EXHIBIT 4.11
WARRANT AGREEMENT dated as of July 15, 2003 between New York Health Care,
Inc., a New York corporation (the "Company"), whose principal place of business
is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ , his successors, designees and assigns (the "Holder").
W I T N E S S E T H:
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WHEREAS, the Company proposes to issue to the Holder a warrant to purchase
up to an aggregate of 100,000 shares of the Company's common stock, $.01 par
value, (the "Common Stock") which shall be known as the "Series E" Warrant.
NOW, THEREFORE, in consideration of the premises, the agreements herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. GRANT. The Company hereby agrees to issue to the Holder the warrant
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described in Section 1.1 below.
1.1 SERIES E WARRANT. The Series E Warrant grants to the Holder the
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right to purchase, at any time from July 15th, 2003 until 5:00 P.M., New York
time, on July 14th , 2005, up to an aggregate of 100,000 shares of Common Stock
(the "Shares") at an initial exercise price (subject to adjustment as provided
in Section 8 hereof) of $2.30 per share subject to the terms and conditions of
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this Agreement. Except as set forth herein, the shares issuable upon exercise
of the Series E Warrant are in all respects identical to the shares of Common
Stock held by all of the Company's other shareholders.
For purposes of this Warrant, the Warrant my be exercised at the times and at
the prices as follows:
First Tranche: Vested immediately 50,000
Remaining Warrants : Vest at the rate of 8,333 per month
2. WARRANT CERTIFICATE. The warrant certificate (the "Warrant Certificate")
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delivered and to be delivered pursuant to this Agreement shall be in the form
set forth in Exhibit A, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. EXERCISE OF WARRANT.
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3.1 METHOD OF EXERCISE. The Series E Warrant is initially exercisable
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at the initial exercise price (subject to adjustment as provided in Section 8
hereof) per Share payable by certified or official bank check in New York
Clearing House funds or by surrender to the Company of a number of Shares
issuable pursuant to the Series E Warrant which, when valued at the exercise
price, equal the amount of the exercise price for the Shares to be issued upon
exercise of the Series E Warrant, subject to adjustment as provided in Section 8
hereof. Upon surrender of a Warrant Certificate with the annexed Form of
Election to Purchase duly executed, together with payment of the Exercise Price
(as hereinafter defined) for the Common Stock purchased at the Company's
principal offices (presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
11223) the registered holder of a Warrant Certificate ("Holder" or "Holders")
shall be entitled to receive a certificate or certificates for the shares of
Common Stock so purchased. The purchase rights represented by each Warrant
Certificate are exercisable at the option of the Holders thereof, in whole or
part (but not as to fractional shares of the Common Stock). In the case of the
purchase of less than all Common Stock purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Common Stock purchasable thereunder.
3.2 DEFINITION OF MARKET PRICE. As used herein, the phrase "Market
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Price" at any date shall be deemed to be (i) when referring to the Common Stock,
the last reported price, or, in case no such reported sale takes place on such
day, the average of the last reported prices for the last three (3) trading
days, in either case as officially reported by the principal securities
exchange on which the Common Stock is listed or admitted to trading or by the
Nasdaq Stock Market ("NSM") or, if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted by NSM, the average
closing price as furnished by the National Association of Securities Dealers,
Inc. ("NASD") through Nasdaq or similar organization if Nasdaq is no longer
reporting such information, or if the Common Stock is not quoted on Nasdaq, or
such similar organization as determined in good faith by resolution of the Board
of Directors of the Company, based on the best information available to it.
4. ISSUANCE OF CERTIFICATE. Upon the exercise of the Series E Warrant,
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the issuance of certificates for shares of Common Stock shall be made forthwith
(and in any event within five (5) business days thereafter) without charge to
the Holder thereof including, without limitation, any tax which may be payable
in respect of the issuance thereof, and such certificates shall (subject to the
provisions of Sections 5 and 7 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder 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.
The Warrant Certificate and the certificate representing the Shares shall
be executed on behalf of the Company by the manual or facsimile signature of the
then present Chairman or Vice Chairman of the Board of Directors or President or
Vice President of the Company under its corporate seal reproduced thereon,
attested to by the manual or facsimile signature of the then present Secretary
or Assistant Secretary of the Company. The Warrant Certificate shall be dated
the date of execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
5. RESTRICTION ON TRANSFER OF WARRANTS. The Holder of a Warrant
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Certificate, by its acceptance thereof, covenants and agrees that the Series E
Warrant is being acquired as an investment and not with a view to the
distribution thereof; that the Series E Warrant may not be
sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or
in part, for a period of one (1) year from the date hereof.
6. EXERCISE PRICE.
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6.1 INITIAL AND ADJUSTED EXERCISE PRICE. Except as otherwise provided
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in Section 8 hereof, the initial exercise price of each Series E Warrant to
purchase Common Stock shall be equal to the initial exercise price set forth in
Sections 1.1 above. The adjusted exercise price shall be the price which shall
result from time to time from any and all adjustments of the initial exercise
price in accordance with the provisions of Section 8 hereof.
6.2 EXERCISE PRICE. The term "Exercise Price" herein shall mean the
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applicable initial exercise price or with respect to the Series E Warrant to
purchase Common Stock at the adjusted exercise price, depending upon the
context.
7. REGISTRATION RIGHTS.
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7.1 CURRENT REGISTRATION UNDER THE SECURITIES ACT OF 1933. The Company
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has registered certain shares of common stock under the Securities Act of 1933,
as amended (the "Act") (the "Registration Statement").
7.2 PIGGYBACK REGISTRATION.
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(a) If, at any time commencing after the date of this Agreement,
the Company proposes to register any of its securities under the Act, either for
its own account or the account of any other security holder or holders of the
Company possessing registration rights ("Other Stockholders"), it shall give
written notice, at least thirty (30) days prior to the filing of each such
registration statement, to the Holder and to all other Holders of warrants with
registration rights of the opportunity to register the Common Stock underlying
such warrants (collectively, "Registrable Securities") of its intention to do
so. If the Holder or other Holders of Registrable Securities notify the Company
within twenty-one (21) days after the receipt of any such notice of its or their
desire to include any such securities in such proposed registration statement,
the Company shall afford the Holder and such other Holders of such securities
the opportunity to have any such securities registered under such registration
statement.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holder and such other Holders as part of the written notice given
pursuant to Section 7.2(a) hereof. The right of the Holder or any such other
Holder to registration pursuant to this Section 7.2 shall be conditioned upon
their participation in such underwriting and the inclusion of their Registrable
Securities in the underwriting to the extent hereinafter provided. The Holder
and all other Holders proposing to distribute their securities through such
underwriting shall (together with the Company and any officer, directors or
Other Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the underwriter
selected by the Company. Notwithstanding any other provision of this Section
7.2, if the underwriter advises the Company in writing that marketing factors
require a limitation or elimination of the number of shares of Common Stock or
other securities to be underwritten, the underwriter may limit the number of
shares of Common Stock or other securities to be included in the registration
and underwriting. The Company shall so advise the Holder and all other Holders
of Registrable Securities requesting registration, and the number of shares of
Common Stock or other securities that are entitled to be included in the
registration and underwriting shall be allocated among the Holder and other
Holders requesting registration, in each case, in proportion, as nearly as
practicable, to the respective amounts of securities which they had requested to
be included in such registration at the time of filing the registration
statement.
(c) Notwithstanding the provisions of this Section 7.2, the
Company shall have the right at any time after it shall have given written
notice pursuant to Section 7.2(a) hereof (irrespective of whether a written
request for inclusion of any such securities shall have been made) to elect not
to file any such proposed registration statement, or to withdraw the same after
the filing but prior to the effective date thereof.
7.3 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In
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connection with any registration under Section 7.2, the Company covenants and
agrees as follows:
(a) The Company shall use its best efforts to have any
registration statement declared effective at the earliest possible time, and
shall furnish each Holder desiring to sell Registrable Securities such number of
prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses
of Holder(s)' counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Section 7.2 hereof including, without limitation, the Company's legal and
accounting fees, printing expenses, blue sky fees and expenses.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Holder(s); provided that
the Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement and each person, if
any, who controls such Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement.
(e) The Holder(s) of the Registrable Securities to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or their successors
or assigns, for specific inclusion in such registration statement.
(f) For purposes of this Agreement, the term "Majority" in
reference to the Holders of Registrable Securities, shall mean in excess of
fifty percent (50%) of the Registrable
Securities that have not been resold to the public pursuant to a registration
statement filed with the SEC under the Act.
(g) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Series E Warrant prior to the initial
filing of any registration statement or the effectiveness thereof.
7.4 RESTRICTIVE LEGENDS. In the event that the Company fails to
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maintain the effectiveness of the Registration Statement, such that the
exercise, in part or in whole, of the Series E Warrants are not, at the time of
such exercise, registered under the Act, any certificates representing the
Shares underlying the Series E Warrants and any of the other securities issuable
upon exercise of the Series E Warrants shall bear the following restrictive
legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act"), and
may not be offered or sold except pursuant to (i) an effective
registration statement under the Act, (ii) to the extent applicable,
Rule 144 under the Act (or any similar rule under such Act relating to
the disposition of securities), or (iii) an opinion of counsel, if
such opinion shall be reasonably satisfactory to counsel to the
issuer, that an exemption from registration under such Act is
available.
8. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES.
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8.1 SUBDIVISION AND COMBINATION. In case the Company shall at any time
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subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
8.2 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of the
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Exercise Price pursuant to the provisions of this Section 8, the number of
Common Stock issuable upon the exercise at the adjusted exercise price of each
Series E Warrant shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of Common Stock issuable upon exercise of the Series E
Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
8.3 DEFINITION OF COMMON STOCK. For the purpose of this Agreement, the
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term "Common Stock" shall mean (i) the class of stock designated as Common Stock
in the Certificate of Incorporation of the Company as amended as of the date
hereof, or (ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
The Company covenants that so long as any of the Series E Warrant are
outstanding, the Company shall not without the prior written consent of the
Holder issue any securities whatsoever other than Common Stock. In the event
that the Company shall, upon the consent of the Holder, after the date hereof
issue securities with greater or superior voting rights than the shares of
Common Stock outstanding as of the date hereof, the Holder, at its option, may
receive upon exercise of any Series E Warrant either shares of Common Stock or a
like number of such securities with greater or superior voting rights.
8.4 MERGER OR CONSOLIDATION. In case of any consolidation of the
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Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the holder of each
Series E Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Series E Warrant) to receive, upon
exercise of such warrant, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger, by a
holder of the number of shares of Common Stock of the Company for which such
Series E Warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant agreement
shall provide for adjustments which shall be identical to the adjustments
provided in Section 8. The above provision of this subsection shall similarly
apply to successive consolidations or mergers.
8.5 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment of
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the Exercise Price shall be made:
(a) upon the issuance or sale of the Series E Warrant or the
shares of Common Stock issuable upon the exercise of the Series E Warrant; or
(b) If the amount of said adjustment shall be less than two (2)
cents per Warrant Security, provided, however, that in such case any adjustment
that would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent adjustment
which, together with any adjustment so carried forward, shall amount to at least
two (2) cents per Warrant Security.
9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each Warrant
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Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Common Stock in such denominations as shall
be designed by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Series E Warrant,
if mutilated, the Company will make and deliver a new Warrant Certificate of
like tenor, in lieu thereof.
10. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
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required to issue fractional shares of Common Stock or the Series E Warrant upon
the exercise of the Series E Warrant. Warrants may only be exercised in such
multiples as are required to permit the issuance by the Company of one or more
whole shares of Common Stock. If one or more Series E Warrant shall be
presented for exercise in full at the same time by the same Holder, the number
of whole shares of Common Stock which shall be issuable upon such exercise
thereof shall be computed on the basis of the aggregate number of shares of
Common Stock purchasable on exercise of the Series E Warrant so presented. If
any fraction of a share of Common Stock would, except for the provisions
provided herein, be issuable on the exercise of any Series E Warrant (or
specified portion thereof), the Company shall pay an amount in cash equal to
such fraction multiplied by the then current market value of a share of Common
Stock, determined as follows:
(1) If the Common Stock is listed, or admitted to unlisted trading
privileges on the New York Stock Exchange ("NYSE") or the American Stock
Exchange ("AMEX"), or is traded on the NSM, the current market value of a share
of Common Stock shall be the closing sale price of the Common Stock at the end
of the regular trading session on the last business day prior to the date of
exercise of the Series E Warrant on whichever of such exchanges or NSM had the
highest average daily trading volume for the Common Stock on such day; or
(2) If the Common Stock is not listed or admitted to unlisted
trading privileges, on either the NYSE or the AMEX and is not traded on NSM, but
is quoted or reported on Nasdaq, the current market value of a share of Common
Stock shall be the closing price (or the last sale price, if then reported by
Nasdaq) of the Common Stock at the end of the regular trading session on the
last business day prior to the date of exercise of the Series E Warrant as
quoted or reported on Nasdaq; or
(3) If the Common Stock is not listed, or admitted to unlisted
trading privileges, on either of the NYSE or the AMEX, and is not traded on NSM
or quoted or reported on Nasdaq, but is listed or admitted to unlisted trading
privileges on the BSE or another national securities exchange (other than the
NYSE or the AMEX), the current market value of a share of Common Stock shall be
the closing price of the Common Stock at the end of the regular trading session
on the last business day prior to the date of exercise of the Series E Warrant
on whichever of such exchanges has the highest average daily trading volume for
the Common Stock on such day; or
(4) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for trading on
NSM or quoted or reported on Nasdaq, but is traded in the over-the-counter
market, the current market value of a share of Common Stock shall be the
average of the last reported bid and asked prices of the Common Stock reported
by the National Quotation Bureau, Inc. on the last business day prior to the
date of exercise of the Series E Warrant; or
(5) If the Common Stock as the case may be, is not listed,
admitted to unlisted trading privileges on any national securities exchange, or
listed for trading on NSM or quoted or reported on Nasdaq, and bid and asked
prices of the Common Stock are not reported by the National Quotation Bureau,
Inc., the current market value of a share of Common Stock shall be
an amount, not less than the book value thereof as of the end of the most
recently completed fiscal quarter of the Company ending prior to the date of
exercise, determined in accordance with generally acceptable accounting
principles, consistently applied.
11. RESERVATION AND LISTING OF SECURITIES. The Company shall at all
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times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Series E Warrant
such number of shares of Common Stock or other securities, properties or rights
as shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Series E Warrant and payment of the Exercise
Price therefore, all shares of Common Stock and other Securities issuable upon
such exercise shall be duly and validly issued, fully paid, non-assessable and
not subject to the preemptive rights of any stockholder. As long as the Series
E Warrant shall be outstanding, the Company shall use its best efforts to cause
all shares of Common Stock issuable upon the exercise of the Series E Warrant
to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued to the public in connection herewith
may then be listed and quoted on NSM.
12. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement
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shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Series E Warrants and their exercise, any of the
following events shall occur:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a dividend or
distribution payable other than in cash, or a cash dividend or distribution
payable other than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable
for shares of capital stock of the Company, or any option, right or warrant to
subscribe therefore; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of closing the transfer book, as the case
may be. Failure to give such notice or any defect therein shall not affect the
validity of any action taken in connection with the declaration or payment of
any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
13. NOTICE.
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All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly made and sent when delivered,
or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of the Series E Warrant, to the
address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice to the
Holders.
14. SUPPLEMENTS AND AMENDMENTS. The Company and the Holder may from
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time to time supplement or amend this Agreement without the approval of any
Holders of Warrant Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the
Holder may deem necessary or desirable and which the Company and the Holder deem
shall not adversely affect the interests of the Holders of Warrant Certificates.
15. SUCCESSORS. All the covenants and provisions of this Agreement
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shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
16. TERMINATION. This Agreement shall terminate at the close of
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business on March 7, 2013. Notwithstanding the foregoing, the indemnification
provisions of Section 7 shall survive such termination until the close of
business on March 8, 2019.
17. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and each
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Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
The Company, the Holder and any other registered Holders hereby agree that
any action, proceeding or claim against it arising out of, or relating in any
way to, this Agreement shall be brought and enforced in the courts of the State
of New York or of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company, the Holder and any other registered Holders hereby
irrevocably waive any objection to such exclusive jurisdiction or inconvenient
forum. Any such process or summons to be served upon any of the Company, the
Holder and the Holders (at the option of the party bringing such action,
proceeding or claim) may be served by transmitting a copy thereof, by registered
or certified mail, return receipt requested, postage prepaid, addressed to it at
the address set forth in Section 14 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the party so served in any
action, proceeding or claim. The Company, the Holder and any other registered
Holders agree that the prevailing party(ies) in any such action or proceeding
shall be entitled to recover from the other party(ies) all of its'/their
reasonable legal costs and expenses relating to such action or proceeding and
incurred in connection with the preparation therefore.
18. ENTIRE AGREEMENT; MODIFICATION. This Agreement contains the entire
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understanding between the parties hereto with respect to the subject matter
hereof and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.
19. SEVERABILITY. If any provision of this Agreement shall be held to
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be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
20. CAPTIONS. The caption headings of the Sections of this Agreement
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are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
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construed to give to any person or corporation other than the Company and the
Holder and any other registered Holder(s) of the Warrant Certificates or Common
Stock any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole benefit of the Company and the Holder and
any other registered Holders of Warrant Certificates or Common Stock.
22. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
NEW YORK HEALTH CARE, INC.
By: /s/_______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
/s/________________________________
▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
[FORM OF SERIES E WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, MARCH 7, 2013
No. EW-2 SERIES E Warrant to Purchase
100,000 Shares of Common Stock
SERIES E WARRANT CERTIFICATE
This Warrant Certificate certifies that ▇▇▇▇▇▇ ▇▇▇▇▇, or registered
assigns, is the registered holder of twenty thousand (20,000) Warrants to
purchase initially, at any time from July 15, 2003 until 5:00 p.m. New York time
on July 14th, 2005 ("Expiration Date"), up to twenty thousand (100,000)
fully-paid and non-assessable shares of common stock, $.01 par value ("Common
Stock") of New York Health Care, Inc., a New York corporation (the "Company"),
at the initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), equal to $2.30 per share upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the Warrant
Agreement dated as of July 15th, 2003 between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Warrant Agreement"). Payment of the Exercise Price shall be made by certified
or official bank check in New York Clearing House funds payable to the order of
the Company or by surrender of this Warrant Certificate.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the type and number of the Company's securities issuable
thereupon may, subject to certain conditions, be adjusted. In such event, the
Company will, at the request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter, or otherwise impair, the rights of the holder as set
forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate of
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated as of July 15th, 2003
Attest: NEW YORK HEALTH CARE, INC.
/s/_____________________________ By: /s/______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary Title: Chief Executive Officer
2
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _________________ hereby sells, assigns and unto
(Please print name and address of transferee
this Warrant Certificate, together with all right, title and interest therein,
and does hereby reasonably constitute and appoint ___________________________,
as Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Date: _______________ Signature: ___________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Other Identifying
Number of Assignee)
3
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
_____________Shares
_____________Series E Warrants
and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House Funds to the order of New York Health
Care, Inc., in the amount of $__________________, or a total of ______________
shares of the Securities issuable upon exercise of the Warrant, all in
accordance with the terms of the Warrant Agreement dated March 7, 2003 between
the undersigned and New York Health Care, Inc. The undersigned request that a
certificate for such Securities be registered in the name of whose address is
and that such Certificate be delivered to whose address is.
Signature _____________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
4
WARRANT AGREEMENT dated as of July 15, 2003 between New York Health Care, Inc.,
a New York corporation (the "Company"), whose principal place of business is
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, her successors, designees and assigns (the
"Holder").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company proposes to issue to the Holder a warrant to purchase
up to an aggregate of 35,000 shares of the Company's common stock, $.01 par
value, (the "Common Stock") which shall be known as the "Series E" Warrant.
NOW, THEREFORE, in consideration of the premises, the agreements herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. GRANT. The Company hereby agrees to issue to the Holder the warrant
-----
described in Section 1.1 below.
1.1 SERIES E WARRANT. The Series E Warrant grants to the Holder the
------------------
right to purchase, from July 15th, 2003 until 5:00 P.M., New York time, on July
14th , 2005, up to an aggregate of 35,000 shares of Common Stock (the "Shares")
at an initial exercise price (subject to adjustment as provided in Section 8
-------
hereof) of $2.30 per share subject to the terms and conditions of this
Agreement. Except as set forth herein, the shares issuable upon exercise of the
Series E Warrant are in all respects identical to the shares of Common Stock
held by all of the Company's other shareholders.
For purposes of this Warrant, the Warrant my be exercised at the times and at
the prices as follows:
First Tranche: Vested immediately 17,500
Remaining Warrants : Vest at the rate of 2,520 per month
2. WARRANT CERTIFICATE. The warrant certificate (the "Warrant
--------------------
Certificate") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. EXERCISE OF WARRANT.
---------------------
3.1 METHOD OF EXERCISE. The Series E Warrant is initially exercisable
--------------------
at the initial exercise price (subject to adjustment as provided in Section 8
hereof) per Share payable by certified or official bank check in New York
Clearing House funds or by surrender to the Company of a number of Shares
issuable pursuant to the Series E Warrant which, when valued at the exercise
price, equal the amount of the exercise price for the Shares to be issued upon
exercise of the Series E Warrant, subject to adjustment as provided in Section 8
hereof. Upon surrender of a Warrant Certificate with the annexed Form of
Election to Purchase duly executed, together with payment of the Exercise Price
(as hereinafter defined) for the Common Stock purchased at the Company's
principal offices (presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
11223) the registered holder of a Warrant Certificate ("Holder" or "Holders")
shall be entitled to receive a certificate or certificates for the shares of
Common Stock so purchased. The purchase rights represented by each Warrant
Certificate are exercisable at the option of the Holders thereof, in whole or
part (but not as to fractional shares of the Common Stock). In the case of the
purchase of less than all Common Stock purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Common Stock purchasable thereunder.
3.2 DEFINITION OF MARKET PRICE. As used herein, the phrase "Market
-----------------------------
Price" at any date shall be deemed to be (i) when referring to the Common Stock,
the last reported price, or, in case no such reported sale takes place on such
day, the average of the last reported prices for the last three (3) trading
days, in either case as officially reported by the principal securities
exchange on which the Common Stock is listed or admitted to trading or by the
Nasdaq Stock Market ("NSM") or, if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted by NSM, the average
closing price as furnished by the National Association of Securities Dealers,
Inc. ("NASD") through Nasdaq or similar organization if Nasdaq is no longer
reporting such information, or if the Common Stock is not quoted on Nasdaq, or
such similar organization as determined in good faith by resolution of the Board
of Directors of the Company, based on the best information available to it.
4. ISSUANCE OF CERTIFICATE. Upon the exercise of the Series E Warrant,
------------------------
the issuance of certificates for shares of Common Stock shall be made forthwith
(and in any event within five (5) business days thereafter) without charge to
the Holder thereof including, without limitation, any tax which may be payable
in respect of the issuance thereof, and such certificates shall (subject to the
provisions of Sections 5 and 7 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder 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.
The Warrant Certificate and the certificate representing the Shares shall
be executed on behalf of the Company by the manual or facsimile signature of the
then present Chairman or Vice Chairman of the Board of Directors or President or
Vice President of the Company under its corporate seal reproduced thereon,
attested to by the manual or facsimile signature of the then present Secretary
or Assistant Secretary of the Company. The Warrant Certificate shall be dated
the date of execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
5. RESTRICTION ON TRANSFER OF WARRANTS. The Holder of a Warrant
---------------------------------------
Certificate, by its acceptance thereof, covenants and agrees that the Series E
Warrant is being acquired as an
investment and not with a view to the distribution thereof; that the Series E
Warrant may not be sold, transferred, assigned, hypothecated or otherwise
disposed of, in whole or in part, for a period of one (1) year from the date
hereof.
6. EXERCISE PRICE.
----------------
6.1 INITIAL AND ADJUSTED EXERCISE PRICE. Except as otherwise provided
------------------------------------
in Section 8 hereof, the initial exercise price of each Series E Warrant to
purchase Common Stock shall be equal to the initial exercise price set forth in
Sections 1.1 above. The adjusted exercise price shall be the price which shall
result from time to time from any and all adjustments of the initial exercise
price in accordance with the provisions of Section 8 hereof.
6.2 EXERCISE PRICE. The term "Exercise Price" herein shall mean the
---------------
applicable initial exercise price or with respect to the Series E Warrant to
purchase Common Stock at the adjusted exercise price, depending upon the
context.
7. REGISTRATION RIGHTS.
---------------------
7.1 CURRENT REGISTRATION UNDER THE SECURITIES ACT OF 1933. The Company
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has registered certain shares of common stock under the Securities Act of 1933,
as amended (the "Act") (the "Registration Statement").
7.2 PIGGYBACK REGISTRATION.
------------------------
(a) If, at any time commencing after the date of this Agreement,
the Company proposes to register any of its securities under the Act, either for
its own account or the account of any other security holder or holders of the
Company possessing registration rights ("Other Stockholders"), it shall give
written notice, at least thirty (30) days prior to the filing of each such
registration statement, to the Holder and to all other Holders of warrants with
registration rights of the opportunity to register the Common Stock underlying
such warrants (collectively, "Registrable Securities") of its intention to do
so. If the Holder or other Holders of Registrable Securities notify the Company
within twenty-one (21) days after the receipt of any such notice of its or their
desire to include any such securities in such proposed registration statement,
the Company shall afford the Holder and such other Holders of such securities
the opportunity to have any such securities registered under such registration
statement.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holder and such other Holders as part of the written notice given
pursuant to Section 7.2(a) hereof. The right of the Holder or any such other
Holder to registration pursuant to this Section 7.2 shall be conditioned upon
their participation in such underwriting and the inclusion of their Registrable
Securities in the underwriting to the extent hereinafter provided. The Holder
and all other Holders proposing to distribute their securities through such
underwriting shall (together with the Company and any officer, directors or
Other Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the underwriter
selected by the Company. Notwithstanding any other provision of this Section
7.2, if the underwriter advises the Company in writing that marketing factors
require a limitation or elimination of the number of shares of Common Stock or
other securities to be underwritten, the underwriter may limit the number of
shares of Common Stock or other securities to be included in the registration
and underwriting. The Company shall so advise the Holder and all other Holders
of Registrable Securities requesting registration, and the number of shares of
Common Stock or other securities that are entitled to be included in the
registration and underwriting shall be allocated among the Holder and other
Holders requesting registration, in each case, in proportion, as nearly as
practicable, to the respective amounts of securities which they had requested to
be included in such registration at the time of filing the registration
statement.
(c) Notwithstanding the provisions of this Section 7.2, the
Company shall have the right at any time after it shall have given written
notice pursuant to Section 7.2(a) hereof (irrespective of whether a written
request for inclusion of any such securities shall have been made) to elect not
to file any such proposed registration statement, or to withdraw the same after
the filing but prior to the effective date thereof.
7.3 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In
---------------------------------------------------------
connection with any registration under Section 7.2, the Company covenants and
agrees as follows:
(a) The Company shall use its best efforts to have any
registration statement declared effective at the earliest possible time, and
shall furnish each Holder desiring to sell Registrable Securities such number of
prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses
of Holder(s)' counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Section 7.2 hereof including, without limitation, the Company's legal and
accounting fees, printing expenses, blue sky fees and expenses.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Holder(s); provided that
the Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement and each person, if
any, who controls such Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement.
(e) The Holder(s) of the Registrable Securities to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information
furnished by or on behalf of such Holders, or their successors or assigns, for
specific inclusion in such registration statement.
(f) For purposes of this Agreement, the term "Majority" in
reference to the Holders of Registrable Securities, shall mean in excess of
fifty percent (50%) of the Registrable Securities that have not been resold to
the public pursuant to a registration statement filed with the SEC under the
Act.
(g) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Series E Warrant prior to the initial
filing of any registration statement or the effectiveness thereof.
7.4 RESTRICTIVE LEGENDS. In the event that the Company fails to
--------------------
maintain the effectiveness of the Registration Statement, such that the
exercise, in part or in whole, of the Series E Warrants are not, at the time of
such exercise, registered under the Act, any certificates representing the
Shares underlying the Series E Warrants and any of the other securities issuable
upon exercise of the Series E Warrants shall bear the following restrictive
legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act"), and
may not be offered or sold except pursuant to (i) an effective
registration statement under the Act, (ii) to the extent applicable,
Rule 144 under the Act (or any similar rule under such Act relating to
the disposition of securities), or (iii) an opinion of counsel, if
such opinion shall be reasonably satisfactory to counsel to the
issuer, that an exemption from registration under such Act is
available.
8. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES.
-------------------------------------------------------------
8.1 SUBDIVISION AND COMBINATION. In case the Company shall at any time
---------------------------
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
8.2 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of the
-------------------------------------
Exercise Price pursuant to the provisions of this Section 8, the number of
Common Stock issuable upon the exercise at the adjusted exercise price of each
Series E Warrant shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately
prior to such adjustment by the number of Common Stock issuable upon exercise of
the Series E Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
8.3 DEFINITION OF COMMON STOCK. For the purpose of this Agreement, the
--------------------------
term "Common Stock" shall mean (i) the class of stock designated as Common Stock
in the Certificate of Incorporation of the Company as amended as of the date
hereof, or (ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
The Company covenants that so long as any of the Series E Warrant are
outstanding, the Company shall not without the prior written consent of the
Holder issue any securities whatsoever other than Common Stock. In the event
that the Company shall, upon the consent of the Holder, after the date hereof
issue securities with greater or superior voting rights than the shares of
Common Stock outstanding as of the date hereof, the Holder, at its option, may
receive upon exercise of any Series E Warrant either shares of Common Stock or a
like number of such securities with greater or superior voting rights.
8.4 MERGER OR CONSOLIDATION. In case of any consolidation of the
-------------------------
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the holder of each
Series E Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Series E Warrant) to receive, upon
exercise of such warrant, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger, by a
holder of the number of shares of Common Stock of the Company for which such
Series E Warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant agreement
shall provide for adjustments which shall be identical to the adjustments
provided in Section 8. The above provision of this subsection shall similarly
apply to successive consolidations or mergers.
8.5 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment of
------------------------------------------------
the Exercise Price shall be made:
(a) upon the issuance or sale of the Series E Warrant or the
shares of Common Stock issuable upon the exercise of the Series E Warrant; or
(b) If the amount of said adjustment shall be less than two (2)
cents per Warrant Security, provided, however, that in such case any adjustment
that would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent adjustment
which, together with any adjustment so carried forward, shall amount to at least
two (2) cents per Warrant Security.
9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each Warrant
-----------------------------------------------------
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Common Stock in such denominations as shall
be designed by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Series E Warrant,
if mutilated, the Company will make and deliver a new Warrant Certificate of
like tenor, in lieu thereof.
10. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
--------------------------------------
required to issue fractional shares of Common Stock or the Series E Warrant upon
the exercise of the Series E Warrant. Warrants may only be exercised in such
multiples as are required to permit the issuance by the Company of one or more
whole shares of Common Stock. If one or more Series E Warrant shall be
presented for exercise in full at the same time by the same Holder, the number
of whole shares of Common Stock which shall be issuable upon such exercise
thereof shall be computed on the basis of the aggregate number of shares of
Common Stock purchasable
on exercise of the Series E Warrant so presented. If any fraction of a share of
Common Stock would, except for the provisions provided herein, be issuable on
the exercise of any Series E Warrant (or specified portion thereof), the Company
shall pay an amount in cash equal to such fraction multiplied by the then
current market value of a share of Common Stock, determined as follows:
(1) If the Common Stock is listed, or admitted to unlisted trading
privileges on the New York Stock Exchange ("NYSE") or the American Stock
Exchange ("AMEX"), or is traded on the NSM, the current market value of a share
of Common Stock shall be the closing sale price of the Common Stock at the end
of the regular trading session on the last business day prior to the date of
exercise of the Series E Warrant on whichever of such exchanges or NSM had the
highest average daily trading volume for the Common Stock on such day; or
(2) If the Common Stock is not listed or admitted to unlisted
trading privileges, on either the NYSE or the AMEX and is not traded on NSM, but
is quoted or reported on Nasdaq, the current market value of a share of Common
Stock shall be the closing price (or the last sale price, if then reported by
Nasdaq) of the Common Stock at the end of the regular trading session on the
last business day prior to the date of exercise of the Series E Warrant as
quoted or reported on Nasdaq; or
(3) If the Common Stock is not listed, or admitted to unlisted
trading privileges, on either of the NYSE or the AMEX, and is not traded on NSM
or quoted or reported on Nasdaq, but is listed or admitted to unlisted trading
privileges on the BSE or another national securities exchange (other than the
NYSE or the AMEX), the current market value of a share of Common Stock shall be
the closing price of the Common Stock at the end of the regular trading session
on the last business day prior to the date of exercise of the Series E Warrant
on whichever of such exchanges has the highest average daily trading volume for
the Common Stock on such day; or
(4) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for trading on
NSM or quoted or reported on Nasdaq, but is traded in the over-the-counter
market, the current market value of a share of Common Stock shall be the
average of the last reported bid and asked prices of the
Common Stock reported by the National Quotation Bureau, Inc. on the last
business day prior to the date of exercise of the Series E Warrant; or
(5) If the Common Stock as the case may be, is not listed,
admitted to unlisted trading privileges on any national securities exchange, or
listed for trading on NSM or quoted or reported on Nasdaq, and bid and asked
prices of the Common Stock are not reported by the National Quotation Bureau,
Inc., the current market value of a share of Common Stock shall be an amount,
not less than the book value thereof as of the end of the most recently
completed fiscal quarter of the Company ending prior to the date of exercise,
determined in accordance with generally acceptable accounting principles,
consistently applied.
11. RESERVATION AND LISTING OF SECURITIES. The Company shall at all
----------------------------------------
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Series E Warrant
such number of shares of Common Stock or other securities, properties or rights
as shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Series E Warrant and payment of the Exercise
Price therefore, all shares of Common Stock and other Securities issuable upon
such exercise shall be duly and validly issued, fully paid, non-assessable and
not subject to the preemptive rights of any stockholder. As long as the Series
E Warrant shall be outstanding, the Company shall use its best efforts to cause
all shares of Common Stock issuable upon the exercise of the Series E Warrant
to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued to the public in connection herewith
may then be listed and quoted on NSM.
12. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement
-----------------------------
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Series E Warrants and their exercise, any of the
following events shall occur:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a dividend or
distribution payable other than in cash, or a cash dividend or distribution
payable other than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefore; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of closing the transfer book, as the case
may be. Failure to give such notice or any defect therein shall not affect the
validity of any action taken in connection with the declaration or payment of
any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
13. NOTICE.
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All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly made and sent when delivered,
or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of the Series E Warrant, to the
address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice to the
Holders.
14. SUPPLEMENTS AND AMENDMENTS. The Company and the Holder may from
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time to time supplement or amend this Agreement without the approval of any
Holders of Warrant Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Holder may deem
necessary or desirable and which the Company and the Holder deem shall not
adversely affect the interests of the Holders of Warrant Certificates.
15. SUCCESSORS. All the covenants and provisions of this Agreement
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shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
16. TERMINATION. This Agreement shall terminate at the close of
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business on March 7, 2013. Notwithstanding the foregoing, the indemnification
provisions of Section 7 shall survive such termination until the close of
business on March 8, 2019.
17. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and each
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Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
The Company, the Holder and any other registered Holders hereby agree that
any action, proceeding or claim against it arising out of, or relating in any
way to, this Agreement shall be brought and enforced in the courts of the State
of New York or of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company, the Holder and any other registered Holders hereby
irrevocably waive any objection to such exclusive jurisdiction or inconvenient
forum.
Any such process or summons to be served upon any of the Company, the Holder and
the Holders (at the option of the party bringing such action, proceeding or
claim) may be served by transmitting a copy thereof, by registered or certified
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 14 hereof. Such mailing shall be deemed personal service
and shall be legal and binding upon the party so served in any action,
proceeding or claim. The Company, the Holder and any other registered Holders
agree that the prevailing party(ies) in any such action or proceeding shall be
entitled to recover from the other party(ies) all of its'/their reasonable legal
costs and expenses relating to such action or proceeding and incurred in
connection with the preparation therefore.
18. ENTIRE AGREEMENT; MODIFICATION. This Agreement contains the entire
------------------------------
understanding between the parties hereto with respect to the subject matter
hereof and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.
19. SEVERABILITY. If any provision of this Agreement shall be held to
------------
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
20. CAPTIONS. The caption headings of the Sections of this Agreement
--------
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
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construed to give to any person or corporation other than the Company and the
Holder and any other registered Holder(s) of the Warrant Certificates or Common
Stock any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole benefit of the Company and the Holder and
any other registered Holders of Warrant Certificates or Common Stock.
22. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
NEW YORK HEALTH CARE, INC.
By: /s/_______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
/s/_______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
EXHIBIT A
[FORM OF SERIES E WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, MARCH 7, 2013
No. EW-2 SERIES E Warrant to Purchase
35,000 Shares of Common Stock
SERIES E WARRANT CERTIFICATE
This Warrant Certificate certifies that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or registered
assigns, is the registered holder of twenty thousand (20,000) Warrants to
purchase initially, at any time from July 15, 2003 until 5:00 p.m. New York time
on July 14, 2005 ("Expiration Date"), up to twenty thousand (35,000) fully-paid
and non-assessable shares of common stock, $.01 par value ("Common Stock") of
New York Health Care, Inc., a New York corporation (the "Company"), at the
initial exercise price, subject to adjustment in certain events (the "Exercise
Price"), equal to $2.30 per share upon surrender of this Warrant Certificate and
payment of the Exercise Price at an office or agency of the Company, but subject
to the conditions set forth herein and in the Warrant Agreement dated as of July
15th, 2003 between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Warrant Agreement").
Payment of the Exercise Price shall be made by certified or official bank check
in New York Clearing House funds payable to the order of the Company or by
surrender of this Warrant Certificate.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the type and number of the Company's securities issuable
thereupon may, subject to certain conditions, be adjusted. In such event, the
Company will, at the request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter, or otherwise impair, the rights of the holder as set
forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate of
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated as of July 15, 2003
Attest: NEW YORK HEALTH CARE, INC.
/s/_____________________________ By: /s/______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary Title: Chief Executive Officer
2
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _________________hereby sells, assigns and unto
(Please print name and address of transferee
this Warrant Certificate, together with all right, title and interest therein,
and does hereby reasonably constitute and appoint ___________________________,
as Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Date: ___________________ Signature: __________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Assignee)
3
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
___________Shares
___________Series E Warrants
and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House Funds to the order of New York Health
Care, Inc., in the amount of $__________________, or a total of ______________
shares of the Securities issuable upon exercise of the Warrant, all in
accordance with the terms of the Warrant Agreement dated March 7, 2003 between
the undersigned and New York Health Care, Inc. The undersigned request that a
certificate for such Securities be registered in the name of whose address is
and that such Certificate be delivered to whose address is.
Signature: __________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Assignee)
4