EXHIBIT 10.3
THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I)
SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR
(III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT SECURED BY THE SECURITIES
SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE
VOID AFTER 5:00 P.M. EASTERN TIME ON [FIFTH ANNIVERSARY OF THE CLOSING DATE]
(THE "EXPIRATION DATE").
No. __________
PHARMAFRONTIERS CORP.
WARRANT TO PURCHASE _______ SHARES OF
COMMON STOCK, PAR VALUE $0.05 PER SHARE
For VALUE RECEIVED, ____________________ ("Warrantholder"), is entitled
to purchase, subject to the provisions of this Warrant, from PharmaFrontiers
Corp., a Texas corporation ("Company"), at any time from and after the Initial
Exercise Date (as defined below) and not later than 5:00 P.M., Eastern time, on
the Expiration Date (as defined above), at an exercise price per share equal to
$0.65 (the exercise price in effect being herein called the "Warrant Price"),
______ shares ("Warrant Shares") of the Company's Common Stock, par value $0.05
per share ("Common Stock"). The number of Warrant Shares purchasable upon
exercise of this Warrant and the Warrant Price shall be subject to adjustment
from time to time as described herein.
This Warrant is one of a series of Warrants of like tenor issued by the
Company pursuant to that certain Purchase Agreement dated April 11, 2006, among
the Company and the Investors named therein (the "Purchase Agreement"), and
initially covering an aggregate of up to 23,000,0000 shares of Common Stock
(collectively, the "Company Warrants").
As used herein, "Initial Exercise Date" shall mean the effective date
of the Reverse Split (as defined in the Purchase Agreement). The Company's
covenants and agreements relating to the Reverse Split contained in the Purchase
Agreement are hereby incorporated herein by reference as if set forth herein at
length and the Warrantholder is hereby made an express third party beneficiary
thereof with the full right to enforce such covenants and agreements as if it
were a party to the Purchase Agreement.
Section 1. REGISTRATION. The Company shall maintain books for the
transfer and registration of the Warrant. Upon the initial issuance of this
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. TRANSFERS. As provided herein, this Warrant may be
transferred only pursuant to a registration statement filed under the Securities
Act of 1933, as amended (the "Securities Act"), or an exemption from such
registration. Subject to such restrictions, the Company shall transfer this
Warrant from time to time upon the books to be maintained by the Company for
that purpose, upon surrender hereof for transfer, properly endorsed or
accompanied by appropriate instructions for transfer and such other documents as
may be reasonably required by the Company, including, if required by the
Company, an opinion of its counsel to the effect that such transfer is exempt
from the registration requirements of the Securities Act, to establish that such
transfer is being made in accordance with the terms hereof, and a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company.
Section 3. EXERCISE OF WARRANT. Subject to the provisions hereof, the
Warrantholder may exercise this Warrant, in whole or in part, at any time after
the Initial Exercise Date and prior to its expiration upon surrender of the
Warrant, together with delivery of a duly executed Warrant exercise form, in the
form attached hereto as Appendix A (the "Exercise Agreement") and payment by
cash, certified check or wire transfer of funds (or, in certain circumstances,
by cashless exercise as provided below) of the aggregate Warrant Price for that
number of Warrant Shares then being purchased, to the Company during normal
business hours on any business day at the Company's principal executive offices
(or such other office or agency of the Company as it may designate by notice to
the Warrantholder). The Warrant Shares so purchased shall be deemed to be issued
to the Warrantholder or the Warrantholder's designee, as the record owner of
such shares, as of the close of business on the date on which this Warrant shall
have been surrendered (or the date evidence of loss, theft or destruction
thereof and security or indemnity satisfactory to the Company has been provided
to the Company), the Warrant Price shall have been paid and the completed
Exercise Agreement shall have been delivered. Certificates for the Warrant
Shares so purchased shall be delivered to the Warrantholder within a reasonable
time, not exceeding three (3) business days, after this Warrant shall have been
so exercised. The certificates so delivered shall be in such denominations as
may be requested by the Warrantholder and shall be registered in the name of the
Warrantholder or such other name as shall be designated by the Warrantholder, as
specified in the Exercise Agreement. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the
Warrantholder a new Warrant representing the right to purchase the number of
shares with respect to which this Warrant shall not then have been exercised. As
used herein, "business day" means a day, other than a Saturday or Sunday, on
which banks in New York City are open for the general transaction of business.
Each exercise hereof shall constitute the re-affirmation by the Warrantholder
that the representations and warranties contained in Section 5 of the Purchase
Agreement are true and correct in all material respects with respect to the
Warrantholder as of the time of such exercise. Notwithstanding the foregoing, to
effect the exercise of the Warrant hereunder, the Warrantholder shall not be
required to physically surrender this Warrant to the Company unless the entire
Warrant is exercised. The Warrantholder and the Company shall maintain records
showing the amount exercised and the dates of such exercise. The Warrantholder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provision of the paragraph, following exercise of a portion of the
Warrant, the number of Warrant Shares of this Warrant may be less than the
amount stated on the face hereof.
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Section 4. COMPLIANCE WITH THE SECURITIES ACT OF 1933. Except as
provided in the Purchase Agreement, the Company may cause the legend set forth
on the first page of this Warrant to be set forth on each Warrant, and a similar
legend on any security issued or issuable upon exercise of this Warrant, unless
counsel for the Company is of the opinion as to any such security that such
legend is unnecessary.
Section 5. PAYMENT OF TAXES. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the Warrantholder in respect of which such shares are
issued, and in such case, the Company shall not be required to issue or deliver
any certificate for Warrant Shares or any Warrant until the person requesting
the same has paid to the Company the amount of such tax or has established to
the Company's reasonable satisfaction that such tax has been paid. The
Warrantholder shall be responsible for income taxes due under federal, state or
other law, if any such tax is due.
Section 6. MUTILATED OR MISSING WARRANTS. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon surrender and cancellation of the mutilated Warrant, or
in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and for the purchase of a like number of Warrant Shares,
but only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if
requested by the Company.
Section 7. RESERVATION OF COMMON STOCK. At any time when this Warrant
is exercisable, the Company shall at all applicable times keep reserved until
issued (if necessary) as contemplated by this Section 7, out of the authorized
and unissued shares of Common Stock, sufficient shares to provide for the
exercise of the rights of purchase represented by this Warrant. The Company
agrees that all Warrant Shares issued upon due exercise of the Warrant shall be,
at the time of delivery of the certificates for such Warrant Shares, duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
of the Company.
Section 8. ADJUSTMENTS. Subject and pursuant to the provisions of this
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall, at any time or from time to time
while this Warrant is outstanding, pay a dividend or make a distribution on its
Common Stock in shares of Common Stock, subdivide its outstanding shares of
Common Stock into a greater number of shares or combine its outstanding shares
of Common Stock into a smaller number of shares or issue by reclassification of
its outstanding shares of Common Stock any shares of its capital stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then (i) the Warrant
Price in effect immediately prior to the date on which such change shall become
effective shall be adjusted by multiplying such Warrant Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such change and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after giving effect to
such change and (ii) the number of Warrant Shares purchasable upon exercise of
this Warrant shall be adjusted by multiplying the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior to the date on which
such change shall become effective by a fraction, the numerator of which is
shall be the Warrant Price in effect immediately prior to the date on which such
change shall become effective and the denominator of which shall be the Warrant
Price in effect immediately after giving effect to such change, calculated in
accordance with clause (i) above. Such adjustments shall be made successively
whenever any event listed above shall occur.
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(b) If any capital reorganization, reclassification of the
capital stock of the Company, consolidation or merger of the Company with
another corporation in which the Company is not the survivor, or sale, transfer
or other disposition of all or substantially all of the Company's assets to
another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition, lawful and adequate provision shall be made whereby each
Warrantholder shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions herein specified and in lieu of the
Warrant Shares immediately theretofore issuable upon exercise of the Warrant,
such shares of stock, securities or assets as would have been issuable or
payable with respect to or in exchange for a number of Warrant Shares equal to
the number of Warrant Shares immediately theretofore issuable upon exercise of
the Warrant, had such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition not taken place, and in any such case
appropriate provision shall be made with respect to the rights and interests of
each Warrantholder to the end that the provisions hereof (including, without
limitation, provision for adjustment of the Warrant Price) shall thereafter be
applicable, as nearly equivalent as may be practicable in relation to any shares
of stock, securities or assets thereafter deliverable upon the exercise hereof.
The Company shall not effect any such consolidation, merger, sale, transfer or
other disposition unless prior to or simultaneously with the consummation
thereof the successor corporation (if other than the Company) resulting from
such consolidation or merger, or the corporation purchasing or otherwise
acquiring such assets or other appropriate corporation or entity shall assume
the obligation to deliver to the Warrantholder, at the last address of the
Warrantholder appearing on the books of the Company, such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the
Warrantholder may be entitled to purchase, and the other obligations under this
Warrant. The provisions of this paragraph (b) shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales,
transfers or other dispositions.
(c) In case the Company shall fix a payment date for the
making of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends or distributions referred to in Section
8(a)), or subscription rights or warrants, the Warrant Price to be in effect
after such payment date shall be determined by multiplying the Warrant Price in
effect immediately prior to such payment date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding multiplied
by the Market Price (as defined below) per share of Common Stock immediately
prior to such payment date, less the fair market value (as determined by the
Company's Board of Directors in good faith) of said assets or evidences of
indebtedness so distributed, or of such subscription rights or warrants, and the
denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such Market Price per share of Common Stock
immediately prior to such payment date. "Market Price" as of a particular date
(the "Valuation Date") shall mean the following: (a) if the Common Stock is then
listed on a national stock exchange, the closing sale price of one share of
Common Stock on such exchange on the last trading day prior to the Valuation
Date; (b) if the Common Stock is then quoted on The Nasdaq Stock Market, Inc.
("Nasdaq"), the National Association of Securities Dealers, Inc. OTC Bulletin
Board (the "Bulletin Board") or such similar quotation system or association,
the closing sale price of one share of Common Stock on Nasdaq, the Bulletin
Board or such other quotation system or association on the last trading day
prior to the Valuation Date or, if no such closing sale price is available, the
average of the high bid and the low asked price quoted thereon on the last
trading day prior to the Valuation Date; or (c) if the Common Stock is not then
listed on a national stock exchange or quoted on Nasdaq, the Bulletin Board or
such other quotation system or association, the fair market value of one share
of Common Stock as of the Valuation Date, as determined in good faith by the
Board of Directors of the Company and the Warrantholder. If the Common Stock is
not then listed on a national securities exchange, Nasdaq, the Bulletin Board or
such other quotation system or association, the Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Warrantholder
prior to the exercise hereunder as to the fair market value of a share of Common
Stock as determined by the Board of Directors of the Company. In the event that
the Board of Directors of the Company and the Warrantholder are unable to agree
upon the fair market value in respect of subpart (c) of this paragraph, the
Company and the Warrantholder shall jointly select an appraiser, who is
experienced in such matters. The decision of such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne equally by the Company
and the Warrantholder. Such adjustment shall be made successively whenever such
a payment date is fixed.
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(d) An adjustment to the Warrant Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an
adjustment.
(e) In the event that, as a result of an adjustment made
pursuant to this Section 8, the Warrantholder shall become entitled to receive
any shares of capital stock of the Company other than shares of Common Stock,
the number of such other shares so receivable upon exercise of this Warrant
shall be subject thereafter to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Warrant Shares contained in this Warrant.
(f) To the extent permitted by applicable law and the listing
requirements of any stock market or exchange on which the Common Stock is then
listed, the Company from time to time may decrease the Warrant Price by any
amount for any period of time if the period is at least twenty (20) days, the
decrease is irrevocable during the period and the Board shall have made a
determination that such decrease would be in the best interests of the Company,
which determination shall be conclusive. Whenever the Warrant Price is decreased
pursuant to the preceding sentence, the Company shall provide written notice
thereof to the Warrantholder at least five (5) days prior to the date the
decreased Warrant Price takes effect, and such notice shall state the decreased
Warrant Price and the period during which it will be in effect. Notwithstanding
the foregoing, the Company shall treat all holders of the Company Warrants
equally.
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Section 9. FRACTIONAL INTEREST. The Company shall not be required to
issue fractions of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this Section 9, be deliverable upon such exercise, the Company, in
lieu of delivering such fractional share, shall pay to the exercising
Warrantholder an amount in cash equal to the Market Price of such fractional
share of Common Stock on the date of exercise.
Section 10. EXTENSION OF EXPIRATION DATE. If the Company fails to cause
any Registration Statement covering Registrable Securities (unless otherwise
defined herein, capitalized terms are as defined in the Registration Rights
Agreement relating to the Warrant Shares (the "Registration Rights Agreement"))
to be declared effective prior to the applicable dates set forth therein, or if
any of the events specified in Section 2(c)(ii) of the Registration Rights
Agreement occurs, and the Blackout Period (whether alone, or in combination with
any other Blackout Period) continues for more than 60 days in any 12 month
period, or for more than a total of 90 days, then the Expiration Date of this
Warrant shall be extended one day for each day beyond the 60-day or 90-day
limits, as the case may be, that the Blackout Period continues.
Section 11. BENEFITS. Nothing in this Warrant shall be construed to
give any person, firm or corporation (other than the Company and the
Warrantholder) any legal or equitable right, remedy or claim, it being agreed
that this Warrant shall be for the sole and exclusive benefit of the Company and
the Warrantholder.
Section 12. NOTICES TO WARRANTHOLDER. Upon the happening of any event
requiring an adjustment of the Warrant Price, the Company shall promptly give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Failure to give such notice to the Warrantholder or any
defect therein shall not affect the legality or validity of the subject
adjustment.
Section 13. IDENTITY OF TRANSFER AGENT. The Transfer Agent for the
Common Stock is Continental Stock Transfer & Trust. Upon the appointment of any
subsequent transfer agent for the Common Stock or other shares of the Company's
capital stock issuable upon the exercise of the rights of purchase represented
by the Warrant, the Company will mail to the Warrantholder a statement setting
forth the name and address of such transfer agent.
Section 14. NOTICES. Unless otherwise provided, any notice required or
permitted under this Warrant shall be given in writing and shall be deemed
effectively given and received as hereinafter described (i) if given by personal
delivery, then such notice shall be deemed received upon such delivery, (ii) if
given by telex or facsimile, then such notice shall be deemed received upon
receipt of confirmation of complete transmittal, (iii) if given by certified
mail return receipt requested, then such notice shall be deemed received upon
the day such return receipt is signed, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one
business day after delivery to such carrier. Copies of such notices shall also
be transmitted by email to the email address provided for on the signature page
of the Purchase Agreement. All notices shall be addressed as follows: if to the
Warrantholder, at its address as set forth in the Company's books and records
and, if to the Company, at the address as follows, or at such other address as
the Warrantholder or the Company may designate by ten days' advance written
notice to the other:
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If to the Company:
PharmaFrontiers Corp.
2635 Crescent Ridge Drive
The Woodlands, Texas 77381
Attention: William Rouse
Fax: (281) 872-8585
With a copy to:
Brewer & Pritchard, P.C.
Three Riverway, 18th Floor
Houston, Texas 77056
Attention: Thomas Pritchard, Esq.
Fax: (713) 659-5302
Section 15. REGISTRATION RIGHTS. The initial Warrantholder is entitled
to the benefit of certain registration rights with respect to the shares of
Common Stock issuable upon the exercise of this Warrant as provided in the
Registration Rights Agreement, and any subsequent Warrantholder may be entitled
to such rights.
Section 16. SUCCESSORS. All the covenants and provisions hereof by or
for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 17. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law
provisions thereof. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant
and the transactions contemplated hereby. Service of process in connection with
any such suit, action or proceeding may be served on each party hereto anywhere
in the world by the same methods as are specified for the giving of notices
under this Warrant. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of venue in such court.
The Company and, by accepting this Warrant, the Warrantholder, each irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE
WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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Section 18. CALL PROVISION. Notwithstanding any other provision
contained in this Warrant to the contrary, in the event that (i) the closing bid
price per share of Common Stock as traded on the Bulletin Board (or such other
exchange or stock market on which the Common Stock may then be listed or quoted)
equals or exceeds $1.30 (appropriately adjusted for any stock split, reverse
stock split, stock dividend or other reclassification or combination of the
Common Stock occurring after the date hereof) for twenty (20) consecutive
trading days commencing after the first anniversary of the date the Registration
Statement (as defined in the Registration Rights Agreement) has been declared
effective and (ii) during such period of twenty (20) consecutive trading days
the daily average trading volume of the common Stock is at least 200,000 shares
(appropriately adjusted for any stock split, reverse stock split, stock dividend
or other reclassification or combination of the Common Stock occurring after the
date hereof), the Company, upon thirty (30) days prior written notice (the
"Notice Period") given to the Warrantholder within three business days
immediately following the end of any such twenty (20) trading day period, may
demand that the Warrantholder exercise its cash exercise rights hereunder, and
the Warrantholder must exercise its rights hereunder, up to any limitation on
the amount to be exercised provided for in Section 23 hereof, prior to the end
of the Notice Period; provided that (i) the Company simultaneously gives a
similar notice to all holders of Company Warrants and (ii) all of the shares of
Common Stock issuable hereunder either (A) are registered pursuant to an
effective Registration Statement (as defined in the Registration Rights
Agreement) which has not been suspended and for which no stop order is in
effect, and pursuant to which the Warrantholder is able to sell such shares of
Common Stock at all times during the Notice Period or (B) no longer constitute
Registrable Securities (as defined in the Registration Rights Agreement). Except
for any limitation on the amount to be exercised pursuant to Section 23 hereof,
if such exercise is not made or if only a partial exercise is made, any and all
rights to further exercise the Warrant shall cease upon the expiration of the
Notice Period and this Warrant or such unexercised portion hereof shall become
null and void.
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Section 19. CASHLESS EXERCISE. Notwithstanding any other provision
contained herein to the contrary, from and after the first anniversary of the
Closing Date (as defined in the Purchase Agreement) and so long as the Company
is required under the Registration Rights Agreement to have effected the
registration of the Warrant Shares for resale to the public pursuant to a
Registration Statement (as such term is defined in the Registration Rights
Agreement), if the Warrant Shares may not be freely sold to the public as a
result of a breach by the Company of its obligations under the Registration
Rights Agreement, the Warrantholder may elect to receive, without the payment by
the Warrantholder of the aggregate Warrant Price in respect of the shares of
Common Stock to be acquired, shares of Common Stock of equal value to the value
of this Warrant, or any specified portion hereof, by the surrender of this
Warrant (or such portion of this Warrant being so exercised) together with a Net
Issue Election Notice, in the form annexed hereto as Appendix B, duly executed,
to the Company. Thereupon, the Company shall issue to the Warrantholder such
number of fully paid, validly issued and nonassessable shares of Common Stock as
is computed using the following formula:
X = Y (A - B)
---------
A
where
X = the number of shares of Common Stock to which the
Warrantholder is entitled upon such cashless exercise;
Y = the total number of shares of Common Stock covered by
this Warrant for which the Warrantholder has surrendered purchase rights at such
time for cashless exercise (including both shares to be issued to the
Warrantholder and shares as to which the purchase rights are to be canceled as
payment therefor);
A = the "Market Price" of one share of Common Stock as of the
date the net issue election is made; and
B = the Warrant Price in effect under this Warrant at the
time the net issue election is made.
Section 20. NO RIGHTS AS STOCKHOLDER. Prior to the exercise of
this Warrant, the Warrantholder shall not have or exercise any rights as a
stockholder of the Company by virtue of its ownership of this Warrant.
Section 21. AMENDMENT; WAIVER. Any term of this Warrant may be amended
or waived (including the adjustment provisions included in Section 8 of this
Warrant) upon the written consent of the Company and the holders of Company
Warrants representing at least 50% of the number of shares of Common Stock then
subject to all outstanding Company Warrants (the "Majority Holders"); PROVIDED,
that (x) any such amendment or waiver must apply to all Company Warrants; and
(y) the number of Warrant Shares subject to this Warrant, the Warrant Price and
the Expiration Date may not be amended, and the right to exercise this Warrant
may not be altered or waived, without the written consent of the Warrantholder.
Section 22. SECTION HEADINGS. The section headings in this Warrant are
for the convenience of the Company and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.
[Section 23A. LIMITATIONS ON EXERCISE. Notwithstanding anything to the
contrary contained herein, the number of Warrant Shares that may be acquired by
the Warrantholder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Warrantholder and its Affiliates and any other
Persons whose beneficial ownership of Common Stock would be aggregated with the
Warrantholder's for purposes of Section 13(d) of the Exchange Act, does not
exceed 9.999% of the total number of issued and outstanding shares of Common
Stock (including for such purpose the shares of Common Stock issuable upon such
exercise of the Company Warrants). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. This provision shall not restrict the
number of shares of Common Stock which a Warrantholder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Warrantholder may receive in the event of a transaction
contemplated by Section 8 of this Warrant. This restriction may not be waived.
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Section 23B. LIMITATIONS ON EXERCISE. Notwithstanding anything to the
contrary contained herein, the number of Warrant Shares that may be acquired by
the Warrantholder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Warrantholder and its Affiliates and any other
Persons whose beneficial ownership of Common Stock would be aggregated with the
Warrantholder's for purposes of Section 13(d) of the Exchange Act, does not
exceed 19.999% of the total number of issued and outstanding shares of Common
Stock (including for such purpose the shares of Common Stock issuable upon such
exercise of the Company Warrants). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. This provision shall not restrict the
number of shares of Common Stock which a Warrantholder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Warrantholder may receive in the event of a transaction
contemplated by Section 8 of this Warrant. This restriction may not be
waived](1)
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(1) To be included only at the specific request of an Investor on the Signature
Page of the Purchase Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed, as of the ______ day of ___________, 2006.
PHARMAFRONTIERS CORP.
By:___________________________
Name:
Title:
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