THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). SUCH SECURITIES AND ANY SECURITIES OR
SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED UNLESS A
REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH SALE OR
TRANSFER, OR IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY,
SUCH REGISTRATION IS UNNECESSARY, OR AN EXCEPTION THEREFROM IS
AVAILABLE UNDER THE ACT.
HYPERBARIC SYSTEMS
WARRANT TO PURCHASE SHARES OF COMMON STOCK
Void after 5:00 p.m. Pacific Coast Time
on January 2, 2010
FOR VALUE RECEIVED, Heartbeat of America, Inc., (the "Warrant
Holder" is entitled to subscribe for and purchase, subject to the terms
and conditions set forth in this Warrant, up to Seven Hundred Thousand
(700,000) shares, of which Thirty-Five Thousand shares to be issued to
each William Shatner set forth in Exhibit A, Richard Strutz set forth
in Exhibit B, and Michael Shippee set forth in Exhibit C, of Common
Stock ("Stock") of HYPERBARIC SYSTEMS, a California corporation (the
"Company"). The exercise price of this warrant (the "Exercise Price")
and purchase price of the Stock shall be One Dollar and Fifty Cents
($1.50) per share. The value of this Warant, as of the date of its
issuance, as indicated herein, shall be One Cent ($0.01).
1. Conditions To Exercise This Warrant. Subject to the provi-
sion and upon the terms and conditions set forth in that certain
Promotion Agreement and herein, this Warrant may be exercised in whole,
or in part, at any time prior to January 2, 2010. The Warrant shall
be exercisable in accordance with the following schedule: (i) the
Warrant shall be exercisable for Two Hundred Thousand (200,000) shares,
including Thirty-Five Thousand (35,000) shares to William Shatner, upon
execution and delivery of the Promotion Agreement; (ii) the Warrant
shall be exercisable for One Hundred Fifty Thousand (10,000) shares
upon completion of the studio shoot as set forth in the Promotion
Agreement; (iii) the Warrant shall be exercisable for One Hundred Fifty
Thousand (150,000) shares upon the airing of the Show defined in
Section 1 of the Promotion Agreement; and (iv) the Warrant shall be
exercisable for Two Hundred Thousand (200,000) shares upon the fufill-
ment of Heartbeat's obligations set forth in Section 5 of the Promotion
Agreement. The Warrant shall expire and be void on and after 5:00 p.m.,
Pacific Coast Time on January 2, 2010 (the "Warrant Termination Date").
In no event may this Warrant be exercised after the Warrant Termination
Date.
2. Transfer of Warrant. Subject to compliance with appli-
cable ederal and state securities laws and Section 7, this Warrant and
all rights (but only with all related obligations) hereunder are trans-
ferable in whole or in party by the Warrant Holder upon the prior written
consent of the Company. The transfer shall be recorded on the books of
the Company upon (i) the surrender of this Warrant, properly endorsed,
to the Company at its principal offices, (ii) the payment to the Company
of all transfer taxes and other governmental charges imposed on such
transfer and (iii) such transferee's (the "Regstered Holder") agreement
in writing to be bound by and subject to the terms and conditions of
this Warrant. In the event of a partial transfer, the Company shall
issue to the Warrant Holder one or more appropriate new warrants.
3. Method of Exercise; Payment; Issuance of New Warrant. The
purchase right represented by this Warrant may only be exercised by the
Registered Holder hereof in accordance with Section 1, in whole or in
part, by the surrender of this Warrant (with the notice of exercise
provision contained on the last page hereof duly executed) at the
principal office of the Company, and by the payment to the Company, by
check, cancellation of indebtedness, or both, of an amount equal to the
Exercise Price per share multiplied by the number of shares then being
purchased. In the event of any exercise of the rights represented by
this Warrant, certificates for the shares of Stock so purchased shall be
delivered to the Registered Holder hereof as soon as practicable. Such
exercise shall be deemed to have been made immediately prior to the
close of business on the date of surrender of this Warrant.
4. Stock Fully Paid; Reservation of Shares. All shares of
Stock which may be issued upon the exercise of this Warrant will, upon
issunce, be duly authorized and validly issued, and fully paid and no
nassessable, and free from all taxes, liens, and charges with respect
to the issue thereof. During the period within which the rights repre-
sented by this Warrant may be exercised, the Company will use its best
efforts to cause to be authorized, and thereafter at all times have
authorized, and reserved for the purpose of the issue upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of
shares of its Stock to provide for the exercise of the rights represented
by this Warrant.
5. Reclassification of Stock. In the event of the reclassifi-
cation of the Stock, the Company agrees that the Warrant Holder will be
entitled to the same rights to acquire such reclassified Stock ("New
Stock") as those rights granted hereby, as the Warrant Holder shall have
to purchase the Stock stated herein. All of the terms and conditions of
this Warrant shall apply equally to the purchase or acquisition of any
New Stock.
6. Fractional Shares. No fractional shares of Stock will be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor equal
to the product of such fraction and the Exercise Price.
7. Compliance with Securities Laws; Disposition of Warrant
and Shares of Common Stock.
(a) Compliance With Securities Laws. The holder of this
Warrant, by acceptance hereof, acknowledges that this Warrant and the
shares of Stock to be issued upon exercise hereof are being acquired for
investment purposes only and that such Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Stock to be issued
upon exercise hereof except under circumstances which will not result
in a violation of the Securities Act of 1933, as amended (the "Act"),
or any state securities laws. Upon exercise of this Warrant, the holder
hereof shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the shares of Stock so purchased are
being acquired for investment purposes only and not with a view toward
distribution or resale. This Warrant and all shares of Stock issued
upon exercise of this Warrant shall be stamped or imprinted with a
legend in substantially the following form (in addition to any legend
required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES AND ANY SECURITIES
OR SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED UNLESS A
REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH SALE OR
TRANSFER, OR IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, SUCH
REGISTRATION IS UNNECESSARY, OR AN EXCEPTION THEREFROM IS AVAILABLE
UNDER THE ACT.
(b) Transfer of Warrant or Shares of Stock. Each
certificate representing the shares of Stock issued hereunder shall be
ar alegend as to the restrictions on transferability in order to insure
compliance with applicable securities laws unless, in the opinion of
counsel for the Company, such legends are not required. The Company may
issue stop transfer instructions to its transfer agent in connection with
such restrictions.
8. Rights of Shareholders. This Warrant shall not entitle the
Holder to be deemed the holder of stock or any other securities of the
Compny which may be issuable on the exercise hereof for any purpose,
nor shall anything contained herein be construed to confer upon the
holder of this Warrant, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action (whether upon any recapital-
ization, issuance of stock, reclassification of stock, consolidation,
merger, conveyance, or otherwise) or to receive notice of meetings, or
to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the certificates representing the
Shares purchasable upon the exercise hereof shall have been issued, as
provided herein.
9. Successors and Assigns. The terms and provisions of
this Warrant shall inure to the benefit of, and be binding upon, the
Company and the Warrant Holder and their respective successors and
assigns.
10. Survival. The warranties, representations and covenants
contained in or made pursuant to this Warrant shall survive the execution,
delivery and exercise, if any, of this Warrant.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to
be executed by an officer thereunto duly authorized as of the day and
date first above written.
HyperBaric Systems
By: /s/ Ardeth N. Sealy
---------------
Ardeth N. Sealy
Secretary
Heartbeat of America, Inc.
By: /s/ Bert Tenzer
-----------
Bert Tenzer
President
NOTICE OF EXERCISE
TO: HYPERBARIC SYSTEMS
1. The undersigned hereby elects to purchase ___________
(________) shares of Common Stock of HYPERBARIC SYSTEMS (the "Company")
pursuant to the terms of the foregoing Warrant, and tenders herewith
payment of the purchase price for such shares in full, together with
all applicable transfer taxes, if any.
2. Please issue a certificate or certificates representing
such securities in the name of the undersigned or in such other name
as is specified below:
Name:
___________________________
Address:
___________________________
___________________________
3. The undersigned represents that the shares of Stock set
forth above are being acquired for the account of the undersigned for
invetment purposes only and not with a view to, or for resale in connec-
tion with, the distribution thereof and that the undersigned has no
present intention of distributing or reselling such shares. In support
thereof, the undersigned agrees to execute an investment representation
statement in a form reasonably requested by the Company as a condition
to the exercise herein noticed.
Name: ______________________________
Address: ______________________________
______________________________
Date: ______________________________