EXHIBIT 10.25
CLASS A WARRANT NO.: [___________]
FORM OF CLASS A WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT
PURPOSES ONLY, AND NOT WITH A VIEW TO THE RESALE OR DISTRIBUTION THEREOF, AND
MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE
THE SECURITIES ACT OF 1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR
OTHER APPLICABLE SECURITIES LAWS.
CLASS A WARRANT TO PURCHASE
COMMON STOCK OF
NATIONAL HEALTH PARTNERS, INC.
Void after 5:00 p.m. Eastern Standard Time on December 31, 2007
This Class A Warrant ("Warrant") confirms that, FOR VALUE RECEIVED,
[___________________________] ("Holder") is entitled to purchase, subject to the
terms and conditions hereof, from NATIONAL HEALTH PARTNERS, INC., an Indiana
corporation (the "Company"), [___________] shares of common stock, $.001 par
value per share, of the Company (the "Common Stock"), at any time during the
period commencing on the Commencement Date (as defined below) and ending at 5:00
p.m. Eastern Standard Time on the date that is 18 months after the Commencement
Date (the "Termination Date"), at an exercise price of $.60 per share of Common
Stock (the "Exercise Price"). The number of shares of Common Stock purchasable
upon exercise of this Warrant and the Exercise Price per share shall be subject
to adjustment from time to time upon the occurrence of certain events as set
forth below.
The shares of Common Stock or any other shares or other units of stock
or other securities or property, or any combination thereof, then receivable
upon exercise of this Warrant, as adjusted from time to time, are sometimes
referred to hereinafter as "Exercise Shares". The exercise price per share as
from time to time in effect is referred to hereinafter as the "Exercise Price".
1. Exercise of Warrant; Issuance of Exercise Shares.
(a) Exercise of Warrant. Subject to the terms hereof, the purchase
rights represented by this Warrant are exercisable by Holder in whole or in
part, at any time, or from time to time, after the Commencement Date by the
surrender of this Warrant and the Notice of Exercise annexed hereto duly
completed and executed on behalf of Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to Holder at the address of Holder appearing on the books of the
Company) accompanied by payment of the Exercise Price in full either (i) in cash
or by bank or certified check for the Exercise Shares with respect to which this
Warrant is exercised; (ii) by delivery to the Company of shares of the Company's
Common Stock having a Fair Market Value (as defined below) equal to the
aggregate Exercise Price of the Exercise Shares being purchased that Holder is
the record and beneficial owner of and, if Holder was subject to Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") at the time
such shares were purchased, that have been held by the Holder for at least six
(6) months; (iii) provided that the sale of the Exercise Shares are covered by
an effective registration statement, by delivering to the Company a duly
executed Notice of Exercise in the form attached hereto as Appendix A ("Notice
of Exercise") together with an irrevocable direction to a broker-dealer
registered under the Exchange Act, to sell a sufficient portion of the Exercise
Shares and deliver the sales proceeds directly to the Company to pay the
Exercise Price; or (iv) by any combination of the procedures set forth in
subsections (i), (ii) and (iii) of this Section 1(a).
For the purposes hereof, "Commencement Date" shall mean the date that
any registration statement filed by the Company with the SEC pursuant to the
terms of that certain Consulting Agreement dated on or about the date hereof by
and between the Company and the Holder (the "Consulting Agreement") is declared
effective by the SEC, and "Fair Market Value" shall be an amount equal to the
average of the Current Market Value (as defined below) for the ten (10) days
preceding the Company's receipt of the duly executed Notice of Exercise.
In the event that this Warrant shall be duly exercised in part prior to
the Termination Date, the Company shall issue a new Warrant of like tenor
evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.
(b) Issuance of Exercise Shares; Delivery of Warrant Certificate. The
Company shall, within ten (10) business days or as soon thereafter as is
practicable of the exercise of this Warrant, issue in the name of and cause to
be delivered to the Holder one or more certificates representing the Exercise
Shares to which the Holder shall be entitled upon such exercise under the terms
hereof. Such certificate or certificates shall be deemed to have been issued and
the Holder shall be deemed to have become the record holder of the Exercise
Shares as of the date of the proper exercise of this Warrant.
(c) Exercise Shares Fully Paid and Non-assessable. The Company agrees
and covenants that all Exercise Shares issuable upon the due exercise of the
Warrant represented by this Warrant certificate ("Warrant Certificate") will,
upon issuance and payment therefor in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable and free and clear of
all taxes (other than taxes which, pursuant to Section 2 hereof, the Company
shall not be obligated to pay) or liens, charges, and security interests created
by the Company with respect to the issuance thereof.
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(d) Reservation of Exercise Shares. The Company covenants that during
the term that this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Exercise Shares upon the exercise of this Warrant, and
from time to time will take all steps necessary to amend its Certificate of
Incorporation to provide sufficient reserves of shares of Common Stock issuable
upon the exercise of the Warrant.
(e) Fractional Shares. The Company shall not be required to issue
fractional shares of capital stock upon the exercise of this Warrant or to
deliver Warrant Certificates that evidence fractional shares of capital stock.
In the event that any fraction of an Exercise Share would, except for the
provisions of this subsection (e), be issuable upon the exercise of this
Warrant, the Company shall pay to the Holder exercising the Warrant an amount in
cash equal to such fraction multiplied by the Current Market Value of the
Exercise Share on the last business day prior to the date on which this Warrant
is exercised. For purposes hereof, the "Current Market Value" for any day shall
be determined as follows:
(i) if the Exercise Shares are listed or traded on a national
securities exchange or the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded, on
the NASDAQ Reporting System, as the case may be, on the last business day prior
to the date of the exercise of this Warrant. The closing price referred to in
this clause (i) shall be the last reported sales price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the national securities exchange on which
the Exercise Shares are then listed or in the NASDAQ Reporting System; or
(ii) if the Exercise Shares are traded in the over-the-counter
market and not on any national securities exchange and not on the NASDAQ
National Market System or NASDAQ Small Cap Market (together, the "NASDAQ
Reporting System"), the average of the mean between the last bid and asked
prices per share, as reported by the National Quotation Bureau, Inc., or an
equivalent generally accepted reporting service, or if not so reported, the
average of the closing bid and asked prices for an Exercise Share as furnished
to the Company by any member of the National Association of Securities Dealers,
Inc., selected by the Company for that purpose; or
(iii) if no such closing price or closing bid and asked prices
are available, as determined in any reasonable manner as may be prescribed by
the Board of Directors of the Company.
2. Payment of Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Exercise Shares upon the exercise of
this Warrant; provided, however, that the Company shall not be required to pay
any tax or taxes that may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Exercise Shares in a
name other than that of the holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
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3. Mutilated or Missing Warrant Certificates. In case any Warrant shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue,
in exchange and substitution for and upon cancellation of the mutilated Warrant,
or in lieu of and in substitution for the Warrant lost, stolen or destroyed, a
new Warrant of like tenor and in the same aggregate denomination, but only (i)
in the case of loss, theft or destruction, upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction of such Warrant and indemnity
or bond, if requested, also satisfactory to them and (ii) in the case of
mutilation, upon surrender of the mutilated Warrant. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company or its counsel may prescribe.
4. Rights of Holder. The Holder shall not, by virtue of anything contained in
this Warrant or otherwise, be entitled to any right whatsoever, either at law or
in equity, of a stockholder of the Company, including without limitation, the
right to receive dividends or to vote or to consent or to receive notice as a
shareholder in respect of the meetings of shareholders or the election of
directors of the Company or any other matter.
5. Registration of Transfers and Exchanges. The Warrant shall be transferable,
subject to the provisions of Section 7 hereof, upon the books of the Company, if
any, to be maintained by it for that purpose, upon surrender of the Warrant
Certificate to the Company at its principal office accompanied (if so required
by the Company) by a written instrument or instruments of transfer in form
satisfactory to the Company and duly executed by Holder or by the duly appointed
legal representative thereof or by a duly authorized attorney and upon payment
of any necessary transfer tax or other governmental charge imposed upon such
transfer. In all cases of transfer by an attorney, the original letter of
attorney, duly approved, or an official copy thereof, duly certified, shall be
deposited and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Company in its discretion. Upon any such
registration of transfer, a new Warrant shall be issued to the transferee named
in such instrument of transfer, and the surrendered Warrant shall be canceled by
the Company.
Any Warrant may be exchanged, at the option of the Holder thereof and
without charge, when surrendered to the Company at its principal office, or at
the office of its transfer agent, if any, for another Warrant of like tenor and
representing in the aggregate the right to purchase from the Company a like
number and kind of Exercise Shares as the Warrant surrendered for exchange or
transfer, and the Warrant so surrendered shall be canceled by the Company or
transfer agent, as the case may be.
6. Adjustment of Exercise Shares and Exercise Price. The Exercise Price and the
number and kind of Exercise Shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of certain
events as hereinafter provided. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon exercise of each Warrant shall be
subject to adjustment as follows:
(a) In case of any consolidation or merger of the Company with another
corporation (other than a merger with another corporation in which the Company
is the surviving corporation and which does not result in any reclassification
or change - 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 - of outstanding Common Stock issuable upon such exercise), the
rights of the Holder of this Warrant shall be adjusted in the manner described
below:
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(i) In the event that the Company is the surviving
corporation, this Warrant shall, without payment of additional consideration
therefor, be deemed modified so as to provide that the Holder of this Warrant,
upon the exercise thereof, shall procure, in lieu of each share of Common Stock
theretofore issuable upon such exercise, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification,
change, consolidation or merger by the holder of each share of Common Stock, had
exercise of this Warrant occurred immediately prior to such reclassification,
change, consolidation or merger. This Warrant (as adjusted) shall be deemed to
provide for further adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The provisions of
this clause (i) shall similarly apply to successive reclassifications, changes,
consolidations and mergers.
(ii) In the event that the Company is not the surviving
corporation, Holder shall be given at least fifteen (15) days prior written
notice of such transaction and shall be permitted to exercise this Warrant, to
the extent it is exercisable as of the date of such notice, during this fifteen
(15) day period. Upon expiration of such fifteen (15) day period, this Warrant
and all of Holder's rights hereunder shall terminate.
(b) If the Company, at any time while this Warrant, or any portion
thereof, remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 6.
(c) In case the Company shall (i) pay a dividend or make a distribution
on its shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding Common Stock into a greater number of shares, or
(iii) combine or reclassify its outstanding Common Stock into a smaller number
of shares, the Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination or reclassification, shall be proportionally adjusted so that the
holder of this Warrant exercised after such date shall be entitled to receive
the aggregate number and kind of shares that, if this Warrant had been exercised
by such holder immediately prior to such date, he would have owned upon such
exercise and been entitled to receive upon such dividend, subdivision,
combination or reclassification. For example, if the Company declares a 2 for 1
stock dividend or stock split and the Exercise Price immediately prior to such
event was $2.00 per share, the adjusted Exercise Price immediately after such
event would be $1.00 per share. Such adjustment shall be made successively
whenever any event listed above shall occur. Whenever the Exercise Price payable
upon exercise of each Warrant is adjusted pursuant to this subsection (c), the
number of Exercise Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Exercise Shares
initially issuable upon exercise of this Warrant by the Exercise Price in effect
on the date hereof and dividing the product so obtained by the Exercise Price,
as adjusted.
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(d) In the event that at any time, as a result of an adjustment made
pursuant to subsection (a), (b) or (c) above, the Holder of this Warrant
thereafter shall become entitled to receive any Exercise Shares of the Company,
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant 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 Common Stock contained in subsections (a), (b) or
(c) above.
(e) Irrespective of any adjustments in the Exercise Price or the number
or kind of Exercise Shares purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant.
(f) Whenever the Exercise Price shall be adjusted as required by the
provisions of the foregoing Section 6, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office and
with its stock transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by Holder and the Company shall, forthwith after
each such adjustment, mail a copy by certified mail of such certificate to
Holder.
(g) All calculations under this Section 6 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
7. Restrictions on Transferability: Restrictive Legend. Neither this Warrant nor
the Exercise Shares shall be transferable except in accordance with the
provisions of this Section.
(a) Restrictions on Transfer; Indemnification. Neither this Warrant nor
any Exercise Share may be offered for sale or sold, or otherwise transferred or
sold in any transaction which would constitute a sale thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), unless (i)
such security has been registered for sale under the Securities Act and
registered or qualified under applicable state securities laws relating to the
offer and sale of securities, or (ii) exemptions from the registration
requirements of the Securities Act and the registration or qualification
requirements of all such state securities laws are available, and the Company
shall have received an opinion of counsel satisfactory to the Company that the
proposed sale or other disposition of such securities may be effected without
registration under the Securities Act and would not result in any violation of
any applicable state securities laws relating to the registration or
qualification of securities for sale, such counsel and such opinion to be
satisfactory to the Company.
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(b) Restrictive Legends. Unless and until otherwise permitted by this
Section 7, this Warrant Certificate, each Warrant Certificate issued to the
Holder or to any transferee or assignee of this Warrant Certificate, and each
certificate representing Exercise Shares issued upon exercise of this Warrant or
to any transferee of the person to whom the Exercise Shares were issued, shall
bear a legend setting forth the requirements of subsection (a) of this Section
7, together with such other legend or legends as may otherwise be deemed
necessary or appropriate by counsel to the Company.
(c) Removal of Legend. The Company shall, at the request of any
registered holder of a Warrant or Exercise Share, exchange the certificate
representing such security for a certificate representing the same security not
bearing the restrictive legend required by subsection (b) if, in the opinion of
counsel acceptable to the Company, such restrictive legend is no longer
necessary.
(d) The Holder agrees to indemnify and hold harmless the Company
against any loss, damage, claim or liability arising from the disposition of
this Warrant or any Exercise Share held by such holder or any interest therein
in violation of the provisions of this Section 7.
8. Registration Rights. The Holder shall be entitled to the registration rights
and subject to the registration obligations set forth in the Consulting
Agreement.
9. Restrictions on Exercise. The Holder may not acquire a number of Exercise
Shares to the extent that, upon such exercise, the number of shares of Common
Stock then beneficially owned by such Holder and its affiliates and any other
persons or entities whose beneficial ownership of Common Stock would be
aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act,
(including shares held by any "group" of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 19.99%
of the total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities Exchange
Commission (the "Commission"), and the percentage held by the holder shall be
determined in a manner consistent with the provisions of Section 13(d) of the
Exchange Act.
10. Notices. All notices or other communications under this Warrant shall be in
writing and shall be deemed to have been given on the day of delivery if
delivered by hand, on the fifth day after deposit in the mail if mailed by
certified mail, postage prepaid, return receipt requested, or on the next
business day after mailing if sent by a nationally recognized overnight courier
such as federal express, addressed as follows:
If to the Company:
National Health Partners, Inc.
120 Gibraltar Road
Suite 107
Horsham, PA 19044
Attention: David M. Daniels
Chief Executive Officer
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and if to Holder, at the address of Holder appearing on the
books of the Company or the Company's transfer agent, if any.
Either of the Company or Holder may from time to time change the
address to which notices to it are to be mailed hereunder by notice in
accordance with the provisions of this Section 10.
11. Supplements and Amendments. The Company may from time to time supplement or
amend this Warrant without the approval of any holders of Warrants in order to
cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision, or to make any
other provisions in regard to matters or questions herein arising hereunder
which the Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the Holder.
12. Successors and Assigns. This Warrant shall inure to the benefit of and be
binding upon the respective successors, assigns and legal representatives of
Holder and the Company.
13. Severability. If for any reason any provision, paragraph or terms of this
Warrant is held to be invalid or unenforceable, all other valid provisions
herein shall remain in full force and effect and all terms, provisions and
paragraphs of this Warrant shall be deemed to be severable.
14. Governing Law. This Warrant shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed in accordance with the laws of said jurisdiction without regard
to such jurisdiction's conflicts of laws provisions.
15. Headings. Section and subsection headings used herein are included herein
for convenience of reference only and shall not affect the construction of this
Warrant nor constitute a part of this Warrant for any other purpose.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Company has caused these presents to be duly
executed as of the [_____] day of [_____________], [_____].
NATIONAL HEALTH PARTNERS, INC.
By: [___________________________]
Name:
Title:
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APPENDIX A
NOTICE OF EXERCISE
TO: National Health Partners, Inc.
120 Gibraltar Road
Suite 107
Horsham, PA 19044
Attention: Chief Executive Officer
(1) The undersigned hereby elects to purchase [_______________] shares
of Common Stock (as defined in the attached Class A Warrant) of NATIONAL HEALTH
PARTNERS, INC. pursuant to the terms of the attached Class A Warrant, and
tenders herewith payment of the Exercise Price (as defined in the attached
Warrant) for such shares in full in the following manner (please check one of
the following choices):
[ ] In Cash;
[ ] Cashless exercise through a broker; or
[ ] Delivery of previously owned shares of Common Stock.
(2) In exercising the Class A Warrant, the undersigned hereby confirms
and acknowledges that the shares of Common Stock to be issued upon conversion
hereof are being acquired solely for the account of the undersigned, not as a
nominee for any other party, and for investment purposes only (unless such
shares are subject to resale pursuant to an effective prospectus), and that the
undersigned will not offer, sell or otherwise dispose of any such shares of
Common Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned.
HOLDER
[___________________] [_____________________]
(Date) (Signature)