THESE WARRANTS AND THE UNDERLYING COMMON STOCK HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE. THESE WARRANTS
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE,
AND THESE WARRANTS AND THE UNDERLYING COMMON STOCK MAY NOT BE SOLD, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR LAWS.
MYO DIAGNOSTICS, INC.
SERIES C WARRANT
To Purchase Shares of Common Stock
No. C-1 Dated: August 18, 1995
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ONTARIO MUNICIPAL EMPLOYEES
RETIREMENT BOARD, or registered assigns ("Holder") is entitled to purchase, upon
the terms and subject to the provisions of this Warrant, from MYO DIAGNOSTICS,
INC., a California corporation (the "Company") the number of fully paid and
nonassessable shares of the Common Stock of the Company specified below at the
price per share specified below at any time during the period from the Initial
Exercise Date (as hereinafter defined) to 5:00 P.M., Los Angeles time, on August
30, 1996 (the "Expiration Date"), at which time this Warrant shall expire and
become void. "Initial Exercise Date" means January 31, 1996, provided, however,
that if on January 31, 1996, the Company has a firm written commitment from a
person which is not an Affiliate of the Company (as hereinafter defined) for
Gross Proceeds (as hereinafter defined), which together with all Gross Proceeds
previously realized by the Company exceeds $500,000, then the Initial Exercise
Date shall mean February 28, 1996, or if earlier, the date on which such firm
written commitment is terminated. "Gross Proceeds" shall mean the aggregate
proceeds realized by the Company subsequent to August 18, 1995, and prior to the
Initial Exercise Date from the sale of its Common Stock or other equity
securities to any person who is not an Affiliate of the Company in a transaction
not involving a public offering. Gross Proceeds shall not include proceeds
realized by the Company from (a) the subscription for and sale of securities of
the Company pursuant to that certain Subscription Agreement, dated as of August
18, 1995 between the Company and Hydra Capital Corporation and Gerald D. Appel
or the subscription for and sale of securities of the Company pursuant to the
Share Purchase Warrant issued or to be issued in accordance with the terms
thereof, (b) the sale of securities of the Company pursuant to that certain
Securities Purchase Agreement, dated as of August 18, 1995, by and among the
Company, Holder and Gerald D. Appel or upon the exercise of this Warrant, (c)
the sale of securities of the Company upon the exercise of that certain Series A
Warrant, dated December 23, 1994, and issued to Holder, as amended, or (d) the
sale of securities of the Company upon the exercise of that
certain Series B Warrant, dated December 23, 1994, and issued to Holder, as
amended. "Affiliate of the Company" means Gerald D. Appel, any person who
controls, is controlled by or is under common control with Mr. Appel or any
relative by blood or marriage (not more remote than first cousin) of Mr. Appel.
The number of shares of Common Stock initially issuable upon exercise of this
Warrant and the initial price to be paid for each share of Common Stock shall be
determined on the Initial Exercise Date as follows:
If Gross Proceeds are greater than $1,500,000, such number of shares shall
be 222,222 and such price shall be $2.30;
If Gross Proceeds are greater than $1,400,000 but not greater than
$1,500,000, such number of shares shall be 222,222 and such price shall be
$2.20;
If Gross Proceeds are greater than $1,300,000 but not greater than
$1,400,000, such number of shares shall be 222,222 and such price shall be
$2.10;
If Gross Proceeds are greater than $1,200,000 but not greater than
$1,300,000, such number of shares shall be 222,222 and such price shall be
$2.00;
If Gross Proceeds are greater than $1,100,000 but not greater than
$1,200,000, such number of shares shall be 222,222 and such price shall be
$1.90;
If Gross Proceeds are greater than $1,000,000 but not greater than
$1,100,000, such number of shares shall be 222,222 and such price shall be
$1.80;
If Gross Proceeds are greater than $900,000 but not greater than
$1,000,000, such number of shares shall be 444,444 and such price shall be
$1.50;
If Gross Proceeds are greater than $800,000 but not greater than $900,000,
such number of shares shall be 666,667 and such price shall be $1.00;
If Gross Proceeds are greater than $700,000 but not greater than $800,000,
such number of shares shall be 888,889 and such price shall be $0.25;
If Gross Proceeds are greater than $600,000 but not greater than $700,000,
such number of shares shall be 1,111,111 and such price shall be $0.10;
If Gross Proceeds are greater than $500,000 but not greater than $600,000,
such number of shares shall be 1,333,333 and such price shall be $0.05; and
If Gross Proceeds are $500,000 or less, such number of shares shall be such
number as would be equal 50.1% of the total number of outstanding shares
Common Stock of the Company after giving effect to the issuance thereof and
such price shall be $0.001.
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid for each share of Common Stock shall be
adjusted from time to time as hereinafter set forth. As used herein, "Common
Stock" shall mean the Company's currently authorized Common Stock and any stock
into which such Common Stock may be exchanged, and the exercise price for a
share of Common Stock in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price". Unless the context
otherwise requires, the term "Warrant", 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.
If Gross Proceeds are greater than $700,000 but not greater than $800,000,
such number of shares shall be 888,889 and such price shall be $0.25;
If Gross Proceeds are greater than $600,000 but not greater than $700,000,
such number of shares shall be 1,111,111 and such price shall be $0.10;
If Gross Proceeds are greater than $500,000 but not greater than $600,000,
such number of shares shall be 1,333,333 and such price shall be $0.05; and
If Gross Proceeds are $500,000 or less, such number of shares shall be such
number as would be equal 50.1% of the total number of outstanding shares
Common Stock of the Company after giving effect to the issuance thereof and
such price shall be $0.001.
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid for each share of Common Stock shall be
adjusted from time to time as hereinafter set forth. As used herein, "Common
Stock" shall mean the Company's currently authorized Common Stock and any stock
into which such Common Stock may be exchanged, and the exercise price for a
share of Common Stock in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price". Unless the context
otherwise requires, the term "Warrant", 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.
1. METHOD OF EXERCISE. This Warrant may be exercised in whole or in part
at any time or from time to time after the date hereof but not after the
Expiration Date by presentation and surrender hereof to the Company at 3710
South Robertson Blvd., Suite 212, Culver City, California 90232 or at such other
office as may be designated by the Company, with the Purchase Form attached
hereto duly executed and accompanied by payment to the Company by cash or check
or bank draft payable to the order of the Company, of an amount equal to the
then applicable Exercise Price multiplied by the number of shares of Common
Stock specified in such Form. If this Warrant should be exercised in part only,
the Company shall, upon presentation of this Warrant upon such exercise, execute
and deliver a new Warrant evidencing the right of the Holder hereof to purchase
the balance of the shares of Common Stock purchasable hereunder upon the same
terms and conditions as herein set forth. The Company agrees that the shares so
purchased shall be deemed to be issued to the Holder hereof as the record owner
of such shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares as aforesaid.
Certificates for the shares of Common Stock so purchased shall be dated the date
of exercise and delivered to the Holder hereof within a reasonable time, not
exceeding 10 Trading Days (as hereinafter defined), after the rights represented
by this Warrant shall have been exercised.
2. RESERVATION AND LISTING OF SHARES; ISSUE TAXES. The Company hereby
agrees that at all times prior to the Expiration Date it will have authorized,
and reserved for the purpose of issue upon exercise of this Warrant, a
sufficient number of shares of its Common Stock to provide for the exercise of
this Warrant in full and that, upon issuance, such shares will be listed on each
national securities exchange, if any, on which the other shares of the
outstanding Common Stock of the Company are then listed. The Company hereby
agrees that all shares of Common Stock issuable upon exercise of this Warrant
will, upon issuance, be fully paid and nonassessable. The Company hereby agrees
that it will pay all documentary, stamp or similar taxes and other governmental
charges which may be imposed with respect to the issuance or delivery of any
shares of Common Stock upon exercise of this Warrant; provided, however, that if
the shares of Common Stock are to be issued in a name other than the name of the
Holder of this Warrant, then no such issuance or delivery shall be made unless
the person requesting the same has paid to the Company any necessary transfer
tax or other governmental charge incident thereto.
3. FRACTIONAL SHARES. If the number of shares of Common Stock purchasable
upon the exercise of this Warrant is adjusted pursuant to the provisions of
Section 6 hereof, the Company shall nevertheless not be required to issue any
fractional shares or scrip representing fractional shares upon the exercise of
this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the Current Market Price (determined as hereinafter
provided) of one share of Common Stock on the last Trading Day prior to the date
of exercise of this Warrant. The Current Market Price of a share of Common Stock
for any day shall be determined as follows:
(a) If the Common Stock is listed on one or more national securities
exchanges or admitted to unlisted trading privileges on any such exchange, the
Current Market Price shall be the last sale price of the Common Stock reported
by the principal exchange on which the Common Stock is traded on such day; or
(b) If the Common Stock is not so listed or admitted to unlisted trading
privileges, the Current Market Price shall be the mean of the last reported bid
and asked prices on such day, as reported by the National Association of
Securities Dealers Automated Quotation System, or if not so reported, as
furnished by the National Quotation Bureau, Inc., or, if such firm at the time
is not engaged in the business of reporting such prices, as furnished by any
similar firm then engaged in such business as selected by the Company, or if
there is no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. selected by the Company; or
(c) If the Common Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the Current Market
Price shall be an amount determined in good faith and in a reasonable manner by
the Board of Directors of the Company.
"Trading Day" means any day on which trades in the Common Stock of the
Company are reported by a national securities exchange or if such Common Stock
is not listed or admitted to trading privileges on any such exchange, any day
such Common Stock is traded in the over-the-counter market, provided that if
Current Market Price is being determined pursuant to clause (c) of Section 3,
"Trading Day" shall mean any day on which the New York Stock Exchange is open
for trading.
4. TRANSFER AND EXCHANGE. Subject to the provisions of Section 8 hereof
this Warrant and all rights hereunder are transferable, in whole or in part, on
the books of the Company by the Holder hereof in person or by duly authorized
attorney, upon presentation and surrender of this Warrant at the principal
office of the Company with the Assignment Form attached hereto duly executed and
upon payment of any necessary transfer tax or other governmental charge imposed
upon such transfer. Upon any partial transfer of this Warrant, the Company will
issue and deliver to the Holder an appropriate new Warrant or Warrants. Each
taker and Holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant when endorsed in blank shall be deemed negotiable and
that when this Warrant shall have been so endorsed, the Holder hereof may be
treated by the
Company and all other persons dealing with this Warrant as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on such books,
the Company may treat the registered Holder hereof as the owner for all
purposes. This Warrant is exchangeable at the principal office of the Company
for Warrants for the purchase of the same aggregate number of shares of Common
Stock, each new Warrant to represent the right to purchase such number of shares
of Common Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the date
hereof and shall be identical to this Warrant except as to the number of shares
of Common Stock issuable pursuant thereto.
5. LOSS OR MUTILATION. Upon receipt by the Company of evidence
satisfactory to it of the ownership of and loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, of
indemnity satisfactory to the Company and, in the case of mutilation, upon
surrender and cancellation thereof, the Company shall (in the absence of notice
to the Company that this Warrant has been acquired by a bona fide purchaser)
execute and deliver to the Holder hereof in lieu hereof, a new Warrant of like
tenor and date and any such lost, stolen or destroyed Warrant shall thereupon
become void.
6. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number and kind
of securities purchasable upon the exercise of this Warrant and the Exercise
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of any
reclassification or change of outstanding securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with
or into another corporation (other than a merger with another corporation in
which the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), the Company, or such successor, as the case may be, shall,
without payment of additional consideration therefor, execute a new Warrant,
providing that the Holder of this Warrant shall have the right to exercise such
new Warrant and procure upon such exercise, in lieu of each share of Common
Stock theretofore issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such
reclassification, change, consolidation, or merger, by a holder of one share of
Common Stock issuable upon exercise of this Warrant, had this Warrant been
exercised immediately prior to the record date for determining the holders of
Common Stock to receive such shares of stock, other
securities, money and property in connection with any such reclassification,
change, consolidation, or merger. Such new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 6. The provisions of this Section 6(a) shall
similarly apply to successive reclassifications, changes, consolidations and
mergers.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Company, at any time while
this Warrant remains outstanding and unexpired, shall subdivide or combine its
Common Stock, the Exercise Price shall be proportionately decreased in the case
of a subdivision or increased in the case of a combination at the effective time
of such subdivision or combination, or if the Company shall set a record date
for the purpose of determining the Common Stock initially affected by such
subdivision or combination, if earlier, as of such record date.
(c) STOCK DIVIDENDS. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend or make any other distribution
(except any distribution specifically provided for in Section 6(a) or 6(b)
hereof) on the Common Stock in shares of Common Stock, then the Exercise Price
shall be adjusted, from and after the date of determination of stockholders
entitled to receive such dividend or distribution, to that price determined by
multiplying the Exercise Price in effect immediately prior to such date of
determination by a fraction (i) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to such dividend or
distribution, and (ii) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution (plus, in the event that the Company pays cash for fractional
shares, the number of additional shares which would have been outstanding had
the Company issued fractional shares in connection with such dividend).
(d) RIGHTS OFFERINGS. If the Company shall issue rights, options, or
warrants to all holders of its outstanding shares of Common Stock, entitling
them (for a period expiring within 45 days after the record date for the
determination of shareholders entitled to receive such rights, options or
warrants) to subscribe for or purchase shares of Common Stock (or securities
exchangeable for or convertible into shares of Common Stock) at a price per
share of Common Stock (or having an exchange or conversion price per share of
Common Stock, with respect to a security exchangeable for or convertible into
shares of Common Stock) that is less than the Exercise Price in effect,
immediately prior to such record date, then such Exercise Price shall be
adjusted by multiplying such Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such record
date plus the number of shares of Common Stock that the aggregate offering price
of the total number of shares of Common Stock so to be offered (or,the aggregate
initial exchange or conversion price of the
exchangeable or convertible securities so to be offered) would purchase at such
Exercise Price and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock to be offered for subscription or purchase (or into which
the exchangeable or convertible securities so to be offered are initially
exchangeable or convertible). Such adjustment shall become effective at the
close of business on such record date; however, to the extent that shares of
Common Stock (or securities exchangeable for or convertible into shares of
Common Stock) are not delivered after the expiration of such rights, options, or
warrants, the Exercise Price shall be readjusted (but only to the extent this
Warrant is unexercised after such expiration) to the Exercise Price that would
then be in effect had the adjustment made upon the issuance of such rights,
options, or warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or securities exchangeable for or convertible into
shares of Common Stock) actually issued. In case any subscription price may be
paid in a consideration, part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined by the Board of
Directors in good faith and in a reasonable manner.
(e) DISTRIBUTIONS OF ASSETS AND INDEBTEDNESS. If the Company shall
distribute to all holders of its shares of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) evidences of its indebtedness or assets,
then in each case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date for the
determination of shareholders entitled to receive such distribution by a
fraction, the numerator of which shall be such Exercise Price, less the fair
market value (as determined by the Board of Directors of the Company acting in
good faith and in a reasonable manner) of the portion of the evidences of
indebtedness or assets so to be distributed applicable to one share of Common
Stock and the denominator of which shall be such Exercise Price. Such adjustment
shall be made whenever any such distribution is made, and shall become effective
on the date of distribution retroactive to the record date for the determination
of shareholders entitled to receive such distribution. This Section 6(e) does
not apply to (i) cash dividends payable out of consolidated retained earnings,
(ii) dividends or distributions payable in shares of stock referred to in
Section 6(c) above or (iii) rights, options or warrants referred to in Section
6(d) above.
(f) COMMON STOCK ISSUE, OPTIONS, WARRANTS, CONVERTIBLE SECURITIES, ETC. If
the Company shall sell or issue shares of Common Stock, or rights, options,
warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock for a consideration per share
of Common Stock (determined, in the case of such rights, options, warrants or
convertible or exchangeable securities, by dividing (i) the total amount
received or receivable by the Company in
consideration of the sale and issuance of such rights, options, warrants or
convertible or exchangeable securities, plus the total consideration payable to
the Company upon exercise or conversion or exchange thereof, by (ii) the total
number of shares of Common Stock covered by such rights, options, warrants or
convertible or exchangeable securities) lower than the Exercise Price in effect
on the date the Company fixes the offering price (or exercise price, option
price or conversion price, as the case may be) per share of such Common Stock,
then the Exercise Price shall be reduced to a price determined by multiplying
the Exercise Price in effect immediately prior thereto by a fraction, the
numerator of which shall be an amount equal to the sum of (A) the number of
shares of Common Stock outstanding immediately prior to such sale and issuance
plus (B) the number of shares of Common Stock which the aggregate consideration
received (determined as provided below) for such sale or issuance would purchase
at such Exercise Price, and the denominator of which shall be the total number
of shares of Common Stock to be outstanding immediately after such sale and
issuance. Such adjustment shall be made successively whenever such an issuance
is made. For the purposes of such adjustments, the shares of Common Stock which
the holder of any such rights, options, warrants, or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of such sale and issuance and the
consideration received by the Company therefor shall be deemed to be the
consideration received by the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the consideration or premiums
stated in such rights, options, warrants or convertible or exchangeable
securities to be paid for the shares of Common Stock covered thereby. For the
purposes of determining "consideration per share of Common Stock" or
"consideration received by the Company" for the purposes of the first sentence
of this Section 6(f), no deduction shall be made for commissions, discounts or
other expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith. In case the Company shall sell and issue
shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock, for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in determining the
"consideration per share of Common Stock" and the "consideration received by the
Company" for purposes of the first sentence of this Section 6(f), the Board of
Directors shall determine the fair value of such property, acting in good faith
and in a reasonable manner. This Section 6(f) does not apply to (i) shares,
rights, options, warrants or convertible or exchangeable securities issued in
any of the transactions described in Sections 6(a) through 6(e), (ii) Common
Stock issued upon the exercise of rights, options, or warrants (including this
Warrant) or upon the conversion or exchange of convertible or exchangeable
securities, (iii) options to purchase not in excess of 400,000 shares of Common
Stock issued pursuant to that certain Agreement, dated December 13, 1994,
between the Company and Donald
Patterson, Ronald Goldsack, James Connacher, Chris Skillen, Richard Reid and
James Black, or (iv) options to purchase not in excess of 400,000 shares of
Common Stock issued after the date hereof to employees, consultants, officers or
directors of the Company (other than Gerald D. Appel).
(g) OTHER ADJUSTMENTS. If any event occurs as to which in the opinion of
the Board of Directors of the Company, the other provisions of this Section 6
are not strictly applicable or if strictly applicable would not fairly protect
the purchase rights of the Holder in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make an
adjustment in the application of such provisions, in accordance with such
essential intent and principles, so as to protect such purchase rights as
aforesaid, but in no event shall any such adjustment have the effect of
increasing the Exercise Price as otherwise determined pursuant to this Section
6.
(h) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the Exercise
Price, the number of shares of Common Stock purchasable hereunder shall be
adjusted to the product obtained by multiplying such number of shares
purchasable immediately prior to such adjustment in the Exercise Price by a
fraction, the numerator of which shalt be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price in effect immediately thereafter.
(i) MINIMUM ADJUSTMENT. No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least $.05 in the Exercise Price; provided, however, that any adjustments which
by reason of this Section 6(i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 6 shall be made to the nearest one-tenth of one cent or to
the nearest one-tenth of a share, as the case may be.
(j) SECURITIES OTHER THAN COMMON STOCK. In the event that at any time, as a
result of an adjustment made pursuant to this Section 6, the Holders of this
Warrant shall become entitled to purchase any shares or securities of the
Company other than shares of Common Stock, thereafter the number of such other
shares or securities so purchasable upon exercise of this Warrant and the
Exercise Price for such shares or securities shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in Section 6(a)
through 6(h), inclusive, of this Section 6 and the other provisions hereof with
respect to the shares of Common Stock shall apply on like terms to any such
other shares.
(k) DEFERMENT OF ADJUSTMENT. In any case in which this Section 6 shall
require that an adjustment in the Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event
issuing to the Holder of any Warrant exercised after such record date the shares
of Common Stock, if any, issuable upon such exercise over and above the shares
of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment.
(l) Voluntary Adjustment by the Company. The Company may at its option, at
any time during the term of this Warrant, reduce the then current Exercise Price
for any period of time to any amount deemed appropriate by the Board of
Directors of the Company.
7. NOTICE OF ADJUSTMENTS. Whenever any Exercise Price shall be adjusted
pursuant to Section 6 hereof, the Company shall promptly prepare a certificate
of its chief financial officer setting forth, in reasonable detail the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price after giving effect to such
adjustment, and shall promptly cause copies of such certificate to be made (by
first class mail, postage prepaid) to the Holder of this Warrant.
8. RESTRICTIONS ON TRANSFER; LEGENDS. This Warrant was issued pursuant to
that certain Securities Purchase Agreement dated as of August 18, 1995, among
the Company, Ontario Municipal Employees Retirement Board, and Gerald D. Appel
(the "Purchase Agreement"), a copy of which will be furnished, without charge,
to the Holder hereof upon written request to the Company. Each taker and Holder
of this Warrant, by taking and holding the same, represents, acknowledges and
agrees that (a) this Warrant was, and any shares of Common Stock acquired upon
exercise hereof will be (unless then registered under the Securities Act of 1933
or an exemption from such registration not requiring such representation is
available for the sale of the Common Stock), acquired for investment and not
with a view to or for sale in connection with any distribution thereof, (b) this
Warrant has not been, and the shares of Common Stock issuable upon exercise
hereof may not be, registered under the Securities Act of 1933 (the 1933 Act ),
may not be transferred in violation of the 1933 Act, and must be held
indefinitely unless they are subsequently registered thereunder or an exemption
from such registration is available, and (c) this Warrant and the shares of
Common Stock issuable upon exercise hereof are subject to other restrictions on
transfer by the provisions of the Purchase Agreement, including, without
limitation, Sections 8.01 and 8.12 thereof. Each taker and Holder of this
Warrant, by taking and holding the same, also agrees that all certificates
representing Common Stock issued upon exercise of this Warrant may bear the
restrictive legend set forth in Section 4.06 of the Purchase Agreement and may
bear such other legends and endorsements as shall be required to comply with any
law or with any rule or regulation of any stock exchange on which such
securities may be listed.
9. EXTENSION OF EXPIRATION DATE. In addition, and notwithstanding any
provision contained herein to the contrary,
in the event that (a) at the Expiration Date the Company is required, pursuant
to an effective request therefor received by the Company from the Holder
pursuant to the provisions of Section 8.03 of the Purchase Agreement at least 90
days prior to the Expiration Date, to effect a Registration under the Securities
Act of 1933 with respect to any shares of Common Stock subject to this Warrant
or (b) at the Expiration Date the Company is in the process of effecting a
registration under the Securities Act of 1933 for an underwritten public
offering in which shares of Common Stock subject to this Warrant are entitled to
be included pursuant an effective request therefor received by the Company from
the Holder pursuant to the provisions of Section 8.02 of the Purchase Agreement
on or prior to the Expiration Date, the Expiration Date shall be extended to
5:00 P.M., Los Angeles time, on the 30th day following the date on which such
Registration shall have become effective but in no event longer than 180 days
after the date this Warrant would otherwise have expired. In the event that the
Expiration Date is extended in accordance with the provisions of this Section 9,
all references contained in this Warrant to the "Expiration Date" shall be
deemed to be references to the Expiration Date as so extended.
10. NO STOCKHOLDER RIGHTS. Nothing contained in this Warrant shall be
construed as conferring upon the Holders or their transferees the right to vote
or to receive dividends or to consent to or receive notice as shareholders in
respect of any meeting of shareholders for the election of directors of the
Company or any other matter, or any rights whatsoever as shareholders of the
Company. If, however, at any time prior to the expiration of this Warrant and
prior to its exercise in full, any of the following events shall occur:
(a) the Company shall declare any dividend payable in any securities upon
its shares of Common Stock or make any distribution to the holders of its shares
of Common Stock (other than a cash dividend or a dividend payable in additional
shares of Common Stock);
(b) the Company shall offer to the holders of its shares of Common Stock
any additional shares of Common Stock or securities convertible into shares of
Common Stock or any right to subscribe to shares of Common Stock or securities
convertible or exchangeable into shares of Common Stock;
(c) any reclassification of the capital stock of the Company (other than a
subdivision or combination of Common Stock), or any consolidation or merger to
which the Company is a party or any sale of all or substantially all of the
assets of the Company shall be proposed, and in each case shareholder approval
is required;
or
(d) a dissolution, liquidation or winding up of the Company shall be
proposed;
then in any one or more of such events, the Company shall give notice in writing
of such event to the Holders of this Warrant at least 20 days prior to the date
fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to such dividend, distribution, or
subscription rights, or for the determination of shareholders entitled to vote
on any such proposed transactions. Such notice shall specify such record date or
date of the closing of the transfer books, as the case may be.
11. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California.
MYO DIAGNOSTICS, INC.
/s/
By___________________________
Name:
Title:
PURCHASE FORM
Dated: ____________, 199__
The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing _________ shares of Common Stock and hereby makes payment
of $______ in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name ______________________________________________
(please typewrite or print in block letters)
Address ______________________________________
______________________________________
Signature:
---------------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________ hereby sells, assigns
and transfers unto
Name ___________________________________________________________
(Please typewrite or print in block letters)
Address _________________________________________ the right to purchase Common
Stock represented by this Warrant to the extent of ____________ shares as to
which such right is exercisable and does hereby irrevocably constitute and
appoint ___________________, attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Signature:
-----------------------------
Dated: ____________, 199__
AMENDMENT TO SERIES C WARRANT
This AMENDMENT TO SERIES C WARRANT (this "Amendment"), is made as of
December 22, 1995, by and between Myo Diagnostics, Inc,, a California
corporation (the "Company") and Ontario Municipal Employees Retirement Board
("OMERB")
RECITALS
A. WHEREAS, OMERB is the holder of that certain Series C Warrant, No. C-1,
dated August 18, 1995 for shares of the Common Stock of the Company (the
"Warrant"); and
B. WHEREAS, the Company and OMERB, and Gerald D. Appel desire to amend the
Warrant as hereinafter provided
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. The introductory paragraph of the Warrant is hereby amended to read in
its entirety as follows:
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ONTARIO MUNICIPAL EMPLOYEES
RETIREMENT BOARD, or registered assigns ("Holder") is entitled to purchase,
upon the terms and subject to the provisions of this Warrant, from MYO
DIAGNOSTICS, INC., a California corporation (the "Company") the number of
fully paid and nonassessable shares of the Common Stock of the Company
specified below at the price per share specified below at any time during
the period from the Initial Exercise Date (as hereinafter defined) to 5:00
P.M., Los Angeles time, on December 31, 1998 (the "Expiration Date"), at
which time this Warrant shall expire and become void. "Initial Exercise
Date" means March 31, 1996, provided, however, that if on March 31, 1996,
the Company has a firm written commitment from a person which is not an
Affiliate of the Company (as hereinafter defined) for Gross Proceeds (as
hereinafter defined), which together with all Gross Proceeds previously
realized by the Company exceeds $500,000, then the Initial Exercise Date
shall mean April 30, 1996, or if earlier, the date on which such firm
written commitment is terminated. "Gross Proceeds" shall mean the aggregate
proceeds realized by the Company subsequent to August 18, 1995, and prior
to the Initial Exercise Date from the sale of its Common Stock or other
equity securities to any person who is not an Affiliate of the Company in a
transaction not involving a public offering. Gross Proceeds shall not
include proceeds realized by the Company from (a) the subscription for and
sale of securities of the Company pursuant to that certain Subscription
Agreement, dated as of August 18, 1995 between the Company and Hydra
Capital Corporation and Gerald D. Appel or the subscription for and sale of
securities of the Company pursuant to the Share Purchase Warrant issued or
to be issued in accordance with
the terms thereof, (b) the sale of securities of the Company pursuant to that
certain Securities Purchase Agreement, dated as of August 18, 1995, by and among
the Company, Holder and Gerald D. Appel or upon the exercise of this Warrant,
(c) the sale of securities of the Company upon the exercise of that certain
Series A Warrant, dated December 23, 1994, and issued to Holder, as amended, or
(d) the sale of securities of the Company upon the exercise of that certain
Series B Warrant, dated December 23, 1994, and issued to Holder, as amended.
"Affiliate of the Company" means Gerald D. Appel, any person who controls, is
controlled by or is under common control with Mr. Appel or any relative by blood
or marriage (not more remote than first cousin) of Mr. Appel. The number of
shares of Common Stock initially issuable upon exercise of this Warrant and the
initial price to be paid for each share of Common Stock shall be determined on
the Initial Exercise Date as follows:
If Gross Proceeds are greater than $1,200,000, such number of shares
shall be 222,222 and such price shall be $2.00;
If Gross Proceeds are greater than $1,100,000 but not greater than
$1,200,000, such number of shares shall be 222,222 and such price
shall be $1.90;
If Gross Proceeds are greater than $1,000,000 but not greater than
$1,100,000, such number of shares shall be 222,222 and such price
shall be $1.80;
If Gross Proceeds are greater than $900,000 but not greater than
$1,000,000, such number of shares shall be 444,444 and such price
shall be $1.50;
If Gross Proceeds are greater than $800,000 but not greater than
$900,000, such number of shares shall be 666,667 and such price shall
be $1.00;
If Gross Proceeds are greater than $700,000 but not greater than
$800,000, such number of shares shall be 888,889 and such price shall
be $0.25;
4. This Amendment may be executed in two or more counterparts and by
different parties in separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first above written.
MYO DIAGNOSTICS, INC.
By: /s/ Gerald D. Appel
----------------------------
Gerald D. Appel
President
ONTARIO MUNICIPAL EMPLOYEES
RETIREMENT BOARD
By: /s/ Peter D.Friend
-----------------------------
Peter D. Friend
Portfolio Manager
By: /s/ Henry A. Rachfalowski
----------------------------
Henry A. Rachfalowski
Vice President
SECOND AMENDMENT TO SERIES C WARRANT
This SECOND AMENDMENT TO SERIES C WARRANT (this "Amendment") is made as of
July 8, 1996, by and between Myo Diagnostics, Inc., a California corporation
(the "Company") and Ontario Municipal Employees Retirement Board ("OMERB").
RECITALS
A. WHEREAS, OMERB is the holder of that certain Series C Warrant No. C-1,
dated August 18, 1995 for shares of the Common Stock of the Company, as amended
by that certain Amendment to Series C Warrant, dated as of December 22, 1995 (as
so amended, the "Warrant"); and
B. WHEREAS, the Company and OMERB desire to further amend the Warrant as
hereinafter provided.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. The introductory paragraph of the Warrant is hereby amended to read in
its entirety as follows:
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ONTARIO MUNICIPAL EMPLOYEES
RETIREMENT BOARD, or registered assigns ("Holder") is entitled to purchase,
upon the terms and subject to the provisions of this Warrant, from MYO
DIAGNOSTICS. INC., a California corporation (the "Company"), 222,222 fully
paid and nonassessable shares of the Common Stock of the Company at the
price of $2.00 per share at any time during the period from December 22,
1995 to 5:00 P.M., Los Angeles time, on December 31, 1998 (the "Expiration
Date"), at which time this Warrant shall expire and become void. The number
of shares of Common Stock to be received upon the exercise of this Warrant
and the price to be paid for each share of Common Stock shall be adjusted
from time to time as hereinafter set forth. As used herein, "Common Stock"
shall mean the Company's currently authorized Common Stock and any stock
into which such Common Stock may be exchanged, and the exercise price for a
share of Common Stock in effect at any time and as adjusted from time to
time is hereinafter sometimes referred to as the "Exercise Price". Unless
the context otherwise requires, the term "Warrant", 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.
2. The Company hereby represents and warrants to OMERB that this Amendment
has been duly executed and delivered by the Company and that the Warrant, as
amended by this Amendment, constitutes the legal, valid, and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
3. OMERB hereby represents and warrants to the Company that this Amendment
has been duly executed and delivered by OMERB.
4. This Amendment may be executed in two or more counterparts and by
different parties in separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first above written.
MYO DIAGNOSTICS. INC.
By /s/ Gerald D. Appel
-------------------------
Gerald D. Appel
President
ONTARIO MUNICIPAL EMPLOYEES RETIREMENT BOARD
By /s/ Peter D. Friend
--------------------------
Peter D. Friend
Portfolio Manager
by /s/ Tom Gunn
--------------------------
Tom Gunn
Senior Vice President, Investments