Exhibit 10.2
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND MAY ONLY BE ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE
EXERCISE OF THIS WARRANT, IF ANY, MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH
SECURITIES UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE LAW WITHOUT AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER
FROM THE SECURITIES AND EXCHANGE COMMISION.
MAY 22, 2007
HC INNOVATIONS, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
For value received, this warrant (the "WARRANT") is hereby issued by HC
INNOVATIONS, INC., a Delaware corporation (the "COMPANY"), to ______________(the
"HOLDER"). Subject to the provisions of this Warrant, the Company hereby grants
to the Holder the right to purchase from the Company up to [50% OF AMOUNT OF
COMMON STOCK PURCHASED] fully paid and non-assessable shares of the
- ---------------------------------------- Company's Common Stock, at an aggregate
price of $____________ or $4.00 per share (the "EXERCISE PRICE").
The term "COMMON STOCK" means the Common Stock, par value $0.001 per
share, of the Company. The number of shares of Common Stock to be received upon
the exercise of this Warrant may be adjusted from time to time as hereinafter
set forth. The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter referred to as "WARRANT SHARES."
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held, subject to all of the conditions,
limitations and provisions set forth herein.
1. EXERCISE OF WARRANT. (a) Subject to the terms and conditions set
forth herein, this Warrant may be exercised in whole or in part, pursuant to the
procedures provided below, at any time on or before the earlier of (i) 5:00
p.m., New York time, on the day occurring two (2) years from May 22, 2007 (the
"EXPIRATION DATE") or, if such day is a day on which banking institutions in New
York are authorized by law to close, then on the next succeeding day that shall
not be such a day. The Warrant shall only be exercisable on a cash basis. To
exercise this Warrant the Holder shall present and surrender this Warrant to the
Company at its principal office, with the Warrant Exercise Form attached hereto
duly executed by the Holder and
accompanied by payment in cash, wire transfer or by check, payable to the order
of the Company, of the aggregate Exercise Price for the total aggregate number
of shares for which this Warrant is exercised. Upon receipt by the Company of
this Warrant, together with the executed Warrant Exercise Form and payment of
the Exercise Price for the shares to be acquired, in proper form for exercise,
and subject to the Holder's compliance with all requirements of this Warrant for
the exercise hereof, the Holder shall be deemed to be the holder of record of
the shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Holder; PROVIDED, HOWEVER, that no exercise of this Warrant shall be
effective, and the Company shall have no obligation to issue any Common Stock to
the Holder upon any attempted exercise of this Warrant, unless the Holder shall
have first delivered to the Company, in form and substance reasonably
satisfactory to the Company, appropriate representations so as to provide the
Company reasonable assurances that the securities issuable upon exercise may be
issued without violation of the registration requirements of the Securities Act
and applicable state securities laws, including without limitation
representations that the Holder is familiar with the Company and its business
and financial condition and has had an opportunity to ask questions and receive
documents relating thereto to his reasonable satisfaction.
2. RESERVATION OF SHARES. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common Stock
from time to time receivable upon exercise of this Warrant. All such shares
shall be duly authorized and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable and free of all preemptive rights.
3. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but the
Company shall pay the Holder an amount equal to the Fair Market Value (as
defined below) of such fractional share of Common Stock in lieu of each fraction
of a share otherwise called for upon any exercise of this Warrant.
4. REDEMPTION. The Company may redeem this Warrant at its option by
giving the Holder thirty (30) days' notice of the Company's intention to redeem,
if the Company's common stock has traded at a closing price of at least $6.00
per share for twenty (20) consecutive trading days. The redemption price is $.05
per Warrant Share.
5. REGISTRATION RIGHTS. The Holder shall have certain piggyback
registration rights with respect to the registration the Warrant Shares as
provided in that certain Registration Rights Agreement by and between the
Company and the parties thereto.
6. ASSIGNMENT OR LOSS OF WARRANT. Subject to the transfer restrictions
herein (including Section 9), upon surrender of this Warrant to the Company or
at the office of its stock transfer agent, if any, with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be canceled. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this
Warrant, and of reasonably satisfactory indemnification by the Holder, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a replacement Warrant of like tenor and date.
-2-
7. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
8. ADJUSTMENTS.
8.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at any
time after the date hereof subdivide its outstanding shares of Common Stock by
recapitalization, reclassification, or split-up thereof, the number of shares of
Common Stock subject to this Warrant immediately prior to such subdivision shall
be proportionately increased, and if the Company shall at any time after the
date hereof combine the outstanding shares of Common Stock by recapitalization,
reclassification, or combination thereof, the number of shares of Common Stock
subject to this Warrant immediately prior to such combination shall be
proportionately decreased. Any such adjustment and adjustment to the Exercise
Price pursuant to this Section 8.1 shall be effective at the close of business
on the effective date of such subdivision or combination.
Whenever the number of shares of Common Stock purchasable upon the
exercise of this Warrant is adjusted, as provided in this Section 8.1, the
Exercise Price shall be adjusted to the nearest cent by multiplying such
Exercise Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise immediately prior to such adjustment, and (y) the denominator
of which shall be the number of shares of Common Stock so purchasable
immediately thereafter.
8.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER. In case of
any reorganization of the Company after the date hereof or in case after such
date the Company shall consolidate with or merge into another corporation or
convey all or substantially all of its assets to another corporation, then, and
in each such case, the Holder of this Warrant upon the exercise thereof as
provided in Section 1 at any time after the consummation of such reorganization,
consolidation, merger, or conveyance, shall be entitled to receive, in lieu of
the securities and property receivable upon the exercise of this Warrant prior
to such consummation, the securities or property to which such Holder would have
been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto; in each such case, the terms of this Warrant shall be
applicable to the securities or property receivable upon the exercise of this
Warrant after such consummation.
8.3 CERTIFICATE AS TO ADJUSTMENTS. The adjustments provided in this
Section 8 shall be interpreted and applied by the Company in such a fashion so
as to reasonably preserve the applicability and benefits of this Warrant (but
not to increase or diminish the benefits hereunder). In each case of an
adjustment in the number of shares of Common Stock receivable on the exercise of
the Warrant, the Company at its expense will promptly compute such adjustment in
accordance with the terms of the Warrant and prepare a certificate executed by
two executive officers of the Company setting forth such adjustment and showing
in detail the facts upon which such adjustment is based. The Company will
forthwith mail a copy of each such certificate to each Holder.
-3-
8.4 NOTICES OF RECORD DATE, ETC. In the event that:
---------------------------
(a) the Company authorizes the granting to Common Stock
holders of any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities; or
(b) the Company authorizes any capital reorganization of the
Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation or entity; or
(c) the Company authorizes any voluntary or involuntary
dissolution, liquidation, or winding up of the Company,
then, and in each such case, the Company shall mail or cause to be mailed to the
holder of this Warrant at the time outstanding a notice specifying, as the case
may be, (i) the date on which a record is to be taken for the purpose of such
right, and stating the amount and character of such right, or (ii) the date on
which such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation, or winding up is to take place, and the time, if any
is to be fixed, as to which the holders of record of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation, or winding up. Such notice shall
be mailed at least twenty (20) days prior to the date therein specified.
8.5 NO IMPAIRMENT. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 10
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holder of this Warrant against impairment.
9. TRANSFER TO COMPLY WITH THE SECURITIES ACT. This Warrant and any
Warrant Shares may not be sold, transferred, pledged, hypothecated or otherwise
disposed of except as follows: (a) to a person who, in the opinion of counsel to
the Company, is a person to whom this Warrant or the Warrant Shares may legally
be transferred without registration and without the delivery of a current
prospectus under the Securities Act with respect thereto and then only against
receipt of an agreement of such person to comply with the provisions of this
Section 9 with respect to any resale or other disposition of such securities; or
(b) to any person upon delivery of a prospectus then meeting the requirements of
the Securities Act relating to such securities and the offering thereof for such
sale or disposition, and thereafter to all successive assignees.
10. LEGEND. Unless the shares of Warrant Shares have been registered
under the Securities Act, upon exercise of any of the Warrants and the issuance
of any of the shares of Warrant Shares, all certificates representing shares
shall bear on the face thereof substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR
OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE
-4-
PROVISIONS OF THAT ACT OR UNLESS AN OPINION OF COUNSEL TO THE
CORPORATION IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
11. NOTICES. All notices required hereunder shall be in writing and
shall be deemed given when telegraphed, delivered personally or within two days
after mailing when mailed by certified or registered mail, return receipt
requested, to the Company or the Holder, as the case may be, for whom such
notice is intended, if to the Holder, at the address of such party shown on the
books of the Company, or if to the Company, at the address set forth on the
signature page hereof, Attn: President, or at such other address of which the
Company or the Holder has been advised by notice hereunder.
12. APPLICABLE LAW. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Delaware, without regard to the conflict of laws provisions of such State.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
HC INNOVATIONS, INC.
By:
----------------------------
Name:
Title:
-5-
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to (i) exercise the within
Warrant to purchase __________ shares of the Common Stock of HC INNOVATIONS,
INC., a Delaware corporation, pursuant to the provisions of Section 1 of the
attached Warrant, and hereby makes payment of $__________ in payment therefore.
The undersigned's execution of this form constitutes the undersigned's agreement
to all the terms of the Warrant and to comply therewith.
----------------------------
Signature
Print Name:
----------------------------
Signature, if jointly held
Print Name:
----------------------------
Date
-6-
ASSIGNMENT FORM
FOR VALUE RECEIVED_____________________________ ("Assignor") hereby sells,
assigns, and transfers unto _______________________________ ("Assignee") all of
Assignor's right, title and interest in, to and under this Warrant issued by HC
INNOVATIONS, INC. dated ______________.
DATED:
-----------------------------
ASSIGNOR:
----------------------------
Signature
Print Name:
----------------------------
Signature,if jointly held
Print Name:
ASSIGNEE:
The undersigned agrees to all of the terms of the Warrant and to comply
therewith.
----------------------------
Signature
Print Name:
----------------------------
Signature,if jointly held
Print Name:
-7-