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EXHIBIT 10.18
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH
SECURITIES FILED UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
AND UPON COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS. THE ISSUER MAY
REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER HEREOF THAT SUCH
REGISTRATION IS NOT REQUIRED AND CONFIRMING COMPLIANCE WITH SUCH LAWS. SEE
SECTION 7 HEREOF FOR ADDITIONAL RESTRICTIONS ON TRANSFERABILITY AND EXERCISE
UPON CERTAIN TRANSFERS.
VISTA LASER CENTERS OF MICHIGAN, INC.
WARRANT TO PURCHASE SHARES OF
10% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
Void after 12:00 p.m., Mountain Standard Time
on July __, 2001
80,000 Shares 10% Series A Cumulative Convertible Preferred Stock
FOR VALUE RECEIVED, VISTA LASER CENTERS OF MICHIGAN, INC. (the "Company"),
a Nevada corporation, hereby certifies that DICKINSON & CO. (the "Holder") or
its permitted assigns are entitled to purchase from the Company, at any time or
from time to time commencing July ___, 1997 (the first anniversary of the
effective date of the Registration Statement for the public offering of the
preferred stock referred to below pursuant to which this Warrant is issued)
(the "Initial Date"), and prior to 12:00 p.m., Mountain Standard Time, on July
__, 2001, up to and including Eighty Thousand (80,000) paid and nonassessable
shares of 10% Series A Cumulative Convertible Preferred stock, par value $0.01
per share, of the Company ("Preferred Stock") for a purchase price of $6.00 per
share. Hereinafter, (i) said Preferred Stock, together with any other equity
securities which may be issued by the Company in respect thereof or in
substitution therefor, are referred to as the "Preferred Stock," and (ii) the
price payable hereunder for each share of Preferred Stock is referred to as the
"Exercise Price." Unless the context otherwise requires, the term "Warrant" or
"Warrants" as used herein includes this Warrant and any other Warrant or
Warrants which may be issued pursuant to the provisions of this Warrant,
whether upon transfer, assignment, partial exercise, divisions, combinations
exchange or otherwise, and the term "Holder" includes any transferee or
transferees or assignee or assignees of the Holder named above, all of whom
shall be subject to the provisions of this Warrant, and, when used with
reference to the shares of the Company's $0.01 par value common stock (the
"Underlying Securities"), means the holder or holders of such Underlying
Securities. The term "Aggregate Purchase Price" shall mean the product of the
number of shares of Preferred Stock purchasable under this Warrant and the
purchase price per share of Preferred Stock both determined as of the date of
original issuance of this Warrant. The Aggregate Purchase Price is not subject
to adjustment except to reflect partial exercises of this Warrant. The Exercise
Price is subject to adjustment as hereinafter provided; in the event of any
such adjustment, the number of shares of Preferred Stock and Underlying
Securities shall be adjusted by dividing the Aggregate Purchase Price by the
Exercise Price in effect immediately after such adjustment.
1. EXERCISE OF WARRANT. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on the Initial Date, and prior to
12:00 p.m., Mountain Standard Time, on July __, 2001, by the Holder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the principal office of the Company, together with proper payment
of the Aggregate Purchase Price, or the proportionate part thereof if this
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Warrant is exercised in part. If this Warrant is transferred after the Initial
Date, it shall be exercised immediately upon transfer or else shall lapse.
Payment for Preferred Stock shall be made by certified or official bank check,
payable to the order of the Company. If this Warrant is exercised in part, this
Warrant must be exercised for a number of whole shares of Preferred Stock, and
the Holder is entitled to receive a new Warrant covering the number of shares
of Preferred Stock in respect of which this Warrant has not been exercised and
setting forth the proportionate part of the Aggregate Purchase Price applicable
to such Preferred Stock. Upon such surrender of this Warrant, the Company will
(a) issue a certificate or certificates in the name of the Holder for the
largest number of whole shares of Preferred Stock to which the Holder shall be
entitled and, if this Warrant is exercised in whole, in lieu of any fractional
shares of Preferred Stock to which the Holder shall be entitled, cash equal to
the fair value of such fractional share (determined in such reasonable manner
as the Board of Directors of the Company shall determine), and (b) deliver the
other securities and properties receivable upon the exercise of this Warrant,
or the proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of this Warrant.
2. PRESERVATION OF AUTHORIZED SHARES. The Company agrees that, prior to
the expiration of this Warrant, the Company will at all times have authorized
and in reserve, and will keep available, solely for issuance or delivery upon
the exercise of this Warrant, the number of shares of Preferred Stock issuable
upon exercise of this Warrant the number of Underlying Securities into which
such Preferred Stock is convertible, and other securities and properties as
from time to time shall be receivable upon the exercise of this Warrant, free
and clear of all restrictions on sale or transfer and free and clear of all
preemptive rights.
3. PROTECTION AGAINST DILUTION.
(a) If, at any time or from time to time after the date of this Warrant,
the Company shall distribute to the holders of the Preferred Stock (i)
securities, other than shares of the Preferred Stock and other than Preferred
Stock or common stock issued in payment of annual dividends in lieu of cash, or
(ii) property, other than cash, without payment therefor, with respect to the
Preferred Stock, then, and in each such case, the Holder, upon the exercise of
this Warrant, shall be entitled to receive the securities and properties which
the Holder would hold on the date of such exercise if, on the date of this
Warrant, the Holder had been the holder of record of the number of shares of
the Preferred Stock subscribed for upon such exercise and, during the period
from the date of this Warrant to and including the date of such exercise, had
retained such shares of Preferred Stock and the securities and properties
receivable by the Holder during such period. Notice of each such distribution
shall be forthwith mailed to the Holder.
(b) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Preferred Stock, (ii) subdivide
its outstanding shares of Preferred Stock into a greater number of shares,
(iii) combine its outstanding shares of Preferred Stock into a smaller number
of shares or (iv) issue by reclassification of its Preferred Stock any shares
of capital stock of the Company, the Exercise Price in effect immediately prior
to such action shall be adjusted so that the Holder of any Warrant surrendered
for exercise immediately thereafter would be entitled to receive the number of
shares of Preferred Stock or other capital stock of the Company which he would
have owned immediately following such action had such Warrant been converted
immediately prior thereto. An adjustment made pursuant to this subsection (b)
shall become effective immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this subsection (b), the
Holder of any Warrant thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes of capital stock or shares of
Preferred Stock and other capital stock of the
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Company, the Board of Directors (whose determination shall be conclusive and
shall be described in a written notice to the Holder promptly after such
adjustment) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes or capital stock or shares of Preferred
Stock and other capital stock.
(c) In case of any consolidation or merger to which the Company is a party
other than a merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, or in
the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Company), the Holder of this Warrant shall have the right
thereafter to exercise this Warrant into the kind and amount of securities,
cash or other property which he would have owned or have been entitled to
receive immediately after such consolidation, merger, statutory exchange, sale
or conveyance had this Warrant been converted immediately prior to the
effective date of such consolidation, merger, statutory exchange, sale or
conveyance, and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the conversion
of this Warrant. The above provisions of this subsection 3(c) shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances. Notice of any such consolidation, merger, statutory exchange, sale
or conveyance and of said provisions so proposed to be made, shall be mailed to
the Holder not less than the earlier of (i) the date on which the transaction
is first publicly announced, or (ii) the date on which notice is made to the
Company's shareholders. A sale of all or substantially all of the assets of the
Company for a consideration consisting primarily of securities shall be deemed
a consolidation or merger for the foregoing purposes.
(d) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least $0.05 per share of
Preferred Stock; provided, however, that any adjustments which by reason of
this subsection (d) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment, and provided further, however,
that adjustments shall be required and made in accordance with the provisions
of this Section 3 (other than this subsection (d)) not later than such time as
may be required in order to preserve the tax-free nature of a distribution to
the Holders of Preferred Stock (if such distribution would be tax free but for
such adjustment). All calculations under this Section 3 shall be made to the
nearest cent or to the nearest 1/100th of a share of Preferred Stock, as the
case may be. Anything in this Section 3 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those required by this Section 3, as it in its discretion shall
deem to be advisable in order that any stock dividend, subdivision of shares or
distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its shareholders shall
not be taxable.
(e) Whenever the Exercise Price is adjusted as provided in this Section 3
and upon any modification of the rights of a Holder in accordance with this
Section 3, the Company's Chief Financial Officer shall provide a certificate
setting forth the Exercise Price and the number of shares of Preferred Stock
and Underlying Securities after such adjustment or the effect of such
modification, a brief statement of the facts requiring such adjustment or
modification and the manner of computing the same and cause copies of such
certificate to be mailed to the Holder.
(f) If the Board of Directors of the Company shall declare any dividend
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or other distribution in cash with respect to the Preferred Stock, other than
out of earned surplus, the Company shall mail notice thereof to the Holder not
less than the earlier of (i) the date on which the transaction is first
publicly announced, or (ii) the date on which notice is made to the Company's
shareholders.
4. FULLY PAID STOCK, TAXES. The Company agrees that the shares of the
Preferred Stock represented by each and every certificate therefor delivered on
the exercise of this Warrant shall, at the time of such delivery, be validly
issued and outstanding, fully paid and non-assessable, and not subject to
preemptive rights. The Company further covenants and agrees that it will pay,
when due and payable, any and all federal and state stamp, original issue or
similar taxes which may be payable in respect of the issue of any shares of
Preferred Stock and Underlying Securities or certificates therefor.
5. REGISTRATION UNDER SECURITIES ACT OF 1933. The Company is under a
contractual obligation to register this Warrant, the Preferred Stock into which
it may be exercised and the Underlying Securities under applicable federal and
state securities laws as provided in the Underwriting Agreement between the
Company and Dickinson & Co. of even date herewith. This Warrant, the Preferred
Stock into which it may be exercised and the Underlying Securities may not be
offered, sold, transferred, pledged or hypothecated in the absence of any
effective registration statement as to such securities filed under the Act, or
an exemption from the requirement of such registration, and compliance with the
applicable state securities laws. The Company may require an opinion of counsel
satisfactory to the Company that such registration is not required and that any
transfer is in compliance with such laws.
6. TERMS OF PREFERRED STOCK AND UNDERLYING SECURITIES. The Preferred Stock
and the Underlying Securities are the same securities and carry the same
obligations, rights, privileges and terms as those offered and sold to the
public by Dickinson & Co. pursuant to the public offering contemplated by its
Underwriting Agreement of even date herewith, except that the exercise price
for purchase of Preferred Stock under this Warrant shall be $6.00 per share.
7. LIMITED TRANSFERABILITY. This Warrant is restricted from sale,
transfer, assignment, pledge or hypothecation (a) until the Initial Date except
(i) to any persons who are officers of Dickinson & Co. or of any such successor
firm, (ii) co-underwriters and members of the selling group and their
respective officers, and (iii) by operation of law or by reason of
reorganization of the Company, and is so transferable only upon the books of
the Company which it shall cause to be maintained for the purpose, and (b) the
Warrant may not be offered, sold, transferred, pledged or hypothecated in the
absence of any effective registration statement as to such Warrant filed under
the Act, or an exemption from the requirement of such registration, and
compliance with the applicable state securities laws. The Company may require
an opinion of counsel satisfactory to the Company that such registration is not
required and that any transfer is in compliance with such laws. In the event of
any transfer after the Initial Date, this Warrant must be immediately exercised
upon transfer. If not exercised immediately upon such transfer, this Warrant
shall lapse pursuant to California Regulations 260.140.21(e). The Company may
treat the registered holder of this Warrant as he or it appears on the
Company's books at any time as the Holder for all purposes. The Company shall
permit the Holder or his duly authorized attorney, upon written request during
ordinary business hours, to inspect and copy or make extracts from its books
showing the registered holders of Warrants.
8. LOSS, ETC. OF WARRANT. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, and upon
reimbursement of the Company's reasonable incidental expenses, the Company
shall execute and deliver to the Holder a new Warrant of like date,
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tenor and denomination.
9. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, prior
to the exercise thereof.
10. COMMUNICATION. No notice or other communication under this Warrant
shall be effective unless, but any notice or other communication shall be
effective and shall be deemed to have been given if, the same is in writing and
is mailed by first-class mail, postage prepaid, addressed to:
(a) the Company at: Ghassan Barazi, President
Vista Laser Centers of Michigan, Inc.
2224 Walker Road
Winsor, Ontario
Canada N8W 3P6
or such other address as the Company will hereafter designate in writing to the
Holder;
(b) the Holder at: Glenn S. Cushman, Executive Vice President
Dickinson & Co.
2425 E. Camelback Road, Suite 530
Phoenix, AZ 85016
or such other address as the Holder will hereafter designate in writing to the
Company.
11. HEADINGS. The headings of this Warrant have been inserted as a matter
of convenience and shall not affect the construction hereof.
12. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the law of the State of Nevada without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its President and its corporate seal to be hereunto affixed and attested by its
Secretary this ____ day of July, 1996.
ATTEST:
VISTA LASER CENTERS OF MICHIGAN, INC.
__________________________ By: _____________________________
Ghassan Barazi, President
Secretary
[Corporate Seal]
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SUBSCRIPTION
The undersigned, ____________________, pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe for and purchase shares of
Preferred Stock of Vista Laser Centers of Michigan, Inc. covered by said
Warrant, and makes payment therefor in full at the Exercise Price provided by
said Warrant.
Dated: ________________________ Signature: ________________________________
Address:
ASSIGNMENT
FOR VALUE RECEIVED, ____________________________hereby sells, assigns and
transfers unto _____________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
______________________, attorney, to transfer said Warrant on the books of
Vista Laser Centers of Michigan, Inc.
Dated: ________________________ Signature: ________________________________
Address:
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, hereby assigns and transfers unto the right to
purchase Underlying Securities of Vista Laser Centers of Michigan, Inc. by the
foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced hereby, and does irrevocably constitute and appoint________________,
attorney to transfer that part of said Warrant on the books of Vista Laser
Centers of Michigan, Inc.
Dated: ________________________ Signature: ________________________________
Address: