FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMPUMED, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 95-2860434
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1230 ROSECRANS AVENUE, SUITE 1000
MANHATTAN BEACH, CALIFORNIA 90266
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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N/A
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective
pursuant to General Instruction A.(c), check the following box.
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective
pursuant to General Instruction A.(d), please check the following box.
Securities Act registration statement file number to which this
form relates: N/A
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Securities to be registered pursuant to Section 12(g) of the Act:
1998 COMMON STOCK PURCHASE WARRANTS
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(Title of Class)
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The securities to be registered hereunder are the 1998
Common Stock Purchase Warrants (the "Warrants") of CompuMed, Inc., a
Delaware corporation (the "Registrant"). The Warrants are exercisable
for shares of the Registrant's Common Stock, $0.01 par value. The
Warrants expire on January 26, 2003, and have an exercise price of
three dollars ($3.00) per share.
ITEM 2. EXHIBITS.
EXHIBIT NO. DESCRIPTION
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1. Form of Warrant certificate
1.1 Warrant Agreement, by and between the Registrant
and U.S. Stock Transfer Corporation
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
Date: March 12, 1998 COMPUMED, INC.
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(Registrant)
By: /s/ James Linesch
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James Linesch
President
<PAGE>
EXHIBIT INDEX
Exhibit Description
1. Form of Warrant certificate
1.1 Warrant Agreement, by and between the Registrant
and U.S. Stock Transfer Corporation
VOID AFTER 5 P.M. PACIFIC TIME ON JANUARY 26, 2003
1998 WARRANTS TO PURCHASE COMMON STOCK
WARRANTS CUSIP 204914 12 1
INCORPORATED IN THE STATE OF DELAWARE
THIS CERTIFIES THAT
or registered assigns, is the registered holder of the number of the
1998 Common Stock Purchase Warrants ("Warrants") set forth above. Each
Warrant entitles the holder thereof to purchase from CompuMed, Inc., a
corporation incorporated under the laws of the State of Delaware
("Company"), subject to the terms and conditions set forth hereinafter
and in the Warrant Agreement hereinafter more fully described
("Warrant Agreement"), one fully paid and nonassessable share of
Common Stock, $0.01 par value, of the Company ("Common Stock") upon
presentation and surrender of this Warrant Certificate with the
instructions for the registration and delivery of Common Stock filled
in, at any time on or after February 27, 1998 and prior to 5:00 P.M.,
Pacific time, on January 26, 2003, at the stock transfer office in
Glendale, California, of U.S. Stock Transfer Corporation, Warrant
Agent of the Company ("Warrant Agent") or of its successor warrant
agent or, if there be no successor warrant agent, at the corporate
offices of the Company, and upon payment of the Exercise Price (as
defined in the Warrant Agreement) and any applicable taxes paid either
in cash, or by certified or official bank check, payable in lawful
money of the United States of America to the order of the Company.
Each Warrant initially entitles the holder to purchase one share of
Common Stock for $3.00, subject to adjustment as provided in the
Warrant Agreement. The number and kind of securities or other property
for which the Warrants are exercisable are subject to adjustment in
certain events, such as mergers, splits, stock dividends,
recapitalizations and the like, to prevent dilution. All Warrants not
theretofore exercised will expire on January 26, 2003. The Company
shall have the right, upon 30 days' prior written notice, to reduce
the exercise price or extend the expiration date of the Warrants.
This Warrant Certificate is subject to all of the terms,
provisions and conditions of the Warrant Agreement, dated as of
February 27, 1998 ("Warrant Agreement"), between the Company and the
Warrant Agent, to all of which terms, provisions and conditions the
registered holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement is incorporated herein by reference and
made a part hereof and reference is made to the Warrant Agreement for
a full description of the rights, limitations of rights, obligations,
duties and immunities of the Warrant Agent, the Company and the
holders of the Warrant Certificates. Copies of the Warrant Agreement
are available for inspection at the stock transfer office of the
Warrant Agent or may be obtained upon written request addressed to the
Company at 1230 Rosecrans Avenue, Manhattan Beach, CA 90266,
Attention: President.
The Company shall not be required upon the exercise of the
Warrants evidenced by this Warrant Certificate to issue fractions of
Warrants, Common Stock or other securities, but shall make adjustment
therefor in cash on the basis of the current market value of any
fractional interest as provided in the Warrant Agreement.
In certain cases, the sale of securities by the Company upon
exercise of Warrants would violate the securities laws of the United
States, certain states thereof or other jurisdictions. The Company has
agreed to use its best efforts to cause a registration statement to
continue to be effective during the term of the Warrants with respect
to such sales under the Securities Act of 1933, and to take such
action under the laws of various states as may be required to cause
the sale of securities upon exercise to be lawful. However, the
Company will not be required to honor the exercise of Warrants if, in
the opinion of the Board of Directors, upon advice of counsel, the
sale of securities upon such exercise would be unlawful. In certain
cases, the Company may, but is not required to, purchase Warrants
submitted for exercise for a cash price equal to the difference
between the market price of the securities obtainable upon such
exercise and the exercise price of such Warrants.
This Warrant Certificate, with or without other Certificates,
upon surrender to the Warrant Agent, any successor warrant agent or,
in the absence of any successor warrant agent, at the corporate office
of the Company, may be exchanged for another Warrant Certificate or
Certificates evidencing in the aggregate the same number of Warrants
as the Warrant Certificate or Certificates so surrendered. If the
Warrants evidenced by this Warrant Certificate shall be exercised in
part, the holder hereof shall be entitled to receive upon surrender
hereof another Warrant Certificate or Certificates evidencing the
number of Warrants not so exercised.
No holder of this Warrant Certificate, as such, shall be entitled
to vote, receive dividends or be deemed the holder of Common Stock or
any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose whatsoever, nor shall anything
contained in the Warrant Agreement or herein be construed to confer
upon the holder of this Warrant Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at
any meeting thereof or give or withhold consent to any corporate
action (whether upon any matter submitted to stockholders at any
meeting thereof, or give or withhold consent to any merger,
recapitalization, issuance of stock, reclassification of stock, change
of par value or change of stock to no par value, consolidation,
conveyance or otherwise) or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Warrant
Agreement) or to receive dividends or subscription rights or otherwise
until the Warrants evidenced by this Warrant Certificate shall have
been exercised and the Common Stock purchasable upon the exercise
thereof shall have become deliverable as provided in the Warrant
Agreement.
If this Warrant Certificate shall be surrendered for exercise
within any period during which the transfer books for the Company's
Common Stock or other class of stock purchasable upon the exercise of
the Warrants evidenced by this Warrant Certificate are closed for any
purpose, the Company shall not be required to make delivery of
certificates for shares purchasable upon such transfer until the date
of the reopening of said transfer books.
Every holder of this Warrant Certificate by accepting the same
consents and agrees with the Company, the Warrant Agent, and with
every other holder of a Warrant Certificate that:
(a) this Warrant Certificate is transferable on the registry
books of the Warrant Agent only upon the terms and conditions set
forth in the Warrant Agreement, and
(b) the Company and the Warrant Agent may deem and treat the
person in whose name this Warrant Certificate is registered as the
absolute owner hereof (notwithstanding any notation of ownership of
other writing thereon made by anyone other than the Company or the
Warrant Agent) for all purposes whatever and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary.
The Company shall not be required to issue or deliver any
certificate for shares of Common Stock or other securities upon the
exercise of Warrants evidenced by this Warrant Certificate until any
tax which may be payable in respect thereof by the holder of this
Warrant Certificate pursuant to the Warrant Agreement shall have been
paid, such tax being payable by the holder of this Warrant Certificate
at the time of surrender.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
WITNESS the facsimile signatures of the proper officers of the
Company and its corporate seal.
Dated:
Countersigned:
U.S. STOCK TRANSFER CORPORATION
Warrant Agent
By:
Authorized Signature
COMPUMED, INC.
Attest By:
SECRETARY PRESIDENT
<PAGE>
COMPUMED, INC.
ELECTION TO PURCHASE
(To be executed by the registered holder upon exercise of Warrants)
Mailing Address:
U.S. Stock Transfer Corporation
1745 Gardena Avenue, 2nd Floor
Glendale, CA 91204
The undersigned hereby irrevocably elects to exercise the right
of purchase represented by this Warrant for, and to purchase
thereunder, ____________ shares of Common Stock, $0.01 par value per
share ("Warrant Shares"), and herewith tenders payment for such shares
in the amount of $ _______ by payment of cash or official bank or
certified check, payable to the order of CompuMed, Inc. The
undersigned requests that a certificate for such Shares be registered
in the name of
Name:
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Address:
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Delivery Address:
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(If different)
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If the number of Warrant Shares is less than all of the Warrant Shares
purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of the Warrants be
registered in the name of, and delivered to as follows: Name: Address:
Delivery Address:
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(If different)
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Dated:
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(INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF HOLDER)
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(SIGNATURE OF REGISTERED HOLDER OR ASSIGNEE)
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(SIGNATURE OF REGISTERED HOLDER OR ASSIGNEE IF CO-OWNED)
NOTE: THE ABOVE SIGNATURES MUST CORRESPOND WITH THE NAMES AS WRITTEN
UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER, UNLESS THIS WARRANT
HAS BEEN ASSIGNED.
ASSIGNMENT
(To be executed by the registered holder in order to transfer Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers _______________ Warrants represented by this Warrant
Certificate to
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(PRINT NAME AND ADDRESS OF ASSIGNEE)
and does hereby irrevocably constitute and appoint
attorney
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to transfer said Warrants on the books of the Company, with full power
of substitution.
Dated:
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(INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF HOLDER)
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(SIGNATURE OF REGISTERED HOLDER)
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(SIGNATURE OF REGISTERED HOLDER IF CO-OWNED)
NOTE: THE ABOVE SIGNATURES MUST CORRESPOND WITH THE NAMES AS WRITTEN
UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE GUARANTEED:
By
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17 Ad-5.
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AMERICAN BANK NOTE COMPANY FEB 27, 1998 fm
3504 ATLANTIC AVENUE
SUITE 12
LONG BEACH, CA 90807 055507BK
(562) 989-2333
(FAX) (562) 426-7450
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<PAGE>
Exhibit 1.1
WARRANT AGREEMENT
between
COMPUMED, INC.
and
U.S. STOCK TRANSFER CORPORATION
for the
1998 COMMON STOCK PURCHASE WARRANTS
February 27, 1998
<PAGE>
WARRANT AGREEMENT
This Agreement, dated as of February 27, 1998, is between
CompuMed, Inc., a Delaware corporation (the "Company"), and U.S. Stock
Transfer Corporation, a California corporation, (the "Warrant Agent").
The Company, at or about the time that is entering into this
Agreement, proposes to issue an aggregate of 1,925,000 Common Stock
Purchase Warrants (the "1998 Warrants") consisting of (a) up to
1,875,000 Common Stock Purchase Warrants to certain claimants and
their counsel (collectively, the "Claimants") in satisfaction of a
Final Judgment and Order of Dismissal, dated January 26, 1998,
approving a Stipulation and Settlement of Class Action and Derivative
Claims, dated as of August 7, 1997, relating to a securities class
action lawsuit filed on October 18, 1995 against the Company and
certain of its current and former officers and directors, and (b)
50,000 Common Stock Purchase Warrants to Genesis Insurance Company
("Genesis"), the insurance carrier for the Company's Directors and
Officers Liability Insurance, in satisfaction of an Agreement and
Policy Release between the Company and Genesis. Each 1998 Warrant
initially entitles the holder to purchase one share of Common Stock
for $3.00, upon the terms and conditions and subject to adjustment in
certain circumstances, all as set forth in this Agreement.
The Company wishes to retain the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of
the certificates evidencing the 1998 Warrants to be issued under this
Agreement (the "Warrant Certificates") and the exercise of the 1998
Warrants.
The Company and the Warrant Agent wish to enter into this
Agreement to set forth the terms and conditions of the 1998 Warrants
and the rights of the holders thereof ("Warrantholders") and to set
forth the respective rights and obligations of the Company and the
Warrant Agent. Each Warrantholder is an intended beneficiary of this
Agreement with respect to the rights of Warrantholders herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as
follows:
Section 1. Appointment of Warrant Agent
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The Company appoints the Warrant Agent to act as agent for
the Company in accordance with the instructions in this Agreement and
the Warrant Agent accepts such appointment.
Section 2. Date, Denomination and Execution of Warrant Certificates
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The Warrant Certificates (and the Form of Election to
Purchase and the Form of Assignment to be printed on the reverse
thereof) shall be in registered form only and shall be substantially
of the tenor and purport recited in Exhibit A hereto, and may have
such letters, numbers or other marks of identification or designation
and such legends, summaries or endorsements printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any law, or with any rule or regulation made
pursuant thereto, or with any rule or regulation of any stock exchange
on which the Common Stock or the 1998 Warrants may be listed or any
automated quotation system, or to conform to usage. Each 1998 Warrant
Certificate shall entitle the registered holder thereof, subject to
the provisions of this Agreement and the Warrant Certificate, to
purchase, on or before the close of business on January 26, 2003 (the
"Expiration Date"), one fully paid and non-assessable share of the
Company's Common Stock, par value $0.01 per share ("Common Stock") for
each 1998 Warrant evidenced by such Warrant Certificate, subject to
adjustments as provided in Section 6 hereof. The initial exercise
price shall be $3.00. The initial exercise price or the exercise price
as adjusted as provided elsewhere in this Agreement is referred to
herein as the "Exercise Price."
Each Warrant Certificate shall be dated the date on which
the Warrant Agent received valid issuance instructions from the
Company or a transferring holder of a Warrant Certificate or, if such
instructions specify another date, such other date.
For purposes of this Agreement, the term "close of business"
on any given date shall mean 5:00 p.m., Pacific time, on such date;
provided, however, that if such date is not a business day, it shall
mean 5:00 p.m., Pacific time, on the next succeeding business day. For
purposes of this Agreement, the term "business day" shall mean any day
other than Saturday, Sunday, or a day on which banking institutions in
California are authorized or obligated by law to be closed.
Each Warrant Certificate shall be executed on behalf of the
Company by a Chairman or Co-Chairman of the Board or its President or
Vice President, either manually or by facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. Each Warrant Certificate
shall be manually countersigned. In case any officer of the Company
who shall have signed any Warrant Certificate shall cease to be such
officer of the Company before countersignature by the Warrant Agent
and issue and delivery thereof by the Company, such Warrant
Certificate, nevertheless, may be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the
person who signed such Warrant Certificate had not ceased to be such
officer of the Company.
2
<PAGE>
Section 3. Subsequent Issue of Warrant Certificates
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Subsequent to their original issuance, no Warrant
Certificates shall be reissued except (i) Warrant Certificates issued
upon transfer thereof in accordance with Section 4 hereof, (ii)
Warrant Certificates issued upon any combination, split-up or exchange
of Warrant Certificates pursuant to Section 4 hereof, (iii) Warrant
Certificates issued in replacement of mutilated, destroyed, lost or
stolen Warrant Certificates pursuant to Section 5 hereof, (iv) Warrant
Certificates upon the partial exercise of Warrant Certificates
pursuant to Section 7 hereof, or (v) Warrant Certificates issued to
reflect any adjustment or change in the Exercise Price or the number
or kind of shares purchasable thereunder pursuant to Section 22
hereof. The Warrant Agent is hereby irrevocably authorized to
countersign and deliver, in accordance with the provisions of said
Sections 4, 5, 7 and 22, the new Warrant Certificates required for
purposes thereof, and the Company, whenever required by the Warrant
Agent, will supply the Warrant Agent with Warrant Certificates duly
executed on behalf of the Company for such purposes.
Section 4. Transfers and Exchanges of Warrant Certificates
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The Warrant Agent will keep or cause to be kept books for
registration of ownership and transfer of the Warrant Certificates
issued hereunder. Such registers shall show the names and addresses of
the respective holders of the Warrant Certificates and the number of
1998 Warrants evidenced by each such Warrant Certificate.
The Warrant Agent shall, from time to time, register the
transfer of any outstanding 1998 Warrants upon the books to be
maintained by the Warrant Agent for that purpose, upon surrender of
the Warrant Certificate evidencing such 1998 Warrants, with the Form
of Assignment duly filled in and executed with such signature
guaranteed by a banking institution or NASD member and such supporting
documentation as the Warrant Agent or the Company may reasonably
require, to the Warrant Agent at its stock-transfer office in
Calabasas, California at any time on or before the Expiration Date,
and upon payment to the Warrant Agent for the account of the Company
of an amount equal to any applicable transfer tax. Payment of the
amount of such tax may be made in cash, or by certified or official
bank check, payable in lawful money of the United States of America to
the order of the Company.
Upon receipt of a Warrant Certificate, with the Form of
Assignment duly filled in and executed, accompanied by payment of an
amount equal to any applicable transfer tax, the Warrant Agent shall
promptly cancel the surrendered Warrant Certificate and countersign
and deliver to the transferee a new Warrant Certificate for the number
of full 1998 Warrants transferred to such transferee; provided,
however, that in case the registered holder of any Warrant Certificate
shall elect to transfer fewer than all of the 1998 Warrants evidenced
by such Warrant Certificate, the Warrant Agent in addition shall
promptly countersign and deliver to such registered holder a new
Warrant Certificate or Certificates for the number of full 1998
Warrants not so transferred.
3
<PAGE>
Any Warrant Certificate or Certificates may be exchanged at
the option of the holder thereof for another Warrant Certificate or
Certificates of different denominations, of like tenor and
representing in the aggregate the same number of 1998 Warrants, upon
surrender of such Warrant Certificate or Certificates, with the Form
of Assignment duly filled in and executed, to the Warrant Agent, at
any time or from time to time after the close of business on the date
hereof and prior to the close of business on the Expiration Date. The
Warrant Agent shall promptly cancel the surrendered Warrant
Certificate and deliver the new Warrant Certificate pursuant to the
provisions of this Section.
Section 5. Mutilated, Destroyed, Lost or Stolen Warrant Certificates
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Upon receipt by the Company and the Warrant Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of any Warrant Certificate, and in the case
of loss, theft or destruction, of indemnity or security (such as a
surety bond) reasonably satisfactory to them, and reimbursement to
them of all reasonable expenses incidental thereto, and, in the case
of mutilation, upon surrender and cancellation of the Warrant
Certificate, the Warrant Agent shall countersign and deliver a new
Warrant Certificate of like tenor for the same number of 1998
Warrants.
Section 6. Adjustments of Number and Kind of Shares Purchasable
----------------------------------------------------
and Exercise Price
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The number and kind of securities or other property
purchasable upon exercise of a 1998 Warrant shall be subject to
adjustment from time to time upon the occurrence, after the date
hereof, of any of the following events:
A. In case the Company shall (i) pay a dividend in, or make a
distribution of, shares of Common Stock or of capital stock
convertible into Common Stock on its outstanding Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number
of such shares or (iii) combine its outstanding shares of Common Stock
into a smaller number of such shares, the total number of shares of
Common Stock purchasable upon the exercise of each 1998 Warrant
outstanding immediately prior thereto shall be adjusted so that the
holder of any Warrant Certificate thereafter surrendered for exercise
shall be entitled to receive at the same aggregate Exercise Price the
number of shares of Common Stock which such holder would have owned or
have been entitled to receive immediately following the happening of
any of the events described above had such 1998 Warrant been exercised
in full immediately prior to the happening of such event. Any
adjustment made pursuant to this Subsection shall in the case of a
stock dividend or distribution, become effective as of the record date
therefor and, in the case of a subdivision or combination, be made as
of the effective date thereof. If, as a result of an adjustment made
pursuant to this Subsection, the holder of any Warrant Certificate
thereafter surrendered for exercise shall become entitled to receive
shares of two or more classes of capital stock of the Company, the
Board of Directors of the Company (whose determination shall be
conclusive and shall be evidenced by a Board resolution filed with the
Warrant Agent) shall determine the allocation of the adjusted Exercise
Price between or among shares of such classes of capital stock.
B. In the event of any adjustment of the total number of shares
of Common Stock purchasable upon the exercise of 1998 Warrants
pursuant to Subsection A. above, the Exercise Price of each such 1998
Warrant shall be proportionately adjusted in order that the aggregate
Exercise Price of such 1998 Warrants shall remain unchanged.
C. In the event of a capital reorganization or a reclassification
of the Common Stock (except as provided in Subsection A. above or
Subsection E. below), any Warrantholder, upon exercise of 1998
Warrants, shall be entitled to receive, in substitution for the Common
Stock to which he would have become entitled upon exercise immediately
prior to such reorganization or reclassification, the shares (of any
class or classes) or other securities or property of the Company (or
cash) that he would have been entitled to receive at the same
aggregate Exercise Price upon such reorganization or reclassification
if such 1998 Warrants had been exercised immediately prior thereto;
and in any such case, appropriate provision (as determined by the
Board of Directors of the Company, whose determination shall be
conclusive and shall be evidenced by a certified Board resolution
filed with the Warrant Agent) shall be made for the application of
this Section 6 with respect to the rights and interests thereafter of
the Warrantholders (including but not limited to the allocation of the
Exercise Price between or among shares of classes of capital stock),
to the end that this Section 6 (including the adjustments of the
number of shares of Common Stock or other securities purchasable and
the Exercise Price thereof) shall thereafter be reflected, as nearly
as reasonably practicable, in all subsequent exercises of the 1998
Warrants for any shares or securities or other property (or cash)
thereafter deliverable upon the exercise of the 1998 Warrants.
D. Whenever the number of shares of Common Stock or other
securities purchasable upon exercise of a 1998 Warrant is adjusted as
provided in this Section 6, the Company will promptly file with the
Warrant Agent a certificate signed by a Chairman or Co-Chairman of the
Board or the President or a Vice President of the Company and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company setting forth the number and kind of
securities or other property purchasable upon exercise of a 1998
Warrant, as so adjusted, stating that such adjustments in the number
or kind of shares or other securities or property conform to the
requirements of this Section 6, and setting forth a brief statement of
the facts accounting for such adjustments. Promptly after receipt of
such certificate, the Company, or the Warrant Agent at the Company's
request, will deliver, by first-class, postage prepaid mail a brief
summary thereof (to be supplied by the Company) to the registered
holders of the outstanding Warrant Certificates; provided, however,
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that failure to file or to give any notice required under this
Subsection, or any defect therein, shall not affect the legality or
validity of any such adjustments under this Section 6; and provided
further, that, where appropriate, such notice may be given in advance
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and included as part of the notice required to be given pursuant to
Section 12 hereof
5
<PAGE>
E. In case of any consolidation of the Company with, or merger of
the Company into, another corporation (other than a consolidation or
merger which does not result in any reclassification or change of the
outstanding Common Stock), or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the corporation formed by such
consolidation or merger or the corporation which shall have acquired
such assets, as the case may be, and which has a class of equity
securities registered under the Securities Exchange Act of 1934, as
amended, shall execute and deliver to the Warrant Agent a supplemental
warrant agreement providing that the holder of each 1998 Warrant then
outstanding shall have the right thereafter (until the expiration of
such 1998 Warrant) to receive, upon exercise of such 1998 Warrant,
solely the kind and amount of shares of stock and other securities and
property (or cash) receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock of the
Company for which such 1998 Warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer.
Such supplemental warrant agreement shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided in this Section. The above provision of this
Subsection shall similarly apply to successive consolidations,
mergers, sales or transfers. Upon a transaction subject to this
Subsection with a corporation which does have a registered class of
equity securities, upon the effective date of such transaction the
1998 Warrants shall terminate.
The Warrant Agent shall not be under any responsibility to
determine the correctness of any provision contained in any such
supplemental warrant agreement relating to either the kind or amount
of shares of stock or securities or property (or cash) purchasable by
holders of Warrant Certificates upon the exercise of their 1998
Warrants after any such consolidation, merger, sale or transfer or of
any adjustment to be made with respect thereto, but subject to the
provisions of Section 20 hereof may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in
relying upon, a certificate of a firm of independent certified public
accountants (who may be the accountants regularly employed by the
Company) with respect thereto.
F. Irrespective of any adjustments in the number or kind of
shares issuable upon exercise of 1998 Warrants, Warrant Certificates
theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the similar
Warrant Certificates initially issuable pursuant to this Warrant
Agreement.
G. The Company may retain a firm of independent public
accountants of recognized standing, which may be the firm regularly
retained by the Company, selected by the Board of Directors of the
Company or the Executive Committee of said Board, and not disapproved
by the Warrant Agent, to make any computation required under this
Section, and a certificate signed by such firm shall in the absence of
fraud or gross negligence, be conclusive evidence of the correctness
of any computation made under this Section.
H. Upon written notice to the Warrantholders, the Company has the
right to reduce the Exercise Price or to extend the expiration date of
the 1998 Warrants.
6
<PAGE>
I. For the purpose of this Section, the term 'Common Stock' shall
mean (i) the class of stock designated as Common Stock in the
Certificate of Incorporation of the Company, as amended, at the date
of this Agreement, or (ii) any other class of stock resulting from
successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any
time as a result of an adjustment made pursuant to this Section, the
holder of any 1998 Warrant thereafter surrendered for exercise shall
become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other
shares so receivable upon exercise of any 1998 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 this Section, and all other provisions of
this Agreement, with respect to the Common Stock, shall apply on like
terms to any such other shares.
Section 7. Exercise Warrants
-----------------
The registered holder of any Warrant Certificate may
exercise the 1998 Warrants evidenced thereby, in whole at any time or
in part from time to time at any time prior to the close of business
on the Expiration Date, subject to the provisions of Section 9, at
which time the Warrant Certificates shall be and become wholly void
and of no value. 1998 Warrants may be exercised by their holders as
follows:
A. Exercise of 1998 Warrants shall be accomplished upon surrender
of the Warrant Certificate evidencing such 1998 Warrants, with the
Form of Election to Purchase on the reverse side thereof duly filled
in and executed, to the Warrant Agent at its stock transfer office in
Glendale, California, together with payment to the Warrant Agent of
the Exercise Price (as of the date of such surrender) of the 1998
Warrants then being exercised and an amount equal to any applicable
transfer tax and, if requested by the Company, any other taxes or
governmental charges which the Company may be required by law to
collect in respect of such exercise. Payment of the Exercise Price and
other amounts may be made by wire transfer of good funds, or by
certified or bank cashiers check, payable in lawful money of the
United States of America to the order of the Warrant Agent, who shall
in turn make prompt payment to the Company. No adjustment shall be
made for any cash dividends, whether paid or declared, on any
securities issuable upon exercise of a 1998 Warrant.
B. Upon receipt of a Warrant Certificate, with the Form of
Election to Purchase duly filled in and executed, accompanied by
payment of the Exercise Price of the 1998 Warrants being exercised
(and of an amount equal to any applicable taxes or government charges
as aforesaid), the Warrant Agent shall promptly request from the
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<PAGE>
Transfer Agent with respect to the securities to be issued and deliver
to or upon the order of the registered holder of such Warrant
Certificate, in such name or names as such registered holder may
designate, a certificate or certificates for the number of full shares
of the securities to be purchased, together with cash made available
by the Company pursuant to Section 8 hereof in respect of any fraction
of a share of such securities otherwise issuable upon such exercise.
If the 1998 Warrant is then exercisable to purchase property other
than securities, the Warrant Agent shall take appropriate steps to
cause such property to be delivered to or upon the order of the
registered holder of such Warrant Certificate. In addition, if it is
required by law and upon instruction by the Company, the Warrant Agent
will deliver to each Warrantholder a prospectus which complies with
the provisions of Section 10 of the Securities Act of 1933 and the
Company agrees to supply Warrant Agent with sufficient number of
prospectuses to effectuate that purpose.
C. In case the registered holder of any Warrant Certificate shall
exercise fewer than all of the 1998 Warrants evidenced by such Warrant
Certificate, the Warrant Agent shall promptly countersign and deliver
to the registered holder of such Warrant Certificate, or to his duly
authorized assigns, a new Warrant Certificate or Certificates
evidencing the number of 1998 Warrants that were not so exercised.
D. Each person in whose name any certificate for securities is
issued upon the exercise of 1998 Warrants shall for all purposes be
deemed to have become the holder of record of the securities
represented thereby as of, and such certificate shall be dated, the
date upon which the Warrant Certificate was duly surrendered in proper
form and payment of the Exercise Price (and of any applicable taxes or
other governmental charges) was made; provided however, that if the
date of such surrender and payment is a date on which the stock
transfer books of the Company are closed, such person shall be deemed
to have become the record holder of such shares as of, and the
certificate for such shares shall be dated, the next succeeding
business day on which the stock transfer books of the Company are open
(whether before, on or after the Expiration Date) and the Warrant
Agent shall be under no duty to deliver the certificate for such
shares until such date. The Company covenants and agrees that it shall
not cause its stock transfer books to be closed for a period of more
than 20 consecutive business days except upon consolidation, merger,
sale of all or substantially all of its assets, dissolution or
liquidation or as otherwise provided by law.
Section 8. Fractional Interests
--------------------
The Company shall not be required to issue any Warrant
Certificate evidencing a fraction of a 1998 Warrant or to issue
fractions of shares of securities on the exercise of the 1998
Warrants. If any fraction (calculated to the nearest one-hundredth) of
a 1998 Warrant or a share of securities would, except for the
provisions of this Section, be issuable on the exercise of any 1998
Warrant, the Company shall, at its option, either purchase such
fraction for an amount in cash equal to the fair market value of such
fraction on the trading day immediately preceding the day upon which
8
<PAGE>
such Warrant Certificate was surrendered for exercise in accordance
with Section 7 hereof or issue the required fractional 1998 Warrant or
share. For the purposes hereof, the fair market value per share of
Common Stock at any date shall be the average of the closing bid and
asked prices of the Common Stock on the relevant date, as reported by
NASDAQ, or, in the event the Common Stock is listed on a stock
exchange or on the NASDAQ National Market or Small Cap System (or
other national market system), the fair market value per share shall
be the closing price on the exchange or on the NASDAQ National Market
System or Small Cap (or other national market system), as the case may
be, as of the relevant date. If the Common Stock is traded on the OTC
Bulletin Board or quoted in the National Quotation Bureau's 'pink
sheets,' the fair market value shall be the mean of the closing bid
and asked prices on the most recent day on which such prices are
available on or preceding the relevant date. In the event the Common
Stock is no longer publicly traded, the fair market value per share
shall be determined in good faith by the Company's Board of Directors
in its sole discretion, exercised in good faith. By accepting a
Warrant Certificate, the holder thereof expressly waives any right to
receive a Warrant Certificate evidencing any fraction of a 1998
Warrant or to receive any fractional share of securities upon exercise
of a 1998 Warrant except as expressly provided in this Section 8.
Section 9. Reservation of Equity Securities
--------------------------------
The Company covenants that it will at all times reserve and
keep available, free from any preemptive rights, out of its authorized
and unissued equity securities, solely for the purpose of issue upon
exercise of the 1998 Warrants, such number of shares of equity
securities of the Company as shall then be issuable upon the exercise
of an outstanding 1998 Warrants ("Equity Securities'). The Company
covenants that all Equity Securities which shall be so issuable shall
upon such issue, be duly authorized, validly issued, fully paid and
non-assessable.
The Company covenants that if any Equity Securities,
required to be reserved for the purpose of issue upon exercise of the
1998 Warrants hereunder, require registration with or approval of any
governmental authority under any federal or state law before such
shares may be issued upon exercise of 1998 Warrants, the Company will
in good faith and as expeditiously as possible use its best efforts to
cause such securities to be duly registered, or approved, as the case
may be, and, to the extent practicable, take all such action in
anticipation of and prior to the exercise of the 1998 Warrants,
provided, however, that in no event shall such Equity Securities be
issued, and the Company is authorized to refuse to honor the exercise
of any 1998 Warrant, if such exercise would result in the opinion of
the Company's Board of Directors, upon advice of counsel in the
violation of any law; and provided further that, in the case of a 1998
Warrant exercisable solely for securities listed on a securities
exchange or for which there are at least two independent market
makers, in lieu of obtaining such registration or approval the Company
may elect to redeem 1998 Warrants submitted to the Warrant Agent for
exercise for a price equal to the difference between the aggregate low
asked price, or closing price, as the case may be, of the securities
for which such 1998 Warrant is exercisable on the date of such
submission and the Exercise Price of such 1998 Warrants; in the event
of such redemption, the Company will pay to the holder of such 1998
Warrants the above-described redemption price in cash within 10
business days after receipt of notice from the Warrant Agent that such
1998 Warrants have been submitted for exercise.
9
<PAGE>
Section 10. Reduction of Exercise Price Below Par Value
-------------------------------------------
Before taking any action that would cause an adjustment
pursuant to Section 6 hereof reducing the portion of the Exercise
Price required to purchase one share of capital stock below the then
par value (if any) of a share of such capital stock, the Company will
use its best efforts to take any corporate action which, in the
opinion of its counsel may be necessary in order that the Company may
validly and legally issue fully paid and non-assessable shares of such
capital stock.
Section 11. Payment of Taxes
----------------
The Company covenants and agrees that it will pay when due
and payable any and all federal and state documentary stamp and other
original issue taxes which may be payable in respect of the original
issuance of the Warrant Certificates, or any shares of Common Stock or
other securities upon the exercise of 1998 Warrants. The Company shall
not, however, be required (i) to pay any tax which may be payable in
respect of any transfer involved in the transfer and delivery of
Warrant Certificates or the issuance or delivery of certificates for
Common Stock or other securities in a name other than that of the
registered holder of the Warrant Certificate surrendered for purchase
or (ii) to issue or deliver any certificate for shares of Common Stock
or other securities upon the exercise of any Warrant Certificate until
any such tax shall have been paid, all such tax being payable by the
holder of such Warrant Certificate at the time of surrender.
Section 12. Notice of Certain Corporate Action
----------------------------------
In case the Company after the date hereof shall propose (i)
to offer to the holders of Common Stock, generally, rights to
subscribe to or purchase any additional shares of any class of its
capital stock, any evidences of its indebtedness or assets, or any
other rights or options or (ii) to effect any reclassification of
Common Stock (other than a reclassification involving merely the
subdivision or combination of outstanding shares of Common Stock) or
any capital reorganization, or any consolidation or merger to which
the Company is a party and for which approval of any shareholders of
the Company is required, or any sale, transfer or other disposition of
its property and assets substantially as an entirety, or the
liquidation, voluntary or involuntary dissolution or winding-up of the
Company, then, in each such case, the Company shall file with the
Warrant Agent and the Company, or the Warrant Agent on its behalf
10
<PAGE>
shall mail (by first-class, postage prepaid mail) to all registered
holders of the Warrant Certificates notice of such proposed action,
which notice shall specify the date on which the books of the Company
shall close or a record be taken for such offer of rights or options,
or the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation,
voluntary or involuntary dissolution or winding-up shall take place or
commence, as the case may be, and which shall also specify any record
date for determination of holders of Common Stock entitled to vote
thereon or participate therein and shall set forth such facts with
respect thereto as shall be reasonably necessary to indicate any
adjustments in the Exercise Price and the number or kind of shares or
other securities purchasable upon exercise of 1998 Warrants which will
be required as a result of such action. Such notice shall be filed and
mailed in the case of any action covered by clause (i) above, at least
ten days prior to the record date for determining holders of the
Common Stock for purposes of such action or, if a record is not to be
taken, the date as of which the holders of shares of Common Stock of
record are to be entitled to such offering; and, in the case of any
action covered by clause (ii) above, at least 20 days prior to the
earlier of the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation,
voluntary or involuntary dissolution or winding-up is expected to
become effective and the date on which it is expected that holders of
shares of Common Stock of record on such date shall be entitled to
exchange their shares for securities or other property deliverable
upon such reclassification, reorganization, consolidation, merger,
sale, transfer, other disposition, liquidation, voluntary or
involuntary dissolution or winding-up.
Failure to give any such notice or any defect therein shall
not affect the legality or validity of any transaction listed in this
Section 12.
Section 13. Disposition of Proceeds on Exercise of Warrant Certificates, etc.
-----------------------------------------------------------------
The Warrant Agent shall account promptly to the Company with
respect to 1998 Warrants exercised and concurrently pay to the Company
all moneys received by the Warrant Agent for the purchase of
securities or other property through the exercise of such 1998
Warrants.
The Warrant Agent shall keep copies of this Agreement
available for inspection by Warrantholders during normal business
hours at its stock transfer office. Copies of this Agreement may be
obtained upon written request addressed to the Warrant Agent at its
stock transfer office in Glendale, California.
Section 14. Warrantholder Not Deemed a Shareholder
--------------------------------------
No Warrantholder, as such, shall be entitled to vote,
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the
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<PAGE>
exercise of the 1998 Warrants represented thereby for any purpose
whatever, nor shall anything contained herein or in any Warrant
Certificate be construed to confer upon any Warrantholder, as such,
any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to
any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value or change of
stock to no par value, consolidation, merger, conveyance or
otherwise), or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 12 hereof), or
to receive dividend or subscription rights, or otherwise, until such
Warrant Certificate shall have been exercised in-accordance with the
provisions hereof and the receipt of the Exercise Price and any other
amounts payable upon such exercise by the Warrant Agent.
Section 15. Right of Action
---------------
All rights of action in respect to this Agreement are vested
in the respective registered holders of the Warrant Certificates; and
any registered holder of any Warrant Certificate, without the consent
of the Warrant Agent or of any other holder of a Warrant Certificate,
may, in his own behalf for his own benefit, enforce, and may institute
and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of his right to exercise
the 1998 Warrants evidenced by such Warrant Certificate, for the
purchase of shares of the Common Stock in the manner provided in the
Warrant Certificate and in this Agreement.
Section 16. Agreement of Holders of Warrant Certificates
--------------------------------------------
Every holder of a Warrant Certificate by accepting the same
consents and agrees with the Company, the Warrant Agent and with every
other holder of a Warrant Certificate that:
A. the Warrant Certificates are transferable on the registry
books of the Warrant Agent only upon the terms and conditions set
forth in this Agreement; and
B. the Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as the
absolute owner of the 1998 Warrant (notwithstanding any notation of
ownership or other writing thereon made by anyone other than the
Company or the Warrant Agent) for all purposes whatever and neither
the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
12
<PAGE>
Section 17. Cancellation of Warrant Certificates
------------------------------------
In the event that the Company shall purchase or otherwise
acquire any Warrant Certificate or Certificates after the issuance
thereof such Warrant Certificate or Certificates shall thereupon be
delivered to the Warrant Agent and be canceled by it and retired. The
Warrant Agent shall also cancel any Warrant Certificate delivered to
it for exercise, in whole or in part, or delivered to it for transfer,
split-up, combination or exchange. Warrant Certificates so canceled
shall be delivered by the Warrant Agent to the Company from time to
time, or disposed of in accordance with the instructions of the
Company.
Section 18. Concerning the Warrant Agent
----------------------------
The Company agrees to pay to the Warrant Agent from time to
time, on demand of the Warrant Agent, reasonable compensation for all
services rendered by it hereunder and also its reasonable expenses,
including counsel fees, and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Warrant Agent, arising
out of or in connection with the acceptance and administration of this
Agreement.
Section 19. Merger or Consolidation or Change of Name of Warrant Agent
----------------------------------------------------------
Any corporation into which the Warrant Agent may be merged
or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Warrant Agent shall be a
party, or any corporation succeeding to the corporate trust business
of the Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant
agent under the provisions of Section 21 hereof In case at the time
such successor to the Warrant Agent shall succeed to the agency
created by this Agreement, any of the Warrant Certificates shall have
been countersigned but not delivered, any such successor to the
Warrant Agent may adopt the countersignature of the original Warrant
Agent and deliver such Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such
Warrant Certificates either in the name of the predecessor Warrant
Agent or in the name of the successor Warrant Agent; and in all such
cases such Warrant Certificates shall have the full force provided in
the Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have
been countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates
so countersigned; and in case at that time any of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in
its changed name; and in all such cases such Warrant Certificates
shall have the full force provided in the Warrant Certificates and in
this Agreement.
13
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Section 20. Duties of Warrant Agent
-----------------------
The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by
all of which the Company and the holders of Warrant Certificates, by
their acceptance thereof, shall be bound:
A. The Warrant Agent may consult with counsel satisfactory to it
(who may be counsel for the Company or the Warrant Agent's in-house
counsel), and the opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with
such opinion; provided, however, that the Warrant Agent shall have
exercised reasonable care in the selection of such counsel. Fees and
expenses of such counsel to the extent reasonable, shall be paid by
the Company.
B. Whenever in the performance of its duties under this
Agreement, the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by a Chairman or co-Chairman of the Board or the
President or a Vice President or the Secretary of the Company and
delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
C. The Warrant Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
D. The Warrant Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or
in the Warrant Certificates (except its countersignature on the
Warrant Certificates and such statements or recitals as describe the
Warrant Agent or action taken or to be taken by it) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
E. The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent)
or in respect of the validity or execution of any Warrant Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Warrant Certificate; nor shall it be
14
<PAGE>
responsible for the making of any change in the number of shares of
Common Stock for which a 1998 Warrant is exercisable required under
the provisions of Section 6 or responsible for the manner, method or
amount of any such change or the ascertaining of the existence of
facts that would require any such adjustment or change (except with
respect to the exercise of 1998 Warrant Certificates after actual
notice of any adjustment of the Exercise Price); nor shall it by any
act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock to be
issued pursuant to this Agreement or any Warrant Certificate or as to
whether any shares of Common Stock will when issued, be validly
issued, fully paid and non-assessable.
F. The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or take any other action likely
to involve expense unless the Company or one or more registered
holders of Warrant Certificates shall furnish the Warrant Agent with
reasonable security and indemnity for any costs and expenses which may
be incurred. All rights of action under this Agreement or under any of
the 1998 Warrants may be enforced by the Warrant Agent without the
possession of any of the 1998 Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in
its name as Warrant Agent and any recovery of judgment shall be for
the ratable benefit of the registered holders of the Warrant
Certificates, as their respective rights or interests may appear.
G. The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the 1998
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to or otherwise act as fully and freely
as though it were not Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
H. The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from a Chairman or co-Chairman of the Board or President or a Vice
President or the Secretary or the Controller of the Company, and to
apply to such officers for advice or instructions in connection with
the Warrant Agent's duties, and it shall not be liable for any action
taken or suffered or omitted by it in good faith in accordance with
instructions of any such officer.
I. The Warrant Agent will not be responsible for any failure of
the Company to comply with any of the covenants contained in this
Agreement or in the Warrant Certificates to be complied with by the
Company.
J. The Warrant Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys, agents or employees and the
Warrant Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys, agents or
employees or for any loss to the Company resulting from such neglect
or misconduct; provided however, that reasonable care shall have been
exercised in the selection and continued employment of such attorneys,
agents and employees.
15
<PAGE>
K. The Warrant Agent will not incur any liability or
responsibility to the Company or to any holder of any Warrant
Certificate for any action taken, or any failure to take action, in
reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument reasonably
believed by the Warrant Agent to be genuine and to have been signed,
sent or presented by the proper party or parties.
L. The Warrant Agent will act hereunder solely as agent of the
Company in a ministerial capacity, and its duties will be determined
solely by the provisions hereof. The Warrant Agent will not be liable
for anything which it may do or refrain from doing in connection with
this Agreement except for its own negligence, bad faith or willful
conduct.
Section 21. Change of Warrant Agent
-----------------------
The Warrant Agent may resign and be discharged from its
duties under this Agreement upon 30 days' prior notice in writing
mailed, by registered or certified mail, to the Company. The Company
may remove the Warrant Agent or any successor warrant agent upon 30
days' prior notice in writing, mailed to the Warrant Agent or
successor warrant agent, as the case may be, by registered or
certified mail. If the Warrant Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint
a successor to the Warrant Agent and shall within 15 days following
such appointment, give notice thereof in writing to each registered
holder of the Warrant Certificates. If the Company shall fail to make
such appointment within a period of 15 days after giving notice of
such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Warrant
Agent then the Company agrees to perform the duties of the Warrant
Agent hereunder until a successor Warrant Agent is appointed. After
appointment and execution of a copy of this Agreement in effect at
that time, the successor Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor
Warrant Agent, within a reasonable time, any property at the time held
by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any
notice provided for in this Section, however, or any defect therein
shall not affect the legality or validity of the resignation or
removal of the Warrant Agent or the appointment of the successor
warrant agent, as the case may be.
16
<PAGE>
Section 22. Issuance of New Warrant Certificates
------------------------------------
Notwithstanding any of the provisions of this Agreement or
the several Warrant Certificates to the contrary, the Company may, at
its option, issue new Warrant Certificates in such form as may be
approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price or the number or kind of shares purchasable
under the several Warrant Certificates made in accordance with the
provisions of this Agreement.
Section 23. Notices
-------
Notice or demand pursuant to this Agreement to be given or
made on the Company by the Warrant Agent or by the registered holder
of any Warrant Certificate shall be sufficiently given or made if sent
by first-class or registered mail postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant
Agent) as follows:
CompuMed, Inc.
1230 Rosecrans Avenue
Manhattan Beach, CA 90266
Attention: President
Subject to the provisions of Section 21, any notice pursuant
to this Agreement to be given or made by the Company or by the holder
of any Warrant Certificate to or on the Warrant Agent shall be
sufficiently given or made if sent by first-class or registered mail
postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company) as follows:
U.S. Stock Transfer Corporation
1745 Gardena Avenue, 2nd Floor
Glendale, CA 91204
Any notice or demand authorized to be given or made to the
registered holder of any Warrant Certificate under this Agreement
shall be sufficiently given or made if sent by first-class or
registered mail postage prepaid, to the last address of such holder as
it shall appear on the registers maintained by the Warrant Agent.
Section 24. Modification of Agreement
-------------------------
The Warrant Agent may, without the consent or concurrence of
the Warrantholders, by supplemental agreement or otherwise, concur
with the Company in making any changes or corrections in this
Agreement that the Warrant Agent shall have been advised by counsel
(who may be counsel for the Company) are necessary or desirable to
17
<PAGE>
cure any ambiguity or to correct any defective or inconsistent
provision or clerical omission or mistake or manifest error herein
contained, or to make any other provisions in regard to matters or
questions arising hereunder and which shall not be inconsistent with
the provisions of the Warrant Certificates and which shall not
adversely affect the interests of the Warrantholders. As of the date
hereof this Agreement contains the entire and only agreement,
understanding, representation, condition, warranty or covenant between
the parties hereto with respect to the matters herein, supersedes any
and all other agreements between the parties hereto relating to such
matters, and may be modified or amended only by a written agreement
signed by both parties hereto pursuant to the authority granted by the
first sentence of this Section.
Section 25. Successors
----------
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Warrant Agent shall bind and
inure-to the benefit of their respective successors and assigns
hereunder.
Section 26. California Contract
-------------------
This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of
California and for all purposes shall be construed in accordance with
the laws of said State.
Section 27. Termination
-----------
This Agreement shall terminate as of the close of business
on the Expiration Date, or such earlier date upon which all 1998
Warrants shall have been exercised or redeemed, except that the
Warrant Agent shall account to the Company as to all 1998 Warrants
outstanding and all cash held by it as of the close of business on the
Expiration Date.
Section 28. Benefits of this Agreement
--------------------------
Nothing in this Agreement or in the Warrant Certificates
shall be construed to give to any person or corporation other than the
Company, the Warrant Agent, and their respective successors and
assigns hereunder and the registered holders of the Warrant
Certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, their respective successors
and assigns hereunder and the registered holders of the Warrant
Certificates.
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Section 29. Descriptive Headings
--------------------
The descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
Section 30. Counterparts
------------
This Agreement may be executed in any number of
counterparts, each of which shall be an original but such counterparts
shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above
written.
COMPUMED, INC.
By: /s/ James Linesch
----------------------
James Linesch
President
U.S. STOCK TRANSFER CORPORATION
By: /s/ Richard Brown
---------------------
Richard C Brown
Vice President
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