next subsequent adjustment.
(h) Duration of Adjustment. Following each computation or
readjustment as provided in this Section 5, the new adjusted Warrant Price and
number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall remain in effect until a further computation or readjustment thereof is
required.
6. Notice to Holders.
(a) Notice of Record Date. In case:
(i) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon
the exercise of this Warrant) for the purpose of entitling them to
receive any dividend (other than a cash dividend payable out of earned
surplus of the Company) or other distribution, or any right to
subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right;
(ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation with or merger of the Company into another corporation,
or any conveyance of all or substantially all of the assets of the
Company to another corporation; or
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(iii) of any voluntary dissolution, liquidation or winding-up
of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution or winding-up. Such notice shall
be mailed at least thirty (30) days prior to the record date therein specified,
or if no record date shall have been specified therein, at least thirty (30)
days prior to such specified date.
(b) Certificate of Adjustment. Whenever any adjustment shall be
made pursuant to Section 5 hereof, the Company shall promptly make a certificate
signed by its Chairman, Chief Executive Officer, President or Vice President and
by its Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, setting
forth in reasonable detail the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Warrant
Price and number of shares of Warrant Stock purchasable upon exercise of this
Warrant after giving effect to such adjustment, and shall promptly cause copies
of such certificates to be mailed (by first class mail, postage prepaid) to the
Holder of this Warrant.
7. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
of evidence satisfactory to it, in the exercise of its reasonable discretion, of
the ownership and the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like tenor dated the date
hereof.
8. Warrant Holder Not a Stockholder. The Holder of this Warrant, as
such, shall not be entitled by reason of this Warrant to any rights whatsoever
as a stockholder of the Company.
9. Registration Rights. This Warrant and the shares of Common Stock
issuable upon exercise of this Warrant will be accorded the registration rights
under the Act set forth in that certain Subscription Agreement between the
Company and the Holders, a form of which agreement is being furnished
concurrently herewith.
10. Definitions. As used herein, unless the context otherwise
requires, the following terms have the respective meanings:
(a) "Affiliate": with respect to any Person, the following: (i)
any other Person that at such time directly or indirectly through one or more
intermediaries controls,
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or is controlled by or is under common control with such first Person or (ii)
any Person beneficially owning or holding, directly or indirectly, 10% or more
of any class of voting or equity interests of the Company or any Subsidiary or
any corporation of which the Company and its Subsidiaries beneficially own or
hold, in the aggregate, directly or indirectly, 10% of more of any class of
voting or equity interests. As used in such definition, "controls," "controlled
by" and "under common control," as used with respect to an Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
(b) "Person": any natural person, corporation, division of a
corporation, partnership, limited liability company, trust, joint venture,
association, company, estate, unincorporated organization or government or any
agency or political subdivision thereof.
(c) "Subsidiaries": with respect to any Person, any corporation,
association or other business entity (whether now existing or hereafter
organized) of which at least a majority of the securities or other ownership
interests having ordinary voting power for the election of directors is, at the
time as of which any determination is being made, owned or controlled by such
Person or one or more subsidiaries of such Person.
11. Notices. Any notice required or contemplated by this Warrant shall
be deemed to have been duly given if transmitted by registered or certified
mail, return receipt requested, to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, or to the Holder at the name and
address set forth in the Warrant Register maintained by the Company.
12. Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed on its behalf, in its corporate name and by its duly authorized officers,
as of this 9th day of December 2003.
DOBI MEDICAL INTERNATIONAL, INC.
(Operating initially under the name Lions Gate
Investment Limited)
By:___________________________
Name:
Title:
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SUBSCRIPTION FORM
The undersigned, the Holder of the attached Warrant, hereby
irrevocably elects to exercise purchase rights represented by such Warrant for,
and to purchase thereunder, the following number of shares of Common Stock of
DOBI MEDICAL INTERNATIONAL, INC.:
Number of Shares Purchase Price Per Share
The undersigned herewith makes payment of $_________ therefor, and
requests that certificates for such shares (and any warrants or other property
issuable upon such exercise) be issued in the name of and delivered to
__________________________ whose address is _______________________________
(social security or taxpayer identification number ___________) and, if such
shares shall not include all of the shares issuable under such warrant, that a
new warrant of like tenor and date for the balance of the shares issuable
thereunder be delivered to the undersigned.
HOLDER:
_____________________________
Signature
_____________________________
Signature, if jointly held
_____________________________
Date
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ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________________________
hereby sells, assigns and transfers unto
Name ________________________________________________________________________
(Please typewrite or print in block letters)
Social Security or Taxpayer Identification Number
the right to purchase Common Stock of DOBI MEDICAL INTERNATINONAL, INC., a
Nevada corporation, represented by this Warrant to the extent of shares as to
which such right is exercisable and does hereby irrevocably constitute and
appoint _________________, Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
DATED:__________________
_______________________________
Signature
_______________________________
Signature, if jointly held
Witness:
____________________________
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