EXHIBIT 10.14
[FORM OF
SECURITIES PURCHASE AGREEMENT]
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated
[_____________], [_____], is entered into by and between NATIONAL HEALTH
PARTNERS, INC., an Indiana corporation (the "Company"), and the purchaser or
purchasers identified on the signature page hereof ("Purchaser").
R E C I T A L S:
WHEREAS, Purchaser desires to purchase, and the Company desires to
sell, shares of the Company's common stock on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises hereof and the
agreements set forth herein below, the parties hereto hereby agree as follows:
1. The Offering.
(a) Private Offering. The securities offered by this Agreement are
being offered in a private offering (the "Offering") of up to [__________]
shares ("Shares") of common stock, $.001 par value per share ("Common Stock"),
Class A Warrants ("Class A Warrants") to acquire up to [__________] shares of
Common Stock, and Class B Warrants ("Class B Warrants"; together with the Class
A Warrants, the "Warrants") to acquire up to [__________] shares of Common
Stock. The Shares and Warrants will be sold in units ("Units") comprised of
[_______] ([__]) shares of Common Stock, [_______] ([__]) Class A Warrant, and
[________] ([__]) Class B Warrant. A maximum of [__________] Units are being
offered hereby. The Units are being sold on a reasonable "best efforts" basis at
a purchase price of $[_______] per Unit pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), and Rule 506 of
Regulation D thereunder. The Units are being offered solely to a limited number
of "accredited investors" as that term is defined in Rule 501(a) of the
Securities Act during an offering period commencing [__________], and
terminating at the sole discretion of the Company. The terms of the Class A
Warrants are set forth in the Form of Class A Warrant, attached hereto and made
a part hereof as Exhibit A (the "Class A Warrant Certificate"). The terms of the
Class B Warrants are set forth in the Form of Class B Warrant, attached hereto
and made a part hereof as Exhibit B (the "Class B Warrant Certificate"; together
with the Class A Warrant Certificate, the "Warrant Certificates"). The Shares,
Warrants and shares of Common Stock issuable upon exercise of the Warrants are
hereinafter referred to collectively as the "Securities."
(b) Use of Proceeds. Assuming all of the Units in the Offering are
sold, the net proceeds to the Company will be approximately $[__________] (after
deducting offering expenses payable by the Company estimated at $[__________]).
The Company intends to use the net proceeds for general working capital purposes
and other general corporate purposes.
2. Sale and Purchase of Units.
(a) Sale and Purchase of Units. Subject to the terms and conditions
hereof, the Company agrees to sell, and Purchaser agrees to purchase, the number
of Units specified on the signature page of this Agreement at a purchase price
of $[_______] per Unit. The aggregate purchase price for the Units shall be as
set forth on the signature page hereto (the "Purchase Price") and shall be
payable upon execution hereof by check or wire transfer of immediately available
funds.
(b) Subscription Procedure. In order to purchase Units, Purchaser
shall deliver to the Company, at its principal executive office identified in
Section 15 hereof: (i) one completed and duly executed copy of this Agreement;
and (ii) immediately available funds in an amount equal to the Purchase Price.
Execution and delivery of this Agreement shall constitute an irrevocable
subscription for that number of Units set forth on the signature page hereto.
Payment for the Units may be made by wire transfer to:
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
or by check made payable to "National Health Partners, Inc." The minimum
purchase that may be made by a Purchaser is [________] Units for a purchase
price of $[________], although the Company may, in its sole discretion, accept
Agreements for a lesser number of Units. This Agreement may be rejected by the
Company, in whole or in part, in its sole discretion, in which event the
Purchase Price will be returned by mail to Purchaser within ten (10) business
days thereafter. Unless the Offering is otherwise terminated by the Company, as
soon as possible after the receipt and acceptance by the Company of this
Agreement and collection of the funds paid for the Units, the Company will issue
certificates for the Shares to Purchaser, together with a copy of Purchaser's
executed Agreement countersigned by the Company.
(c) Closing.
(i) Closing Date. The closing of the transactions (the
"Closing") shall take place at such time, on such date and in such manner as the
parties may agree.
(ii) Closing Transactions. At the Closing, the Company shall
execute and deliver to Purchaser a certificate representing the number of Shares
underlying the number of Units specified on the signature page of this
Agreement, against payment of the Purchase Price specified on the signature page
of this Agreement by wire transfer or check payable to the Company.
3. Representations and Warranties of Purchaser. Purchaser represents
and warrants to the Company as follows:
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(a) Organization and Qualification.
(i) If Purchaser is an entity, Purchaser is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, with the corporate or other entity power and authority to own and
operate its business as presently conducted, except where the failure to be or
have any of the foregoing would not have a material adverse effect on Purchaser,
and Purchaser is duly qualified as a foreign corporation or other entity to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified or in
good standing as would not have a material adverse effect on it.
(ii) If Purchaser is an entity, the address of its principal
place of business is as set forth on the signature page hereto, and if Purchaser
is an individual, the address of its principal residence is as set forth on the
signature page hereto.
(b) Authority; Validity and Effect of Agreement.
(i) If Purchaser is an entity, Purchaser has the requisite
corporate or other entity power and authority to execute and deliver this
Agreement and perform its obligations under this Agreement. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and all other necessary corporate or other entity action
on the part of Purchaser have been duly authorized by its Boards of Directors or
similar governing body, and shareholders or similar interest holders, if
necessary, and no other corporate or other entity proceedings on the part of
Purchaser is necessary for Purchaser to execute and deliver this Agreement and
perform its obligations hereunder.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by Purchaser and, assuming it has been duly and validly
executed and delivered by the Company, constitutes a legal, valid and binding
obligation of Purchaser, in accordance with its terms.
(c) No Conflict; Required Filings and Consents. Neither the
execution and delivery of this Agreement by Purchaser nor the performance by
Purchaser of its obligations hereunder will: (i) if Purchaser is an entity,
conflict with Purchaser's Articles of Incorporation or Bylaws, or other similar
organizational documents; (ii) violate any statute, law, ordinance, rule or
regulation, applicable to Purchaser or any of the properties or assets of
Purchaser; or (iii) violate, breach, be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or result in the
termination of, the acceleration of the maturity of, or the acceleration of the
performance of any obligation of Purchaser under, or result in the creation or
imposition of any lien upon any properties, assets or business of Purchaser
under, any material contract or any order, judgment or decree to which Purchaser
is a party or by which it or any of its assets or properties is bound or
encumbered except, in the case of clauses (ii) and (iii), for such violations,
breaches, conflicts, defaults or other occurrences which, individually or in the
aggregate, would not have a material adverse effect on its obligation to perform
its covenants under this Agreement.
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(d) Accredited Investor. Purchaser is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D under the Securities Act. If
Purchaser is an entity, Purchaser was not formed for the specific purpose of
acquiring the Securities, and, if it was, all of Purchaser's equity owners are
"accredited investors" as defined above.
(e) No Government Review. Purchaser understands that neither the
United States Securities and Exchange Commission ("SEC") nor any securities
commission or other governmental authority of any state, country or other
jurisdiction has approved the issuance of the Securities or passed upon or
endorsed the merits of the Securities, or this Agreement, the Warrant
Certificates or any of the other documents relating to the proposed Offering
(collectively, the "Offering Documents"), or confirmed the accuracy of,
determined the adequacy of, or reviewed this Agreement or the other Offering
Documents.
(f) Investment Intent. The Securities are being acquired for the
Purchaser's own account for investment purposes only, not as a nominee or agent
and not with a view to the resale or distribution of any part thereof, and
Purchaser has no present intention of selling, granting any participation in or
otherwise distributing the same. By executing this Agreement, Purchaser further
represents that Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or third person with respect to any of the Securities.
(g) Restrictions on Transfer. Purchaser understands that the
Securities are "restricted securities" as such term is defined in Rule 144 under
the Securities Act and have not been registered under the Securities Act or
registered or qualified under any state securities law, and may not be, directly
or indirectly, sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act and
registration or qualification under applicable state securities laws or the
availability of an exemption therefrom. In any case where such an exemption is
relied upon by Purchaser from the registration requirements of the Securities
Act and the registration or qualification requirements of such state securities
laws, Purchase shall furnish the Company with an opinion of counsel stating that
the proposed sale or other disposition of such securities may be effected
without registration under the Securities Act and will not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and opinion to be
satisfactory to the Company. Purchaser acknowledges that it is able to bear the
economic risks of an investment in the Securities for an indefinite period of
time, and that its overall commitment to investments that are not readily
marketable is not disproportionate to its net worth.
(h) Investment Experience. Purchaser has such knowledge,
sophistication and experience in financial, tax and business matters in general,
and investments in securities in particular, that it is capable of evaluating
the merits and risks of this investment in the Securities, and Purchaser has
made such investigations in connection herewith as it deemed necessary or
desirable so as to make an informed investment decision without relying upon the
Company for legal or tax advice related to this investment. In making its
decision to acquire the Securities, Purchaser has not relied upon any
information other than information provided to Purchaser by the Company or its
representatives and contained herein and in the other Offering Documents.
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(i) Access to Information. Purchaser acknowledges that it has had
access to and has reviewed all documents and records relating to the Company
that it has deemed necessary in order to make an informed investment decision
with respect to an investment in the Securities; that it has had the opportunity
to ask representatives of the Company certain questions and request certain
additional information regarding the terms and conditions of such investment and
the finances, operations, business and prospects of the Company and has had any
and all such questions and requests answered to its satisfaction; and that it
understands the risks and other considerations relating to such investment.
(j) Reliance on Representations. Purchaser understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of the federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities. Purchaser represents and warrants to the
Company that any information that Purchaser has heretofore furnished or
furnishes herewith to the Company is complete and accurate, and further
represents and warrants that it will notify and supply corrective information to
the Company immediately upon the occurrence of any change therein occurring
prior to the Company's issuance of the Securities. Within five (5) days after
receipt of a request from the Company, Purchaser will provide such information
and deliver such documents as may reasonably be necessary to comply with any and
all laws and regulations to which the Company is subject.
(k) No General Solicitation. Purchaser is unaware of, and in
deciding to participate in the Offering is in no way relying upon, and did not
become aware of the Offering through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media, or broadcast over television or radio or the
internet, in connection with the Offering.
(l) Placement and Finder's Fees. No agent, broker, investment
banker, finder, financial advisor or other person acting on behalf of Purchaser
or under its authority is or will be entitled to any broker's or finder's fee or
any other commission or similar fee, directly or indirectly, in connection with
the Offering, and no person is entitled to any fee or commission or like payment
in respect thereof based in any way on agreements, arrangements or understanding
made by or on behalf of Purchaser.
(m) Offering Risks. Purchaser understands that purchasing Units in
the Offering will subject Purchaser to certain risks, including, but not limited
to, each of the following:
(i) The Company is a development-stage company with a limited
operating history and an unproven business model, which makes it difficult for
Purchaser to evaluate the Company's current business and future prospects. As a
result, the revenue and income potential of the Company's business and market
are unproven.
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(ii) The Company has experienced net losses in each fiscal
quarter since its inception and expects to continue to incur significant net
losses for the foreseeable future. While the Company is unable to predict
accurately its future operating expenses, it currently expects these expenses to
increase substantially as it implements its business plan.
(iii) The Company is in need of substantial additional capital
to fund its current and future operations. In order to satisfy such obligations,
attract and retain employees, consultants and other service providers, and
satisfy other obligations, the Company may be required to issue additional
shares of Common Stock, securities convertible into Common Stock, or debt. Such
shares may be issued for a purchase price consisting of cash, services or other
consideration that may be materially different than the purchase price of the
Units. The forgoing may result in substantial dilution to the relative ownership
interests of the Company's existing shareholders and substantial reduction in
net book value per share. Additional equity securities may have rights,
preferences and privileges senior to those of the holders of Common Stock and
any debt financing may involve restrictive covenants that may limit the
Company's operating flexibility.
(iv) The offering price of the Units offered hereby has been
determined solely by the Company in its sole discretion and does not necessarily
bear any relationship to the value of the Company's assets, current or potential
earnings of the Company, or any other recognized criteria used for measuring
value, and therefore, there can be no assurance that the offering price of the
Units is representative of the actual value of the underlying Securities.
(v) The Company has provided herein that it intends to use the
net proceeds from the Offering for general working capital purposes and other
general corporate purposes. Thus, Purchaser is making its investment in the
Securities based in part upon very limited information regarding the specific
uses to which the net proceeds will be applied.
(vi) An investment in the Securities may involve certain
material legal, accounting and federal and state tax consequences. Purchaser
should consult with its legal counsel, accountant and/or business adviser as to
the legal, accounting, tax and related matters accompanying such an investment.
(n) Legends. The certificates and agreements evidencing the
Securities shall have endorsed thereon the following legend (and appropriate
notations thereof will be made in the Company's stock transfer books), and stop
transfer instructions reflecting these restrictions on transfer will be placed
with the transfer agent of the Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO REGISTRATION
UNDER THE SECURITIES ACT AND REGISTRATION OR QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION
THEREFROM. NO TRANSFER OF THE SECURITIES REPRESENTED HEREBY MAY BE MADE
IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION UNLESS THERE SHALL
HAVE BEEN DELIVERED TO THE ISSUER A WRITTEN OPINION OF UNITED STATES
COUNSEL OF RECOGNIZED STANDING, IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER, TO THE EFFECT THAT SUCH TRANSFER MAY BE MADE WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.
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4. Representations and Warranties of the Company. The Company
represents and warrants to Purchaser as follows:
(a) Organization and Qualification. The Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, with the corporate power and authority to own and operate its
business as presently conducted, except where the failure to be or have any of
the foregoing would not have a material adverse effect on the Company. The
Company is duly qualified as a foreign corporation or other entity to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified or in
good standing as would not have a material adverse effect on the Company.
(b) Authority; Validity and Effect of Agreement.
(i) The Company has the requisite corporate power and authority
to execute and deliver this Agreement, perform its obligations under this
Agreement, and conduct the Offering. The execution and delivery of this
Agreement by the Company, the performance by the Company of its obligations
hereunder, the Offering and all other necessary corporate action on the part of
the Company have been duly authorized by its Board of Directors, and no other
corporate proceedings on the part of the Company is necessary to authorize this
Agreement or the Offering. This Agreement has been duly and validly executed and
delivered by the Company and, assuming that it has been duly authorized,
executed and delivered by Purchaser, constitutes a legal, valid and binding
obligation of the Company, in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(ii) The Shares have been duly authorized and, when issued and
paid for in accordance with this Agreement, will be validly issued, fully paid
and non-assessable shares of Common Stock with no personal liability resulting
solely from the ownership of such shares and will be free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company. The shares of Common Stock issuable upon exercise of the Warrants have
been duly reserved for issuance upon exercise of the Warrants and, when issued
and paid for in accordance with the Warrants, will be duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock, with no personal
liability resulting solely from the ownership of such shares, and will be free
and clear of all liens, charges, restrictions, claims and in encumbrances
imposed by or through the Company.
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(c) No Conflict; Required Filings and Consents. Neither the
execution and delivery of this Agreement by the Company nor the performance by
the Company of its obligations hereunder will: (i) conflict with the Company's
Articles of Incorporation or Bylaws; (ii) violate any statute, law, ordinance,
rule or regulation, applicable to the Company or any of the properties or assets
of the Company; or (iii) violate, breach, be in conflict with or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or permit the termination of any provision of, or
result in the termination of, the acceleration of the maturity of, or the
acceleration of the performance of any obligation of the Company, or result in
the creation or imposition of any lien upon any properties, assets or business
of the Company under, any material contract or any order, judgment or decree to
which the Company is a party or by which it or any of its assets or properties
is bound or encumbered except, in the case of clauses (ii) and (iii), for such
violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not have a material adverse effect on
its obligation to perform its covenants under this Agreement; and
(d) Placement and Finder's Fees. Neither the Company nor any of its
respective officers, directors, employees or managers, has employed any broker,
finder, advisor or consultant, or incurred any liability for any investment
banking fees, brokerage fees, commissions or finders' fees, advisory fees or
consulting fees in connection with the Offering for which the Company has or
could have any liability.
5. Indemnification. Purchaser agrees to indemnify, defend and hold
harmless the Company and its respective affiliates and agents from and against
any and all demands, claims, actions or causes of action, judgments,
assessments, losses, liabilities, damages or penalties and reasonable attorneys'
fees and related disbursements incurred by the Company that arise out of or
result from a breach of any representations or warranties made by Purchaser
herein, and Purchaser agrees that in the event of any breach of any
representations or warranties made by Purchaser herein, the Company may, at its
option, forthwith rescind the sale of the Units to Purchaser.
6. Confidentiality. Purchaser acknowledges and agreements that:
(a) This Agreement and the other Offering Documents have been
furnished to Purchaser by the Company for the sole purpose of enabling Purchaser
to consider and evaluate an investment in the Company, and will be kept
confidential by Purchaser and not used for any other purpose.
(b) The information contained herein shall not, without the prior
written consent of the Company, be disclosed by Purchaser to any person or
entity, other than Purchaser's personal financial and legal advisors for the
sole purpose of evaluating an investment in the Company, and will not, directly
or indirectly, disclose or permit Purchaser's personal financial and legal
advisors to disclose any of such information without the prior written consent
of the Company.
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(c) Purchaser shall make its representatives aware of the terms of
this section and to be responsible for any breach of this Agreement by such
representatives.
(d) Purchaser shall not, without the prior written consent of the
Company, directly or indirectly, make any statements, public announcements or
release to trade publications or the press with respect to the subject matter of
this Agreement and the other Offering Documents.
(e) If Purchaser decides to not pursue further investigation of the
Company or to not participate in the Offering, Purchaser will promptly return
this Agreement, the other Offering Documents and any accompanying documentation
to the Company.
7. Registration Rights. The Company covenants and agrees as follows:
7.1 For the purpose of this Section 7, the following definitions
shall apply:
(a) "Person" shall mean an individual, partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
(b) "Register," "registered," and "registration" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or order of
effectiveness of such registration statement or document.
(c) "Registration Statement" shall mean any registration
statement of the Company filed with the SEC pursuant to the provisions of
Section 7.2 of this Agreement, but excluding registration statements on SEC
Forms ▇-▇, ▇-▇ or any similar or successor forms, that covers the resale of the
Restricted Stock on an appropriate form then permitted by the SEC to be used for
such registration and the sales contemplated to be made thereby under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including any pre-
and post- effective amendments thereto, in each case including the prospectus
contained therein, all exhibits thereto and all materials incorporated by
reference therein.
(d) "Restricted Stock" shall mean (i) 50% of the Shares
purchased hereunder; (ii) 50% of the shares of Common Stock issuable upon
exercise of the Warrants; and (iii) any additional shares of Common Stock of the
Company issued or issuable after the date hereof in respect of any of the
foregoing securities, by way of a stock dividend or stock split; provided that,
as to any particular shares of Restricted Stock, such securities shall cease to
constitute Restricted Stock when (x) a Registration Statement with respect to
the sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of thereunder, (y) such securities
are permitted to be transferred pursuant to Rule 144 (or any successor provision
to such rule) under the Securities Act, or (z) such securities are otherwise
freely transferable to the public without further registration under the
Securities Act.
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(e) "Selling Stockholders" shall mean Purchaser and any other
purchaser of Units in the Offering, and their respective successors and assigns.
7.2. Registration of the Shares.
(a) The Company shall use its reasonable best efforts to prepare
and file with the SEC, within six (6) months of the date of termination of the
Offering, a Registration Statement under the Act to permit the public sale of
the Restricted Stock purchased hereby, and to cause such Registration Statement
to be declared effective as soon as reasonably practicable thereafter. Purchaser
shall furnish such information as may be reasonably requested by the Company in
order to include such Restricted Stock in such Registration Statement. If
Purchaser decides not to include all of its Restricted Stock in any registration
statement thereafter filed by the Company, such Purchaser shall nevertheless
continue to have the right to include any Restricted Stock in any subsequent
registration statement or registration statements as may be filed by the Company
with respect to offerings of its securities, all upon the terms and conditions
set forth herein. In the event that any registration pursuant to this Section
7.2(a) is terminated or withdrawn, the Company shall use its reasonable best
efforts to prepare and file with the SEC, within 180 days thereafter, a
Registration Statement under the Act to permit the public sale of the Restricted
Stock purchased hereby.
(b) In the event that any registration pursuant to Section
7.2(a) shall be, in whole or in part, an underwritten public offering of Common
Stock on behalf of the Company, all Purchasers proposing to distribute their
Restricted Stock through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by the Company. If the managing underwriter thereof advises
the Company in writing that in its opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in an
orderly manner in such offering within a price range acceptable to the Company,
the Company shall include in such registration (i) first, the securities the
Company proposes to sell, and (ii) second, the Restricted Stock and any other
registrable securities eligible and requested to be included in such
registration to the extent that the number of shares to be registered under this
clause (ii) will not, in the opinion of the managing underwriter, adversely
affect the offering of the securities pursuant to clause (i). In such a case,
shares shall be registered pro rata among the holders of such Restricted Stock
and registrable securities on the basis of the number of shares eligible for
registration that are owned by all such holders and requested to be included in
such registration.
(c) Notwithstanding anything to the contrary contained herein,
the Company's obligation in Sections 7.2(a) and (b) above shall extend only to
the inclusion of the Restricted Stock in a Registration Statement. The Company
shall have no obligation to assure the terms and conditions of distribution, to
obtain a commitment from an underwriter relative to the sale of the Restricted
Stock or to otherwise assume any responsibility for the manner, price or terms
of the distribution of the Restricted Stock.
(d) The Company shall have the right to terminate or withdraw
any registration initiated by it under this Section 7.2 prior to the
effectiveness of such registration without thereby incurring liability to the
holders of the Restricted Stock, regardless of whether any holder has elected to
include securities in such registration. The Registration Expenses (as defined
in Section 7.5) of such withdrawn registration shall be borne by the Company in
accordance with Section 7.4 hereof.
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7.3. Registration Procedures. Whenever it is obligated to register
any Restricted Stock pursuant to this Agreement, the Company shall:
(a) prepare and file with the SEC a Registration Statement with
respect to the Restricted Stock in the manner set forth in Section 7.2 hereof
and use its reasonable best efforts to cause such Registration Statement to
become effective as promptly as possible and to remain effective until the
earlier of (i) the sale of all shares of Restricted Stock covered thereby, (ii)
the availability under Rule 144 for the Selling Stockholder to immediately,
freely resell without restriction all Restricted Stock covered thereby, or (iii)
one (1) year from the effective date of the first Registration Statement filed
by the Company with the SEC pursuant to this Agreement or, with respect to any
subsequent Registration Statement, 180 days from the effective date of such
Registration Statement;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for the period specified in Section 7.3(a)
above and to comply with the provisions of the Act with respect to the
disposition of all Restricted Stock covered by such Registration Statement in
accordance with the intended method of disposition set forth in such
Registration Statement for such period;
(c) furnish to the Selling Stockholders such number of copies of
the Registration Statement and the prospectus included therein (including each
preliminary prospectus) as such person may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Stock covered
by such Registration Statement;
(d) use its reasonable best efforts to register or qualify the
Restricted Stock covered by such Registration Statement under the state
securities laws of such jurisdictions as any Selling Stockholder shall
reasonably request; provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
(e) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each
Purchaser participating in such underwriting shall also enter into and perform
its obligations under such an agreement, as described in Section 7.2(b);
(f) immediately notify each Selling Stockholder at any time when
a prospectus relating thereto is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus contained in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required or necessary to be
stated therein in order to make the statements contained therein not misleading
in light of the circumstances under which they were made. The Company will use
reasonable efforts to amend or supplement such prospectus in order to cause such
prospectus not to include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;
11
(g) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statements as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement;
(h) use its reasonable best efforts to list the Restricted Stock
covered by such Registration Statement on each exchange or automated quotation
system on which similar securities issued by the Company are then listed (with
the listing application being made at the time of the filing of such
Registration Statement or as soon thereafter as is reasonably practicable);
(j) notify each Selling Stockholder of any threat by the SEC or
state securities commission to undertake a stop order with respect to sales
under the Registration Statement; and
(k) cooperate in the timely removal of any restrictive legends
from the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.
7.4. Delay of Registration. No Selling Stockholder shall have any
right to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 7.
7.5 Expenses.
(a) For the purposes of this Section 7.5, the term "Registration
Expenses" shall mean: all expenses incurred by the Company in complying with
Section 7.2 of this Agreement, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, reasonable fees and
disbursements of a single special counsel for the Selling Stockholders, fees
under state securities laws, fees of the National Association of Securities
Dealers, Inc., fees and expenses of listing shares of Restricted Stock on any
securities exchange or automated quotation system on which the Company's shares
are listed and fees of transfer agents and registrars. The term "Selling
Expenses" shall mean: all underwriting discounts and selling commissions
applicable to the sale of Restricted Stock and all accountable or
non-accountable expenses paid to any underwriter in respect of such sale.
(b) Except as otherwise provided herein, the Company will pay
all Registration Expenses in connection with the Registration Statements filed
pursuant to Section 7.2 of this Agreement. All Selling Expenses in connection
with any Registration Statements filed pursuant to Section 7.2 of this Agreement
shall be borne by the Selling Stockholders pro rata on the basis of the number
of shares registered by each Selling Stockholder whose shares of Restricted
Stock are covered by such Registration Statement, or by such persons other than
the Company (except to the extent the Company may be a seller) as they may
agree.
12
7.6. Obligations of the Selling Stockholders.
(a) In connection with each registration hereunder, each Selling
Stockholder shall furnish to the Company in writing such information with
respect to it and the securities held by it and the proposed distribution by it,
as shall be reasonably requested by the Company in order to assure compliance
with applicable federal and state securities laws as a condition precedent to
including the Selling Stockholder's Restricted Stock in the Registration
Statement. Each Selling Stockholder shall also promptly notify the Company of
any changes in such information included in the Registration Statement or
prospectus as a result of which there is an untrue statement of material fact or
an omission to state any material fact required or necessary to be stated
therein in order to make the statements contained therein not misleading in
light of the circumstances under which they were made.
(b) In connection with the filing of the Registration Statement,
each Selling Stockholder shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with such Registration Statement or prospectus.
(c) In connection with each registration pursuant to this
Agreement, each Selling Stockholder agrees that it will not effect sales of any
Restricted Stock until notified by the Company of the effectiveness of the
Registration Statement, and thereafter will suspend such sales after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a Registration Statement or prospectus. At the end
of any period during which the Company is obligated to keep a Registration
Statement current, each Selling Stockholder shall discontinue sales of
Restricted Stock pursuant to such Registration Statement upon receipt of notice
from the Company of its intention to remove from registration the Restricted
Stock covered by such Registration Statement which remains unsold, and each
Selling Stockholder shall notify the Company of the number of shares registered
which remain unsold immediately upon receipt of such notice from the Company.
7.7. Information Blackout and Holdbacks.
(a) At any time when a Registration Statement effected pursuant
to Section 7.2 is effective, upon written notice from the Company to Purchaser
that the Company has determined in good faith that the sale of Restricted Stock
pursuant to the Registration Statement would require disclosure of non-public
material information, Purchaser shall suspend sales of Restricted Stock pursuant
to such Registration Statement until such time as the Company notifies Purchaser
that such material information has been disclosed to the public or has ceased to
be material, or that sales pursuant to such Registration Statement may otherwise
be resumed.
(b) Notwithstanding any other provision of this Agreement,
Purchaser shall not effect any public sale or distribution (including sales
pursuant to Rule 144 under the Securities Act), if and when available, of equity
securities of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the thirty (30) days prior to the
commencement of any primary offering to be undertaken by the Company of shares
of its unissued Common Stock ("Primary Offering"), which may also include other
securities, and ending one hundred twenty (120) days after completion of any
such Primary Offering, unless the Company, in the case of a non-underwritten
Primary Offering, or the managing underwriter, in the case of an underwritten
Primary Offering, otherwise agree.
13
7.8. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by
law, each Selling Stockholder, such Selling Stockholder's respective partners,
officers, directors, underwriters and each Person who controls any Selling
Stockholder (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses caused by (i) any untrue statement of
or alleged untrue statement of material fact contained in the Registration
Statement, prospectus or preliminary prospectus or any amendment or supplement
thereto, (ii) any omission of or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement
("Violations"); provided, however, that the indemnity agreement contained in
this Section 7.8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company, which consent shall not be unreasonably withheld,
nor shall the Company be liable in for any loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Selling
Stockholder, partner, officer, director, underwriter or controlling person of
such Selling Stockholder.
(b) To the extent permitted by law, each Selling Stockholder
shall indemnify and hold harmless the Company, each of its directors, its
officers and each person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Selling Stockholder selling
securities under such registration statement or any of such other Selling
Stockholder's partners, directors or officers or any person who controls such
Selling Stockholder, against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, underwriter or other such Selling Stockholder, or partner, director,
officer or controlling person of such other Selling Stockholder, may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation (i) occurs in reliance
upon and in conformity with written information furnished by such Selling
Stockholder under an instrument duly executed by such Selling Stockholder for
use in connection with such registration; (ii) occurs as a result of any failure
to deliver a copy of the prospectus relating to such Registration Statement, or
(iii) occurs as a result of any disposition of the Restricted Stock in a manner
that fails to comply with the permitted methods of distribution identified
within the Registration Statement.
14
(c) Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party), and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) If the indemnification provided for in this Section 7.8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the violation(s) described in Section
7.8(a) that resulted in such loss, claim, damage or liability, as well as any
other relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, that in no event
shall any contribution by a Selling Stockholder hereunder exceed the net
proceeds from the offering received by such Selling Stockholder.
(e) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
Company also agrees to make such provisions as are reasonably requested by any
indemnified party for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
8. Entire Agreement. This Agreement contains the entire agreement
between the parties and supercedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereto,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations, guarantees or covenants except as specifically set
forth in this Agreement. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement contained herein.
15
9. Amendment and Modification. This Agreement may not be amended,
modified or supplemented except by an instrument or instruments in writing
signed by the party against whom enforcement of any such amendment, modification
or supplement is sought.
10. Extensions and Waivers. At any time prior to the Closing, the
parties hereto entitled to the benefits of a term or provision may (a) extend
the time for the performance of any of the obligations or other acts of the
parties hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto, or (c) waive compliance with any obligation, covenant, agreement or
condition contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument or
instruments in writing signed by the party against whom enforcement of any such
extension or waiver is sought. No failure or delay on the part of any party
hereto in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty, covenant or agreement.
11. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided, however, that no party hereto may assign its rights or
delegate its obligations under this Agreement without the express prior written
consent of the other party hereto. Except as provided in Section 5, nothing in
this Agreement is intended to confer upon any person not a party hereto (and
their successors and assigns) any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
12. Survival of Representations, Warranties and Covenants. The
representations and warranties contained herein shall survive the Closing and
shall thereupon terminate eighteen (18) months from the Closing, except that the
representations contained in Sections 3(a), 3(b), 3(d), 4(a), and 4(b) shall
survive indefinitely. All covenants and agreements contained herein which by
their terms contemplate actions following the Closing shall survive the Closing
and remain in full force and effect in accordance with their terms. All other
covenants and agreements contained herein shall not survive the Closing and
shall thereupon terminate.
13. Headings; Definitions. The Section headings contained in this
Agreement are inserted for convenience of reference only and will not affect the
meaning or interpretation of this Agreement. All references to Sections
contained herein mean Sections of this Agreement unless otherwise stated. All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms.
14. Severability. If any provision of this Agreement or the application
thereof to any person or circumstance is held to be invalid or unenforceable to
any extent, the remainder of this Agreement shall remain in full force and
effect and shall be reformed to render the Agreement valid and enforceable while
reflecting to the greatest extent permissible the intent of the parties hereto.
16
15. Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy,
telefax or other electronic transmission service to the appropriate address or
number as set forth below:
If to the Company:
National Health Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
with a copy to:
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
If to Purchaser:
To that address indicated on the signature page hereof.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
17. Arbitration. If a dispute arises as to the interpretation of this
Agreement, it shall be decided in an arbitration proceeding conforming to the
Rules of the American Arbitration Association applicable to commercial
arbitration then in effect at the time of the dispute. The arbitration shall
take place in the Commonwealth of Pennsylvania. The decision of the arbitrators
shall be conclusively binding upon the parties and final, and such decision
shall be enforceable as a judgment in any court of competent jurisdiction. The
parties hereto shall share equally the costs of the arbitration.
18. Counterparts. This Agreement may be executed and delivered by
facsimile in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same agreement.
[Remainder of page intentionally left blank]
17
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto
have caused this Agreement to be executed as of the date set forth below.
PURCHASER
Date: __________________________________ _____________________________________
By:__________________________________
Name:
Title:
Address:__________________________
__________________________________
__________________________________
Number of Units Purchased: __________
Purchase Price
@ $[____] per Unit: $________________
NATIONAL HEALTH PARTNERS, INC.
Date:__________________________________ By:__________________________________
Name:
Title:
18
EXHIBIT A
CLASS A WARRANT NO.: [__________]
FORM OF CLASS A WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT
PURPOSES ONLY, AND NOT WITH A VIEW TO THE RESALE OR DISTRIBUTION THEREOF, AND
MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE
THE SECURITIES ACT OF 1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR
OTHER APPLICABLE SECURITIES LAWS.
CLASS A WARRANT TO PURCHASE
COMMON STOCK OF
NATIONAL HEALTH PARTNERS, INC.
Void after 5:00 p.m. Eastern Standard Time on [_____________]
This Class A Warrant ("Warrant") confirms that, FOR VALUE RECEIVED,
[_____________________________] ("Holder") is entitled to purchase, subject to
the terms and conditions hereof, from NATIONAL HEALTH PARTNERS, INC., an Indiana
corporation (the "Company"), [_____________] shares of common stock, $.001 par
value per share, of the Company (the "Common Stock"), at any time during the
period commencing on the Commencement Date (as defined below) and ending at 5:00
p.m. Eastern Standard Time on the date that is [___________] after the
Commencement Date (the "Termination Date"), at an exercise price of $[_____] per
share of Common Stock (the "Exercise Price"). The number of shares of Common
Stock purchasable upon exercise of this Warrant and the Exercise Price per share
shall be subject to adjustment from time to time upon the occurrence of certain
events as set forth below.
The shares of Common Stock or any other shares or other units of stock
or other securities or property, or any combination thereof, then receivable
upon exercise of this Warrant, as adjusted from time to time, are sometimes
referred to hereinafter as "Exercise Shares". The exercise price per share as
from time to time in effect is referred to hereinafter as the "Exercise Price".
1. Exercise of Warrant; Issuance of Exercise Shares.
(a) Exercise of Warrant. Subject to the terms hereof, the purchase
rights represented by this Warrant are exercisable by Holder in whole or in
part, at any time, or from time to time, after the Commencement Date by the
surrender of this Warrant and the Notice of Exercise annexed hereto duly
completed and executed on behalf of Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to Holder at the address of Holder appearing on the books of the
Company) accompanied by payment of the Exercise Price in full either (i) in cash
or by bank or certified check for the Exercise Shares with respect to which this
Warrant is exercised; (ii) by delivery to the Company of shares of the Company's
Common Stock having a Fair Market Value (as defined below) equal to the
aggregate Exercise Price of the Exercise Shares being purchased that Holder is
the record and beneficial owner of and, if Holder was subject to Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") at the time
such shares were purchased, that have been held by the Holder for at least six
(6) months; (iii) provided that the sale of the Exercise Shares are covered by
an effective registration statement, by delivering to the Company a duly
executed Notice of Exercise in the form attached hereto as Appendix A ("Notice
of Exercise") together with an irrevocable direction to a broker-dealer
registered under the Exchange Act, to sell a sufficient portion of the Exercise
Shares and deliver the sales proceeds directly to the Company to pay the
Exercise Price; or (iv) by any combination of the procedures set forth in
subsections (i), (ii) and (iii) of this Section 1(a); provided, however, that in
no event may Holder exercise.
For the purposes hereof, "Commencement Date" shall mean the date that
any registration statement filed by the Company with the SEC pursuant to Section
7 of that certain Securities Purchase Agreement dated on or about the date
hereof by and between the Company and the Holder (the "Securities Purchase
Agreement") is declared effective by the SEC, and "Fair Market Value" shall be
an amount equal to the average of the Current Market Value (as defined below)
for the ten (10) days preceding the Company's receipt of the duly executed
Notice of Exercise.
In the event that this Warrant shall be duly exercised in part prior to
the Termination Date, the Company shall issue a new Warrant of like tenor
evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.
(b) Issuance of Exercise Shares; Delivery of Warrant Certificate. The
Company shall, within ten (10) business days or as soon thereafter as is
practicable of the exercise of this Warrant, issue in the name of and cause to
be delivered to the Holder one or more certificates representing the Exercise
Shares to which the Holder shall be entitled upon such exercise under the terms
hereof. Such certificate or certificates shall be deemed to have been issued and
the Holder shall be deemed to have become the record holder of the Exercise
Shares as of the date of the proper exercise of this Warrant.
(c) Exercise Shares Fully Paid and Non-assessable. The Company agrees
and covenants that all Exercise Shares issuable upon the due exercise of the
Warrant represented by this Warrant certificate ("Warrant Certificate") will,
upon issuance and payment therefor in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable and free and clear of
all taxes (other than taxes which, pursuant to Section 2 hereof, the Company
shall not be obligated to pay) or liens, charges, and security interests created
by the Company with respect to the issuance thereof.
2
(d) Reservation of Exercise Shares. The Company covenants that during
the term that this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Exercise Shares upon the exercise of this Warrant, and
from time to time will take all steps necessary to amend its Certificate of
Incorporation to provide sufficient reserves of shares of Common Stock issuable
upon the exercise of the Warrant.
(e) Fractional Shares. The Company shall not be required to issue
fractional shares of capital stock upon the exercise of this Warrant or to
deliver Warrant Certificates that evidence fractional shares of capital stock.
In the event that any fraction of an Exercise Share would, except for the
provisions of this subsection (e), be issuable upon the exercise of this
Warrant, the Company shall pay to the Holder exercising the Warrant an amount in
cash equal to such fraction multiplied by the Current Market Value of the
Exercise Share on the last business day prior to the date on which this Warrant
is exercised. For purposes hereof, the "Current Market Value" for any day shall
be determined as follows:
(i) if the Exercise Shares are listed or traded on a national
securities exchange or the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded, on
the NASDAQ Reporting System, as the case may be, on the last business day prior
to the date of the exercise of this Warrant. The closing price referred to in
this clause (i) shall be the last reported sales price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the national securities exchange on which
the Exercise Shares are then listed or in the NASDAQ Reporting System; or
(ii) if the Exercise Shares are traded in the over-the-counter
market and not on any national securities exchange and not on the NASDAQ
National Market System or NASDAQ Small Cap Market (together, the "NASDAQ
Reporting System"), the average of the mean between the last bid and asked
prices per share, as reported by the National Quotation Bureau, Inc., or an
equivalent generally accepted reporting service, or if not so reported, the
average of the closing bid and asked prices for an Exercise Share as furnished
to the Company by any member of the National Association of Securities Dealers,
Inc., selected by the Company for that purpose; or
(iii) if no such closing price or closing bid and asked prices
are available, as determined in any reasonable manner as may be prescribed by
the Board of Directors of the Company.
2. Payment of Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Exercise Shares upon the exercise of
this Warrant; provided, however, that the Company shall not be required to pay
any tax or taxes that may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Exercise Shares in a
name other than that of the holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
3
3. Mutilated or Missing Warrant Certificates. In case any Warrant shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue,
in exchange and substitution for and upon cancellation of the mutilated Warrant,
or in lieu of and in substitution for the Warrant lost, stolen or destroyed, a
new Warrant of like tenor and in the same aggregate denomination, but only (i)
in the case of loss, theft or destruction, upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction of such Warrant and indemnity
or bond, if requested, also satisfactory to them and (ii) in the case of
mutilation, upon surrender of the mutilated Warrant. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company or its counsel may prescribe.
4. Rights of Holder. The Holder shall not, by virtue of anything contained in
this Warrant or otherwise, be entitled to any right whatsoever, either at law or
in equity, of a stockholder of the Company, including without limitation, the
right to receive dividends or to vote or to consent or to receive notice as a
shareholder in respect of the meetings of shareholders or the election of
directors of the Company or any other matter.
5. Registration of Transfers and Exchanges. The Warrant shall be transferable,
subject to the provisions of Section 7 hereof, upon the books of the Company, if
any, to be maintained by it for that purpose, upon surrender of the Warrant
Certificate to the Company at its principal office accompanied (if so required
by the Company) by a written instrument or instruments of transfer in form
satisfactory to the Company and duly executed by Holder or by the duly appointed
legal representative thereof or by a duly authorized attorney and upon payment
of any necessary transfer tax or other governmental charge imposed upon such
transfer. In all cases of transfer by an attorney, the original letter of
attorney, duly approved, or an official copy thereof, duly certified, shall be
deposited and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Company in its discretion. Upon any such
registration of transfer, a new Warrant shall be issued to the transferee named
in such instrument of transfer, and the surrendered Warrant shall be canceled by
the Company.
Any Warrant may be exchanged, at the option of the Holder thereof and
without charge, when surrendered to the Company at its principal office, or at
the office of its transfer agent, if any, for another Warrant of like tenor and
representing in the aggregate the right to purchase from the Company a like
number and kind of Exercise Shares as the Warrant surrendered for exchange or
transfer, and the Warrant so surrendered shall be canceled by the Company or
transfer agent, as the case may be.
6. Adjustment of Exercise Shares and Exercise Price. The Exercise Price and the
number and kind of Exercise Shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of certain
events as hereinafter provided. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon exercise of each Warrant shall be
subject to adjustment as follows:
(a) In case of any consolidation or merger of the Company with another
corporation (other than a merger with another corporation in which the Company
is the surviving corporation and which does not result in any reclassification
or change - other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination - of outstanding Common Stock issuable upon such exercise), the
rights of the Holder of this Warrant shall be adjusted in the manner described
below:
4
(i) In the event that the Company is the surviving
corporation, this Warrant shall, without payment of additional consideration
therefor, be deemed modified so as to provide that the Holder of this Warrant,
upon the exercise thereof, shall procure, in lieu of each share of Common Stock
theretofore issuable upon such exercise, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification,
change, consolidation or merger by the holder of each share of Common Stock, had
exercise of this Warrant occurred immediately prior to such reclassification,
change, consolidation or merger. This Warrant (as adjusted) shall be deemed to
provide for further adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The provisions of
this clause (i) shall similarly apply to successive reclassifications, changes,
consolidations and mergers.
(ii) In the event that the Company is not the surviving
corporation, Holder shall be given at least fifteen (15) days prior written
notice of such transaction and shall be permitted to exercise this Warrant, to
the extent it is exercisable as of the date of such notice, during this fifteen
(15) day period. Upon expiration of such fifteen (15) day period, this Warrant
and all of Holder's rights hereunder shall terminate.
(b) If the Company, at any time while this Warrant, or any portion
thereof, remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 6.
(c) In case the Company shall (i) pay a dividend or make a distribution
on its shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding Common Stock into a greater number of shares, or
(iii) combine or reclassify its outstanding Common Stock into a smaller number
of shares, the Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination or reclassification, shall be proportionally adjusted so that the
holder of this Warrant exercised after such date shall be entitled to receive
the aggregate number and kind of shares that, if this Warrant had been exercised
by such holder immediately prior to such date, he would have owned upon such
exercise and been entitled to receive upon such dividend, subdivision,
combination or reclassification. For example, if the Company declares a 2 for 1
stock dividend or stock split and the Exercise Price immediately prior to such
event was $2.00 per share, the adjusted Exercise Price immediately after such
event would be $1.00 per share. Such adjustment shall be made successively
whenever any event listed above shall occur. Whenever the Exercise Price payable
upon exercise of each Warrant is adjusted pursuant to this subsection (c), the
number of Exercise Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Exercise Shares
initially issuable upon exercise of this Warrant by the Exercise Price in effect
on the date hereof and dividing the product so obtained by the Exercise Price,
as adjusted.
5
(d) In the event that at any time, as a result of an adjustment made
pursuant to subsection (a), (b) or (c) above, the Holder of this Warrant
thereafter shall become entitled to receive any Exercise Shares of the Company,
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in subsections (a), (b) or
(c) above.
(e) Irrespective of any adjustments in the Exercise Price or the number
or kind of Exercise Shares purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant.
(f) Whenever the Exercise Price shall be adjusted as required by the
provisions of the foregoing Section 6, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office and
with its stock transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by Holder and the Company shall, forthwith after
each such adjustment, mail a copy by certified mail of such certificate to
Holder.
(g) All calculations under this Section 6 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
7. Restrictions on Transferability: Restrictive Legend. Neither this Warrant nor
the Exercise Shares shall be transferable except in accordance with the
provisions of this Section.
(a) Restrictions on Transfer; Indemnification. Neither this Warrant nor
any Exercise Share may be offered for sale or sold, or otherwise transferred or
sold in any transaction which would constitute a sale thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), unless (i)
such security has been registered for sale under the Securities Act and
registered or qualified under applicable state securities laws relating to the
offer and sale of securities, or (ii) exemptions from the registration
requirements of the Securities Act and the registration or qualification
requirements of all such state securities laws are available, and the Company
shall have received an opinion of counsel satisfactory to the Company that the
proposed sale or other disposition of such securities may be effected without
registration under the Securities Act and would not result in any violation of
any applicable state securities laws relating to the registration or
qualification of securities for sale, such counsel and such opinion to be
satisfactory to the Company.
6
(b) Restrictive Legends. Unless and until otherwise permitted by this
Section 7, this Warrant Certificate, each Warrant Certificate issued to the
Holder or to any transferee or assignee of this Warrant Certificate, and each
certificate representing Exercise Shares issued upon exercise of this Warrant or
to any transferee of the person to whom the Exercise Shares were issued, shall
bear a legend setting forth the requirements of subsection (a) of this Section
7, together with such other legend or legends as may otherwise be deemed
necessary or appropriate by counsel to the Company.
(c) Removal of Legend. The Company shall, at the request of any
registered holder of a Warrant or Exercise Share, exchange the certificate
representing such security for a certificate representing the same security not
bearing the restrictive legend required by subsection (b) if, in the opinion of
counsel acceptable to the Company, such restrictive legend is no longer
necessary.
(d) The Holder agrees to indemnify and hold harmless the Company
against any loss, damage, claim or liability arising from the disposition of
this Warrant or any Exercise Share held by such holder or any interest therein
in violation of the provisions of this Section 7.
8. Registration Rights. The Holder shall be entitled to the rights and subject
to the obligations set forth in Section 7 of the Securities Purchase Agreement.
9. Restrictions on Exercise. The Holder may not acquire a number of Exercise
Shares to the extent that, upon such exercise, the number of shares of Common
Stock then beneficially owned by such Holder and its affiliates and any other
persons or entities whose beneficial ownership of Common Stock would be
aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act,
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 19.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities Exchange
Commission (the "Commission"), and the percentage held by the holder shall be
determined in a manner consistent with the provisions of Section 13(d) of the
Exchange Act.
10. Notices. All notices or other communications under this Warrant shall be in
writing and shall be deemed to have been given on the day of delivery if
delivered by hand, on the fifth day after deposit in the mail if mailed by
certified mail, postage prepaid, return receipt requested, or on the next
business day after mailing if sent by a nationally recognized overnight courier
such as federal express, addressed as follows:
If to the Company:
National Health Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
7
with a copy to:
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
and if to Holder, at the address of Holder appearing on the
books of the Company or the Company's transfer agent, if any.
Either of the Company or Holder may from time to time change the
address to which notices to it are to be mailed hereunder by notice in
accordance with the provisions of this Section 10.
11. Supplements and Amendments. The Company may from time to time supplement or
amend this Warrant without the approval of any holders of Warrants in order to
cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision, or to make any
other provisions in regard to matters or questions herein arising hereunder
which the Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the Holder.
12. Successors and Assigns. This Warrant shall inure to the benefit of and be
binding upon the respective successors, assigns and legal representatives of
Holder and the Company.
13. Severability. If for any reason any provision, paragraph or terms of this
Warrant is held to be invalid or unenforceable, all other valid provisions
herein shall remain in full force and effect and all terms, provisions and
paragraphs of this Warrant shall be deemed to be severable.
14. Governing Law. This Warrant shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed in accordance with the laws of said jurisdiction without regard
to such jurisdiction's conflicts of laws provisions.
15. Headings. Section and subsection headings used herein are included herein
for convenience of reference only and shall not affect the construction of this
Warrant nor constitute a part of this Warrant for any other purpose.
[Remainder of page intentionally left blank]
8
IN WITNESS WHEREOF, the Company has caused these presents to be duly
executed as of the [___] day of [______________], [_______].
NATIONAL HEALTH PARTNERS, INC.
By: [___________________________]
Name:
Title:
9
APPENDIX A
NOTICE OF EXERCISE
TO: National Health Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
(1) The undersigned hereby elects to purchase [_______________] shares
of Common Stock (as defined in the attached Class A Warrant) of NATIONAL HEALTH
PARTNERS, INC. pursuant to the terms of the attached Class A Warrant, and
tenders herewith payment of the Exercise Price (as defined in the attached
Warrant) for such shares in full in the following manner (please check one of
the following choices):
[ ] In Cash;
[ ] Cashless exercise through a broker; or
[ ] Delivery of previously owned shares of Common Stock.
(2) In exercising the Class A Warrant, the undersigned hereby confirms
and acknowledges that the shares of Common Stock to be issued upon conversion
hereof are being acquired solely for the account of the undersigned, not as a
nominee for any other party, and for investment purposes only (unless such
shares are subject to resale pursuant to an effective prospectus), and that the
undersigned will not offer, sell or otherwise dispose of any such shares of
Common Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned.
HOLDER
[__________________________] [__________________________________]
(Date) (Signature)
EXHIBIT B
CLASS B WARRANT NO.: [__________]
FORM OF CLASS B WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT
PURPOSES ONLY, AND NOT WITH A VIEW TO THE RESALE OR DISTRIBUTION THEREOF, AND
MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE
THE SECURITIES ACT OF 1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR
OTHER APPLICABLE SECURITIES LAWS.
CLASS B WARRANT TO PURCHASE
COMMON STOCK OF
NATIONAL HEALTH PARTNERS, INC.
Void after 5:00 p.m. Eastern Standard Time on [______________]
This Class B Warrant ("Warrant") confirms that, FOR VALUE RECEIVED,
[_____________________________] ("Holder") is entitled to purchase, subject to
the terms and conditions hereof, from NATIONAL HEALTH PARTNERS, INC., an Indiana
corporation (the "Company"), [_____________] shares of common stock, $.001 par
value per share, of the Company (the "Common Stock"), at any time during the
period commencing on the Commencement Date (as defined below) and ending at 5:00
p.m. Eastern Standard Time on the date that is [____________] after the
Commencement Date (the "Termination Date"), at an exercise price of $[______]
per share of Common Stock (the "Exercise Price"). The number of shares of Common
Stock purchasable upon exercise of this Warrant and the Exercise Price per share
shall be subject to adjustment from time to time upon the occurrence of certain
events as set forth below.
The shares of Common Stock or any other shares or other units of stock
or other securities or property, or any combination thereof, then receivable
upon exercise of this Warrant, as adjusted from time to time, are sometimes
referred to hereinafter as "Exercise Shares". The exercise price per share as
from time to time in effect is referred to hereinafter as the "Exercise Price".
1. Exercise of Warrant; Issuance of Exercise Shares.
(a) Exercise of Warrant. Subject to the terms hereof, the purchase
rights represented by this Warrant are exercisable by Holder in whole or in
part, at any time, or from time to time, after the Commencement Date by the
surrender of this Warrant and the Notice of Exercise annexed hereto duly
completed and executed on behalf of Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to Holder at the address of Holder appearing on the books of the
Company) accompanied by payment of the Exercise Price in full either (i) in cash
or by bank or certified check for the Exercise Shares with respect to which this
Warrant is exercised; (ii) by delivery to the Company of shares of the Company's
Common Stock having a Fair Market Value (as defined below) equal to the
aggregate Exercise Price of the Exercise Shares being purchased that Holder is
the record and beneficial owner of and, if Holder was subject to Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") at the time
such shares were purchased, that have been held by the Holder for at least six
(6) months; (iii) provided that the sale of the Exercise Shares are covered by
an effective registration statement, by delivering to the Company a duly
executed Notice of Exercise in the form attached hereto as Appendix A ("Notice
of Exercise") together with an irrevocable direction to a broker-dealer
registered under the Exchange Act, to sell a sufficient portion of the Exercise
Shares and deliver the sales proceeds directly to the Company to pay the
Exercise Price; or (iv) by any combination of the procedures set forth in
subsections (i), (ii) and (iii) of this Section 1(a).
For the purposes hereof, "Commencement Date" shall mean the date that
any registration statement filed by the Company with the SEC pursuant to Section
7 of that certain Securities Purchase Agreement dated on or about the date
hereof by and between the Company and the Holder (the "Securities Purchase
Agreement") is declared effective by the SEC, and "Fair Market Value" shall be
an amount equal to the average of the Current Market Value (as defined below)
for the ten (10) days preceding the Company's receipt of the duly executed
Notice of Exercise.
In the event that this Warrant shall be duly exercised in part prior to
the Termination Date, the Company shall issue a new Warrant of like tenor
evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.
(b) Issuance of Exercise Shares; Delivery of Warrant Certificate. The
Company shall, within ten (10) business days or as soon thereafter as is
practicable of the exercise of this Warrant, issue in the name of and cause to
be delivered to the Holder one or more certificates representing the Exercise
Shares to which the Holder shall be entitled upon such exercise under the terms
hereof. Such certificate or certificates shall be deemed to have been issued and
the Holder shall be deemed to have become the record holder of the Exercise
Shares as of the date of the proper exercise of this Warrant.
(c) Exercise Shares Fully Paid and Non-assessable. The Company agrees
and covenants that all Exercise Shares issuable upon the due exercise of the
Warrant represented by this Warrant certificate ("Warrant Certificate") will,
upon issuance and payment therefor in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable and free and clear of
all taxes (other than taxes which, pursuant to Section 2 hereof, the Company
shall not be obligated to pay) or liens, charges, and security interests created
by the Company with respect to the issuance thereof.
2
(d) Reservation of Exercise Shares. The Company covenants that during
the term that this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Exercise Shares upon the exercise of this Warrant, and
from time to time will take all steps necessary to amend its Certificate of
Incorporation to provide sufficient reserves of shares of Common Stock issuable
upon the exercise of the Warrant.
(e) Fractional Shares. The Company shall not be required to issue
fractional shares of capital stock upon the exercise of this Warrant or to
deliver Warrant Certificates that evidence fractional shares of capital stock.
In the event that any fraction of an Exercise Share would, except for the
provisions of this subsection (e), be issuable upon the exercise of this
Warrant, the Company shall pay to the Holder exercising the Warrant an amount in
cash equal to such fraction multiplied by the Current Market Value of the
Exercise Share on the last business day prior to the date on which this Warrant
is exercised. For purposes hereof, the "Current Market Value" for any day shall
be determined as follows:
(i) if the Exercise Shares are listed or traded on a national
securities exchange or the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded, on
the NASDAQ Reporting System, as the case may be, on the last business day prior
to the date of the exercise of this Warrant. The closing price referred to in
this clause (i) shall be the last reported sales price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the national securities exchange on which
the Exercise Shares are then listed or in the NASDAQ Reporting System; or
(ii) if the Exercise Shares are traded in the over-the-counter
market and not on any national securities exchange and not on the NASDAQ
National Market System or NASDAQ Small Cap Market (together, the "NASDAQ
Reporting System"), the average of the mean between the last bid and asked
prices per share, as reported by the National Quotation Bureau, Inc., or an
equivalent generally accepted reporting service, or if not so reported, the
average of the closing bid and asked prices for an Exercise Share as furnished
to the Company by any member of the National Association of Securities Dealers,
Inc., selected by the Company for that purpose; or
(iii) if no such closing price or closing bid and asked prices
are available, as determined in any reasonable manner as may be prescribed by
the Board of Directors of the Company.
2. Payment of Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Exercise Shares upon the exercise of
this Warrant; provided, however, that the Company shall not be required to pay
any tax or taxes that may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Exercise Shares in a
name other than that of the holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
3
3. Mutilated or Missing Warrant Certificates. In case any Warrant shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue,
in exchange and substitution for and upon cancellation of the mutilated Warrant,
or in lieu of and in substitution for the Warrant lost, stolen or destroyed, a
new Warrant of like tenor and in the same aggregate denomination, but only (i)
in the case of loss, theft or destruction, upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction of such Warrant and indemnity
or bond, if requested, also satisfactory to them and (ii) in the case of
mutilation, upon surrender of the mutilated Warrant. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company or its counsel may prescribe.
4. Rights of Holder. The Holder shall not, by virtue of anything contained in
this Warrant or otherwise, be entitled to any right whatsoever, either at law or
in equity, of a stockholder of the Company, including without limitation, the
right to receive dividends or to vote or to consent or to receive notice as a
shareholder in respect of the meetings of shareholders or the election of
directors of the Company or any other matter.
5. Registration of Transfers and Exchanges. The Warrant shall be transferable,
subject to the provisions of Section 7 hereof, upon the books of the Company, if
any, to be maintained by it for that purpose, upon surrender of the Warrant
Certificate to the Company at its principal office accompanied (if so required
by the Company) by a written instrument or instruments of transfer in form
satisfactory to the Company and duly executed by Holder or by the duly appointed
legal representative thereof or by a duly authorized attorney and upon payment
of any necessary transfer tax or other governmental charge imposed upon such
transfer. In all cases of transfer by an attorney, the original letter of
attorney, duly approved, or an official copy thereof, duly certified, shall be
deposited and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Company in its discretion. Upon any such
registration of transfer, a new Warrant shall be issued to the transferee named
in such instrument of transfer, and the surrendered Warrant shall be canceled by
the Company.
Any Warrant may be exchanged, at the option of the Holder thereof and
without charge, when surrendered to the Company at its principal office, or at
the office of its transfer agent, if any, for another Warrant of like tenor and
representing in the aggregate the right to purchase from the Company a like
number and kind of Exercise Shares as the Warrant surrendered for exchange or
transfer, and the Warrant so surrendered shall be canceled by the Company or
transfer agent, as the case may be.
6. Adjustment of Exercise Shares and Exercise Price. The Exercise Price and the
number and kind of Exercise Shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of certain
events as hereinafter provided. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon exercise of each Warrant shall be
subject to adjustment as follows:
(a) In case of any consolidation or merger of the Company with another
corporation (other than a merger with another corporation in which the Company
is the surviving corporation and which does not result in any reclassification
or change - other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination - of outstanding Common Stock issuable upon such exercise), the
rights of the Holder of this Warrant shall be adjusted in the manner described
below:
4
(i) In the event that the Company is the surviving
corporation, this Warrant shall, without payment of additional consideration
therefor, be deemed modified so as to provide that the Holder of this Warrant,
upon the exercise thereof, shall procure, in lieu of each share of Common Stock
theretofore issuable upon such exercise, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification,
change, consolidation or merger by the holder of each share of Common Stock, had
exercise of this Warrant occurred immediately prior to such reclassification,
change, consolidation or merger. This Warrant (as adjusted) shall be deemed to
provide for further adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The provisions of
this clause (i) shall similarly apply to successive reclassifications, changes,
consolidations and mergers.
(ii) In the event that the Company is not the surviving
corporation, Holder shall be given at least fifteen (15) days prior written
notice of such transaction and shall be permitted to exercise this Warrant, to
the extent it is exercisable as of the date of such notice, during this fifteen
(15) day period. Upon expiration of such fifteen (15) day period, this Warrant
and all of Holder's rights hereunder shall terminate.
(b) If the Company, at any time while this Warrant, or any portion
thereof, remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 6.
(c) In case the Company shall (i) pay a dividend or make a distribution
on its shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding Common Stock into a greater number of shares, or
(iii) combine or reclassify its outstanding Common Stock into a smaller number
of shares, the Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination or reclassification, shall be proportionally adjusted so that the
holder of this Warrant exercised after such date shall be entitled to receive
the aggregate number and kind of shares that, if this Warrant had been exercised
by such holder immediately prior to such date, he would have owned upon such
exercise and been entitled to receive upon such dividend, subdivision,
combination or reclassification. For example, if the Company declares a 2 for 1
stock dividend or stock split and the Exercise Price immediately prior to such
event was $2.00 per share, the adjusted Exercise Price immediately after such
event would be $1.00 per share. Such adjustment shall be made successively
whenever any event listed above shall occur. Whenever the Exercise Price payable
upon exercise of each Warrant is adjusted pursuant to this subsection (c), the
number of Exercise Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Exercise Shares
initially issuable upon exercise of this Warrant by the Exercise Price in effect
on the date hereof and dividing the product so obtained by the Exercise Price,
as adjusted.
5
(d) In the event that at any time, as a result of an adjustment made
pursuant to subsection (a), (b) or (c) above, the Holder of this Warrant
thereafter shall become entitled to receive any Exercise Shares of the Company,
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in subsections (a), (b) or
(c) above.
(e) Irrespective of any adjustments in the Exercise Price or the number
or kind of Exercise Shares purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant.
(f) Whenever the Exercise Price shall be adjusted as required by the
provisions of the foregoing Section 6, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office and
with its stock transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by Holder and the Company shall, forthwith after
each such adjustment, mail a copy by certified mail of such certificate to
Holder.
(g) All calculations under this Section 6 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
7. Restrictions on Transferability; Restrictive Legend. Neither this Warrant nor
the Exercise Shares shall be transferable except in accordance with the
provisions of this Section.
(a) Restrictions on Transfer; Indemnification. Neither this Warrant nor
any Exercise Share may be offered for sale or sold, or otherwise transferred or
sold in any transaction which would constitute a sale thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), unless (i)
such security has been registered for sale under the Securities Act and
registered or qualified under applicable state securities laws relating to the
offer and sale of securities, or (ii) exemptions from the registration
requirements of the Securities Act and the registration or qualification
requirements of all such state securities laws are available, and the Company
shall have received an opinion of counsel satisfactory to the Company that the
proposed sale or other disposition of such securities may be effected without
registration under the Securities Act and would not result in any violation of
any applicable state securities laws relating to the registration or
qualification of securities for sale, such counsel and such opinion to be
satisfactory to the Company.
6
(b) Restrictive Legends. Unless and until otherwise permitted by this
Section 7, this Warrant Certificate, each Warrant Certificate issued to the
Holder or to any transferee or assignee of this Warrant Certificate, and each
certificate representing Exercise Shares issued upon exercise of this Warrant or
to any transferee of the person to whom the Exercise Shares were issued, shall
bear a legend setting forth the requirements of subsection (a) of this Section
7, together with such other legend or legends as may otherwise be deemed
necessary or appropriate by counsel to the Company.
(c) Removal of Legend. The Company shall, at the request of any
registered holder of a Warrant or Exercise Share, exchange the certificate
representing such security for a certificate representing the same security not
bearing the restrictive legend required by subsection (b) if, in the opinion of
counsel acceptable to the Company, such restrictive legend is no longer
necessary.
(d) The Holder agrees to indemnify and hold harmless the Company
against any loss, damage, claim or liability arising from the disposition of
this Warrant or any Exercise Share held by such holder or any interest therein
in violation of the provisions of this Section 7.
8. Registration Rights. The Holder shall be entitled to the rights and subject
to the obligations set forth in Section 7 of the Securities Purchase Agreement.
9. Restrictions on Exercise. The Holder may not acquire a number of Exercise
Shares to the extent that, upon such exercise, the number of shares of Common
Stock then beneficially owned by such Holder and its affiliates and any other
persons or entities whose beneficial ownership of Common Stock would be
aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act,
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 19.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities Exchange
Commission (the "Commission"), and the percentage held by the holder shall be
determined in a manner consistent with the provisions of Section 13(d) of the
Exchange Act.
10. Notices. All notices or other communications under this Warrant shall be in
writing and shall be deemed to have been given on the day of delivery if
delivered by hand, on the fifth day after deposit in the mail if mailed by
certified mail, postage prepaid, return receipt requested, or on the next
business day after mailing if sent by a nationally recognized overnight courier
such as federal express, addressed as follows:
If to the Company:
National Health Partners, Inc.
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
7
with a copy to:
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
and if to Holder, at the address of Holder appearing on the
books of the Company or the Company's transfer agent, if any.
Either of the Company or Holder may from time to time change the
address to which notices to it are to be mailed hereunder by notice in
accordance with the provisions of this Section 10.
11. Supplements and Amendments. The Company may from time to time supplement or
amend this Warrant without the approval of any holders of Warrants in order to
cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision, or to make any
other provisions in regard to matters or questions herein arising hereunder
which the Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the Holder.
12. Successors and Assigns. This Warrant shall inure to the benefit of and be
binding upon the respective successors, assigns and legal representatives of
Holder and the Company.
13. Severability. If for any reason any provision, paragraph or terms of this
Warrant is held to be invalid or unenforceable, all other valid provisions
herein shall remain in full force and effect and all terms, provisions and
paragraphs of this Warrant shall be deemed to be severable.
14. Governing Law. This Warrant shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed in accordance with the laws of said jurisdiction without regard
to such jurisdiction's conflicts of laws provisions.
15. Headings. Section and subsection headings used herein are included herein
for convenience of reference only and shall not affect the construction of this
Warrant nor constitute a part of this Warrant for any other purpose.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Company has caused these presents to be duly
executed as of the [___] day of [______________], [_____].
NATIONAL HEALTH PARTNERS, INC.
By: [_____________________________]
Name:
Title:
9
APPENDIX A
NOTICE OF EXERCISE
TO: National Health Partners, Inc.
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
(1) The undersigned hereby elects to purchase [_______________] shares
of Common Stock (as defined in the attached Class B Warrant) of NATIONAL HEALTH
PARTNERS, INC. pursuant to the terms of the attached Class B Warrant, and
tenders herewith payment of the Exercise Price (as defined in the attached Class
B Warrant) for such shares in full in the following manner (please check one of
the following choices):
[ ] In Cash;
[ ] Cashless exercise through a broker; or
[ ] Delivery of previously owned shares of Common Stock.
(2) In exercising the Class B Warrant, the undersigned hereby confirms
and acknowledges that the shares of Common Stock to be issued upon conversion
hereof are being acquired solely for the account of the undersigned, not as a
nominee for any other party, and for investment purposes only (unless such
shares are subject to resale pursuant to an effective prospectus), and that the
undersigned will not offer, sell or otherwise dispose of any such shares of
Common Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned.
HOLDER
__________________________] [________________________________]
[(Date) (Signature)