THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS RELATING TO SUCH SECURITIES
OR AN OPTION OF COUNSEL REASONABLY SATISFACTORY TO MEDJET INC. AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase 18,272 Shares of Common
Stock of MEDJET INC. (subject to
Adjustment as provided herein).
COMMON STOCK PURCHASE WARRANT
April 20, 1998
MEDJET INC. a corporation organized under the laws of the
State of Delaware (the "Company") hereby certifies that, for value received,
Judah Wernick, or registered assigns (the "Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company at any time or from time to
time after the date of this Warrant and before 5:00 p.m.. New York time, on
April 19, 2002 (the "Expiration Date"), up to Eighteen Thousand Two Hundred
Seventy Two (18,272) fully paid and nonassessable shares of Warrant Stock (as
hereinafter defined), $.001 par value per share, of the Company, at a purchase
price per share equal to one hundred and ten percent (110%) of the lesser of (i)
$6.79 or (ii) the average closing bid price for the Common Stock quoted on the
National Association of Securities Dealers, Inc. OTC Bulletin Board (the "OTC
Bulletin Board") for the twenty (20) trading day period ending on the last
trading day immediately prior to an Automatic Conversion Event (as defined in
the Certificate of Designation of Series A Preferred Stock of the Company filed
by the Company with the office of the Secretary of State of the State of
Delaware on April 20, 1998) (such purchase price per share as adjusted from time
to time as herein provided is referred to herein as the "Purchase Price"). In
the event this Warrant is exercised in whole or in part prior to the occurrence
of an Automatic Conversion Event, the Purchase Price. shall be $7.47. The number
and character of such shares of Warrant Stock and the Purchase price are subject
to adjustment as provided herein.
At the option of Holder, this Warrant may be exercised in one of the
following "cashless exercise" transactions:
(a) The Holder shall have the right to convert, in whole or in
part, the Warrants (the "Conversion Right") at any time prior to the
Expiration Date, into shares of Common Stock in accordance with the
provisions of this paragraph by the Holder tendering to the Company
written notice of exercise together with advice of the delivery of an
order to a broker to sell part or all of the shares of Common Stock
underlying the Warrants, subject to such exercise notice and an
irrevocable order to and an irrevocable commitment by, such broker to
deliver to the Company (or its transfer agent) sufficient proceeds from
the sale of such shares to pay the aggregate Purchase Price of such
Warrants and any withholding taxes All documentation and procedures to
be followed in connection with such "cashless exercise" shall be
approved in advance by the Company, which approval shall be
expeditiously provided and not unreasonably withheld; or
(b) Upon written notice of exercise, the Company shall deliver
to the Holder (without payment by the Holder of the aggregate Purchase
Price) that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the value of the portion of the Warrants being
exercised at that time (determined by subtracting the aggregate
Purchase Price for the number of Warrants being exercised (in effect
immediately prior to the exercise of the Conversion Right) from the
amount obtained by multiplying the number of shares of Common Stock
underlying the Warrants to be exercised by the Fair Market Value of one
share of Common Stock immediately prior to the exercise of the
Conversion Right by (y) the Fair Market Value of one share of Common
Stock immediately prior to the exercise of the Conversion Right.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(i) The term Company shall include MEDJET INC. and
any corporation which shall succeed or assume the obligation of such
company hereunder.
(ii) The term "Common Stock" includes (i) the
Company's Common Stock, $.00l par value per share, as authorized on the
date of the Agreement, and (ii) any other securities into which or for
which any of the securities described in (i) hereof, may be converted
or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
(iii) The term "Other Securities" refers to any stock
(other than Common Stock) and other securities of the Company or any
other person (corporate or otherwise) which the Holder at any time
shall be entitled to receive, or shall have received, upon exercise of
the Warrant, in lieu of or in addition to Common Stock, or which at any
time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 5
or otherwise.
(iv) The term "Warrant Stock" means the Shares of
Common Stock and Other Securities owned or to be owned upon exercise of
this Warrant and all other warrants in substantially the same form as
this Warrant issued to Judah Wernick or thereafter to its Transferees
(as hereinafter defined).
1. EXERCISE OF WARRANT.
1.1 NUMBER OF SHARES ISSUABLE ON EXERCISE. The Holder shall be entitled to
receive, upon exercise of this Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, shares of Warrant Stock, subject to adjustment pursuant to
Section 5.
1.2 FULL EXERCISE. This Warrant may be exercised in full by the
Holder by surrender of this Warrant, with the form of subscription attached as
Exhibit A hereto (the "Subscription Form") duly executed by the Holder, to the
Company at its principal office, accompanied by payment either (a) in cash or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Warrant Stock for which
this Warrant is then exercisable by the Purchase Price then in effect or, (b)
the surrender to the Company of securities of the Company having an aggregate
Fair Market Value (as hereinafter defined) equal to the aggregate Purchase Price
of the shares of Warrant Stock being purchased upon such exercise; provided,
however, that in lieu of the method of payment under clauses (a) or (b) of this
Section 1.2, the Holder may make payment by allowing the Company to deduct from
the number of shares of Warrant Stock deliverable upon such exercise of this
Warrant a number of shares of Warrant Stock which has an aggregate Fair Market
Value determined as of the date of such exercise of this Warrant equal to the
aggregate Purchase Price for all shares of Warrant Stock as to which this
Warrant is then being exercised.
1.3 PARTIAL EXERCISE. This Warrant may be exercised in part (but not for a
fractional share) on not more than two (2)occasions by surrender of this Warrant
in the manner and at the place provided in subsection 1.2 except that the amount
payable by the Holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Warrant Stock designated by the Holder
in the Subscription Form by (b) the Purchase Price then in effect. The method of
payment shall be as permitted by Section 1.2. On any such partial Exercise, the
Company, at its expense, will forthwith issue and deliver to or upon the order
of the Holder a new Warrant of like tenor, in the name of the Holder hereof or
as the Holder (upon payment by such Holder of any applicable transfer taxes),
may request, subject to compliance with applicable securities laws, representing
the number of shares of Warrant Stock for which such Warrant may still be
exercised.
1.4 FAIR MARKET VALUE. Fair Market Value of a share of Warrant Stock as of
a particular date (the "Determination Date") shall mean:
(a) If the Warrant Stock is traded on an exchange or is quoted on the
Nasdaq National Market or the Nasdaq SmallCap Market ("Nasdaq"), then the
average of the closing or last sale price, respectively, reported for the five
business days immediately preceding the Determination Date.
(b) If the Warrant Stock is not traded on an exchange or on Nasdaq but is
traded in the over-the-counter market or other similar organization (including
the OTC Bulletin Board), then the average of the closing bid and ask prices
reported for the five business days immediately preceding the Determination
Date.
(c) If the Warrant Stock is not traded as provided above, then the price
determined in good faith by the Board of Directors of the Company, provided that
(1) the basis or bases of each such determination shall be set forth in the
corporate records of the Company pertaining to meetings and other actions of
such board, and (2) such records are available to the Holder for inspection
during normal business hours of the Company upon the giving of reasonable prior
notice.
(d) If the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or winding up
pursuant to the Company's charter, then all amounts to be payable per share to
Holders of the securities then comprising Warrant Stock pursuant to the charter
in the event of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Warrant Stock in liquidation
under the charter, assuming for the purposes of this clause (d) that all of the
shares of Warrant Stock then issuable upon exercise of all of the Warrants are
outstanding at the Determination Date.
1.5 COMPANY ACKNOWLEDGMENT. The Company will, at the time of the exercise
of this Warrant, upon the request of the Holder acknowledge in writing its
continuing obligation to afford to the Holder any rights to which the holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to the Holder any such rights.
1.6 TRUSTEE FOR WARRANT HOLDERS. In the event that a bank or trust company
shall have been appointed as trustee for the Holder pursuant to subsection 4.2,
such bank or trust company shall have all the powers and duties of a warrant
agent appointed pursuant to Section 11 and shall accept, in its own name for the
account of the Company or such successor person as may be entitled thereto, all
amounts otherwise payable to the Company or such successor, as the case may be,
on exercise of this Warrant pursuant to this Section 1.
2. DELIVERY OF STOCK CERTIFICATES, ETC. ON EXERCISE. The Company agrees
that the shares of Warrant Stock purchased upon exercise of this Warrant shall
be deemed to be issued to the Holder 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. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within five business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as the Holder (upon
payment by such Holder of any applicable transfer taxes) may direct, subject to
compliance with applicable securities laws, a certificate or certificates for
the number of duly authorized and validly issued, fully paid and nonassessable
shares of Warrant: Stock to which the Holder shall be entitled on such exercise
plus, in lieu of any fractional share to which the Holder would otherwise be
entitled cash equal to such fraction multiplied by the then Fair Market Value of
one full share, together with any Other Securities and property (including cash,
where applicable) to which the Holder is entitled upon such exercise.
3. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.
RECLASSIFICATION. ETC. In case at any time or from time to time, the Holders of
securities then comprising Warrant Stock shall have received, or (on or after
the record date fixed for the determination of stockholders eligible to receive)
shall have become entitled to receive, without payment therefor,
(a) additional, Common Stock or Other Securities or property (other than
cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings or
earned surplus of the Company), or
(c) additional Common Stock or Other Securities or property (including
cash) by way of spin-off, split-up, reclassification, recapitalization,
combination of shares or similar corporate rearrangement, other than additional
shares of Warrant Stock issued as a stock dividend or in a stock split
(adjustments in respect of which are provided for in Section 5), then and in
each such case the Holder, on the exercise hereof as provided in Section 1,
shall be entitled to receive the amount of Common Stock and Other Securities and
property (including cash in the cases referred to in subdivisions (b) and (c) of
this Section 3) which the Holder would hold on the date of such exercise if on
the date hereof the Holder had been the holder of record of the number of shares
of Warrant Stock called for on the face of this Warrant and had thereafter,
during the period from the date hereof to and including the date of such
exercise, retained such shares and all such additional Common Stock and Other
Securities and property (including cash in the cases referred to in subdivisions
(b) and (c) of this Section 3) receivable by the Holder as aforesaid during such
period, giving effect to all adjustments called for during such period by
Section 4 and 5.
4. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
4.1 REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at any time or from
time to time the Company shall (a) effect a reorganization, (b) consolidate with
or merge into any other person, or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction proper and adequate
provision shall be made by the Company whereby the Holder, on the exercise
hereof as provided in Section 1 at any time after the consummation of such
reorganization consolidation or merger or the effective date of such
dissolution, as the case may be shall receive in lieu of the Warrant Stock
issuable on such exercise prior to such consummation or such effective date, the
Common Stock and Other Securities and property (including cash) to which the
Holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if the Holder had so exercised this
warrant, immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 3 and 5.
4.2 DISSOLUTION. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets in a
transaction contemplated by Section 4.1(c), the Company, simultaneously with
such dissolution, shall distribute or cause to be distributed to the Holder the
Common Stock and Other Securities and property (including cash, where
applicable) which would be receivable by the Holder it the Holder had exercised
its Warrant in full immediately prior to such dissolution, less an amount of
Common Stock Other Securities, property and cash with a value equal to the
Purchase Price.
4.3 CONTINUATION OF TERMS. Upon any reorganization, consolidation, merger
or transfer referred to in this Section 4, this Warrant shall continue in full
force and effect and the terms hereof shall be applicable to the shares of
Common Stock and Other Securities and property receivable on the exercise of
this Warrant after the consummation of such reorganization consolidation or
merger, as the case may be, and shall be binding upon the issuer of any such
Common Stock or Other Securities, including, in the case of any such transfer,
the person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant as provided herein.
5. OTHER ADJUSTMENTS.
5.1 EXTRAORDINARY EVENTS REGARDING WARRANT STOCK. In the event that the
Company shall (a) issue additional shares of the Warrant Stock as a dividend or
other distribution on outstanding Warrant Stock, (b) subdivide its outstanding
shares of Warrant Stock, or (c) combine its outstanding shares of Warrant Stock
into a smaller number of shares of Warrant Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Warrant Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Warrant Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 5. The number
of shares of Warrant Stock that the Holder shall thereafter, on the exercise
hereof as provided in Section 1, be entitled to receive shall be increased or
decreased to a number determined by multiplying the number of shares of Warrant
Stock that would otherwise (but for the provisions of this Section 5.1) be
issuable upon such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 5.1)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.
5.2 ADJUSTMENT FOR SALE OF ADDITIONAL SHARES.
(a) Except with respect to the shares of Common Stock issuable upon
conversion of the shares of the Company's convertible preferred stock offered
for sale by the Company pursuant to the Confidential Private Placement
Memorandum dated January 12, 1998, as supplemented by Supplement No. 1 dated
February 27, 1998 to the Confidential Private Placement Memorandum and
Supplement No. 2 dated March 18, 1998 to the Confidential Private Placement
Memorandum, as the same may be from time to time be further amended or
Supplemented, if the Company shall after the date hereof issue any additional
shares of Common Stock of any class at a price per share less than the greater
of (1) the Fair Market value of such Common Stock as of the date of grant or (2)
the Purchase Price in effect immediately prior to such issuance or sale, then in
each such case the purchase Price shall be reduced to an amount determined by
multiplying the purchase Price by a fraction:
(i) the numerator of which shall be (x) the number of shares of Common
Stock of all classes outstanding (excluding treasury shares but
including Warrants, options and convertible Securities (as defined in
the Warrant Agreement dated as of August 6, 1996 executed in
connection with the company's initial public offering), on an as-if
exercised or converted basis) immediately prior to the issuance of
such additional shares of Common stock plus (y) the number of shares
of Common Stock which the Net Aggregate Consideration Per Share
received by the company for the total number of such additional shares
of Common Stock so issued would purchase at the purchase Price (prior
to adjustment), and
(ii) the denominator of which shall be (x) the number of shares of Common
Stock of all classes outstanding (excluding treasury shares but
including Warrants, options and Convertible Securities, on an as-if
exercised or converted basis) immediately prior to the issuance of
such additional shares of Common stock plus (y) the number of such
additional shares of Common Stock so issued.
For purposes of this paragraph 5.2, if a part or all of the consideration
received by the Company in connection with the issuance of shares of the Common
Stock or the issuance of any of the securities described in paragraph (b) below
of this paragraph 5.2 consists of property other than cash, such consideration
shall be deemed to have the same value as is recorded on the books of the
Company with respect to receipt of such property so long as such recorded value
was determined in good faith by the Company's Board of Directors, and shall
otherwise be deemed to have a value equal to its fair market value.
(b) For the purpose of this paragraph 5.2, the issuance of any warrants,
options or other subscription or purchase rights with respect to shares of
Common Stock of any class and the issuance of any securities convertible into
shares of Common stock of any class (or the issuance of any warrants, options or
any rights with respect to such convertible securities) shall be deemed an
issuance at such time of such Common Stock if the Net Consideration Per Share
which may be received by the Company for such Common stock (as hereinafter
determined) shall be less than the Purchase Price at the time of such issuance
and, except as hereinafter provided an adjustment in the Purchase Price shall be
made upon each such issuance in the manner provided in paragraph (a) of this
paragraph 5.2 as if such Common Stock were issued at such Net Consideration Per
Share. No adjustment of the Purchase Price shall be made under this paragraph
5.2 upon the issuance of any additional shares of Common stock which are issued
pursuant to the exercise of any warrants, options or other subscription or
purchase rights or pursuant to the exercise of any conversion or exchange rights
or in any convertible securities if any adjustment shall previously have been
made upon the issuance of such warrants, options or other rights. Any adjustment
of the Purchase Price with respect to this paragraph (b) of this paragraph 5.2
shall be disregarded if, as and when the rights to acquire shares of Common
stock upon exercise or conversion of the warrants, options, rights or
convertible securities which gave rise to such adjustment expire or are canceled
without having been exercised, so that the Purchase Price effective immediately
upon such cancellation or expiration shall be equal to the Purchase Price in
effect immediately prior to the time of the issuance of the expired or canceled
warrants, options, rights or convertible securities, with such additional
adjustments as would have been made to that Purchase Price had the expired or
canceled warrants, options, rights or convertible securities not been issued. In
the event that the terms of any warrants, options other subscription or purchase
rights or convertible securities previously issued by the Company are changed
(whether by their terms or for any other reason) as to change the Net
Consideration Per share payable with respect thereto (whether or not the
issuance of such warrants, options, rights or convertible securities originally
gave rise to an adjustment of the Purchase Price), the Purchase Price shall be
recomputed as of the date of such change, so that the Purchase Price effective
immediately upon such change shall be equal to the Purchase Price in effect at
the time of the issuance of the warrants, options, rights or convertible
securities subject to such change, adjusted for the issuance thereof in
accordance with the terms thereof after giving effect to such change, and with
such additional adjustments as would have been made to that Purchase Price had
the warrants, options, rights or convertible securities been issued on such
changed terms. For purposes of this paragraph (b), the Net Consideration Per
share which may be received by the Company shall be determined as follows:
(i) The Net Consideration Per Share shall mean the amount equal to the
total amount of consideration, if any, received by the Company for the
issuance of such warrants, options, rights or convertible securities,
plus the minimum amount of consideration, if any, payable to the
Company upon exercise or conversion thereof, divided by the aggregate
number of shares of Common stock that would be issued if all such
warrants, options, subscriptions, or other purchase rights or
convertible securities were exercised or converted at such net
consideration per share.
(ii) The Net Consideration Per Share which may be received by the Company
shall be determined in each instance as of the date of issuance of
warrants, options, rights or convertible securities without giving
effect to any possible future price - adjustments or rate adjustments
which may be applicable with respect to such warrants, options, rights
or convertible securities and which are contingent upon future events;
provided that in the case of an adjustment to be made as a result of a
change in terms of such warrants. options, rights or convertible
securities, the Net Consideration Per Share shall be determined as of
the date of such change.
5.3 EXCEPTIONS.
No adjustment pursuant to Section 5 hereof to the Purchase Price of the
Warrants will be made, however.
(i) upon the sale or exercise of this Warrant or any Class A Redeemable
Common Stock Purchase Warrants to purchase one (1) share of Common
Stock at a present exercise price of $10.00 per share ("Class A
Warrant"), including without limitation the sale or exercise of any of
the Class A Warrants comprising the Unit Purchase Options issued in
connection with the Company's initial public offering to Patterson
Travis, Inc., or its affiliates, associates or employees; or
(ii) upon the issuance or sale of Common Stock or Convertible Securities,
upon the exercise of any rights or warrants to subscribe for or
purchase, or any options for the purchase of, Common Stock or
Convertible Securities, whether or not such rights, warrants, or
options were outstanding on the date of the original sale of this
Warrant or were thereafter issued or sold; or
(iii)upon the issuance or sale of Common Stock upon conversion or exchange
of any Convertible Securities, whether or not any adjustment in the
Purchase Price was made or required to be made upon the issuance or
sale of such Convertible Securities and whether or not such
Convertible Securities were outstanding on the date of the original
sale of the Warrants or were thereafter issued or sold; or
(iv) upon the issuance or sale of Common Stock or Convertible Securities in
a private placement unless the issuance or sale price is less than 85%
of the Fair Market Value of the Common Stock on the date of issuance,
in which case the adjustment shall only be for the difference between
85% of the Fair Market Value and the issue or sale price;
(v) upon the issuance or sale of Common Stock or Convertible Securities to
(a) stockholders of any corporation which merges into the Company or
from which the Company acquires assets and some or all of the
consideration consists of equity securities of the Company, in
proportion to their stock holdings of such corporation immediately
prior to the acquisition or (b) to any corporation or person from
which the Company acquires assets but only if no adjustment is
required pursuant to any other provision of this Section 5; or
(vi) upon the issuance or sale of (a) up to 300,000 options for the
purchase Common Stock to employees, officers, directors, advisors or
consultants under the Company's 1994 Stock Option Plan, as amended
(the "Stock Option Plan") or (b) Common Stock issued upon the exercise
of options granted under the Stock Option Plan.
6. CHIEF FINANCIAL OFFICER'S CERTIFICATE AS TO ADJUSTMENTS. In each case of
any adjustment or readjustment in the shares of Warrant Stock issuable upon
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Warrant Stock issued or sold or deemed to have been issued or sold, (b) the
number of shares of Warrant Stock outstanding or deemed to be outstanding, and
(c) the purchase Price and the number of shares of Warrant Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the registered
holder at such holder's last address as it appears on the books of the Company.
7. RESERVATION OF STOCK, ETC. ISSUABLE ON EXERCISE OF WARRANT. The Company
will at all times reserve and keep available, solely for issuance and delivery
upon exercise of this warrant, such number of shares of Warrant Stock as are
issuable from time to time upon the exercise of this Warrant.
8. ASSIGNMENT; EXCHANGE OF WARRANT. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by the Holder (the "Transferor") with respect to any or all of the
shares of Warrant Stock underlying this Warrant; provided, however, that the
following conditions have been satisfied: (x) at the time of such transfer the
Transferee (as hereinafter defined) provides to the Company in writing such
representations and warranties as the Company may reasonably request regarding
the status of the Transferee as an "accredited investor" as defined in Rule 501
promulgated under the Securities Act and (y) based solely on the representations
and warranties provided pursuant to clause (x) above, there are not, at the Lime
of the proposed transfer, more than ten holders of Warrants which are not
"accredited investors." On the surrender for exchange of this Warrant, with the
Transferor's endorsement in the form of Exhibit B attached hereto (the
"Transferor Endorsement Form") if to the Company, the Company at its expense but
with payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant or Warrants
of like tenor, in the name of the Transferor and/or the transferee(s) specified
in such Transferor Endorsement Form (each a "Transferee"), calling in the
aggregate on the face or faces thereof for the number of shares of Warrant Stock
called for on the face or faces of the Warrant so surrendered by the Transferor.
Each Transferee shall be entitled (pro rata according to the number of shares of
Warrant Stock issuable under the Transferee's new Warrant) to those benefits
accruing to the Transferor under this Warrant prior to the date of issue of such
new Warrant or Warrants.
9. REGISTRATION RIGHTS; PROCEDURE; INDEMNIFICATION.
9.1 REGISTRATION RIGHTS.
(a) As soon as practicable following the initial closing or any other of
two subsequent closings relating to the sale of the Company's Convertible
Preferred Stock as contemplated by that certain Placement Agency Agreement dated
January 12, 1998 between the Company and Patterson `Travis, Inc., as amended by
a letter agreement dated March 13, 1998 between the Company and Patterson
Travis, Inc., but no later than July 20, 1998, the Company shall prepare and
file a registration statement with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), covering the Warrant Stock to the extent required to permit the sale or
other disposition of the Warrant Stock so registered by the holders use its best
efforts to thereof (collectively, the "Seller"). The Company shall use its best
efforts to cause the registration statement to remain effective for the period
ending on the earlier of the: (i) date when all shares of Warrant Stock covered
by the Registration statement have been gold; (ii) date such shares of Warrant
Stock could be sold pursuant to Rule 144(k) under the Securities Act, as Rule
144(k) may subsequently be amended, supplemented or modified, or (iii) the
Expiration Date
(b) Intentionally Omitted.
(c) Intentionally Omitted.
9.2 REGISTRATION PROCEDURES.
(a) The Company will, as expeditiously as possible:
(i) prepare and tile with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for the period specified in Section 9.1 above and comply
with the provisions of the Securities Act with respect to the
disposition of all of the Warrant Stock covered by such registration
statement in accordance with the Seller's intended method of
disposition set forth in such registration statement for such period;
(ii) furnish to the Seller, and to each underwriter, if any, such number of
copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons
reasonably may request to facilitate the public sale or other
disposition of the securities covered by such registration statement;
(iii)use its best efforts to register or qualify the Seller's Warrant
Stock covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as the Seller designates,
provided, however, that the Company shall not for any such purpose be
required to qualify generally to transact business as a foreign
corporation or a broker of or dealer in securities in any jurisdiction
where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(iv) list the Warrant Stock covered by such registration statement
with any securities exchange market system on which the Warrant
Stock of the Company is then listed or traded.
(v) immediately notify the Seller and each underwriter,it any, at any time
when a prospectus relating to the Warrant Stock is required to be
delivered under the Securities Act, of the happening of any event of
which the Company has knowledge as a result of which such prospectus,
as then in effect, includes an untrue statement of a material fact or
omits to state a material tact required to be stated therein or
necessary to make the statements therein not misleading in light of
the circumstances then existing;
(vi) make available for inspection by the seller, any underwriter
participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by the
Seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by the Seller, underwriter, attorney, accountant
or agent in connection with such registration statement.
(b) The seller shall provide such cooperation as the Company may request in
connection with the preparation of the Registration Statement.
9.3 EXPENSES. All expenses incurred by the Company in complying with this
Section 9, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including counsel fees) incurred
in connection with complying with state securities or "blue sky" laws, fees of
the National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars and costs of insurance are called "Registration
Expenses." All underwriting discounts and selling commissions applicable to the
sale of Warrant Stock, including any fees and disbursements of any special
counsel to the Seller, are called "Selling Expenses."
The Company will pay all Registration Expenses in connection with the
registration statements filed under this Section 5. All selling Expenses in
connection with each registration statement under this Section 9 shall be borne
by the seller in proportion to the number of shares cold by the Seller relative
to the number of shares sold under such registration statement or as all sellers
thereunder may agree.
9.4 INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of a registration of any Warrant Stock under the
Securities Act pursuant to this Section 9, the Company will indemnify and hold
harmless the Seller, each underwriter, if any, of such Warrant Stock thereunder
and each other person if any, who controls such Seller or underwriter within the
meaning of the Securities Act, from and against any losses, claims, damages or
liabilities, joint or several, to which the seller, or such underwriter or
controlling person may become subject under the Securities Act or otherwise
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Warrant Stock was registered under the Securities Act pursuant to
this Section 9, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the seller, each such underwriter and each such controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damages liability or
action; provided, however, that the Company will not be liable to the provider
of information giving rise to any claim in any such case if and to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by any such Seller, the
underwriter or any such controlling person about itself in writing specifically
for use in such registration statement or prospectus; provided further that the
indemnity with respect to any preliminary prospectus shall not be applicable on
account of any losses, claims, damages, liabilities or litigation arising from
the sale of such securities to any person if the misstatement or omission was
corrected in the final prospectus related thereto but such final prospectus was
not delivered by the seller to such person at or prior to the sale of
securities.
(b) In the event of a registration of any of the Warrant Stock under the
Securities Act pursuant to Section 9, the Seller will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
from and against all losses, claims, damages or liabilities, joint or several,
to which the Company or such officer, director, underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such Warrant
Stock was registered under the Securities Act pursuant to this Section 9, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material tact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided; however, that the Seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with information
pertaining to such Seller, as such, furnished in writing to the Company by such
Seller specifically for use in such registration statement or prospectus, and
provided, further, however, that the liability of the Seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of the Warrant
Stock sold by the Seller under such registration statement bears to the total
public offering price of all securities sold thereunder, but not in any event to
exceed the proceeds received by the seller from the sale of Warrant Stock
covered by such registration statement.
(c) promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 9.4(c) and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 9.4(c) if and to the extent the indemnifying party is prejudiced by
such omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party `to such indemnified party of its ejection so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9.4(c) for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected;
provided. however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the indemnifying
party or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party or if the indemnifying
party shall not have assumed or undertaken the defense of such action with
counsel reasonably satisfactory to such indemnified party. the indemnified party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of one such separate counsel and other expenses related to
such participation to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) the Seller,
or any controlling person of the Seller, makes a claim for indemnification
pursuant to this Section 9.4 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this section 9.4 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of the Seller or
controlling person of the seller in circumstances for which indemnification is
provided under this Section 9.4; then, and in each such case, the Company and
the seller will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Seller is responsible for the portion represented by
the percentage that the public offering price of its securities offered by the
registration statement bears to the public offering price of all securities
offered by such registration statement, and the Company is responsible for the
remaining portion; provided, however, that, in any such case, (A) the seller
will not be required to contribute any amount in excess of the proceeds received
by such Seller from the sale of all such securities offered by it pursuant to
such registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
10. REPLACEMENT OF WARRANT. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this warrant
and, in the case of any such loss, theft or destruction of this warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
11. WARRANT AGENT. The Company may, by written notice to each Holder of the
Warrant, appoint an agent having an office in New York, NY for the purpose of
issuing Warrant Stock (or Other Securities) upon exercise of this Warrant
pursuant to Section 1, exchanging this Warrant pursuant to Section 8, and
replacing this Warrant pursuant to Section 10, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
12. TRANSFER ON THE COMPANY BOOKS. Until this Warrant is transferred on the
books of the Company, the Company may treat the registered Holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
13. NOTICES, ETC. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail, postage
prepaid, at such address as may have been furnished td the Company in writing by
the Holder or, until the Holder furnishes to the Company an address, then to,
and at the address of, the last Holder of this Warrant who has so furnished an
address to the Company. Notices shall be deemed given 48 hours after mailing.
14. MISCELLANEOUS. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of New York. The headings in this Warrant are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof. The invalidity or unenforceability of any other provision.
IN WITNESS WHEREOF, the Company has executed this Warrant under seal as
of the date first written above.
MEDJET INC.
By:/s/Eugene I. Gordon
-----------------------------------------
Name: Eugene I. Gordon
Title: President-Technology Development
and Chairman of the Board
Attest:
By:/s/Thomas M. Handschiegel
---------------------------------------
Name: Thomas M. Handschiegel
Title: Vice President-Finance and
Human Resources and Secretary
Exhibit A
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: MEDJET INC.
The undersigned, the Holder of the within Warrant, hereby irrevocably elects to
exercise this Warrant for, and to purchase thereunder, ______________ shares of
Warrant Stock of MEDJET INC. and herewith makes payment of $___________________
therefor by [delivery of a check in such amount] [hereby instructing MEDJET INC.
to deduct from the enclosed Warrant a number of shares of Warrant Stock having
an aggregate Fair Market Value equal to $_________ as of the date hereof, which
amount represents the Purchase Price for the shares for which the within Warrant
is hereby exercised, and which is equal to ______ shares of Warrant Stock], and
requests that the certificates for such shares be issued in the name of, and
delivered to ___________________ whose address is______________________________.
Dated:
_________________________________________
(Signature must conform to name of Holder
as specified on the face of the Warrant)
_________________________________________
(Address)
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received. the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Warrant to purchase the percentage and number of
shares of Warrant Stock of Medjet Inc. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of Medjet Inc.
with full power of substitution in the premises.
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PERCENTAGE NUMBER
TRANSFEREES TRANSFERRED TRANSFERRED
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Dated: _____________________________, 19__ ___________________________________
(Signature must conform to name
of Holder as specified on the face
of the Warrant)
Signed in the presence of:
_____________________________________ _____________________________________
(Name) (Address)
_____________________________________ _____________________________________