NATIONAL HEALTH PARTNERS, INC. SECURITIES PURCHASE AGREEMENT
Exhibit 10.7
NATIONAL HEALTH PARTNERS, INC.
SECURITIES PURCHASE AGREEMENT
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CLASS A WARRANTS
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CONFIDENTIAL
NOTICE TO OFFEREES
THE RECIPIENT OF THIS SECURITIES PURCHASE AGREEMENT HAS REQUESTED THAT
NATIONAL HEALTH PARTNERS, INC. (THE "COMPANY") PROVIDE THE RECIPIENT WITH A COPY
OF THIS SECURITIES PURCHASE AGREEMENT. THIS SECURITIES PURCHASE AGREEMENT IS
BEING PROVIDED TO THE RECIPIENT BASED ON THE RECIPIENT'S PRIOR EXPRESS AGREEMENT
TO KEEP THE INFORMATION CONTAINED IN THIS SECURITIES PURCHASE AGREEMENT
CONFIDENTIAL. BY ACCEPTING RECEIPT OF THIS SECURITIES PURCHASE AGREEMENT, THE
RECIPIENT ACKNOWLEDGES AND AGREES THAT THE SECURITIES PURCHASE AGREEMENT HAS
BEEN FURNISHED TO RECIPIENT ON A CONFIDENTIAL BASIS SOLELY FOR THE PURPOSE OF
ENABLING THE RECIPIENT TO EVALUATE THE COMPANY, THE RECIPIENT MAY NOT DISTRIBUTE
THIS SECURITIES PURCHASE AGREEMENT TO ANYONE WITHOUT THE PRIOR WRITTEN CONSENT
OF THE COMPANY, AND THE RECIPIENT WILL NOT REPRODUCE OR REDISTRIBUTE THIS
SECURITIES PURCHASE AGREEMENT, IN WHOLE OR IN PART, OR DISCLOSE, DIRECTLY OR
INDIRECTLY, ANY OF THE CONTENTS OF THIS SECURITIES PURCHASE AGREEMENT TO ANYONE
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS SECURITIES PURCHASE
AGREEMENT AND THE OTHER OFFERING DOCUMENTS DO NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THE SECURITIES ARE BEING SOLD FOR INVESTMENT PURPOSES ONLY, WITHOUT A VIEW
TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE TRANSFERRED, RESOLD OR OFFERED
FOR RESALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND EFFECTIVE REGISTRATION OR QUALIFICATION UNDER THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, OR THE AVAILABILITY OF AN
EXEMPTION THEREFROM.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR THE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS SECURITIES PURCHASE AGREEMENT OR ANY OF THE OTHER OFFERING
DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement"), dated May 5, 2011,
is entered into by and between National Health Partners, Inc., an Indiana
corporation (the "Company"), and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Purchaser").
RECITALS:
WHEREAS, Purchaser desires to purchase, and the Company desires to sell,
warrants exercisable into shares of the Company's common stock on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
1. Purchase and Sale of Units.
(a) Purchase and Sale of Units. Subject to the terms and conditions hereof,
Purchaser agrees to purchase, and the Company agrees to sell, four units
("Units") for a total purchase price of $250 (the "Transaction"). Each Unit
shall be comprised of 1,000,000 Class A warrants ("Class A Warrants" or, the
"Warrants"). Each Class A Warrant shall be exercisable into one share of the
Company's common stock, $.001 par value per share ("Common Stock"), at an
exercise price of $0.006 per share. The terms of the Class A Warrants are set
forth in the Form of Class A Warrant attached hereto and made a part hereof as
Exhibit A (the "Class A Warrant Certificate" or, the "Warrant Certificates").
This Agreement and the Warrant Certificates are hereinafter referred to
collectively as the "Purchase Documents." The Warrants and shares of Common
Stock issuable upon exercise of the Warrants are hereinafter referred to
collectively as the "Securities." All references to "dollar" or "$" are
references to U.S. Dollars.
(b) Placement Agent and Finder Fees. The Company reserves the right to pay
reasonable placement agent and finder fees consisting of cash, units identical
to the Units or such other consideration as the Company deems appropriate.
(c) Closing. The closing of the Transaction (the "Closing") shall take
place at a time, on a date and at a place to be determined by the Company in its
sole discretion. At or prior to the Closing: (i) Purchaser shall deliver to the
Company one completed and duly executed copy of this Agreement and the purchase
price by check or wire transfer of immediately available funds to the following
account:
TD Bank
Philadelphia, PA
Routing Number: ▇▇▇▇▇▇▇▇▇
Account Name: National Health Partners, Inc.
Account Number: 367884541
Swift Code: ▇▇▇▇▇▇▇▇
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and (ii) the Company shall execute this Agreement. After the Closing, the
Company will issue to Purchaser the Warrant Certificates duly executed by the
Company, together with a copy of Purchaser's executed Agreement countersigned by
the Company.
2. Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company as follows:
(a) Organization and Qualification.
(i) If Purchaser is an entity, Purchaser is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, with the corporate or other entity power and authority to own and
operate its business as presently conducted, except where the failure to be or
have any of the foregoing would not have a material adverse effect on Purchaser,
and Purchaser is duly qualified as a foreign corporation or other entity to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified or in
good standing as would not have a material adverse effect on it.
(ii) If Purchaser is an entity, the address of its principal place of
business is set forth on the signature page of this Agreement, and if Purchaser
is an individual, the address of its principal residence is set forth on the
signature page of this Agreement.
(b) Authority; Validity and Effect of Agreement.
(i) If Purchaser is an entity, Purchaser has the requisite corporate
or other entity power and authority to execute and deliver this Agreement and
perform its obligations under this Agreement. The execution and delivery of this
Agreement by Purchaser, the performance by Purchaser of its obligations
hereunder and all other necessary corporate or other entity action on the part
of Purchaser have been duly authorized by its board of directors or similar
governing body, and shareholders or similar interest holders, if necessary, and
no other corporate or other entity proceedings on the part of Purchaser is
necessary for Purchaser to execute and deliver this Agreement and perform its
obligations hereunder.
(ii) This Agreement has been duly and validly authorized, executed and
delivered by Purchaser and, assuming it has been duly and validly executed and
delivered by the Company, constitutes a legal, valid and binding obligation of
Purchaser, in accordance with its terms.
(c) No Conflict; Required Filings and Consents. Neither the execution and
delivery of this Agreement by Purchaser nor the performance by Purchaser of its
obligations hereunder will: (i) if Purchaser is an entity, conflict with
Purchaser's articles of incorporation or bylaws, or other similar organizational
documents; (ii) violate any statute, law, ordinance, rule or regulation,
applicable to Purchaser or any of the properties or assets of Purchaser; or
(iii) violate, breach, be in conflict with or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or permit the termination of any provision of, or result in the termination of,
the acceleration of the maturity of, or the acceleration of the performance of
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any obligation of Purchaser under, or result in the creation or imposition of
any lien upon any properties, assets or business of Purchaser under, any
material contract or any order, judgment or decree to which Purchaser is a party
or by which it or any of its assets or properties is bound or encumbered except,
in the case of clauses (ii) and (iii), for such violations, breaches, conflicts,
defaults or other occurrences which, individually or in the aggregate, would not
have a material adverse effect on its obligation to perform its covenants under
this Agreement.
(d) Accredited Investor. Purchaser is an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act"). If Purchaser is an entity, Purchaser was not
formed for the specific purpose of acquiring the Securities, and, if it was, all
of Purchaser's equity owners are "accredited investors" as defined above.
(e) No Government Review. Purchaser understands that neither the United
States Securities and Exchange Commission ("SEC") nor any securities commission
or other governmental authority of any state, country or other jurisdiction has
approved the issuance of the Securities or passed upon or endorsed the merits of
the Securities or the Purchase Documents, or confirmed the accuracy of,
determined the adequacy of, or reviewed the Purchase Documents.
(f) Investment Intent. The Securities are being acquired for the
Purchaser's own account for investment purposes only, not as a nominee or agent
and not with a view to the resale or distribution of any part thereof, and
Purchaser has no present intention of selling, granting any participation in or
otherwise distributing the same. By executing this Agreement, Purchaser further
represents that Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or third person with respect to any of the Securities.
(g) Restrictions on Transfer. Purchaser understands that the Securities are
"restricted securities" as such term is defined in Rule 144 under the Securities
Act and have not been registered under the Securities Act or registered or
qualified under any state securities law, and may not be, directly or
indirectly, sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act and
registration or qualification under applicable state securities laws or the
availability of an exemption therefrom. In any case where such an exemption is
relied upon by Purchaser from the registration requirements of the Securities
Act and the registration or qualification requirements of such state securities
laws, Purchaser shall furnish the Company with an opinion of counsel stating
that the proposed sale or other disposition of such securities may be effected
without registration under the Securities Act and will not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and opinion to be
satisfactory to the Company. Purchaser acknowledges that it is able to bear the
economic risks of an investment in the Securities for an indefinite period of
time, and that its overall commitment to investments that are not readily
marketable is not disproportionate to its net worth.
(h) Investment Experience. Purchaser has such knowledge, sophistication and
experience in financial, tax and business matters in general, and investments in
securities in particular, that it is capable of evaluating the merits and risks
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of this investment in the Securities, and Purchaser has made such investigations
in connection herewith as it deemed necessary or desirable so as to make an
informed investment decision without relying upon the Company for legal or tax
advice related to this investment. In making its decision to acquire the
Securities, Purchaser has not relied upon any information other than information
contained in the Purchase Documents.
(i) Access to Information. Purchaser acknowledges that it has had access to
and has reviewed all documents and records relating to the Company, including
but not limited to the Company's filings with the SEC, that it has deemed
necessary in order to make an informed investment decision with respect to the
Securities. Purchaser acknowledges that the Company may concurrently issue
additional securities for a purchase price consisting of cash, services or other
consideration that may be materially different from the purchase price of the
Units and that such securities may have rights, preferences and privileges
senior to those of the Securities. Purchaser acknowledges that it has had the
opportunity to ask representatives of the Company certain questions and request
certain additional information regarding the terms and conditions of such
investment and the finances, operations, business and prospects of the Company,
that it has had any and all such questions and requests answered to its
satisfaction, and that it understands the risks and other considerations
relating to its investment in the Securities.
(j) Reliance on Representations. Purchaser understands that the Securities
are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of the federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Purchaser's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Securities. Purchaser represents and warrants to the Company that any
information that Purchaser has heretofore furnished or furnishes herewith to the
Company is complete and accurate, and further represents and warrants that it
will notify and supply corrective information to the Company immediately upon
the occurrence of any change therein occurring prior to the Company's issuance
of the Securities. Within five (5) days after receipt of a request from the
Company, Purchaser will provide such information and deliver such documents as
may reasonably be necessary to comply with any and all laws and regulations to
which the Company is subject.
(k) No General Solicitation. Purchaser is unaware of, and in deciding to
purchase the Units is in no way relying upon, and did not become aware of the
opportunity to purchase the Units through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media, or broadcast over television or radio or the
internet, in connection with the Transaction.
(l) Legends. The certificates and agreements evidencing the Securities
shall have endorsed thereon the following legend (and appropriate notations
thereof will be made in the Company's stock transfer books), and stop transfer
instructions reflecting these restrictions on transfer will be placed with the
transfer agent of the shares of Common Stock:
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES
ACT AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM. NO TRANSFER OF THE
SECURITIES REPRESENTED HEREBY MAY BE MADE IN THE ABSENCE OF SUCH
REGISTRATION OR QUALIFICATION UNLESS THERE SHALL HAVE BEEN DELIVERED TO THE
ISSUER A WRITTEN OPINION OF UNITED STATES COUNSEL OF RECOGNIZED STANDING,
IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS.
(m) Placement and Finder's Fees. No agent, broker, investment banker,
finder, financial advisor or other person acting on behalf of Purchaser or under
its authority is or will be entitled to any broker's or finder's fee or any
other commission or similar fee, directly or indirectly, in connection with the
Transaction, and no person is entitled to any fee or commission or like payment
in respect thereof based in any way on agreements, arrangements or understanding
made by or on behalf of Purchaser.
3. Representations and Warranties of the Company. The Company represents and
warrants to Purchaser as follows:
(a) Organization and Qualification. The Company is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, with the corporate power and authority to own and operate its
business as presently conducted, except where the failure to be or have any of
the foregoing would not have a material adverse effect on the Company. The
Company is duly qualified as a foreign corporation or other entity to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified or in
good standing as would not have a material adverse effect on the Company.
(b) Authority; Validity and Effect of Agreement.
(i) The Company has the requisite corporate power and authority to
execute and deliver this Agreement, perform its obligations under this
Agreement, and engage in the Transaction. The execution and delivery of this
Agreement by the Company, the performance by the Company of its obligations
hereunder, the Transaction and all other necessary corporate action on the part
of the Company have been duly authorized by its board of directors, and no other
corporate proceedings on the part of the Company is necessary to authorize this
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Agreement or the Transaction. This Agreement has been duly and validly executed
and delivered by the Company and, assuming that it has been duly authorized,
executed and delivered by Purchaser, constitutes a legal, valid and binding
obligation of the Company, in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(ii) The shares of Common Stock issuable upon exercise of the Warrants
have been duly reserved for issuance upon exercise of the Warrants and, when
issued and paid for in accordance with the Warrants, will be duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock, with no
personal liability resulting solely from the ownership of such shares, and will
be free and clear of all liens, charges, restrictions, claims and in
encumbrances imposed by or through the Company.
(c) No Conflict; Required Filings and Consents. Neither the execution and
delivery of this Agreement by the Company nor the performance by the Company of
its obligations hereunder will: (i) conflict with the Company's Certificate of
Incorporation or Bylaws; (ii) violate any statute, law, ordinance, rule or
regulation, applicable to the Company or any of the properties or assets of the
Company; or (iii) violate, breach, be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or result in the
termination of, the acceleration of the maturity of, or the acceleration of the
performance of any obligation of, the Company, or result in the creation or
imposition of any lien upon any properties, assets or business of the Company
under, any material contract or any order, judgment or decree to which the
Company is a party or by which it or any of its assets or properties is bound or
encumbered except, in the case of clauses (ii) and (iii), for such violations,
breaches, conflicts, defaults or other occurrences which, individually or in the
aggregate, would not have a material adverse effect on its obligation to perform
its covenants under this Agreement.
(d) Placement Agent and Finder's Fees. Except as provided in Section 1(b),
neither the Company nor any of its respective officers, directors, employees or
managers, has employed any broker, finder, advisor or consultant, or incurred
any liability for any investment banking fees, brokerage fees, commissions or
finders' fees, advisory fees or consulting fees in connection with the
Transaction for which the Company has or could have any liability.
4. Indemnification. Purchaser agrees to indemnify, defend and hold harmless the
Company and its respective affiliates and agents from and against any and all
demands, claims, actions or causes of action, judgments, assessments, losses,
liabilities, damages or penalties and reasonable attorneys' fees and related
disbursements incurred by the Company that arise out of or result from a breach
of any representations or warranties made by Purchaser herein, and Purchaser
agrees that in the event of any breach of any representations or warranties made
by Purchaser herein, the Company may, at its option, forthwith rescind the sale
of the Units to Purchaser.
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5. Confidentiality. Purchaser acknowledges and agrees that:
(a) All of the information contained herein and in the other Purchase
Documents is of a confidential nature and may be regarded as material non-public
information under Regulation FD of the Securities Act.
(b) The Purchase Documents have been furnished to Purchaser by the Company
for the sole purpose of enabling Purchaser to consider and evaluate an
investment in the Company, and will be kept confidential by Purchaser and not
used for any other purpose.
(c) The information contained herein shall not, without the prior written
consent of the Company, be disclosed by Purchaser to any person or entity, other
than Purchaser's personal financial and legal advisors for the sole purpose of
evaluating an investment in the Company, and Purchaser will not, directly or
indirectly, disclose or permit Purchaser's personal financial and legal advisors
to disclose any of such information without the prior written consent of the
Company.
(d) Purchaser shall make its representatives aware of the terms of this
section and shall be responsible for any breach of this Agreement by such
representatives.
(e) Purchaser shall not, without the prior written consent of the Company,
directly or indirectly, make any statements, public announcements or release to
trade publications or the press with respect to the subject matter of the
Purchase Documents.
(f) If Purchaser decides to not pursue further investigation of the Company
or to not participate in the Transaction, Purchaser will promptly return the
Purchase Documents and any accompanying documentation to the Company.
6. Non-Public Information. Purchaser acknowledges that information concerning
the matters that are the subject matter of this Agreement may constitute
material non-public information under United States federal securities laws, and
that United States federal securities laws prohibit any person who has received
material non-public information relating to the Company from purchasing or
selling securities of the Company, or from communicating such information to any
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell securities of the Company. Accordingly,
until such time as any such non-public information has been adequately
disseminated to the public, Purchaser shall not purchase or sell any securities
of the Company, or communicate such information to any other person.
7. Registration Rights. The Company covenants and agrees as follows:
(a) For the purpose of this Section 7, the following definitions shall
apply:
(i) "Person" shall mean an individual, partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
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quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
(ii) "Register," "registered," and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or order of
effectiveness of such registration statement or document.
(iii) "Registration Statement" shall mean any registration statement
of the Company filed with the SEC pursuant to the provisions of Section 7(b) of
this Agreement, but excluding registration statements on SEC Forms ▇-▇, ▇-▇ or
any similar or successor forms, that covers the resale of the Restricted Stock
on an appropriate form then permitted by the SEC to be used for such
registration and the sales contemplated to be made thereby under the Securities
Act, or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including any pre- and post-
effective amendments thereto, in each case including the prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
(iv) "Restricted Stock" shall mean: (A) all shares of Common Stock
underlying the Class A Warrants, and (B) any additional shares of Common Stock
issued or issuable after the date hereof in respect of any of the foregoing
shares of Common Stock by way of a stock dividend or stock split; provided that,
as to any particular shares of Restricted Stock, such securities shall cease to
constitute Restricted Stock when: (x) a Registration Statement with respect to
the sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of thereunder, (y) such securities
are permitted to be transferred pursuant to Rule 144 (or any successor provision
to such rule) under the Securities Act, or (z) such securities are otherwise
freely transferable to the public without further registration under the
Securities Act.
(v) "Selling Stockholders" shall mean Purchaser and any other holder
of Restricted Stock, and their respective successors and assigns.
(b) Registration of the Shares.
(i) The Company shall use its reasonable best efforts to prepare and
file with the SEC, by August 31, 2011, a Registration Statement under the
Securities Act to permit the public sale of the Restricted Stock and use its
reasonable best efforts to cause such Registration Statement to be declared
effective by the SEC as soon as reasonably practicable thereafter. The Selling
Stockholders shall furnish such information as may be reasonably requested by
the Company in order to include such Restricted Stock in such Registration
Statement. If the Selling Stockholders decide not to include all or any portion
of their Restricted Stock in such Registration Statement, then the Company shall
have no further obligation to include such Restricted Stock in any subsequent
Registration Statement or Registration Statements as may be filed by the Company
with respect to offerings of its securities.
(ii) In the event that any registration pursuant to Section 7(b)(i)
shall be, in whole or in part, an underwritten public offering of Common Stock
on behalf of the Company, all Selling Stockholders proposing to distribute their
Restricted Stock through such underwriting shall enter into an underwriting
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agreement in customary form with the underwriter or underwriters selected for
such underwriting by the Company. If the managing underwriter thereof advises
the Company in writing that in its opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in an
orderly manner in such offering within a price range acceptable to the Company,
the Company shall include in such registration: (A) first, the securities the
Company proposes to sell, and (B) second, the Restricted Stock and any other
registrable securities eligible and requested to be included in such
registration to the extent that the number of shares to be registered under this
clause (B) will not, in the opinion of the managing underwriter, adversely
affect the offering of the securities pursuant to clause (A). In such a case,
shares shall be registered pro rata among the holders of such Restricted Stock
and registrable securities on the basis of the number of shares eligible for
registration that are owned by all such holders and requested to be included in
such registration.
(iii) Notwithstanding anything to the contrary contained herein, the
Company's obligation in Sections 7(b)(i) and (ii) above shall extend only to the
inclusion of the Restricted Stock in a Registration Statement. The Company shall
have no obligation to assure the terms and conditions of distribution, to obtain
a commitment from an underwriter relative to the sale of the Restricted Stock,
or to otherwise assume any responsibility for the manner, price or terms of the
distribution of the Restricted Stock.
(iv) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 7(b) prior to the effectiveness
of such registration without thereby incurring liability to the holders of the
Restricted Stock, regardless of whether any holder has elected to include
securities in such registration. The Registration Expenses (as defined in
Section 7(e)) of such withdrawn registration shall be borne by the Company in
accordance with Section 7(d) hereof.
(c) Registration Procedures. Whenever it is obligated to register any
Restricted Stock pursuant to this Agreement, the Company shall:
(i) prepare and file with the SEC a Registration Statement with
respect to the Restricted Stock in the manner set forth in Section 7(b) hereof
and use its reasonable best efforts to cause such Registration Statement to be
declared effective by the SEC as soon as reasonably practicable thereafter and
to remain effective until the earlier of: (A) the date all shares of Restricted
Stock covered thereby have been sold, (B) the date that Rule 144 of the
Securities Act is available for the Selling Stockholder to immediately, freely
resell without restriction all Restricted Stock covered thereby, or (C) 180 days
from the effective date of the first Registration Statement filed by the Company
with the SEC pursuant to this Agreement or, with respect to any subsequent
Registration Statement, 180 days from the effective date of such Registration
Statement;
(ii) prepare and file with the SEC such amendments (including
post-effective 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 7(c)(i)
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above and to comply with the provisions of the Act with respect to the
disposition of all Restricted Stock covered by such Registration Statement in
accordance with the intended method of disposition set forth in such
Registration Statement for such period;
(iii) furnish to the Selling Stockholders such number of copies of the
Registration Statement and the prospectus included therein (including each
preliminary prospectus) as such person may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Stock covered
by such Registration Statement;
(iv) use its reasonable best efforts to register or qualify the
Restricted Stock covered by such Registration Statement under the state
securities laws of such jurisdictions as any Selling Stockholder shall
reasonably request; provided, however, that the Company shall not be required to
qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(v) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Selling
Stockholder participating in such underwriting shall also enter into and perform
its obligations under such an agreement, as described in Section 7(b)(ii);
(vi) immediately notify each Selling Stockholder at any time when a
prospectus relating thereto is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus contained in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required or necessary to be
stated therein in order to make the statements contained therein not misleading
in light of the circumstances under which they were made. The Company will use
reasonable efforts to amend or supplement such prospectus in order to cause such
prospectus not to include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;
(vii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statements as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement;
(viii) use its reasonable best efforts to list the Restricted Stock
covered by such Registration Statement on each exchange or automated quotation
system on which similar securities issued by the Company are then listed (with
the listing application being made at the time of the filing of such
Registration Statement or as soon thereafter as is reasonably practicable); and
(ix) cooperate in the timely removal of any restrictive legends from
the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.
12
(d) Delay of Registration. No Selling Stockholder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 7.
(e) Expenses.
(i) For the purposes of this Section 7(e), the term "Registration
Expenses" shall mean: all expenses incurred by the Company in complying with
Section 7(b) of this Agreement, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees under state securities
laws, fees of the National Association of Securities Dealers, Inc., fees and
expenses of listing shares of Restricted Stock on any securities exchange or
automated quotation system on which the Company's shares are listed and fees of
transfer agents and registrars. The term "Selling Expenses" shall mean: all
underwriting discounts and selling commissions applicable to the sale of
Restricted Stock and all accountable or non-accountable expenses paid to any
underwriter in respect of such sale.
(ii) Except as otherwise provided herein, the Company will pay all
Registration Expenses in connection with the Registration Statements filed
pursuant to Section 7(b) of this Agreement. All Selling Expenses in connection
with any Registration Statements filed pursuant to Section 7(b) of this
Agreement shall be borne by the Selling Stockholders pro rata on the basis of
the number of shares registered by each Selling Stockholder whose shares of
Restricted Stock are covered by such Registration Statement, or by such persons
other than the Company (except to the extent the Company may be a seller) as
they may agree upon. Each Selling Stockholder shall be responsible for any
broker fees or transfer agent fees that it incurs in connection with the sale of
the Warrants or its Restricted Stock.
(f) Obligations of the Selling Stockholders.
(i) In connection with each registration hereunder, each Selling
Stockholder shall furnish to the Company in writing such information with
respect to it and the securities held by it and the proposed distribution by it,
as shall be reasonably requested by the Company in order to assure compliance
with applicable federal and state securities laws as a condition precedent to
including the Selling Stockholder's Restricted Stock in the Registration
Statement. Each Selling Stockholder shall also promptly notify the Company in
writing of any changes in such information included in the Registration
Statement or prospectus as a result of which there is an untrue statement of
material fact or an omission to state any material fact required or necessary to
be stated therein in order to make the statements contained therein not
misleading in light of the circumstances under which they were made.
(ii) In connection with the filing of the Registration Statement, each
Selling Stockholder shall furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with such
Registration Statement or prospectus.
(iii) In connection with each registration pursuant to this Agreement,
each Selling Stockholder agrees that it will not effect sales of any Restricted
Stock until notified by the Company of the effectiveness of the Registration
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Statement, and thereafter will suspend such sales after receipt of notice from
the Company to suspend sales to permit the Company to correct or update a
Registration Statement or prospectus or upon receipt by the Company of a threat
by the SEC or state securities commission to undertake a stop order with respect
to sales under the Registration Statement. At the end of any period during which
the Company is obligated to keep a Registration Statement current, each Selling
Stockholder shall discontinue sales of Restricted Stock pursuant to such
Registration Statement upon receipt of notice from the Company of its intention
to remove from registration the Restricted Stock covered by such Registration
Statement which remains unsold, and each Selling Stockholder shall notify the
Company in writing of the number of shares registered which remain unsold
immediately upon receipt of such notice from the Company.
(g) Information Blackout and Holdbacks.
(i) At any time when a Registration Statement effected pursuant to
Section 7(b) is effective, upon written notice from the Company to the Selling
Stockholder that the Company has determined in good faith that the sale of
Restricted Stock pursuant to the Registration Statement would require disclosure
of non-public material information, the Selling Stockholder shall suspend sales
of Restricted Stock pursuant to such Registration Statement until such time as
the Company notifies the Selling Stockholder that such material information has
been disclosed to the public or has ceased to be material, or that sales
pursuant to such Registration Statement may otherwise be resumed.
(ii) Notwithstanding any other provision of this Agreement, the
Selling Stockholder shall not effect any public sale or distribution (including
sales pursuant to Rule 144 under the Securities Act), if and when available, of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the 30 days prior to the
commencement of any primary offering to be undertaken by the Company of shares
of its unissued Common Stock ("Primary Offering"), which may also include other
securities, and ending 120 days after completion of any such Primary Offering,
unless the Company, in the case of a non-underwritten Primary Offering, or the
managing underwriter, in the case of an underwritten Primary Offering, otherwise
agree.
(h) Indemnification.
(i) The Company agrees to indemnify, to the extent permitted by law,
each Selling Stockholder, such Selling Stockholder's respective partners,
officers, directors, underwriters and each Person who controls any Selling
Stockholder (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses caused by: (x) any untrue statement of
or alleged untrue statement of material fact contained in the Registration
Statement, prospectus or preliminary prospectus or any amendment or supplement
thereto, (y) any omission of or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
(z) any violation or alleged violation by the Company of the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement (collectively, "Violations"); provided,
14
however, that the indemnity agreement contained in this Section 7(h)(i) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in for any loss, claim, damage, liability or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with information furnished by such Selling Stockholder, partner,
officer, director, underwriter or controlling person of such Selling
Stockholder.
(ii) To the extent permitted by law, each Selling Stockholder shall
indemnify and hold harmless the Company, each of its directors, its officers and
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Selling Stockholder selling
securities under the Registration Statement or any of such other Selling
Stockholder's partners, directors or officers or any person who controls such
Selling Stockholder, against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, underwriter or other such Selling Stockholder, or partner, director,
officer or controlling person of such other Selling Stockholder, may become
subject under the Securities Act, the Exchange Act or any other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent that such Violation occurs: (A) in reliance upon and in conformity
with information furnished by such Selling Stockholder to the Company; (B) as a
result of any failure to deliver a copy of the prospectus relating to such
Registration Statement, or (C) as a result of any disposition of the Restricted
Stock in a manner that fails to comply with the permitted methods of
distribution identified within the Registration Statement.
(iii) Any Person entitled to indemnification hereunder shall: (A) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party), and (B) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(iv) If the indemnification provided for in this Section 7(h) is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
15
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the violation(s) described in Section
7(h)(i) that resulted in such loss, claim, damage or liability, as well as any
other relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, however, that in no
event shall any contribution by a Selling Stockholder hereunder exceed the net
proceeds from the offering received by such Selling Stockholder.
(v) The indemnification provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities. The Company also
agrees to make such provisions as are reasonably requested by any indemnified
party for contribution to such party in the event the Company's indemnification
is unavailable for any reason.
8. Entire Agreement. This Agreement contains the entire agreement between the
parties and supersedes all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereto, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, guarantees or covenants except as specifically set
forth in this Agreement.
9. Amendment and Modification. This Agreement may not be amended, modified or
supplemented except by an instrument or instruments in writing signed by the
party against whom enforcement of any such amendment, modification or supplement
is sought.
10. Extensions and Waivers. At any time prior to the Closing, the parties hereto
entitled to the benefits of a term or provision may (a) extend the time for the
performance of any of the obligations or other acts of the parties hereto, (b)
waive any inaccuracies in the representations and warranties contained herein or
in any document, certificate or writing delivered pursuant hereto, or (c) waive
compliance with any obligation, covenant, agreement or condition contained
herein. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument or instruments in writing
signed by the party against whom enforcement of any such extension or waiver is
sought. No failure or delay on the part of any party hereto in the exercise of
any right hereunder shall impair such right or be construed to be a waiver of,
or acquiescence in, any breach of any representation, warranty, covenant or
agreement.
11. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
provided, however, that no party hereto may assign its rights or delegate its
obligations under this Agreement without the express prior written consent of
the other party hereto. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
16
12. Survival of Representations, Warranties and Covenants. The representations
and warranties contained herein shall survive the Closing and shall thereupon
terminate 18 months from the Closing, except that the representations contained
in Sections 2(a), 2(b), 2(d), 3(a) and 3(b) shall survive indefinitely. All
covenants and agreements contained herein which by their terms contemplate
actions following the Closing shall survive the Closing and remain in full force
and effect in accordance with their terms.
13. Headings; Definitions. The Section headings contained in this Agreement are
inserted for convenience of reference only and will not affect the meaning or
interpretation of this Agreement. All references to Sections contained herein
mean Sections of this Agreement unless otherwise stated. All capitalized terms
defined herein are equally applicable to both the singular and plural forms of
such terms.
14. Severability. If any provision of this Agreement or the application thereof
to any person or circumstance is held to be invalid or unenforceable to any
extent, the remainder of this Agreement shall remain in full force and effect
and shall be reformed to render the Agreement valid and enforceable while
reflecting to the greatest extent permissible the intent of the parties hereto.
15. Notices. All notices hereunder shall be sufficiently given for all purposes
hereunder if in writing and delivered personally, sent by documented overnight
delivery service or, to the extent receipt is confirmed, telecopy, telefax or
other electronic transmission service to the appropriate address or number as
set forth below:
If to the Company:
National Health Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
To the Purchaser address set forth on the signature page
hereof.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof, except to the extent that the Indiana Business Corporation Law
shall apply to the internal corporate governance of the Company.
16. Arbitration. If a dispute arises as to the interpretation of this Agreement,
it shall be decided in an arbitration proceeding conforming to the Rules of the
American Arbitration Association applicable to commercial arbitration then in
effect at the time of the dispute. The arbitration shall take place in the
Commonwealth of Pennsylvania. The decision of the arbitrators shall be
conclusively binding upon the parties and final, and such decision shall be
enforceable as a judgment in any court of competent jurisdiction. The parties
hereto shall share equally the costs of the arbitration.
17. Counterparts. This Agreement may be executed and delivered by facsimile in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same agreement.
[Remainder of page intentionally left blank]
17
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
executed this Agreement as of the date first above written.
PURCHASER
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
Address: ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
NATIONAL HEALTH PARTNERS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO
18
Exhibit A
No. 2011 - 03
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 the Termination Date
(as defined below)
This 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"), 4
million shares of common stock, $.001 par value per share, of the Company (the
"Common Stock"), at any time during the period commencing on the date hereof
(the "Commencement Date") and ending at 5:00 p.m. Eastern Standard Time on
August 19, 2011 (the "Termination Date") at an exercise price of $0.006 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.
(i) 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
19
Holder appearing on the books of the Company) accompanied by payment of the
Exercise Price in full either: (x) in cash, by bank or certified check, or by
wire transfer of immediately available funds for the Exercise Shares with
respect to which this Warrant is exercised, or (y) by any other method approved
by the board of directors of the Company (the "Board").
(ii) 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 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") shall, 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.
(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 articles 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 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
20
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 Capital 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 this Warrant or any certificates for Exercise Shares in a name other
than that of the holder of this Warrant surrendered upon the exercise of this
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.
Except as specifically provided in this Section 2, Holder shall be responsible
for the payment of all other taxes incurred in connection with the receipt,
transfer or sale of the Warrant or the Exercise Shares.
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.
21
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 this Warrant 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. This 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: (i) a merger with a wholly-owned subsidiary of the
Company and (ii) 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:
(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.
22
(ii) In the event that the Company is not the surviving corporation,
Holder shall be given at least 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 15- day period. Upon expiration of
such 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.
(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.
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(f) Whenever the Exercise Price shall be adjusted as required by the
provisions of this 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.
(b) Restrictive Legends. Unless and until otherwise permitted by this
Section 7 or unless otherwise determined by the Board, this Warrant, each
Warrant issued to the Holder or to any transferee or assignee of this Warrant,
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.
Holder shall be responsible for the payment of all costs and expenses associated
with the removal of the restrictive legend.
(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.
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8. Registration Rights. The Holder shall be entitled to the rights and subject
to the obligations set forth in Section 7 of that certain Securities Purchase
Agreement dated on or about the date hereof by and between the Company and the
Holder.
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. Entire Agreement. This Warrant contains the entire agreement between the
parties and supersedes all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereto, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, guarantees or covenants except as specifically set
forth in this Warrant.
11. Amendment and Modification. This Warrant may not be amended, modified or
supplemented except by an instrument or instruments in writing signed by the
party against whom enforcement of any such amendment, modification or supplement
is sought.
12. Extensions and Waivers. The parties hereto entitled to the benefits of a
term or provision may (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto, or (c) waive compliance with
any obligation, covenant, agreement or condition contained herein. Any agreement
on the part of a party to any such extension or waiver shall be valid only if
set forth in an instrument or instruments in writing signed by the party against
whom enforcement of any such extension or waiver is sought. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement.
13. Successors and Assigns. This Warrant shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided, however, that no party hereto may assign its rights or delegate its
obligations under this Warrant without the express prior written consent of the
other party hereto. Nothing in this Warrant, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Warrant, except as expressly provided in this Warrant.
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14. Headings; Definitions. The section headings contained in this Warrant are
inserted for convenience of reference only and will not affect the meaning or
interpretation of this Warrant. All references to sections contained herein mean
sections of this Warrant unless otherwise stated. All capitalized terms defined
herein are equally applicable to both the singular and plural forms of such
terms.
15. Severability. If any provision of this Warrant or the application thereof to
any person or circumstance is held to be invalid or unenforceable to any extent,
the remainder of this Warrant shall remain in full force and effect and shall be
reformed to render the Warrant valid and enforceable while reflecting to the
greatest extent permissible the intent of the parties hereto.
16. Notices. All notices hereunder shall be sufficiently given for all purposes
hereunder if in writing and delivered personally, sent by documented overnight
delivery service or, to the extent receipt is confirmed, telecopy, telefax or
other electronic transmission service to the appropriate address or number as
set forth below:
If to the Company:
National Health Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Holder:
To the address of the Holder appearing on the books of
the Company or the Company's transfer agent, if any.
17. Governing Law. This Warrant shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania, without regard to the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof, except to the extent that the Indiana Business Corporation Law shall
apply to the internal corporate governance of the Company.
18. Arbitration. If a dispute arises as to the interpretation of this Warrant,
it shall be decided in an arbitration proceeding conforming to the Rules of the
American Arbitration Association applicable to commercial arbitration then in
effect at the time of the dispute. The arbitration shall take place in the
Commonwealth of Pennsylvania. The decision of the arbitrators shall be
conclusively binding upon the parties and final, and such decision shall be
enforceable as a judgment in any court of competent jurisdiction. The parties
hereto shall share equally the costs of the arbitration.
19. Counterparts. This Warrant may be executed and delivered by facsimile in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company has caused these presents to be duly
executed as of this [___] day of [______________], [________].
NATIONAL HEALTH PARTNERS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: President & CEO
---------------------------------
27
NOTICE OF EXERCISE
To: National Health Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
(1) The undersigned hereby elects to purchase 3,475,000 shares of Common
Stock of the Company pursuant to the terms of the attached warrant, and tenders
herewith payment of the purchase price for such shares in full in accordance
with the terms of the warrant.
(2) In exercising the warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued upon conversion
thereof are being acquired solely for the account of the undersigned for
investment purposes only (unless such shares are subject to resale pursuant to
an effective registration statement or an exemption from registration under
applicable federal and state securities laws), 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 or any
state securities laws.
(3) Terms not otherwise defined in this Notice of Exercise shall have the
meanings ascribed to such terms in the attached warrant.
(4) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
(Signature)
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name:
--------------------------------------
Title:
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