Exhibit 10.4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES LAW OR SPO MEDICAL GROUP, LTD. (THE "COMPANY") SHALL
HAVE RECEIVED AN OPINION IN FORM, SCOPE AND SUBSTANCE REASONABLY ACCEPTABLE TO
COUNSEL FOR THE COMPANY, THAT REGISTRATION OF SUCH SECURITIES UNDER THE ACT AND
UNDER PROVISIONS OF SUCH APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS NOT
REQUIRED.
FORM OF COMMON STOCK PURCHASE WARRANT
Expires ____, 2007
No.: Number of shares:_________
Date of Issuance: __________ 2005
1. Issuance. In consideration of good and valuable consideration, the
receipt of which is hereby acknowledged by SPO Medical Inc., a Delaware
corporation (the "Company") that ___________________ or his registered assigned
(the "Holder") is hereby granted the right to purchase at any time until 5:00
P.M., New York City time, on ____, 2007 [INSERT DATE 24 MONTHS FROM DATE OF
WARRANT] (the "Expiration Date"), _________fully paid and nonassessable shares
(the "Warrant Shares") of the Company's common stock, par value $0.01 per share
(the "Common Stock"), at an exercise price (the "Exercise Price") per share
equal to $0.85. The Exercise Price and the number of shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein.
2. Exercise of Warrants. Exercise of the purchase rights represented by
this Warrant may be made at any time or times, on or before 5:00 P.M. New York
City time on the Expiration Date, or such earlier date on which this Warrant may
terminate as provided in this Warrant, by the surrender of this Warrant and the
Notice of Exercise Form annexed hereto duly executed, at the office of the
company (or such other office or agency of the Company as it may designate by
notice in writing to the registered holder hereof at the address of such holder
appearing on the books of the Company) and upon payment of an amount of
consideration therefore payable by certified check or cashier's check or by wire
transfer to an account designated by the Company in an amount equal to the
Exercise Price multiplied by the number of Warrant Shares purchased. This
Warrant may be exercised in whole or in part and such exercise shall be
accompanied by written notice from the Holder of this Warrant showing the number
of Warrant Shares with respect to which rights are being surrendered thereunder
(the "Surrendered Shares") and the net number of shares of Common Stock to be
issued after giving effect to such surrender. The Company shall cancel this
Warrant with respect to any Surrendered Shares. In the event of an exercise of
this Warrant in accordance with this Section 2, the Holder shall be entitled to
receive a certificate for the number of shares of Common Stock so purchased.
2. Reservation of Shares. The Company hereby covenants that at all times
during the term of this Warrant there shall be reserved a sufficient number of
shares of its Common Stock as shall be required for issuance upon exercise of
this Warrant (the "Warrant Shares").
3. No Fractional Shares of Scrip. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant.
4. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction)
receipt of reasonably satisfactory indemnification, and (in the case of
mutilation) upon surrender and cancellation of this Warrant, the Company will
execute and deliver a new Warrant of like tenor and date and any such lost,
stolen, destroyed or mutilated Warrant shall thereupon become void.
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5. 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 equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
7. Capital Adjustments. In case of any stock split or reverse stock split,
stock dividend, reclassification of the Common Stock, recapitalization, merger
or consolidation (where the Company is not the surviving entity), the provisions
of this Section 7 shall be applied as if such capital adjustment event had
occurred immediately prior to the date of this Warrant and the original Exercise
Price had been fairly allocated to the stock resulting from such capital
adjustment; and in other respects the provisions of this Section shall be
applied in a fair, equitable and reasonable manner so as to give effect, as
nearly as may be, to the purposes hereof.
7.1 Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to this Section 7, the Holder shall be entitled to purchase
such number of shares of Common Stock as will cause (i) (x) the total number of
shares of Common Stock Holder is entitled to purchase pursuant to this Warrant
following such adjustment, multiplied by (y) the adjusted Exercise Price per
share, to equal the result of (ii) (x) the dollar amount of the total number of
shares of Common Stock Holder is entitled to purchase before adjustment,
multiplied by (y) the total Exercise Price before adjustment.
An adjustment made pursuant to this Section 7 shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
8. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
Holder notice of such adjustment or adjustments setting forth the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made. Such notice, in absence of manifest error, shall
be conclusive evidence of the correctness of such adjustment.
9. Transfer to Comply with the Securities Law. This Warrant has not been
registered under the Securities Act of 1933, as amended (the "Act") and has been
issued to the Holder for investment and not with a view to the distribution of
either the Warrant or the Warrant Shares. Neither this Warrant nor any of the
Warrant Shares or any other security issued or issuable upon exercise of this
Warrant may be sold, transferred, pledged or hypothecated in the absence of an
effective registration statement under the Act relating to such security or an
opinion of counsel satisfactory to the Company that registration is not required
under the Act. Each certificate for the Warrant, the Warrant Shares and any
other security issued or issuable upon exercise of this Warrant shall contain a
legend on the face thereof, in form and substance satisfactory to counsel for
the Company, setting forth the restrictions on transfer contained in this
Paragraph as well as any other restriction on sale or transfer such as would be
contained in a lock-up agreement. The warrant is also subject to a lock-up.
10. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage pre-paid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission,
or, if mailed, two days after the date of deposit in the Untied States mails.
The addresses for such communications shall be with respect to the Holder of
this Warrant or of Warrant Shares issued pursuant hereto, addressed to such
Holder at its last known address or facsimile number appearing on the books of
the Company maintained for such purposes, or with respect to the Company,
addressed to:
SPO Medical Group, Inc.
Suite 380,
North Building,
21860, Burbank Boulevard,
Woodland Hills,
CA 91367-6493
Attention: Michael Braunold
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with a copy to:
Aboudi & Brounstein
Attn: David Aboudi, Esq.
Rechov Gavish 3, POB 2432
Kfar Saba Industrial Zone 44641 Israel
Telephone No.: (011-972-9) 764-4833
Telecopier No.: (011-972-9) 764-4834
Or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other party hereto by
notice given in accordance with this Section.
11. Supplements and Amendments; Whole Agreement. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant of even date herewith contain the full understanding of the
parties hereto with respect to its subject matter and there are no
representations, warranties, agreements or understandings other than expressly
contained herein.
12. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to its
conflicts of laws principles. The Holder hereby irrevocably submits to the
jurisdiction of any United States district court located in the City of New York
over any action or proceeding arising out of or relating to this Agreement. The
Holder further agrees that any action or proceeding brought against the Company
shall be brought only in the United States district courts located in the City
of New York.
13. Counterparts. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
14. Descriptive Headings. Descriptive headings of the several Sections of
this Warrant are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
[signature page follows on the next page]
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
______ _____, 2005.
SPO MEDICAL INC.
By:
---------------------------------
Name: Michael Braunold
Title: CEO
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NOTICE OF EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant certificate dated as of _________, 2005, to purchase
___________ shares of the Common Stock, stated value $______ per share, of SPO
Medical Inc. and tenders herewith payment.
By certificate check, cashier's check or wire transfer of
$_____________.
Number of Warrant Shares Surrendered for Cancellation:________
Number of Warrant Shares to be Issued: ___________________________
In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, 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 Untied States Securities Act of 1933, as amended,
or any foreign or state securities laws.
Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------- (Name)
--------------------------------
(Address)
--------------------------------
By:
---------------------------
Name:
Dated:
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