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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 6, 1999
MEDJET INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-11765 22-3283541
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(Commission File Number) (I.R.S. Employer Identification No.)
1090 King Georges Post Road, Suite 301
Edison, New Jersey 08837
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(Address of Principal Executive Offices) (Zip Code)
(732) 738-3990
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Registrant's Telephone Number, Including Area Code
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
Recent Private Placement.
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On December 6, 1999, Medjet Inc. (the "Registrant") completed a private
placement (the "Private Placement") of 16,000 shares of a newly created Series B
Convertible Preferred Stock, $.01 par value per share (the "Series B Preferred
Stock"), at an aggregate price of $2,000,000. Each share of Series B Preferred
Stock initially is convertible into shares of Common Stock of the Registrant at
a price of $1.25 per share, subject to antidilution adjustments. The purchasers
in the Private Placement also received warrants (the "Private Placement
Warrants") to purchase up to 1,600,000 shares of Common Stock at an initial
exercise price of $3.50 per share. The exercise price and number of shares of
Common Stock purchasable under the Private Placement Warrants also are subject
to antidilution adjustments. The Private Placement Warrants may be exercised at
any time after January 31, 2000 and until December 3, 2004.
In connection with the Private Placement, the Registrant also issued
Private Placement Warrants to purchase up to 500,000 shares of Common Stock to
Adam Smith & Company, Inc. ("ASC") pursuant to an investment banking agreement,
dated December 3, 1999, entered into between the Registrant and ASC.
Certain additional information regarding the Private Placement is included
in the Registrant's press release dated December 7, 1999 filed as an exhibit
hereto, which information is incorporated by reference.
Termination of Alcon Agreement.
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On December 13, 1999, the Registrant received notice from Nestle S.A. that
it was terminating the Exclusive License Agreement, dated July 22, 1998, with
the Registrant under which Alcon Laboratories, a Nestle affiliate, had been
granted an exclusive license to develop the Registrant's waterjet technology for
ophthalmologic applications. In accordance with the terms of the Exclusive
License Agreement, the termination will be effective three months after the
notice from Nestle.
Certain additional information regarding the termination of the Exclusive
License Agreement is included in the Registrant's press release dated December
16, 1999 filed as an exhibit hereto, which information is incorporated by
reference.
Item 7. Financial Statements, Pro Forma Financial Information And Exhibits.
(c) Exhibits
The following exhibits are filed as part of with this Form 8-K:
3.1 Certificate of Amendment of Amended and Restated Certificate
of Incorporation of the Registrant.
3.2 Certificate of Designations of Series B Convertible
Preferred Stock of Medjet Inc.
4.1 Subscription Agreement for Series B Convertible Preferred
Stock and Warrants, dated as of December 3, 1999, by and
among the Registrant and the "Investors" (as defined
therein).
4.2 Composite copy of Common Stock Purchase Warrant, dated
December 3, 1999, by the Registrant in favor of the
Investors.
4.3 Registration Rights Agreement, dated December 3, 1999, by
and among the Registrant and the Investors named therein.
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4.5 Investment Banking Agreement, dated December 3, 1999,
between the Registrant and Adam Smith & Company, Inc.
99.1 Press release of December 7, 1999 relating to the Private
Placement.
99.2 Press release of December 16, 1999 relating to the
termination of its Alcon Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MEDJET INC.
(Registrant)
Date: December 16, 1999
By: /s/ Thomas M. Handschiegel
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Name: Thomas M. Handschiegel
Title: Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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3.1 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of the Registrant.
3.2 Certificate of Designations of Series B Convertible Preferred Stock
of Medjet Inc.
4.1 Subscription Agreement for Series B Convertible Preferred Stock and
Warrants, dated as of December 3, 1999, by and among the Registrant
and the "Investors" (as defined therein).
4.2 Composite copy of Common Stock Purchase Warrant, dated December 3,
1999, by the Registrant in favor of the Investors.
4.3 Registration Rights Agreement, dated December 3, 1999, by and among
the Registrant and the Investors named therein.
4.5 Investment Banking Agreement, dated December 3, 1999, between the
Registrant and Adam Smith & Company, Inc.
99.1 Press release of December 7, 1999 relating to the Private
Placement.
99.2 Press release of December 16, 1999 relating to the termination of
the Alcon Agreement.
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EXHIBIT 3.1
CERTIFICATE OF AMENDMENT OF THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MEDJET INC.
Medjet Inc., a corporation duly organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify that:
I. The amendment to the Corporation's Amended and Restated Certificate of
Incorporation set forth below was duly adopted in accordance with the provisions
of Section 242 and has been consented to in writing by the stockholders.
II. Article Fourth of the Corporation's Amended and Restated Certificate
of Incorporation is amended to read in its entirety as follows:
FOURTH: The aggregate number of shares of capital stock which the
Corporation shall have authority to issue is 31,000,000, of which
30,000,000 shall be shares of common stock, par value $.001 per share (the
"Common Stock"), and 1,000,000 shall be shares of preferred stock, par
value $.01 per share (the "Preferred Stock"). Shares of the Preferred Stock
may be issued in one or more series. The number of shares included in any
series of Preferred Stock and the full or limited voting powers, if any,
designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations or restrictions, of
Preferred Stock or any series of Preferred Stock shall be stated in the
resolution or resolutions providing for the issuance of Preferred Stock or
such series of Preferred Stock adopted by the Board of Directors of the
Corporation (the "Board").
III. The foregoing amendment to the Corporation's Amended and Restated
Certificate of Incorporation will become effective on January 31, 2000.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by Thomas M. Handschiegel, its Secretary, this 22/nd/
day of November 1999.
MEDJET INC.
By: /s/ Thomas M. Handschiegel
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Thomas M. Handschiegel
Secretary
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EXHIBIT 3.2
CERTIFICATE OF DESIGNATIONS OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
MEDJET INC.
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Pursuant to Section 151(a) of the General
Corporation Law of the State of Delaware
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Medjet Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify:
FIRST: That pursuant to authority conferred upon the Board of Directors of
the Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151(a) of the General
Corporation Law of the State of Delaware, said Board of Directors, by unanimous
written consent without a meeting, on November 5, 1999, adopted the following
resolutions, which remain in full force and effect as of the date hereof:
WHEREAS, the Board of Directors of the Corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights, and
the liquidation preferences of any wholly unissued classes of preferred shares,
and the number of shares constituting any such classes and the designation
thereof or any of them;
WHEREAS, the Corporation heretofore has provided (i) for the issue of three
series of preferred shares of the Corporation consisting of an aggregate of not
more than 400,000 shares of Preferred Stock, and (ii) for such three series to
be designated as "Series A Preferred Stock", "Series B Preferred Stock" and
"Series C Preferred Stock" and to fix the rights, preferences, privileges,
restrictions and other matters relating to said Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock;
WHEREAS, the Board of Directors desires to provide for the issue of a
series of preferred shares of the Corporation designated as "Series B
Convertible Preferred Stock", consisting of 16,000 shares, and to fix the
rights, preferences, privileges, restrictions and other matters relating to said
Series B Convertible Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that a series of Preferred Stock of
Medjet Inc., a Delaware corporation (the "Corporation"), having the rights,
preferences,
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privileges and restrictions, and the number of shares constituting such
series and the designation of such series, set forth below be, and it
hereby is, authorized by the Board of Directors of the Corporation pursuant
to authority given by the Corporation's Certificate of Incorporation.
1. Number and Designation. This series shall consist of 16,000
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shares of Preferred Stock of the Corporation and shall be designated the
Series B Convertible Preferred Stock ("Series B Stock"). The number of
authorized shares of Series B Stock may be reduced to the extent any shares
are not issued and outstanding by further resolution duly adopted by the
Board of Directors of the Corporation and by filing amendments to the
Certificate of Designations pursuant to the provisions of the General
Corporation Law of the State of Delaware stating that such reduction has
been so authorized, but the number of authorized shares of this Series
shall not be increased except with the approval of the holders of not less
than a majority of such outstanding shares of Series B Stock. None of the
shares of Series B Stock has been issued.
2. Dividends. When and as any dividend or distribution is declared
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or paid by the Corporation on Common Stock, whether payable in cash,
property, securities or rights to acquire securities, the Series B Holders
will be entitled to participate with the holders of Common Stock in such
dividend or distribution as set forth in this Section 2. At the time such
dividend or distribution is payable to the holders of Common Stock, the
Corporation will pay to each Series B Holder such holder's share of such
dividend or distribution equal to the amount of the dividend or
distribution per share of Common Stock payable at such time multiplied by
the number of shares of Common Stock then obtainable upon conversion of
such holder's Series B Stock.
3. Voting Rights.
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A. The Series B Holders shall be entitled to notice of any
shareholders' meeting and to vote as a single class with the Common Stock
upon any matter submitted for approval by the holders of Common Stock on
the following basis: the Series B Holders shall have that number of votes
equal to the number of shares of Common Stock into which such Series B
Stock is then convertible.
B. In addition to any other rights provided by law, so long as
any Series B Stock is outstanding, the Corporation, without first obtaining
the affirmative vote or written consent of the holders of not less than a
majority of such outstanding shares of Series B Stock, will not:
(i) amend or repeal any provision of, or add any provision
to, the Corporation's Certificate of Incorporation or By-Laws if such
action would alter adversely the liquidation preferences of, or the
rights or restrictions provided for the benefit of, any Series B
Stock;
(ii) authorize or issue shares of any class or series of
stock not expressly authorized herein having any preference or
priority as to dividends, voting
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or liquidation or other rights superior to any such preference or
priority of the Series B Stock, or authorize or issue shares of stock
of any class or any bonds, debentures, notes or other obligations
convertible into or exchangeable for, or having option rights to
purchase, any shares of stock of the Corporation having any preference
or priority as to dividends, voting or liquidation or other rights
superior to any such preference or priority of the Series B Stock;
(iii) reclassify any class or series of stock junior to the
Series B Stock into stock senior to the Series B Stock with respect to
any preference or priority;
(iv) issue any class(es) or series of equity security(ies)
which (a) is (are) convertible directly or indirectly into Common
Stock at a rate related to the market price of the Common Stock or
other such variable basis (other than normal anti-dilution provisions)
or (b), in any transaction or series of transactions over a 12 month
period, constitute(s) 15% or more of the outstanding Common Stock of
the Corporation, assuming conversion or exercise in full of any
Convertible Securities included in such securities; or
(v) elect to windup, dissolve or liquidate the Corporation
or revoke any such election.
4. Preference Upon Liquidation.
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A. Upon any liquidation, dissolution or winding up of the
Corporation, each Series B Holder will be entitled to be paid, before any
distribution or payment is made upon any Junior Securities of the
Corporation, an amount in cash equal to the aggregate Liquidation Value (as
defined in Section 6C below) of all shares of Series B Stock held by such
holder, plus accrued dividends, if any; thereafter, each Series B Holder
will participate in any distribution or payment on a pro rata basis with
all Junior Securities as if the Series B Stock had been converted into
Common Stock.
B. The reorganization, consolidation or the merger of the
Corporation into or with any other corporation(s) or other entity(ies)
("Reorganization"), the sale, lease, licensing, exchange or other transfer
by the Corporation of all or any material part of its assets or the
commencement by the Corporation of a voluntary case under the United States
bankruptcy laws or any applicable bankruptcy, insolvency or similar law of
any other country, or consent to the entry of an order for relief in an
involuntary case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or
the making of an assignment for the benefit of its creditors, or an
admission in writing of its inability to pay its debts generally as they
become due, will be deemed to be a liquidation, dissolution or winding up
of the Corporation within the meaning of this Section 4; provided that,
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with the approval of the holders of not less than a majority of the
outstanding shares of Series B Stock (the "Reorganization Consent"), a
Reorganization of the Corporation shall not be deemed to be a liquidation,
dissolution or
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winding up of the Corporation within the meaning of this Section 4 if (i)
the principal agreement for such Reorganization shall expressly provide
that the Series B Stock shall become preferred stock of such surviving
entity with the equivalent rights to the rights set forth herein
("Surviving Entity Preferred Stock"), (ii) the holders of Junior Securities
receive, in exchange for such Junior Securities, common stock or preferred
stock in the surviving entity (whether or not the surviving entity is the
Corporation) of such Reorganization, or common stock or preferred stock of
another entity, which is junior as to dividends and upon liquidation,
dissolution or winding up to the Series B Stock or Surviving Entity
Preferred Stock, as applicable, and (iii) the Series B Holders shall be
entitled to receive at the option of each Series B Holder (A) either the
Surviving Entity Preferred Stock or (B) the kind and amount of shares or
other securities or property which they would have been entitled to receive
had they converted their shares of Series B Stock into shares of Common
Stock of the Corporation as of the record date for the determination of
holders of Common Stock entitled to cast their votes for or against or to
express any dissent to such Reorganization. After any such Reorganization
and Reorganization Consent, the rights of such holders of Surviving Entity
Preferred Stock with respect to the adjustment of the Conversion Price
shall be appropriately continued and preserved in order to afford, as
nearly as possible, protection against dilution of the conversion rights
and privileges comparable to those conferred herein.
5. Conversion into Conversion Stock
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A. Conversion.
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(i) At any time any Series B Holder may convert all or any
portion of such holder's shares of Series B Stock into a number of
shares of the Conversion Stock computed by multiplying the number of
shares to be converted by $125.00 and dividing the result by the
Conversion Price then in effect. For purposes of this Section,
"Conversion Stock" means the Common Stock.
(ii) Each conversion of Series B Stock will be deemed to
have been effected as of the close of business on the date on which
the certificate or certificates representing the Series B Stock to be
converted have been surrendered at the principal office of the
Corporation. At such time as such conversion has been effected, the
rights of the holder of such Series B Stock as such holder will cease
and the person or persons in whose name or names any certificate or
certificates for shares of Conversion Stock are to be issued upon such
conversion will be deemed to have become the holder or holders of
record of the shares of Conversion Stock represented thereby.
(iii) As soon as possible after a conversion has been
effected, the Corporation will deliver to the converting holder:
(a) a certificate or certificates representing the
number of shares of Conversion Stock issuable by reason of such
conversion in
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such name or names and such denomination or denominations as the
converting holder has specified; and
(b) a certificate representing any shares of Series B
Stock which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion
but which were not converted.
(iv) If any fractional share of Conversion Stock would be
issuable upon any conversion, the Corporation will pay the holder of
the Conversion Stock the fair market value of such fractional share.
(v) The issuance of certificates for shares of Conversion
Stock upon conversion of Series B Stock will be made without charge.
(vi) The Corporation will not close its books against the
transfer of Series B Stock or of Conversion Stock issued or issuable
upon conversion of Series B Stock in any manner which interferes with
the conversion of Series B Stock.
B. Conversion Price. The initial Conversion Price for the
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Series B Stock will be $1.25. In order to prevent dilution of the
conversion rights granted under this Section, the Conversion Price will be
subject to adjustment from time to time pursuant to this Section 5.
C. Subdivision or Combination of Common Stock; Dissolution.
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(i) If the Corporation at any time subdivides (by any stock
split, stock dividend or otherwise) its outstanding shares of Common
Stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision will be proportionately reduced,
and if the Corporation at any time combines (by reverse stock split or
otherwise) its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to
such combination will be proportionately increased.
(ii) In the event of a judicial or non-judicial dissolution
of the Corporation, the conversion rights and privileges of the Series
B Holders shall terminate on a date, as fixed by the Board of
Directors of the Corporation, not more than 45 days and not less than
30 days before the date of such dissolution. The reference to shares
of Common Stock herein shall be deemed to include shares of any class
into which said shares of Common Stock may be changed.
D. Other Adjustments.
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(i) General. In any case to which Section 5C hereof is not
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applicable, where the Corporation shall issue or sell shares of its
Common Stock
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after the Original Issue Date for a consideration per share less than
the Conversion Price in effect pursuant to the terms of the Series B
Stock at the time of issuance or sale of such additional shares (the
"Lower Price"), then the Conversion Price in effect hereunder shall
simultaneously with such issuance or sale be reduced to the Lower
Price. This Section 5D shall not apply to (a) issuances of Common
Stock, Convertible Securities, rights and options that have been
approved by the holders of not less than a majority of the outstanding
shares of Series B Stock, (b) issuances of Common Stock pursuant to
the exercise of options, warrants and rights outstanding on the date
hereof or issued pursuant to a plan which has been approved by the
holders of not less than a majority of the outstanding shares of
Series B Stock or (c) the issuance of warrants to a lender pursuant to
a loan to the Company with a term of not less than four years in an
amount of not less than $10,000,000 (and the issuance of shares of
Common Stock on the exercise of such lender warrants).
(ii) Convertible Securities.
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(a) In case the Corporation shall issue or sell any
securities convertible into Common Stock of the Corporation
("Convertible Securities") after the Original Issue Date, there shall
be determined the price per share for which Common Stock is issuable
upon the conversion or exchange thereof, such determination to be made
by dividing (1) the total amount received or receivable by the
Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion
or exchange thereof, by (2) the maximum number of shares of Common
Stock of the Corporation issuable upon the conversion or exchange of
all of such Convertible Securities.
(b) If the price per share so determined shall be less
than the applicable Conversion Price, then such issue or sale shall be
deemed to be an issue or sale for cash (as of the date of issue or
sale of such Convertible Securities) of such maximum number of shares
of Common Stock at the price per share so determined, provided that,
if such Convertible Securities shall by their terms provide for an
increase or increases or decrease or decreases with the passage of
time, in the amount of additional consideration, if any, to the
Corporation, or in the rate of exchange, upon the conversion or
exchange thereof, the adjusted Conversion Price shall, forthwith upon
any such increase or decrease becoming effective, be readjusted to
reflect the same, and provided further, that upon the expiration of
such rights of conversion or exchange of such Convertible Securities,
if any thereof shall not have been exercised, the adjusted Conversion
Price shall forthwith be readjusted and thereafter be the price which
it would have been had an adjustment been made on the basis that the
only shares of Common Stock so issued or sold were issued or sold upon
the conversion or exchange of such Convertible Securities, and that
they were issued or sold for the consideration actually received by
the
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Corporation upon such conversion or exchange, plus the consideration,
if any, actually received by the Corporation for the issue or sale of
all of such Convertible Securities which shall have been converted or
exchanged.
(iii) Rights and Options.
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(a) In case the Corporation shall grant any rights or
options to subscribe for, purchase or otherwise acquire Common Stock,
there shall be determined the price per share for which Common Stock
is issuable upon the exercise of such rights or options, such
determination to be made by dividing (1) the total amount, if any,
received or receivable by the Corporation as consideration for the
granting of such rights or options, plus the minimum aggregate amount
of additional consideration payable to the Corporation upon the
exercise of such rights or options, by (2) the maximum number of
shares of Common Stock of the Corporation issuable upon the exercise
of such rights or options.
(b) If the price per share so determined shall be less
than the applicable Conversion Price, then the granting of such rights
or options shall be deemed to be an issue or sale for cash (as of the
date of the granting of such rights or options) of such maximum number
of shares of Common Stock at the price per share so determined,
provided that, if such rights or options shall by their terms provide
for an increase or increases or decrease or decreases, with the
passage of time, in the amount of additional consideration payable to
the Corporation upon the exercise thereof, the adjusted Conversion
Price shall, forthwith upon any such increase or decrease becoming
effective, be readjusted to reflect the same, and provided, further,
that upon the expiration of such rights or options, if any thereof
shall not have been exercised, the adjusted Conversion Price shall
forthwith be readjusted and thereafter be the price which it would
have been had an adjustment been made on the basis that the only
shares of Common Stock so issued or sold were those issued or sold
upon the exercise of such rights or options and that they were issued
or sold for the consideration actually received by the Corporation
upon such exercise, plus the consideration, if any, actually received
by the Corporation for the granting of all such rights or options,
whether or not exercised.
E. Certain Events. If any event occurs of the type contemplated
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by the provisions of this Section 5 but not expressly provided for by such
provisions, then the Board of Directors of the Corporation will make an
appropriate adjustment in the Conversion Price so as to protect the rights
of the Series B Holders; provided that no such adjustment will increase the
Conversion Price as otherwise determined pursuant to this Section 5 or
decrease the number of shares of Conversion Stock issuable upon conversion
of each share of Series B Stock so as to protect the rights of the Series B
Holders.
F. Notices.
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(i) Immediately upon any adjustment of the
Conversion Price, the Corporation will send written notice thereof to
all Series B Holders.
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(ii) The Corporation will send written notice to all Series
B Holders at least 20 days prior to the date (a) on which the
Corporation closes its books or takes a record (1) with respect to any
dividend or distribution upon Common Stock, (2) with respect to any
pro rata subscription offer to holders of Common Stock, (3) for
--- ----
determining rights to vote on or approve any matter or (b) proposes to
take any action on which the Series B Holders are entitled to vote
pursuant to Section 3B or Section 4B.
(iii) All notices and other communications from the
Corporation to a Series B Holder shall be mailed by first class
registered or certified mail, postage prepaid, at such address as may
have been furnished to the Corporation in writing by such holder, or,
until an address is so furnished, to and at the address of the last
holder who has so furnished an address to the Corporation.
G. Converted Shares. Any shares of Series B Stock which are
----------------
converted pursuant to this Section 5 will be canceled and will not be
reissued, sold or transferred.
H. Insufficient Authorized Shares. In the event at the time any
------------------------------
Series B Holder requests conversion of any of such shares and the
Corporation does not have a sufficient (for other events) number of shares
of Common Stock authorized and unreserved to provide for conversion of all
outstanding shares of Series B Stock, the Corporation shall give at least
10 days prior written notice of such requested conversion to all other
Series B Holders in order to enable such other holders to request
conversion of their respective shares. In the event that Series B Holders
request conversion of shares or Series B Stock into a greater number of
shares of Common Stock than the Corporation then has authorized and
unreserved (for other events), the Corporation shall issue all of its
authorized and unreserved (for other events) shares of Common Stock to such
holders pro rata in accordance with the number of shares of Series B Stock
--- ----
of which each holder has requested conversion. The unconverted balance of
the shares of Series B Stock will remain as shares of Series B Stock until
the Corporation has authorized a sufficient number of additional shares of
Common Stock to provide for conversion of all shares of Series B Stock then
outstanding. In the event at the time any Series B Holder requests
conversion of any of such shares and the Corporation does not have a
sufficient number of shares of Common Stock authorized and reserved to
provide for conversion of all outstanding shares of Series B Stock, the
Corporation will promptly reserve such number of shares of authorized
Common Stock as are sufficient to provide for conversion of all outstanding
shares of Series B Stock, but if the Corporation does not have a sufficient
number of shares of Common Stock authorized and unreserved (for other
events) to reserve such number of shares, the Corporation will promptly
reserve the authorized and unreserved (for other events) Common Stock and
provide for such meetings to be held, and approvals to be solicited, as are
necessary to authorize and reserve a sufficient number of shares of Common
Stock to provide for conversion of all outstanding shares of Series B
Stock.
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6. Miscellaneous.
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A. Registration of Transfer. The Corporation will keep at its
------------------------
principal office a register for the registration of Series B Stock. Upon
the surrender of any certificate representing Series B Stock at such place,
the Corporation will, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the
aggregate the number of shares represented by the surrendered certificate.
Each such new certificate will be registered in such name and will
represent such number of shares as is requested by the holder of the
surrendered certificate and will be substantially identical in form to the
surrendered certificate.
B. Replacement. Upon receipt of evidence reasonably
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satisfactory to the Corporation (an affidavit of the registered holder will
be satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing one or more shares of Series B
Stock, and in the case of any such loss, theft or destruction, upon receipt
of indemnity reasonably satisfactory to the Corporation, the Corporation
will (at its expense) execute and deliver in lieu of such certificate a new
certificate representing the number of shares represented by such lost,
stolen, destroyed or mutilated certificate.
C. Definitions. For purposes hereof:
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"Common Stock" means the Common Stock of the Corporation, $.001
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par value per share, and includes all stock of any class or classes
(however designated) of the Company, authorized upon the Original Issue
Date or thereafter, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends
and distributions on any shares entitled to preference, and the holders of
which shall ordinarily, in the absence of contingencies, be entitled to
vote for the election of a majority of directors of the Company (even
though the right so to vote has been suspended by the happening of such a
contingency).
"Conversion Price" and "Conversion Stock" shall have the meanings
---------------- ----------------
set forth in Sections 5B and 5A(i), respectively.
"Corporation" means Medjet Inc., a Delaware corporation.
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"Junior Securities" means the Common Stock and any equity
-----------------
securities of any kind (but not including any debt securities convertible
into equity securities) which the Corporation or any Subsidiary at any time
issues or is authorized to issue other than the Series B Stock unless the
terms of such security explicitly state that such security shall be senior
to or on a par with the Series B Stock.
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"Liquidation Value" of any share of Series B Stock as of any
-----------------
particular date will be $125.00.
"Original Issue Date" means the date the Series B Stock is first
-------------------
issued.
"Person" and "person" means an individual, a partnership, a
------ ------
corporation, a limited liability company, a trust, a joint venture, an
unincorporated organization and a government or any department or agency
thereof.
"Series B Holder" shall mean a registered holder of Series B
---------------
Stock.
"Series B Stock" shall have the meaning set forth in Section 1.
--------------
"Subsidiary" means any corporation of which the shares of stock
----------
having a majority of the general voting power in electing the board of
directors are, at the time as of which any determination is being made,
owned by the Corporation either directly or indirectly through
Subsidiaries.
D. Amendment and Waiver. No amendment, modification or waiver
--------------------
will be binding or effective with respect to any provision hereof without
the prior approval of a majority of the outstanding shares of Series B
Stock; provided that notwithstanding Section 3.B above no such action will
change or affect (a) the Conversion Price of the Series B Stock or the
number of shares or the class of stock into which the Series B Stock is
convertible, (b) the Liquidation Value of the Series B Stock, or (c) the
amount of cash, securities or other property receivable or to be received
by the Series B Holders.
E. Generally Accepted Accounting Principles. When any
----------------------------------------
accounting determination or calculation is required to be made, such
determination or calculation (unless otherwise provided) will be made in
accordance with generally accepted accounting principles, consistently
applied, except that if because of a change in generally accepted
accounting principles the Corporation would have to alter a previously
utilized accounting method or policy in order to remain in compliance with
generally accepted accounting principles, such determination or calculation
will continue to be made in accordance with the Corporation's previous
accounting methods and policies unless the Corporation has obtained the
prior written consent of the holders of a majority of the Series B Stock
then outstanding.
SECOND: That said determination of the designation and the relative
powers, preferences, rights, qualifications, limitations and restrictions
thereof, relating to the Series B Convertible Preferred Stock, was duly made by
the Board of Directors pursuant to the provisions of the Amended and Restated
Certificate of Incorporation, in accordance with the provisions of Section
151(a) of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Eugene I. Gordon, its Chairman of the Board, as of this 29/th/ day of
October, 1999.
-10-
<PAGE>
MEDJET INC.
By: /s/ Eugene I. Gordon
---------------------------------------
Name: Eugene I. Gordon
Title: Chairman of the Board and Chief Executive Officer
-11-
<PAGE>
EXHIBIT 4.1
MEDJET INC.
SUBSCRIPTION AGREEMENT
FOR SERIES B CONVERTIBLE PREFERRED STOCK
AND WARRANTS
SUBSCRIPTION AGREEMENT (the "Agreement") dated as of December 3, 1999
---------
among MEDJET INC., a Delaware corporation ("Company"), and the persons who
-------
execute this agreement as investors (the "Investors").
---------
WHEREAS, the Company desires to sell to the Investors, and the
Investors desire to purchase, 16,000 shares of the Company's Series B
Convertible Preferred Stock, par value $.01 per share (the "Series B Preferred
------------------
Stock"), having the terms set forth in the Certificate of Designations of Series
- -----
B Convertible Preferred Stock attached hereto as Exhibit 1 (the "Certificate")
--------- -----------
and 1,600,000 five-year warrants, each exercisable to purchase one share of the
Company's Common Stock, par value $.001 per share, in the form attached hereto
as Exhibit 2 (the "Purchased Warrants");
--------- --------- --------
WHEREAS, in connection with the completion of the offering of the
Series B Preferred Stock to the Investors, the Company has obtained an agreement
from Eugene Gordon ("Gordon") to extend the maturity on certain payment
------
obligations aggregating $150,000 to May 15, 2000 (the "Gordon Extension");
----------------
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. Purchase and Sale of Stock.
--------------------------
1.1. Sale and Issuance of Purchased Securities. The Company shall
-----------------------------------------
sell to the Investors and the Investors shall purchase from the Company 16,000
units, each unit consisting of one share of Series B Preferred Stock and one
hundred Purchased Warrants, at a price of $125.00 per unit, or a total of 16,000
shares of Series B Preferred Stock (the "Purchased Shares") and 1,600,000
----------------
Purchased Warrants, for an aggregate purchase price of $2,000,000. The
Purchased Shares and Purchased Warrants are referred to herein collectively as
the "Purchased Securities". The number of Purchased Shares and Purchased
--------------------
Warrants to be purchased by each Investor from the Company is set forth opposite
the name of such Investor on the signature page hereof, subject to acceptance,
in whole or in part, by the Company.
1.2. Closing. The purchase and sale of the Purchased Securities
-------
hereunder shall take place at a closing (the "Closing"; the date on which the
-------
Closing occurs is hereinafter referred to as the "Closing Date"). The Closing
------------
shall take place concurrently with the execution and delivery of this Agreement
by the Investors. At the Closing:
(a) each Investor shall deliver to the Company or its designees
by wire transfer, cashier's check or certified checks from a bank
acceptable to the Company, or
<PAGE>
such other method of payment as the Company shall approve, an amount equal
to the purchase price of the portion of the Purchased Securities purchased
by such Investor, as set forth opposite its name on the signature pages
hereof;
(b) the Company shall issue and deliver to each Investor (i) a
certificate or certificates for its portion of the Purchased Shares and
(ii) warrants for the portion of the Purchased Warrants to be issued by the
Company to and purchased by such Investor, as set forth opposite such
Investor's name on the signature pages hereof;
(c) the Company and the Investors shall execute and deliver a
Registration Rights Agreement in the form attached as Exhibit 3 with
---------
respect to the Underlying Shares (as hereafter defined);
(d) the Company shall execute and deliver an investment banking
agreement with Adam Smith & Company, Inc. in the form attached as Exhibit 4
---------
providing for compensation of 500,000 warrants in the same form as the
Purchased Warrants (the "Investment Banking Warrants");
---------------------------
(e) the Company shall deliver to the Investors an Opinion of
Counsel with respect to the matters set forth on Exhibit 5;
---------
(f) the Company and Eugene Gordon shall have entered into the
Gordon Extension;
(g) the Company shall deliver to the Investors a writing, in
form and content satisfactory to the Investors, signed by the holders of a
majority of the outstanding Common Stock of the Company by which such
holders agree, if necessary, to grant their further consent and reapprove
the recent increase in the authorized number of shares of Common Stock to
30,000,000 shares; and
(h) Eugene Gordon shall deliver to the Investors such written
agreements and assurances with respect to any pending litigation against
the Company as the Investors reasonably request.
All certificates shall have all necessary stock transfer tax stamps
(purchased at the expense of the Company) affixed.
The parties agree that for purposes of allocating the price paid for
the Purchased Securities, the Purchased Warrants have a nominal value.
2. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants to the Investors as follows:
2.1. Corporate Organization; Authority; Due Authorization.
----------------------------------------------------
(a) The Company (i) is a corporation duly organized,
validly
-2-
<PAGE>
existing and in good standing under the laws of the State of Delaware, (ii) has
the corporate power and authority to own or lease its properties as and in the
places where such business is now conducted and to carry on its business as now
conducted and (iii) is duly qualified and in good standing as a foreign
corporation authorized to do business in every jurisdiction where the failure to
so qualify, individually or in the aggregate, would have a material adverse
effect on the operations, prospects, assets, liabilities, financial condition or
business of the Company (a "Company Material Adverse Effect"). Certificates of
-------------------------------
state authorities as of a recent date evidencing such valid existence or due
qualification, as the case may be, and good standing have been delivered to the
Investors.
(b) The Company (i) has the requisite corporate power
and authority to execute, deliver and perform this Agreement and the other
agreements and warrants contemplated hereby to which it is a party
(collectively, the "Other Agreements") and to incur the obligations herein and
----------------
herein and therein and (ii) has been authorized by all necessary corporate
action to execute, deliver and perform this Agreement and the Other Agreements
and to consummate the transactions contemplated hereby and thereby (the
"Contemplated Transactions"). This Agreement and each of the Other Agreements
-------------------------
is a valid and binding obligation of the Company enforceable in accordance with
its terms.
2.2. Capitalization. Immediately prior to the Closing, the
--------------
authorized capital of the Company consisted of (i) 30,000,000 shares of Common
Stock, $.001 par value per share (the "Common Stock"), of which 3,901,431 shares
------------
of Common Stock are outstanding, and (ii) 1,000,000 shares of Preferred Stock,
$.01 par value per share, of which 16,000 shares have been designated as Series
B Convertible Preferred Stock, none of which shares are outstanding. Immediately
after the Closing the capitalization of the Company will be as set forth on
Exhibit 6. The Certificate has been duly filed with and recorded by the
- ---------
Secretary of State of the State of Delaware and proof of such filing has been
delivered to the Investors. All outstanding shares were issued in compliance
with all applicable Federal and state securities laws. Except as contemplated
by this Agreement or as set forth in the disclosure letter delivered to the
Investors prior to the execution of this Agreement (the
"Company Disclosure Letter", which letter is referenced in Exhibit 7), there
-------------------------
are (i) no outstanding subscriptions, warrants, options, conversion privileges
or other rights or agreements to purchase or otherwise acquire or issue any
shares of capital stock of the Company (or shares reserved for such purpose),
(ii) no preemptive rights or rights of first refusal with respect to the
issuance of additional shares of capital stock of the Company, including the
Purchased Securities and the shares of Common Stock which the Purchased Warrants
and Investment Banking Warrants are exercisable to purchase and for which the
Purchased Shares are convertible into, and (iii) no commitments or
understandings (oral or written) of the Company to issue any shares, warrants,
options or other rights. Exhibit 6 sets forth the warrants, options, convertible
---------
securities and other stock purchase rights outstanding on the date hereof, the
number of shares of common stock issuable thereunder and the exercise or
conversion price thereof, as the case may be, (i) immediately prior to and (ii)
immediately after the Closing. To the best of the Company's knowledge, except as
set forth in the Company Disclosure Letter, none of the shares of Common Stock
are subject to any shareholders' agreement, voting trust agreement or similar
arrangement or understanding. Except as set forth in the Company Disclosure
Letter, the Company has no outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or
-3-
<PAGE>
exercisable for securities having the right to vote) with the stockholders of
the Company on any matter.
2.3. Validity of Purchased Shares. The issuance of the Purchased
----------------------------
Shares has been duly authorized, and when issued, sold and delivered in
accordance with the terms and for the consideration expressed herein, the
Purchased Shares shall be validly issued, fully paid and non-assessable.
2.4. Common Stock Issuable upon Conversion of Purchased Shares
---------------------------------------------------------
and Exercise of Purchased Warrants and Investment Banking Warrants. The
- ------------------------------------------------------------------
issuance of the shares of Common Stock (the "Underlying Shares") issuable upon
-----------------
conversion of the Purchased Shares or upon exercise of the Purchased Warrants
and the Investment Banking Warrants has been duly authorized and the Underlying
Shares have been, and at all times prior to such conversion or exercise will
have been, duly reserved for issuance upon such conversion or exercise and, when
so issued, will be validly issued, fully paid and non-assessable.
2.5. Private Offering. Neither the Company nor anyone acting on
----------------
its behalf has within the last 12 months issued, sold or offered any security of
the Company to any person or organization under circumstances that would cause
the issuance and sale of the Purchased Securities, as contemplated by this
Agreement, or the issuance of the Investment Banking Warrants to be subject to
the registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"). The Company agrees that neither the Company nor anyone
--------------
acting on its behalf will offer the Purchased Securities or Investment Banking
Warrants or any part thereof or any similar securities for issuance or sale to,
or solicit any offer to acquire any of the same from, anyone so as to make the
issuance and sale of the Purchased Securities or the issuance of the Investment
Banking Warrants subject to the registration requirements of Section 5 of the
Securities Act.
2.6. Brokers and Finders. The Company has not retained any
-------------------
investment banker, broker or finder in connection with the Contemplated
Transactions.
2.7. Subsidiaries. The Company has no Subsidiaries and does not
------------
otherwise directly or indirectly control any other business entity. As used in
this Agreement, "Subsidiary" means any corporation or other organization,
----------
whether incorporated or unincorporated, of which the Company directly or
indirectly owns or controls at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization, or any organization of which the Company is a
general partner or any limited liability company of which the Company is a
manager.
2.8. Other Interest. The Company does not own directly or
--------------
indirectly any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or entity.
2.9. Use of Proceeds. The Company will use the proceeds from the
---------------
sale of the Purchased Securities as set forth on Exhibit 8 attached hereto.
---------
-4-
<PAGE>
2.10. No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement and the
Other Agreements by the Company do not, and the performance of this Agreement
and the Other Agreements and the consummation by the Company of the Contemplated
Transactions will not, (i) conflict with or violate the Certificate of
Incorporation or By-Laws or equivalent organizational documents of the Company,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or by which any property or asset of the
Company is bound or affected, or (iii) except as set forth in the Company
Disclosure Letter, result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, result
in the loss of a material benefit under, or give to others any right of purchase
or sale, or any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of the Company pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company is a party or by which the
Company or any property or asset of the Company is bound or affected, except, in
the case of clauses (i)(y), (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not prevent or delay
consummation of any of the Contemplated Transactions in any material respect, or
otherwise prevent the Company from performing its obligations under this
Agreement or any Other Agreement in any material respect, and would not,
individually or in the aggregate, have a Company Material Adverse Effect. The
execution and delivery of this Agreement and the Other Agreements by the Company
do not, and the performance of this Agreement and the Other Agreements and the
consummation by the Company of the Contemplated Transactions will not, result in
any material breach of or constitute a material default (or an event which with
notice or lapse of time or both would become a material default) under, result
in the loss of a material benefit under, or give to others any right of purchase
or sale, or any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of the Company pursuant to, any Company
Material Contract (as hereafter defined).
(b) The execution and delivery of this Agreement and the
Other Agreements by the Company do not, and the performance of this Agreement
and the Other Agreements and the consummation by the Company of the Contemplated
Transactions will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign (each a "Governmental Entity") except for applicable
-------------------
requirements, if any, of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or any state securities or "blue sky" laws ("Blue Sky Laws").
------------ -------------
2.11. Compliance. Except as set forth in the Company Disclosure
----------
Letter the Company is not in conflict with, or in default or violation of (i)
any law, rule, regulation, order, judgment or decree applicable to the Company
or by which any property or asset of the Company is bound or affected
("Legal Requirement"), or (ii) any note, bond, mortgage, indenture, contract,
-----------------
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company is a party or by which the Company or any property or asset
of the
-5-
<PAGE>
Company is bound or affected, in each case except for any such conflicts,
defaults or violations that would not, individually or in the aggregate, have a
Company Material Adverse Effect. The Company has not received any notice or
other communication from any Governmental Body regarding any actual or possible
violation of, or failure to comply with, any Legal Requirement. The Company has
obtained all licenses, permits, and other authorizations and have taken all
actions required by applicable law or governmental regulations in connection
with their business as now conducted, where the failure to obtain any such item
or to take any such action would have, individually or in the aggregate, a
Company Material Adverse Effect. None of the Company or, to the knowledge of
Company, any director, officer, agent, employee or other person acting on behalf
of any of the foregoing has used any corporate funds for unlawful contributions,
payments, gifts or entertainment or for the payment of other unlawful expenses
relating to political activity, or made any direct or indirect unlawful payments
to governmental or regulatory officials or others. For purposes of this
Agreement "Governmental Body" shall mean any: (a) nation, state, commonwealth,
-----------------
province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government; or
(c) governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, organization, unit, body or entity and any court or other tribunal).
2.12. SEC Documents.
-------------
(a) The Company has filed all forms, reports and documents
required to be filed by it with the Securities and Exchange Commission (the
"SEC") since its formation (collectively, the "Company Reports"). As of their
--- ---------------
respective dates, the Company Reports filed prior to or on the date hereof (i)
complied as to form in all material respects with the applicable requirements of
the Securities Act, the Exchange Act, and the rules and regulations thereunder
and (ii) did not contain 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 made therein, in the light of the circumstances under which they were
made, not misleading. The representation in clause (ii) of the preceding
sentence shall not apply to any misstatement or omission in any Company Report
filed prior to the date of this Agreement which was superseded by a subsequent
Company Report filed prior to the date of this Agreement. Except as set forth in
the Company Disclosure Letter the Company is not a party or subject to any note,
bond, mortgage, indenture, contract, lease, license, agreement, understanding,
instrument, bid or proposal that is required to be described in or filed as an
exhibit to any Company Report and that is not described in or filed as an
exhibit to such Company Report as required by the Securities Act or the Exchange
Act, as the case may be. No event has occurred prior to the date hereof as a
consequence of which the Company would be required to file a Current Report on
Form 8-K pursuant to the requirements of the Exchange Act as to which such a
report has not been timely filed with the SEC. Any reports, statements and
registration statements and amendments thereto (including, without limitation,
Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current
Reports on Form 8-K, as amended) filed by the Company with the SEC after the
date hereof shall be mailed to the Investors no later than the date of such
filing.
(b) Each of the consolidated balance sheets of Company
included in or incorporated by reference into the Company Reports (including the
related notes
-6-
<PAGE>
and schedules) fairly presents the consolidated financial position of the
Company and the Company Subsidiaries as of its date, and each of the
consolidated statements of income, retained earnings and cash flows of Company
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents the results of operations, retained
earnings or cash flows, as the case may be, of the Company and the Company
Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which would not be
material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein. The Company has no liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on, or reserved against in, a balance sheet of the
Company or in the notes thereto, prepared in accordance with generally accepted
accounting principles consistently applied, except for (i) liabilities or
obligations that were so reserved on, or reflected in (including the notes to),
the consolidated balance sheet of the Company as of September 30, 1999; (ii)
liabilities or obligations arising in the ordinary course of business since
September 30, 1999; and (iii) liabilities or obligations which would not,
individually or in the aggregate, have a Company Material Adverse Effect.
2.13. Litigation. Except as set forth in the Company Disclosure
----------
Letter there are no claims, actions, suits, investigations, inquiries or
proceedings pending against the Company or, to the knowledge of the Company,
threatened against the Company, or any officer, director, employee or agent
thereof in his or her capacity as such, at law or in equity, or before or by any
court, tribunal, arbitrator, mediator or any federal or state commission, board,
bureau, agency or instrumentality, that, individually or in the aggregate, are
reasonably likely to have a Company Material Adverse Effect.
2.14. Absence of Certain Changes. Except as specifically
--------------------------
contemplated by this Agreement or set forth in the Company Disclosure Letter,
since September 30, 1999, there has not been (i) any event, occurrence, fact,
condition, change, development or effect ("Event") that would reasonably be
-----
expected to have a Company Material Adverse Effect; (ii) any declaration,
payment or setting aside for payment of any dividend (except to Company wholly
owned by Company) or other distribution or any redemption, purchase or other
acquisition of any shares of capital stock or securities of Company or any
Company Subsidiary; (iii) any return of any capital or other distribution of
assets to stockholders of Company or any Company Subsidiary (except to Company
wholly owned by Company); (iv) any acquisition (by merger, consolidation,
acquisition of stock or assets or otherwise) of any person or business; (v) any
other action or agreement or undertaking by Company or any Company Subsidiary
that, if taken or done on or after the date hereof would reasonably be expected
to have a Company Material Adverse Effect; or (vi) any material change in its
accounting principles, practices or methods. Without limiting foregoing, since
September 30, 1999, there has been no Company Material Adverse Effect affecting
the Company's financial condition as of the date of this Agreement or results of
operations through the date of this Agreement which would be reflected in its
audited financial statements to be prepared for and through December 31, 1999.
2.15. Taxes.
-----
-7-
<PAGE>
(a) The Company has filed all material tax returns and
reports required to be filed by it, or requests for extensions to file such
returns or reports have been timely filed and granted and have not expired, and
all tax returns and reports are complete and accurate in all respects, except to
the extent that such failures to file, have extensions granted that remain in
effect or be complete and accurate in all respects, as applicable, individually
or in the aggregate, would not have a Company Material Adverse Effect. The
Company has paid all taxes shown as due on such tax returns and reports. The
most recent financial statements contained in the Company Reports reflect an
adequate reserve for all taxes payable by the Company for all taxable periods
and portions thereof accrued through the date of such financial statements, and
no deficiencies for any taxes have been proposed, asserted or assessed against
the Company that are not adequately reserved for, except for inadequately
reserved taxes and inadequately reserved deficiencies that would not,
individually or in the aggregate, have a Company Material Adverse Effect. No
requests for waivers of the time to assess any taxes against the Company have
been granted or are pending, except for requests with respect to such taxes that
have been adequately reserved for in the most recent financial statements
contained in the Company Reports, or, to the extent not adequately reserved, the
assessment of which would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(b) As used in this Section 2.15, "taxes" shall include all
Federal, state, local and foreign income, franchise, property, sales, use,
excise and other taxes, including obligations for withholding taxes from
payments due or made to any other person and any interest, penalties or
additions to tax.
2.16. Employee Benefit Plans. Except as would not, individually
----------------------
or in the aggregate, have a Company Material Adverse Effect, (i) all employee
benefit plans or programs maintained for the benefit of the current or former
employees or directors of the Company that are sponsored, maintained or
contributed to by the Company, or with respect to which the Company has any
liability, including without limitation any such plan that is an "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), are in compliance with all applicable
-----
requirements of law, including ERISA and the Code, and (ii) the Company has no
liabilities or obligations with respect to any such employee benefit plans or
programs, whether accrued, contingent or otherwise, nor to the knowledge of the
Company are any such liabilities or obligations expected to be incurred. The
execution of, and performance of the transactions contemplated in, this
Agreement or the other Agreements will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any benefit
plan, policy, arrangement or agreement or any trust or loan that will or may
result in any payment (whether of severance pay, bonus, golden parachute or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any
employee. The only severance agreements or severance policies applicable to the
Company are the agreements and policies specifically referred to in the Company
Disclosure Letter.
2.17. Labor Matters. The Company has no material obligations,
-------------
contingent or otherwise, under any employment, severance or consulting
agreement, any collective bargaining agreement or any other contract with a
labor union or other labor or employee group. To the knowledge of Company, as
of the date of this Agreement, there are no
-8-
<PAGE>
negotiations, demands or proposals that are presently pending or overtly
threatened by or on behalf of any labor union with respect to the unionizing of
employees of Company. There is no labor strike, labor dispute, work slowdown,
stoppage or lockout actually pending or, to the knowledge of the Company,
threatened against or affecting the Company, except as would not, individually
or in the aggregate, have a Company Material Adverse Effect. There is no unfair
labor practice or labor arbitration proceeding pending or, to the knowledge of
the Company, threatened against the Company relating to its business, except for
any such proceeding which would not have a Company Material Adverse Effect.
2.18. Contracts. Except as set forth in the Company Reports or
---------
the Company Disclosure Letter, the Company is not a party or subject to, and its
property and assets are not bound or affected by, any of the following (each, a
"Company Material Contract"):
-------------------------
(a) any agreement or understanding with an affiliate of the Company;
(b) any contract relating to the acquisition, transfer, use,
development, sharing or license of any technology or any Proprietary Asset
(as hereafter defined);
(c) any single note, bond, mortgage, indenture, contract, lease,
license, agreement, understanding, instrument, bid or proposal pursuant to
which the financial obligation of the Company thereunder or applicable to
the assets or properties of the Company subject thereto could exceed
$10,000 after the Closing Date;
(d) any single contract, bid or offer to which the Company is a party
or by which the Company is bound to provide services to third parties which
provides for recurring monthly revenues to the Company in excess of
$10,000;
(e) any contract creating or involving any agency relationship,
distribution arrangement or franchise relationship;
(f) any contract which includes any exclusivity restrictions
applicable to the Company or imposes any restriction on the Company's right
or ability (A) to compete with any person, (B) to acquire any product or
other asset or any services from any other person, to sell any product or
other asset to or perform any services for any other person or to transact
business or deal in any other manner with any other person, or (C) develop
or distribute any technology;
(g) any contract relating to the acquisition, issuance or transfer of
any securities, except as contemplated hereunder;
(h) any contract involving or incorporating any guaranty, any pledge,
any performance or completion bond, any indemnity or any surety
arrangement;
(i) any contract creating or relating to any partnership or joint
venture or any sharing of revenues, profits, losses, costs or liabilities;
-9-
<PAGE>
(j) any contract constituting or relating to a Government Contract
(as hereafter defined) or Government Bid (as hereafter defined);
(k) any contract that was entered into outside the ordinary course
of business or was inconsistent with the Company's past practices;
(l) any other Company Contract that has a term of more than 120 days
and that may not be terminated by the Company (without penalty) within 120
days after the delivery of a termination notice by the Company; or
(m) any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation that is
material to the ownership or operation of any of the Company.
The Company has made available to the Investors true and accurate copies of the
Company Material Contracts. Except as set forth in the Company Disclosure
Letter all such Company Material Contracts, are valid and binding and are or
will be in full force and effect and enforceable in accordance with their
respective terms. Except as set forth in the Company Disclosure Letter no
consent of any person is needed in order that each such Company Material
Contract shall continue in full force and effect in accordance with its terms
without penalty, acceleration or rights of early termination by reason of the
consummation of the transactions contemplated by this Agreement, except for
consents the absence of which, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. The Company
is not in violation or breach of or default under any such Company Material
Contract, nor to the Company's knowledge is any other party to any such Company
Material Contract in violation or breach of or default under any such Company
Material Contract, in each case where such violation or breach would give rise
to a right of termination or modification. For purposes of this Agreement
"Government Bid" shall mean any quotation, bid or proposal submitted to any
--------------
Governmental Body or any proposed prime contractor or higher-tier subcontractor
of any Governmental Body. For purposes of this Agreement "Government Contract"
-------------------
shall mean any prime contract, subcontract, letter contract, purchase order or
delivery order executed or submitted to or on behalf of any Governmental Body or
any prime contractor or higher-tier subcontractor, or under which any
Governmental Body or any such prime contractor or subcontractor otherwise has or
may acquire any right or interest.
2.19. Environmental Matters. As of the date of this Agreement,
---------------------
(i) the Company is in compliance with all applicable Environmental Laws (as
hereinafter defined), (ii) there is no civil, criminal or administrative
judgment, action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter pending or, to the knowledge
of the Company, threatened against the Company or any of its respective
properties pursuant to Environmental Laws, and (iii) there are no past or
present Events which, reasonably may be expected to prevent compliance with, or
which have given rise to or will give rise to liability on the part of the
Company under, Environmental Laws, except, in each case, for any deviations from
the foregoing which, individually or in the aggregate, do not and would not
reasonably be expected to have a Company Material Adverse Effect. The Company
has provided or made
-10-
<PAGE>
available to the Investors prior to the date of this Agreement true, accurate
and complete copies of all environmental reports in the possession of the
Company relating to any of their respective past or present properties. As used
herein, the term "Environmental Laws" shall mean laws relating to pollution,
------------------
waste control, the generation, presence or disposal of asbestos, hazardous or
toxic wastes or substances, the protection of the environment, environmental
activity or public health and safety.
2.20. Proprietary Assets. (a) For purposes of this Agreement
------------------
"Proprietary Assets" shall mean any: (i) patent, patent application, trademark
- -------------------
(whether registered or unregistered), trademark application, trade name,
fictitious business name, service mark (whether registered or unregistered),
service mark application, copyright (whether registered or unregistered),
copyright application, maskwork, maskwork application, trade secret, know-how,
customer list, franchise, system, computer software, computer program,
invention, design, blueprint, engineering drawing, proprietary product,
technology, proprietary right or other intellectual property right or intangible
asset; or (ii) right to use or exploit any of the foregoing.
(b) The Company Disclosure Letter sets forth, with respect
to each Proprietary Asset of the Company registered with any Governmental Body
or for which an application has been filed with any Governmental Body, (i) a
brief description of such Proprietary Asset and (ii) the names of the
jurisdictions covered by the applicable registration or application. The Company
Disclosure Letter identifies and provides a brief description of all other
Proprietary Assets owned by the Company, and identifies and provides a brief
description of each Proprietary Asset licensed to the Company by any person
(except for any Proprietary Asset that is licensed to the Company under any
third party software license generally available to the public at a cost of less
than $10,000), and identifies the license agreement under which such Proprietary
Asset is being licensed to the Company. Except as set forth in the Company
Disclosure Letter, the Company: has good, valid and marketable title to all of
the Proprietary Assets identified in the Company Disclosure Letter (including
without limitation all Proprietary Assets used in the business of the Company
and held in the name of Eugene Gordon), free and clear of all liens and other
encumbrances; has a valid right to use all Proprietary Assets identified in the
Company Disclosure Letter; and is not obligated to make any payment to any
person for the use of any Proprietary Asset. Except as set forth in the Company
Disclosure Letter, the Company has not developed jointly with any other person
any Proprietary Asset with respect to which such other person has any rights.
(c) The Company has taken all measures and precautions
necessary to protect and maintain the confidentiality and secrecy of all
Proprietary Assets of the Company (except Proprietary Assets whose value would
be unimpaired by public disclosure) and otherwise to maintain and protect the
value of all Proprietary Assets of the Company. Except as set forth in the
Company Disclosure Letter, the Company has not (other than pursuant to license
agreements identified in the Company Disclosure Letter) disclosed or delivered
to any person, or permitted the disclosure or delivery to any person of, (i) the
source code, or any portion or aspect of the source code, of any Proprietary
Asset, or (ii) the object code, or any portion or aspect of the object code, of
any Proprietary Asset of the Company.
(d) Except as set forth in the Company Disclosure Letter,
(i) to
-11-
<PAGE>
the best of the knowledge of the Company, none of the Proprietary Assets of the
Company infringes or conflicts with any Proprietary Asset owned or used by any
other Person, (ii) the Company is not infringing, misappropriating or making any
unlawful use of, and the Company has not at any time infringed, misappropriated
or made any unlawful use of, or received any notice or other communication (in
writing or otherwise) of any actual, alleged, possible or potential
infringement, misappropriation or unlawful use of, any Proprietary Asset owned
or used by any other Person, and (iii) to the best of the knowledge of the
Company, no other Person is infringing, misappropriating or making any unlawful
use of, and no Proprietary Asset owned or used by any other person infringes or
conflicts with, any Proprietary Asset of the Company.
(e) Except as set forth in the Company Disclosure Letter,
there has not been any claim by any customer or other person alleging that any
Proprietary Asset of the Company (including each version thereof that has ever
been licensed or otherwise made available by the Company to any person) does not
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the best of the knowledge of the Company, there
is no basis for any such claim.
(f) The Proprietary Assets of the Company constitute all
the Proprietary Assets necessary to enable the Company to conduct its businesses
in the manner in which such businesses have been and are being conducted or are
expected to be conducted pursuant to the Business Plan included in the Company
Disclosure Letter. Except as set forth in the Company Disclosure Letter (i) the
Company has not licensed any of its Proprietary Assets to any person on an
exclusive, semi-exclusive or royalty-free basis, and (ii) the Company has not
entered into any covenant not to compete or contract limiting their ability to
exploit fully any of its Proprietary Assets or to transact business in any
market or geographical area or with any person.
2.21. No Adverse Actions. Except as set forth in the Company
------------------
Disclosure Letter, there is no existing, pending or, to the knowledge of the
Company, threatened termination, cancellation, limitation, modification or
change in the business relationship of Company, with any supplier, customer or
other person except such as would not reasonably be expected, individually or in
the aggregate, to have a Company Material Adverse Effect.
2.22. Insurance. The Company maintains with sound and reputable
---------
insurance companies all insurance customarily maintained by comparable
companies.
2.23. Disclosure. No representation or warranty of the Company
----------
herein and no information contained or referenced in the Company Reports or
Company Disclosure Letter contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements contained herein or therein not misleading.
-12-
<PAGE>
3. Representations and Warranties of the Investors. Each Investor
-----------------------------------------------
represents and warrants to the Company as follows:
3.1. Authorization. When executed and delivered by such
-------------
Investor, this Agreement will constitute the valid and binding obligation of
such Investor.
4. Securities Laws.
---------------
4.1. Securities Laws Representations and Covenants of Investors.
----------------------------------------------------------
(a) This Agreement is made with each Investor in reliance
upon such Investor's representation to the Company, which by such Investor's
execution of this Agreement such Investor hereby confirms, that the Purchased
Securities to be received by such Investor will be acquired for investment for
such Investor's own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof such that such Investors would
constitute an "underwriter" under the Securities Act, and that such Investor has
no present intention of selling, granting any participation in or otherwise
distributing the Purchased Securities. By executing this Agreement, each
Investor further represents that such Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person with respect to, any of the
Purchased Securities.
(b) Each Investor understands and acknowledges that the
offering of the Purchased Securities pursuant to this Agreement will not be
registered under the Securities Act or qualified under any Blue Sky Laws on the
grounds that the offering and sale of the Purchased Securities are exempt from
registration and qualification, respectively, under the Securities Act and the
Blue Sky Laws, and that the Company's reliance upon such exemption is predicated
upon such Investor's representations set forth in this Agreement.
(c) Each Investor covenants that, unless the Purchased
Shares, the Purchased Warrants, the Underlying Shares or any other shares of
capital stock of the Company received in respect of the foregoing have been
registered pursuant to the Registration Rights Agreement being entered into
among the Company and the Investors, such Investor will not dispose of such
securities unless and until such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with an opinion of
counsel reasonably satisfactory in form and substance to the Company to the
effect that (x) such disposition will not require registration under the
Securities Act and (y) appropriate action necessary for compliance with the
Securities Act and any applicable state, local or foreign law has been taken;
provided, however, that an Investor may dispose of such securities without
- -------- -------
providing the opinion referred to above if the Company has been provided with
adequate assurance that such disposition is made in compliance with Rule 144
under the Securities Act (or any similar or analogous rule) and any applicable
state, local or foreign law.
(d) In connection with the investment representations made
herein, each Investor represents that (i) such Investor is able to fend for
itself in the Contemplated Transactions; (ii) such Investor has such knowledge
and experience in financial
-13-
<PAGE>
and business matters as to be capable of evaluating the merits and risks of such
Investor's prospective investment in the Purchased Securities; (iii) such
Investor has the ability to bear the economic risks of such Investor's
prospective investment and can afford the complete loss of such investment; (iv)
such Investor has been furnished with and has had access to such information as
is in the Company Disclosure Letter together with the opportunity to obtain such
additional information as it requested to verify the accuracy of the information
supplied; and (v) such Investor has had access to officers of the Company and an
opportunity to ask questions of and receive answers from such officers and has
had all questions that have been asked by such Investor satisfactorily answered
by the Company.
(e) Each Investor further represents by execution of this
Agreement that such Investor qualifies as an "accredited investor" as such term
is defined under Rule 501 promulgated under the Securities Act. Any Investor
that is a corporation, a partnership, a trust or other business entity further
represents by execution of this Agreement that it has not been organized for the
purpose of purchasing the Purchased Securities.
(f) By acceptance hereof, each Investor agrees that the
Purchased Shares, the Purchased Warrants, the Underlying Shares and any shares
of capital stock of the Company received in respect of the foregoing held by it
may not be sold by such Investor without registration under the Securities Act
or an exemption therefrom, and therefore such Investor may be required to hold
such securities for an indeterminate period.
4.2. Legends. All certificates for the Purchased Shares,
-------
Purchased Warrants and the shares of Common Stock issued upon conversion or
exercise thereof, and each certificate representing any shares of capital stock
of the Company received in respect of the foregoing, whether by reason of a
stock split or share reclassification thereof, a stock dividend thereon or
otherwise and each certificate for any such securities issued to subsequent
transferees of any such certificate (unless otherwise permitted herein) shall
bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE [SECURITIES REPRESENTED BY
THIS WARRANT] HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES [WARRANTS] MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT."
In addition, such certificates shall bear any legend that, in the opinion of the
Company's counsel, is required pursuant to any state, local or foreign law
governing the Purchased Shares, the Purchased Warrants or the Underlying Shares.
5. Additional Covenants of the Company.
-----------------------------------
5.1. Reports, Information, Shares.
----------------------------
-14-
<PAGE>
(a) The Company shall cooperate with each Investor in
supplying such information as may be reasonably requested by such Investor to
complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption,
presently existing or hereafter adopted, from the Securities Act for the sale of
any of the Purchased Shares, the Purchased Warrants, the Underlying Shares and
shares of capital stock of the Company received in respect of the foregoing.
(b) The Company shall deliver to each Investor,
contemporaneously with delivery to other holders of Common Stock, a copy of each
report of the Company delivered to holders of Common Stock.
(c) The Company shall keep reserved for issuance a
sufficient number of authorized but unissued shares of Common Stock so that the
Purchased Warrants may be exercised to purchase, and the Purchased Shares may be
converted into, Common Stock at any time.
5.2. Expenses; Indemnification.
-------------------------
(a) The Company agrees to pay on the Closing Date and save
the Investors harmless against liability for the payment of any stamp or similar
taxes (including interest and penalties, if any) that may be determined to be
payable in respect of the execution and delivery of this Agreement, the issue
and sale of any Purchased Securities, the expense of preparing and issuing the
Purchased Securities, the cost of delivering the Purchased Securities purchased
by each Investor to such Investor's home office, insured to such Investor's
satisfaction, and the costs and expenses incurred in the preparation of all
certificates and letters on behalf of the Company and of the Company's
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with. Each Investor shall be responsible
for its out-of-pocket expenses arising in connection with the Contemplated
Transactions, including, without limitation, fees and disbursements of counsel
to the Investors and due diligence expenses of the Investors.
(b) The Company hereby agrees and acknowledges that the
Investors have been induced to enter into this Agreement and to purchase the
Purchased Securities hereunder, in part, based upon the representations,
warranties and covenants of the Company contained herein. The Company hereby
agrees to pay, indemnify and hold harmless the Investors and any director,
officer or employee of any Investor against all claims, losses and damages
resulting from any and all legal or administrative proceedings, including
without limitation, reasonable attorneys' fees and expenses incurred in
connection therewith (collectively, "Loss"), resulting from a breach by the
----
Company of any representation or warranty of the Company contained herein or the
failure of the Company to perform any covenant made herein.
(c) As soon as reasonably practicable after receipt by an
Investor of notice of any Loss in respect of which the Company may be liable
under this Section 5.2, the Investor shall give notice thereof to the Company.
Each Investor may, at its option, claim indemnity under this Section 5.2 as soon
as a claim has been threatened by a third party,
-15-
<PAGE>
regardless of whether an actual Loss has been suffered, so long as counsel for
such Investor shall in good faith determine that such claim is not frivolous and
that such Investor may be liable or otherwise incur a Loss as a result thereof
and shall give notice of such determination to the Company. Each Investor shall
permit the Company, at the Company's option and expense, to assume the defense
of any such claim by counsel mutually and reasonably satisfactory to the Company
and the Investors who are subject to such claim, and to settle or otherwise
dispose of the same; provided, however, that each Investor may at all times
-------- -------
participate in such defense at such Investor's expense; and provided, further,
-------- -------
that the Company shall not, in defense of any such claim, except with the prior
written consent of each Investor subject to such claim, (i) consent to the entry
of any judgment that does not include as an unconditional term thereof the
giving by the claimant or plaintiff in question to each Investor and its
subsidiaries of a release of all liabilities in respect of such claims, or (ii)
consent to any settlement of such claim. If the Company does not promptly assume
the defense of such claim irrespective of whether such inability is due to the
inability of the afore-described Investors and the Company to mutually agree as
to the choice of counsel, or if any such counsel is unable to represent an
investor due to a conflict or potential conflict of interest, then an Investor
may assume such defense and be entitled to indemnification and prompt
reimbursement from the Company for its costs and expenses incurred in connection
therewith, including without limitation, reasonable attorneys' fees and
expenses. Such fees and expenses shall be reimbursed to the Investors as soon as
practicable after submission of invoices to the Company.
5.3. Information Statement. As soon as is practicable following
---------------------
the Closing, the Company shall prepare and file with the SEC an information
statement regarding the recent increase in the authorized number of shares of
Common Stock of the Company. Thereafter, the Company shall furnish such
information statement to the stockholders of the Company in accordance with the
appropriate SEC rules and regulations and shall take all such other actions as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable shares of Common Stock upon the
conversion and exercise in full of all Purchased Securities from time to time
outstanding.
6. Miscellaneous.
-------------
6.1. Entire Agreement; Successors and Assigns. This
----------------------------------------
Agreement, the Purchased Securities and the Registration Rights Agreement
constitute the entire contract between the parties relative to the subject
matter hereof and no party shall be liable or bound to the other in any manner
by any warranties, representations or covenants except as specifically set forth
herein. Any previous agreement among the parties with respect to the sale of
the Purchased Securities is superseded by this Agreement. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective executors, administrators, heirs, successors and assigns of the
parties. Except as expressly provided herein, nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
6.2. Survival of Representations and Warranties.
------------------------------------------
Notwithstanding any right of the Investors fully to investigate the affairs of
the Company and notwithstanding any knowledge of facts determined or
determinable by any Investor pursuant to such right of
-16-
<PAGE>
investigation or right of investigation, each Investor has the right to rely
fully upon the representations, warranties, covenants and agreements of the
Company contained in this Agreement or in any documents delivered pursuant to
this Agreement. All such representations and warranties of the Company shall
survive the execution and delivery of this Agreement and each Closing hereunder
and shall continue in full force and effect for six months after any applicable
statute of limitations (taking into account any waiver or tolling thereof) with
respect to claims which may arise thereunder or relate thereto shall have run
and the provisions of this Section 6.2 shall constitute a waiver by the Company
of any such applicable statute of limitations.
6.3. Governing Law; Jurisdiction. This Agreement shall be
---------------------------
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of law. Each party hereby irrevocably
consents and submits to the jurisdiction of any New York State or United States
Federal Court sitting in the State of New York, County of New York, over any
action or proceeding arising out of or relating to this Agreement and
irrevocably consents to the service of any and all process in any such action or
proceeding by registered mail addressed to such party at its address specified
in Exhibit 9. Each party further waives any objection to venue in New York and
---------
any objection to an action or proceeding in such state and county on the basis
of forum non-conveniens. Each party also waives any right to trial by jury.
6.4. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5. Headings. The headings of the sections of this
--------
Agreement are for convenience and shall not by themselves determine the
interpretation of this Agreement.
6.6. Notices. Any notice required or permitted hereunder
-------
shall be given in writing and shall be deemed effectively given upon personal
delivery and if a fax number has been provided, upon delivery (with answerback
confirmed), addressed to a party at its address and the fax number, if any,
shown below or at such other address and fax number as such party may designate
by three days advance notice to the other party.
Any notice to the Investors shall be sent to the addresses set forth on
Exhibit 9, with a copy to:
- ---------
Hahn & Hessen LLP
350 Fifth Avenue
New York, New York 10118,
Fax Number: (212) 594-7167
Attention: James Kardon, Esq.
Any notice to the Company shall be sent to:
Medjet Inc.
1090 King George Post Road
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<PAGE>
Suite 301
Edison, New Jersey 08837
Fax Number: (732)738-3984
Attention: Dr. Eugene Gordon, Chairman and CEO
with a copy to:
Troy & Gould Professional Corporation
1801 Century Park East, 16/th/ Floor
Los Angeles, CA 90067
Fax Number: (310) 553-4441
Attention: Dale E. Short, Esq.
6.7. Rights of Transferees. Any and all rights and
---------------------
obligations of Investors herein incident to the ownership of Purchased
Securities shall pass successively to all subsequent transferees of such
Purchased Securities until extinguished pursuant to the terms hereof.
6.8. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or any other provision of this Agreement.
-18-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Purchased Securities subscribed for INVESTORS:
hereunder:
ADAM SMITH INVESTMENT PARTNERS, L.P.
By: ADAM SMITH CAPITAL MANAGEMENT,
L.L.C., General Partner
10,400 Purchased Shares and
1,040,000 Purchased Warrants By: /s/ Richard Grossman
____________________________
Name: Richard Grossman
Title: Manager
ADAM SMITH INVESTMENTS, LTD.
By: F.M.C. Limited
1,600 Purchased Shares and
160,000 Purchased Warrants By: /s/ Anna Carrington
________________________________
Name: Anna Carrington
Title:
RICHARD AND ANA GROSSMAN JTWROS
800 Purchased Shares and
80,000 Purchased Warrants By: /s/ Richard and Ana Grossman
--------------------------------
760 Purchased Shares and /s/ Orin Hirschman
76,000 Purchased Warrants ------------------------------------
Orin Hirschman
360 Purchased Shares and /s/ Paul Packer
36,000 Purchased Warrants -----------------------------------
Paul Packer
-19-
<PAGE>
ADAM-JACK M. DODICK, MD GENERAL
PARTNERSHIP
By: Adam Smith Capital Management, L.L.C.,
General Partner
2,000 Purchased Shares and By: /s/ Richard Grossman
200,000 Purchased Warrants __________________________________
Name: Richard Grossman
Title: Manager
80 Purchased Shares and /s/ Hershel P. Berkowitz
8,000 Purchased Warrants _____________________________________
Hershel P. Berkowitz
-20-
<PAGE>
ACCEPTED AND AGREED BY:
MEDJET INC.
By: /s/ Eugene Gordon
--------------------------------------
Name: Eugene Gordon
Title: Chairman of the Board and Chief
Executive Officer
Date: December 3, 1999
-21-
<PAGE>
EXHIBITS TO THE SUBSCRIPTION AGREEMENT
Exhibit 1: Certificate of Designations of Preferences and Rights of Series B
Convertible Preferred Stock
Exhibit 2: Form of Warrants
Exhibit 3: Registration Rights Agreement
Exhibit 4: Investment Banking Agreement
Exhibit 5: Legal Opinion
Exhibit 6: Capitalization Post-Closing
Exhibit 7: Disclosure Letter
Exhibit 8: Use of Proceeds
Exhibit 9: Name, Address and Fax Number of Investors
-22-
<PAGE>
EXHIBIT 4.2
Void after December 3, 2004 Warrant No. 1999-1
Adam Smith & Company, Inc. to acquire 500,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Adam Smith & Company, Inc., or assigns, is entitled, subject to the
terms set forth below, to purchase from the Company at any time on or from time
to time after January 31, 2000 and before 5:00 P.M., New York City time, on
December 3, 2004 or as extended in accordance with the terms hereof (the
"Expiration Date"), 500,000 fully paid and non-assessable shares of Common Stock
of the Company, at the initial Purchase Price per share (as defined below) of
$3.50. The number and character of such shares of Common Stock and the Purchase
Price per share are subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
Void after December 3, 2004 Warrant No. 1999-2
Adam Smith & Company, Inc. to acquire 1,040,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Adam Smith Investment Partners, L.P., or assigns, is entitled, subject
to the terms set forth below, to purchase from the Company at any time on or
from time to time after January 31, 2000 and before 5:00 P.M., New York City
time, on December 3, 2004 or as extended in accordance with the terms hereof
(the "Expiration Date"), 1,040,000 fully paid and non-assessable shares of
Common Stock of the Company, at the initial Purchase Price per share (as defined
below) of $3.50. The number and character of such shares of Common Stock and the
Purchase Price per share are subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
Void after December 3, 2004 Warrant No. 1999-3
Adam Smith & Company, Inc. to acquire 160,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Adam Smith Investments, Ltd., or assigns, is entitled, subject to the
terms set forth below, to purchase from the Company at any time on or from time
to time after January 31, 2000 and before 5:00 P.M., New York City time, on
December 3, 2004 or as extended in accordance with the terms hereof (the
"Expiration Date"), 160,000 fully paid and non-assessable shares of Common Stock
of the Company, at the initial Purchase Price per share (as defined below) of
$3.50. The number and character of such shares of Common Stock and the Purchase
Price per share are subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
Void after December 3, 2004 Warrant No. 1999-4
Adam Smith & Company, Inc. to acquire 80,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Richard and Ana Grossman JTWROS, or assigns, is entitled, subject to
the terms set forth below, to purchase from the Company at any time on or from
time to time after January 31, 2000 and before 5:00 P.M., New York City time,
on December 3, 2004 or as extended in accordance with the terms hereof (the
"Expiration Date"), 80,000 fully paid and non-assessable shares of Common Stock
of the Company, at the initial Purchase Price per share (as defined below) of
$3.50. The number and character of such shares of Common Stock and the Purchase
Price per share are subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
Void after December 3, 2004 Warrant No. 1999-5
Adam Smith & Company, Inc. to acquire 76,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Orin Hirschman, or assigns, is entitled, subject to the terms set
forth below, to purchase from the Company at any time on or from time to time
after January 31, 2000 and before 5:00 P.M., New York City time, on December
3, 2004 or as extended in accordance with the terms hereof (the "Expiration
Date"), 76,000 fully paid and non-assessable shares of Common Stock of the
Company, at the initial Purchase Price per share (as defined below) of $3.50.
The number and character of such shares of Common Stock and the Purchase Price
per share are subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
Void after December 3, 2004 Warrant No. 1999-6
Adam Smith & Company, Inc. to acquire 36,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Paul Packer, or assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time on or from time to time after
January 31, 2000 and before 5:00 P.M., New York City time, on December 3, 2004
or as extended in accordance with the terms hereof (the "Expiration Date"),
36,000 fully paid and non-assessable shares of Common Stock of the Company, at
the initial Purchase Price per share (as defined below) of $3.50. The number and
character of such shares of Common Stock and the Purchase Price per share are
subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
Void after December 3, 2004 Warrant No. 1999-7
Adam Smith & Company, Inc. to acquire 200,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Adam-Jack M. Dodick, MD General Partnership, or assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
on or from time to time after January 31, 2000 and before 5:00 P.M., New York
City time, on December 3, 2004 or as extended in accordance with the terms
hereof (the "Expiration Date"), 200,000 fully paid and non-assessable shares of
Common Stock of the Company, at the initial Purchase Price per share (as defined
below) of $3.50. The number and character of such shares of Common Stock and the
Purchase Price per share are subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
Void after December 3, 2004 Warrant No. 1999-8
Adam Smith & Company, Inc. to acquire 8,000 shares
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
MEDJET INC.
COMMON STOCK PURCHASE WARRANT
Medjet Inc. (the "Company"), having its principal office at 1090 King
George Post Road, Edison, New Jersey 08837 hereby certifies that, for value
received, Hershel P. Berkowitz, or assigns, is entitled, subject to the terms
set forth below, to purchase from the Company at any time on or from time to
time after January 31, 2000 and before 5:00 P.M., New York City time, on
December 3, 2004 or as extended in accordance with the terms hereof (the
"Expiration Date"), 8,000 fully paid and non-assessable shares of Common Stock
of the Company, at the initial Purchase Price per share (as defined below) of
$3.50. The number and character of such shares of Common Stock and the Purchase
Price per share are subject to adjustment as provided herein.
Background. The Company will issue warrants to purchase up to an
----------
aggregate of up to 2,100,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 16,000 shares of Series B Convertible Preferred Stock
(the "Preferred Stock") of the Company, and 1,600,000 common stock purchase
warrants (each a "Private Placement Warrant"), each Warrant entitling the Holder
thereof to purchase one share of Common Stock and (ii) the issuance to Adam
Smith & Company, Inc. of an additional 500,000 Warrants (the "ASC Warrants") to
purchase up to 500,000 shares of Common Stock (the Private Placement Warrants
and the ASC Warrants collectively, the "Warrants"). This Warrant is one of the
Warrants originally issued as of the Original Issue Date (as defined below).
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
The term "Company" includes the Company and any corporation which shall
succeed to or assume the obligations of the Company hereunder.
The term "Common Stock" includes all stock of any class or classes
(however designated) of the Company, authorized upon the Original Issue Date or
thereafter, the Holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference, and the Holders of which shall ordinarily, in the
absence of contingencies, be entitled to vote for the election of a majority of
directors of the Company (even though the right so to vote has been suspended by
the happening of such a contingency).
The term "Exchange Act" means the Securities Exchange Act of 1934 as
the same shall be in effect at the time.
The term "Holder" means any record owner of Warrants or Underlying
Securities.
The term "Nasdaq" shall mean the OTC Bulletin Board, the Nasdaq
SmallCap Market or other principal market on which the Common Stock is traded.
The "Original Issue Date" is December 3, 1999, the date as of which the
Warrants were first issued.
The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the Holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to section 6 or otherwise.
The term "Purchase Price per share" shall be the then applicable
exercise price hereunder for one share of Common Stock.
The terms "registered" and "registration" refer to a registration
effected by filing a registration statement in compliance with the Securities
Act, to permit the disposition of Common Stock (or Other Securities) issued or
issuable upon the exercise of Warrants, and any post-effective amendments and
supplements filed or required to be filed to permit any such disposition.
The term "Securities Act" means the Securities Act of 1933 as the same
shall be in effect at the time.
The term "Series B Preferred Stock" shall mean the 16,000 shares of
Series B Convertible Preferred Stock of the Company issued simultaneously with
the issuance of the Private Placement Warrants.
-2-
<PAGE>
The term "Underlying Securities" shall mean any Common Stock or Other
Securities issued or issuable upon exercise of Warrants.
The term "Warrant" shall mean, as applicable, this Warrant or each
right as set forth in this Warrant to purchase one share of Common Stock, as
adjusted.
1. Registration, etc. The Holder shall have the rights to
------------------
registration of Underlying Securities issuable upon exercise of the Warrants
that are set forth in the Registration Rights Agreement, dated the date hereof
between the Company and the Holder (the "Registration Rights Agreement").
2. Sale or Exercise Without Registration. If, at the time of any
-------------------------------------
exercise, transfer or surrender for exchange of a Warrant or of Underlying
Securities previously issued upon the exercise of Warrants, such Warrant or
Underlying Securities shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such exercise, transfer or
exchange, that the Holder or transferee of such Warrant or Underlying
Securities, as the case may be, furnish to the Company a satisfactory opinion of
counsel to the effect that such exercise, transfer or exchange may be made
without registration under the Securities Act, provided that the disposition
thereof shall at all times be within the control of such Holder or transferee,
as the case may be, and provided further that nothing contained in this section
2 shall relieve the Company from complying with any request for registration
pursuant to the Registration Rights Agreement. The first Holder of this Warrant,
by acceptance hereof, represents to the Company that it is acquiring the
Warrants for investment and not with a view to the distribution thereof.
3. Exercise of Warrant.
-------------------
3.1. Exercise in Full. Subject to the provisions hereof, this
----------------
Warrant may be exercised in full by the Holder hereof by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
Holder, to the Company at its principal office accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock called
for on the face of this Warrant (without giving effect to any adjustment
therein) by the Purchase Price per share.
3.2. Partial Exercise. Subject to the provisions hereof, this
----------------
Warrant may be exercised in part by surrender of this Warrant in the manner and
at the place provided in subsection 3.1 except that the amount payable by the
Holder upon any partial exercise shall be the amount obtained by multiplying (a)
the number of shares of Common Stock (without giving effect to any adjustment
therein) designated by the Holder in the subscription at the end hereof by (b)
the Purchase Price per share. Upon any such partial exercise, the Company at
its expense will forthwith issue and deliver to or upon the order of the Holder
hereof a new Warrant or Warrants of like tenor, in the name of the Holder hereof
or as such Holder (upon payment by such Holder of any applicable transfer taxes)
may request, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock equal (without giving effect to any
-3-
<PAGE>
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares designated by the Holder in the
subscription at the end hereof.
3.3. Exercise by Surrender of Warrant or Shares of Common Stock.
----------------------------------------------------------
In addition to the method of payment set forth in sections 3.1 and 3.2 and in
lieu of any cash payment required thereunder, the Holder(s) of the Warrants
shall have the right at any time and from time to time to exercise the Warrants
in full or in part by surrendering shares of Common Stock, Series B Preferred
Stock, the Warrant Certificate or other securities issued by the Company in the
manner and at the place specified in section 3.1 as payment of the aggregate
Purchase Price per share for the Warrants to be exercised. The number of
Warrants or shares of Common Stock to be surrendered in payment of the aggregate
Purchase Price for the Warrants to be exercised shall be determined by
multiplying the number of Warrants to be exercised by the Purchase Price per
share, and then dividing the product thereof by an amount equal to the Market
Price (as defined below) . The number of shares of Series B Preferred Stock or
such other securities to be surrendered in payment of the aggregate Purchase
Price for the Warrants to be exercised shall be determined in accordance with
the preceding sentence as if the Series B Preferred Stock or other securities
had been converted into Common Stock immediately prior to exercise or, in the
case the Company has issued other securities which are not convertible into
Common Stock, at the Market Price thereof.
3.4. Definition of Market Price. As used herein, the phrase
--------------------------
"Market Price" at any date shall be deemed to be (i) if the principal trading
market for such securities is an exchange, the average of the last reported sale
prices for the last five previous trading days in which a sale was reported, as
officially reported on any consolidated tape, (ii) if the principal market for
such securities is the over-the-counter market, the average of the high bid
prices on such trading days as set forth by Nasdaq or, (iii) if the security is
not quoted on Nasdaq, the average of the high bid prices on such trading days as
set forth in the National Quotation Bureau sheet listing such securities for
such day. Notwithstanding the foregoing, if there is no reported closing price
or high bid price, as the case may be, on any of the ten trading days preceding
the event requiring a determination of Market Price hereunder, then the Market
Price shall be determined in good faith by resolution of the Board of Directors
of the Company, based on the best information available to it.
3.5. Company to Reaffirm Obligations. The Company will, at the
-------------------------------
time of any exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder any
rights (including, without limitation, any right to registration of the
Underlying Securities) to which such Holder shall continue to be entitled after
such exercise in accordance with the provisions of this Warrant, provided that
--------
if the Holder of this Warrant shall fail to make any such request, such failure
shall not affect the continuing obligation of the Company to afford such Holder
any such rights.
4. Delivery of Stock Certificates, etc., on Exercise. As soon as
-------------------------------------------------
practicable after the exercise of this Warrant in full or in part, and in any
event within three business days thereafter, the Company at its own expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such
-4-
<PAGE>
Holder (upon payment by such Holder of any applicable transfer taxes) may
direct, a certificate or certificates for the number of full paid and non-
assessable shares of Common Stock or Other Securities to which such Holder shall
be entitled upon such exercise, plus, in lieu of any fractional share to which
such Holder would otherwise be entitled, cash equal to such fraction multiplied
by the then current Market Price of one full share, together with any other
stock or other securities and property (including cash, where applicable) to
which such Holder is entitled upon such exercise pursuant to section 5 or
otherwise.
5. Adjustment for Dividends in Other Stock, Property, etc.;
--------------------------------------------------------
Reclassification, etc. In case at any time or from time to time after the
- ----------------------
Original Issue Date the holders of Common Stock (or Other Securities) shall have
received, or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash paid or payable (including, without limitation, by
way of dividend), or
(c) other or additional (or less) stock or other securities or
property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate rearrangement,
then, and in each such case the Holder of this Warrant, upon the exercise hereof
as provided in section 3, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this section 5) which such Holder would hold on the
date of such exercise if on the Original Issue Date such Holder had been the
Holder of record of the number of shares of Common Stock called for on the face
of this Warrant and had thereafter, during the period from the Original Issue
Date to and including the date of such exercise, retained such shares and all
such other or additional (or less) stock and other securities and property
(including cash in the cases referred to in subdivisions (b) and (c) of this
section 5) receivable by such Holder as aforesaid during such period, giving
effect to all adjustments called for during such period by sections 6 and 7
hereof.
6. Reorganization, Consolidation, Merger, etc. In case the Company
-------------------------------------------
after the Original Issue Date shall (a) effect a reorganization, (b) consolidate
with or merge into any other person, or (c) transfer all or substantially all of
its properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, the
Holder of this Warrant, upon the exercise hereof as provided in section 3 at any
time after the consummation of such reorganization, consolidation or merger or
the effective date of such dissolution, as the case may be, shall be entitled to
receive (and the Company shall be entitled to deliver), in lieu of the
Underlying Securities issuable upon such exercise prior to such consummation or
such effective date, the stock and other securities and property (including
cash)
-5-
<PAGE>
to which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in sections 5 and 7 hereof. The Company shall
not effect any such reorganization, consolidation, merger or sale, unless prior
to or simultaneously with the consummation thereof, the successor corporation
resulting from such consolidation or merger or the corporation purchasing such
assets or the appropriate corporation or entity shall assume, by written
instrument, the obligation to deliver to each Holder the shares of stock, cash,
other securities or assets to which, in accordance with the foregoing
provisions, each Holder may be entitled to and all other obligations of the
Company under this Warrant.
7. Other Adjustments.
-----------------
7.1. General. In any case to which Sections 5 and 6 hereof are
-------
not applicable, where the Company shall issue or sell shares of its Common Stock
after the Original Issue Date for a consideration per share less than the
Purchase Price per share in effect pursuant to the terms of this Warrant at the
time of issuance or sale of such additional shares (the "Lower Price"), then the
Purchase Price in effect hereunder shall simultaneously with such issuance or
sale be reduced to an amount equal to the Lower Price. In the event of an
adjustment to the Purchase Price under this Section 7, the number of shares of
Underlying Securities issuable upon exercise hereof shall be increased so that
the aggregate exercise price of this Warrant is not reduced as a result of such
reduction of Purchase Price.
7.2. Convertible Securities. (a) In case the Company shall issue
----------------------
or sell any securities convertible into Common Stock of the Company
("Convertible Securities") after the date hereof, there shall be determined the
price per share for which Common Stock is issuable upon the conversion or
exchange thereof, such determination to be made by dividing (i) the total amount
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the maximum number of shares of Common Stock of the Company
issuable upon the conversion or exchange of all of such Convertible Securities.
(b) If the price per share so determined shall be less than
the applicable Purchase Price per share, then such issue or sale shall be deemed
to be an issue or sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of Common Stock at the
price per share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases or decrease or
decreases, with the passage of time, in the amount of additional consideration,
if any, to the Company, or in the rate of exchange, upon the conversion or
exchange thereof, the adjusted Purchase Price per share shall, forthwith upon
any such increase or decrease becoming effective, be readjusted to reflect the
same, and provided further, that upon the expiration of such rights of
conversion or exchange of such Convertible Securities, if any thereof shall not
have been exercised, the adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been had an
adjustment been made on the basis that the only shares of Common Stock so issued
or sold were issued or sold upon the conversion or exchange
-6-
<PAGE>
of such Convertible Securities, and that they were issued or sold for the
consideration actually received by the Company upon such conversion or exchange,
plus the consideration, if any, actually received by the Company for the issue
or sale of all of such Convertible Securities which shall have been converted or
exchanged.
7.3. Rights and Options. (a) In case the Company shall grant any
------------------
rights or options to subscribe for, purchase or otherwise acquire Common Stock,
there shall be determined the price per share for which Common Stock is issuable
upon the exercise of such rights or options, such determination to be made by
dividing (i) the total amount, if any, received or receivable by the Company as
consideration for the granting of such rights or options, plus the minimum
aggregate amount of additional consideration payable to the Company upon the
exercise of such rights or options, by (ii) the maximum number of shares of
Common Stock of the Company issuable upon the exercise of such rights or
options.
(b) If the price per share so determined shall be less than the
applicable Purchase Price per share, then the granting of such rights or options
shall be deemed to be an issue or sale for cash (as of the date of the granting
of such rights or options) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such rights or options
shall by their terms provide for an increase or increases or decrease or
decreases, with the passage of time, in the amount of additional consideration
payable to the Company upon the exercise thereof, the adjusted Purchase Price
per share shall, forthwith upon any such increase or decrease becoming
effective, be readjusted to reflect the same, and provided, further, that upon
the expiration of such rights or options, if any thereof shall not have been
exercised, the adjusted Purchase Price per share shall forthwith be readjusted
and thereafter be the price which it would have been had an adjustment been made
on the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the exercise of such rights or options and that they were
issued or sold for the consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received by the Company for
the granting of all such rights or options, whether or not exercised.
7.4. Combination of Shares. If the number of shares of Common Stock
---------------------
outstanding at any time after the date hereof is decreased by a combination or
reverse stock split of the outstanding shares of Common Stock of the Company,
the Purchase Price shall be increased and the number of shares of Common Stock
purchasable under this Warrant shall be decreased in proportion to such decrease
in outstanding shares of Common Stock.
7.5. Exceptions. This Section 7 shall not apply to (a) the issuance of
-----------
the Series B Preferred Stock, (b) the issuance of shares of Common Stock upon
conversion of the Series B Preferred Stock, (c) upon the exercise of the
Warrants aggregating not in excess of 2,100,000 shares, (d) issuances of Common
Stock, Convertible Securities, rights and options that have been approved by the
holders of not less than a majority of the outstanding shares of Series B
Preferred Stock, (e) issuances of Common Stock pursuant to the exercise of
options, warrants and rights outstanding on the date hereof or issued pursuant
to the Company's existing stock option plan or a plan which has been approved by
the holders of not less than a majority of the outstanding shares of Series B
Preferred Stock or (f) the issuance of warrants to a lender pursuant to a loan
to the Company with a term of at least four years and in an amount of not less
than
-7-
<PAGE>
$10,000,000 (and the issuance of shares of Common Stock on the exercise of such
lender warrants).
8. Further Assurances. The Company will take all such action as may
------------------
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable shares of stock upon the exercise of all
Warrants from time to time outstanding.
9. Accountants' Certificate as to Adjustments. In each case of any
------------------------------------------
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable upon the exercise of the Warrants, the Company at its expense will
promptly cause the Company's regularly retained auditor to compute such
adjustment or readjustment in accordance with the terms of the Warrants and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based, and the
number of shares of Common Stock outstanding or deemed to be outstanding. The
Company will forthwith mail a copy of each such certificate to each Holder.
10. Notices of Record Date, etc. In the event of
----------------------------
(a) any taking by the Company of a record of the Holders of any
class of securities for the purpose of determining the Holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to receive
any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of
stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities (other than the issue of Common Stock on
the exercise of the Warrants), then and in each such event the Company
will mail or cause to be mailed to each Holder of a Warrant a notice
specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, (ii) the date on
which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up
is to take place, and the time, if any, as of which the Holders of
record of Underlying Securities shall be entitled to exchange their
shares of Underlying Securities for securities or other property
deliverable
-8-
<PAGE>
upon such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or
rights or options with respect thereto, proposed to be issued or
granted, the date of such proposed issue or grant and the persons or
class of persons to whom such proposed issue or grant and the persons
or class of persons to whom such proposed issue or grant is to be
offered or made. Such notice shall be mailed at least 20 days prior to
the date therein specified.
11. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
------------------------------------------------------------
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable upon the exercise of the Warrants.
12. Listing on Securities Exchanges; Registration. In furtherance and
---------------------------------------------
not in limitation of any other provision of this Warrant, if the Company at any
time shall list any Common Stock on any national securities exchange and shall
register such Common Stock under the Exchange Act, the Company will, at its
expense, simultaneously list on such exchange or Nasdaq, upon official notice of
issuance upon the exercise of the Warrants, and maintain such listing of all
shares of Common Stock from time to time issuable upon the exercise of the
Warrants; and the Company will so list on any national securities exchange or
Nasdaq, will so register and will maintain such listing of, any Other Securities
if and at the time that any securities of like class or similar type shall be
listed on such national securities exchange or Nasdaq by the Company.
13. Exchange of Warrants. Subject to the provisions of section 2
--------------------
hereof, upon surrender for exchange of any Warrant, properly endorsed, to the
Company, as soon as practicable (and in any event within three business days)
the Company at its own expense will issue and deliver to or upon the order of
the Holder thereof a new Warrant or Warrants of like tenor, in the name of such
Holder or as such Holder (upon payment by such Holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
or Warrants so surrendered.
14. Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
15. Warrant Agent. The Company may, by written notice to each Holder
-------------
of a Warrant, appoint an agent having an office in New York, New York, for the
purpose of issuing Common Stock (or Other Securities) upon the exercise of the
Warrants pursuant to section 3,
-9-
<PAGE>
exchanging Warrants pursuant to section 13, and replacing Warrants pursuant to
section 14, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
16. Remedies. The Company stipulates that the remedies at law of the
--------
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
17. Negotiability, etc. Subject to Section 2 above, this Warrant is
-------------------
issued upon the following terms, to all of which each Holder or owner hereof by
the taking hereof consents and agrees:
(a) subject to the provisions hereof, title to this Warrant may be
transferred by endorsement (by the Holder hereof executing the form of
assignment at the end hereof) and delivery in the same manner as in the
case of a negotiable instrument transferable by endorsement and
delivery;
(b) subject to the foregoing, any person in possession of this
Warrant properly endorsed is authorized to represent himself as
absolute owner hereof and is empowered to transfer absolute title
hereto by endorsement and delivery hereof to a bona fide purchaser
hereof for value; each prior taker or owner waives and renounces all of
his equities or rights in this Warrant in favor of each such bona fide
purchaser and each such bona fide purchaser shall acquire absolute
title hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered Holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.
18. Notices, etc. All notices and other communications from the
-------------
Company to the Holder of this Warrant shall be mailed by first class registered
or certified mail, postage prepaid, at such address as may have been furnished
to the Company in writing by such Holder, or, until an address is so furnished,
to and at the address of the last Holder of this Warrant who has so furnished an
address to the Company.
19. Miscellaneous. This Warrant and any term hereof may be changed,
-------------
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant is being delivered in the State of New York and shall
be construed and enforced in accordance with and governed by the laws of such
State. The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
-10-
<PAGE>
20. Extended Expiration. The right to exercise this Warrant shall
-------------------
expire at 5:00 P.M., New York City time, on the Expiration Date, provided,
however, that if the Holders of Warrants issued hereunder have, in accordance
with the terms thereof, requested a registration statement pursuant to the
Registration Rights Agreement 90 days or more prior to the Expiration Date and
such registration statement has not become effective prior to the Expiration
Date then the right to exercise this Warrant shall be extended and shall expire
30 days after the effective date of such registration statement.
21. Assignability. Subject to Section 2 hereof, this Warrant is fully
-------------
assignable at any time.
Dated: December 3, 1999
MEDJET INC.
By: /s/ Eugene Gordon
------------------------------
Eugene Gordon
Chairman of the Board and
Chief Executive Officer
[Corporate Seal]
Attest: /s/ Thomas M. Handschiegel
---------------------------------
Thomas M. Handschiegel, Secretary
-11-
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: MEDJET INC.
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, shares of Common Stock of Medjet Inc., and herewith makes
payment of $ * therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to, , whose address
is
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
(Address)
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment
for additional Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of the
Warrant, may be deliverable upon exercise.
-12-
<PAGE>
FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto _________________________ the right represented by the within Warrant to
purchase _________ of Common Stock of Medjet Inc. to which the within Warrant
relates, and appoints ______________________________ Attorney to transfer such
right on the books of Medjet Inc. with full power of substitution in the
premises. The Warrant being transferred hereby is one of the Warrants issued by
Medjet Inc. as of December 3, 1999 to purchase an aggregate of up to 2,100,000
shares of Common Stock.
Dated:
____________________________________________
(Signature must conform in all respects to
name of Holder as specified on the face of
the Warrant)
____________________________________________
(Address)
________________________________
Signature guaranteed by a Bank
or Trust Company having its
principal office in New York City
or by a Member Firm of the New
York or American Stock Exchange
-13-
<PAGE>
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into this 3/rd/ day of December, 1999, by and among Medjet Inc., a Delaware
corporation (the "Company"), Adam Smith & Company, Inc. ("ASC"), and the
individuals and trusts whose names are set forth on the signature page(s) hereof
(as that term is defined in the next paragraph) (collectively, the
"Stockholders").
Background. The Company has entered into (i) a Subscription Agreement of
----------
even date herewith (as amended, the "Subscription Agreement") with the
Stockholders pursuant to which the Company will issue to the Stockholders an
aggregate of 16,000 Units, each consisting of one share of Series B Convertible
Preferred Stock of the Company and one hundred common stock purchase warrants
(each a "Unit Warrant"), each Unit Warrant entitling the holder thereof to
purchase one share of common stock; and (ii) an investment banking agreement
with ASC providing for, among other matters, the issuance of an additional
500,000 Warrants (the "ASC Warrants", and collectively with the Unit Warrants,
the "Warrants") to purchase up to 500,000 shares of common stock. An aggregate
of 1,600,000 authorized but unissued shares of common stock, $.01 par value per
share, of the Company ("Common Stock") are reserved for issuance upon conversion
of the Preferred Stock to be issued to the Stockholders under the Subscription
Agreement, and an aggregate of 2,100,000 authorized but unissued shares of
Common Stock are reserved for issuance upon exercise of the Warrants.
In consideration of the background transactions and the mutual covenants
and agreements herein set forth, the parties to this Agreement hereby agree,
effective at the Effective Date (as defined below), subject to the terms and
conditions hereinafter set forth, as follows:
1. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
Agreement: As defined in the introductory paragraph of this Agreement.
----------
Commission: The U.S. Securities and Exchange Commission or any other
-----------
governmental authority at the time administering the Securities Act or the
Exchange Act.
Common Stock: As defined in the paragraph of this Agreement entitled
-------------
"Background."
Company: As defined in the introductory paragraph of this Agreement.
--------
Effective Date: The date on which Preferred Stock and Warrants are first
---------------
issued to the Stockholders.
Exchange Act: The U.S. Securities Exchange Act of 1934, as amended, or any
-------------
similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar or successor federal statute.
<PAGE>
Person: A corporation, an association, a partnership, a limited liability
-------
company, an individual, a joint venture, a trust or estate, an unincorporated
organization, or a government or any department or agency thereof.
Preferred Stock: As defined in the paragraph of this Agreement entitled
----------------
"Background":
Registrable Securities: (a) Any shares of Common Stock issued or issuable
-----------------------
upon conversion of any shares of Preferred Stock issued to the Stockholders
pursuant to the Subscription Agreement or upon exercise of the Warrants and (b)
any securities issued or issuable with respect to any Common Stock referred to
in the foregoing clauses by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities when (v) they may be sold without restriction pursuant to Rule 144(k)
(or any successor provision) under the Securities Act, (w) a registration
statement with respect to the sale of such securities in the United States shall
have become effective under the Securities Act and such securities shall have
been disposed of in accordance with such registration statement, (x) they shall
have been transferred pursuant to Rule 144 (or any successor provision) under
the Securities Act, (y) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification under the Securities Act or any similar
state law then in force, or (z) they shall have ceased to be outstanding. While
the shares of Preferred Stock and the Warrants outstanding from time to time are
not Registrable Securities for the purpose of registration, holders of shares of
Preferred Stock and Warrants shall, for purposes of giving of notices or the
calculation of percentages of Registrable Securities, be treated as the holders
of the Registrable Securities issuable upon conversion of their shares of
Preferred Stock or upon exercise of their Warrants. In addition, for purposes of
calculation of percentages of Registrable Securities, all shares of Preferred
Stock shall be treated as the same number of shares of Common Stock into which
they are then convertible and all Warrants shall be treated as the same number
of shares of Common Stock which may be purchased upon exercise thereof.
Registration Expenses: All expenses incident to the Company's performance
----------------------
of or compliance with Section 2 of this Agreement, including, without
limitation, all registration, filing and listing or Nasdaq fees, all fees and
expenses of complying with securities or blue sky laws, all word processing,
duplicating and printing expenses, all messenger and delivery expenses, the fees
and disbursements of counsel for the Company and of its independent public
accountants, including without limitation the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance, premiums and other costs of policies of insurance, if any, against
liabilities arising out of the public offering of the Registrable Securities
being registered, and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding underwriting discounts
and commissions, transfer taxes, if any, and the fees and disbursements of any
counsel and accountants retained by the holder or holders of the Registrable
Securities being registered.
Securities Act: The U.S. Securities Act of 1933, as amended, or any similar
---------------
or successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar or successor federal statute.
-2-
<PAGE>
Subscription Agreement: As defined in the paragraph of this Agreement
-----------------------
entitled "Background."
Stockholders: As defined in the introductory paragraph of this Agreement.
-------------
Warrants: As defined in the paragraph of this Agreement entitled
---------
"Background."
2. Registration under Securities Act
2.1. (a) Registration on Request. Upon the written request of ASC or the
-----------------------
holder or holders of thirty percent (30%) or more of the Registrable Securities
that the Company effect the registration under the Securities Act in connection
with a sale of such shares in the United States of all or part of such holders,
Registrable Securities and specifying the intended method of disposition thereof
(including whether or not such disposition is intended to be effected as an
underwritten offering), the Company will promptly give written notice of such
requested registration to all other holders of Registrable Securities and
thereupon the Company will use its best efforts to effect the registration under
the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the holder or holders submitting the request, and
(ii) all other Registrable Securities which the Company has
been requested to register by the holder or holders thereof by written
request given to the Company within fifteen (15) days after the giving of
such written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities), all to the
extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be
registered.
(b) Priority in Requested Registrations. If a requested registration
-----------------------------------
pursuant to this Section 2.1 involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that, in its opinion, the number
of Registrable Securities and other securities of the Company held by any other
party requested to be included in such registration exceeds the number which can
be sold in (or during the time of) such offering within a price range acceptable
to the holders of a majority (by number of shares) of the Registrable Securities
requested to be included in such registration, the Company will include in such
registration all Registrable Securities requested to be included in such
registration (unless the provisions of the following sentence apply) and will
include in such registration other securities of the Company (including any
securities proposed to be issued and sold by the Company) held by any other
party only to the extent that the number of shares which the Company is advised
can be so sold in (or during the time of) such offering exceeds the number of
Registrable Securities to be included in such registration. If a requested
registration pursuant to this Section 2.1 involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a copy to
each holder of Registrable Securities requesting registration) that, in its
opinion, the number of Registrable Securities requested to be included in such
registration exceeds the number which can be sold in (or during the time of)
such offering within a price range acceptable to the holders of a majority (by
number of shares) of the Registrable Securities requested to be included in such
registration, the Company will include in such registration only Registrable
Securities requested to be included in
-3-
<PAGE>
such registration. In such event, such Registrable Securities will be included
in such registration only to the extent of the number of shares which the
Company is advised can be so sold in (or during the time of) such offering; the
Registrable Securities to be included in such registration shall be taken up pro
rata from the holders of Registrable Securities requesting such registration on
the basis of the percentage of Registrable Securities requested to be included
in such registration; and all shares proposed to be sold by the Company or any
other party shall be deleted from such registration prior to effecting any
reduction of Registrable Securities by the holders thereof under this paragraph
(b).
(c) Registration Statement Form. Registrations under this Section 2.1
---------------------------
shall be on such appropriate registration form of the Commission (i) for which
the Company qualifies, and which the Company's counsel (after consultation with
counsel or counsels for the holders of the Registrable Securities) deems
appropriate, and (ii) as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in the request for such registration. The Company agrees to include in
any such registration statement all information as to the holders of the
Registrable Securities to be registered which the holders of the Registrable
Securities being registered shall reasonably request or which shall be required
by applicable law.
(d) Expenses. Except as provided in paragraph (g) of this Section
--------
2.1, the Company will pay all Registration Expenses incurred in connection with
any registration requested pursuant to this Section 2.1 which the Company is
obligated to effect, whether or not such registration is effected.
(e) Effected Registration Statement. A registration requested
-------------------------------
pursuant to this Section 2.1 shall not be deemed to have been effected unless a
registration statement with respect thereto has become effective except: (i) if
the registration statement is withdrawn prior to its effectiveness pursuant to
the request of all of the holders of Registrable Securities who have requested
the inclusion in such registration statement of some or all of their Registrable
Securities and one or more of the holders of Registrable Securities have not
paid the Registration Expenses relating thereto in accordance with paragraph (g)
of this Section 2.1, (ii) if, after the registration statement has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason, and such stop order, injunction or other order or
requirement results from any action or inaction of a holder or holders of
Registrable Securities, or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied due to a failure by a holder of Registrable
Securities to satisfy a condition required to be satisfied by such holder
pursuant to the purchase agreement or underwriting agreement and one or more of
the holders of Registrable Securities have not paid the Registration Expenses
relating thereto in accordance with paragraph (g) of this Section 2.1.
(f) Selection of Underwriter. If a requested registration pursuant to
------------------------
this Section 2.1 involves an underwritten offering, the underwriter or
underwriters thereof shall be, selected by the holders of a majority of the
Registrable Securities to be so registered, subject to the approval of the
Company, which approval shall not be unreasonably withheld.
-4-
<PAGE>
(g) Limitation on Registrations. The Company's obligations under
---------------------------
Section 2.1(a) shall be limited to effecting two (2) registrations within the
meaning of paragraph (e) of this Section 2.1; provided, however, that (i) if all
of the holders who have requested the inclusion of Registrable Securities held
by them in a registration requested under this Section 2.1 withdraw such request
prior to the time the registration statement has become effective and any or all
of such persons pay all Registration Expenses relating thereto, such proposed
registration shall not count as one of the registrations provided for by this
Section 2.1; and (ii) if a registration is deemed to be effected pursuant to
paragraph (e) of this Section 2.1 because a condition to closing specified in
the purchase agreement or underwriting agreement entered into in connection with
such registration is not satisfied due to a failure by a holder of Registrable
Securities to satisfy a condition required to be satisfied by such holder
pursuant to such agreement and one or more of the holders of Registrable
Securities elects to pay (and shall actually have paid) all Registration
Expenses relating thereto, such registration shall not count as one of the
registrations provided for by this Section 2.1.
(h) Company's Right to Delay Registration. Notwithstanding the
-------------------------------------
foregoing provisions of this Section 2.1, the Company shall not be obligated to
effect a registration pursuant to this Section 2.1 within a period of one (1)
year after the effective date of a registration statement previously filed as a
result of a request pursuant to this Section 2.1. In addition, if the Company
has issued and sold to the public, pursuant to a registration statement filed
under the Securities Act, any of its securities within three (3) months prior to
the date of its receipt of a request for registration pursuant to this Section
2.1 and the Company's investment banker has advised the Company in writing that
the registration of Registrable Securities would materially adversely affect the
market for the Common Stock, the Company shall have the right, which may not be
exercised more than once in a twelve month period, to delay the requested
registration of Registrable Securities for such period as the investment banker
may so advise, but no more than one hundred twenty (120) days after the date on
which such request was made.
(i) Limitation on Sales. Notwithstanding the foregoing provisions of
-------------------
this Section 2.1, no Registrable Securities may be sold pursuant to a
registration requested under this Section 2.1 until nine months after the date
of this Agreement.
2.2. Incidental Registration.
-----------------------
(a) Right to Incidental Registration. If the Company at any time proposes
--------------------------------
to register any of its securities under the Securities Act (other than by a
registration on Form S-8 or Form S-4 or any successor or similar form and other
than pursuant to Section 2.1 of this Agreement), whether or not for sale for its
own account, it will each such time give prompt written notice to all holders of
Registrable Securities of its intention to do so and of such holders' rights
under this Section 2.2. Upon the written request of any such holder made within
fifteen (15) days after the receipt of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by such holder and
the intended method of disposition thereof), the Company will use its best
efforts to effect the registration under the Securities Act in connection with a
sale of such shares in the United States of all Registrable Securities which the
Company has been so requested to register by the holders of Registrable
Securities, to the extent requisite to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities so
to be registered, provided that if, at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement
-5-
<PAGE>
filed in connection with such registration, the Company shall determine for any
reason, after consultation with the holders of Registrable Securities which have
requested inclusion in such registration, not to register or to delay such
registration, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to register, shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to do so to request that such registration be
effected as a registration under Section 2.1 above, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities. No registration effected under this Section 2.2 shall relieve
the Company of its obligation to effect any registration upon request under
Section 2.1 above. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 2.2.
(b) Priority in Incidental Registrations. If (i) a registration pursuant to
------------------------------------
this Section 2.2 involves an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company, and (ii) the
managing underwriter of such underwritten offering shall inform the Company and
the holders of the Registrable Securities requesting such registration by letter
of its belief that the number of securities requested to be included in such
registration exceeds the number which can be sold in (or during the time of)
such offering, then (A) in the case of an offering for the account of the
Company, registration for the Registrable Securities shall be cut back such that
(i) no holder of Registrable Securities shall be entitled to participate in such
underwritten public offering unless all shares of Common Stock proposed to be
sold by the Company for its own account have been included in such underwritten
public offering, and (ii) after the Company has included its own shares of
Common Stock, the holders of Registrable Securities and the holders of other
securities as to which the Company has granted registration rights ("Other
Registrable Securities"), including incidental registration rights, shall be
entitled to include their Registrable Securities and Other Registrable
Securities in an amount up to the amount that such managing underwriter or
underwriters advise may be included therein (allocated among the holders of
Registrable Securities and the holders of other Registrable Securities pro rata
on the basis of the number of securities requested to be included therein by
each such holder) and (B) in the case of an offering that was commenced as a
result of the exercise of demand registration rights by Persons other than
Stockholders, the Persons commencing such registration and the holders of
Registrable Securities shall be entitled to include their Registrable Securities
and Other Registrable securities in an amount up to the amount such managing
underwriters or underwriters advise may be included therein (allocated among the
persons commencing such registration and the holders of Registrable Securities
pro rate on the basis of the number of securities requested to be so included
therein by each such person or holder). If, however, the registration was
initiated by the Company within one hundred twenty (120) days of a requested
registration and is in lieu thereof, then the Company shall include in the
registration all Registrable Securities requested to be included in such
registration and shall decrease the number of securities proposed to be sold by
the Company and to be included in such registration to the extent necessary to
reduce the number of securities to be included in the registration to the level
recommended by the managing underwriter.
-6-
<PAGE>
2.3. Registration Procedures. If and whenever the Company is required to
-----------------------
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 2.1 or 2.2 above, the Company
will, as expeditiously as possible:
(i) prepare and (as soon thereafter as possible or in any event
no later than seventy-five (75) days after the end of the period within
which requests for registration may be given to the Company (ninety (90)
days in the case of requests for registration made during the last quarter
of a fiscal year or the first fifteen (15) days of the first quarter of any
fiscal year) or such longer period as the Company shall in good faith
require to produce the financial statements required in connection with
such registration) file with the Commission the requisite registration
statement to effect such registration and thereafter use its best efforts
to cause such registration statement to become effective, provided that the
Company may discontinue any registration of its securities which are not
Registrable Securities (and, under the circumstances specified in Section
2.2(a) above, its securities which are Registrable Securities) at any time
prior to the effective date of the registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof as set forth in such registration statement but
in no event for a period which would exceed one hundred twenty (120) days
from the date on which the registration statement became effective;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, as such seller may reasonably
request;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions in the
United States as each seller thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller,
except that the Company shall not for any such purpose be required to
either qualify generally to do business as a foreign corporation, or
subject itself to taxation or to general service of process in any
jurisdiction wherein it would not, but for the requirements of this clause
(iv), be obligated to be so qualified or subject to taxation or service of
process, other than as to matters and transactions related to such
registration or qualification;
-7-
<PAGE>
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other United States governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) furnish to each seller of Registrable Securities a copy of
each of the following, if any, addressed to the underwriters:
(A) an opinion of counsel for the Company, dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement) reasonably satisfactory in form and substance to
such seller; and
(B) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement, covering substantially the same matters with
respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in underwritten
public offerings of securities and, in the case of the accountants'
letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as such seller (or the
underwriters, if any) may reasonably request;
(vii) (A) notify each seller of Registrable Securities covered by
such registration statement, their counsel and the managing underwriters,
if any, promptly, and (if requested in writing by any such Person), confirm
such notice in writing: (1) when a registration statement or any amendment
thereto has been filed, and, with respect to a registration statement or
any post-effective amendment, when the same has become effective, (2) of
any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a registration statement or
related prospectus or for additional information, (3) of the issuance by
the Commission of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that
purpose, (4) if at any time the representations and warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated by this Section 2 cease to be true and correct, (5) of the
receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, and (6) of the happening of
any event that makes any statement made in such registration statement or
related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes to such registration statement,
prospectus or documents so that, in the case of the registration statement,
it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements
-8-
<PAGE>
therein, not misleading, and that in the case of the prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and (B)at
the request of any such seller promptly prepare and furnish to such seller
a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary (and a post-effective amendment to such
registration statement as may be necessary in connection therewith) so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an 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;
(viii) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of
any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction;
(ix) If requested by the managing underwriters, if any, or the
Holders of a majority in interest of the Registrable Securities being sold
in connection with an underwritten offering, promptly include in a
prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and such Holders may reasonably request in
order to permit the intended method of distribution of such securities and
make all required filings of such prospectus supplement or such post-
effective amendment as soon as practicable after the Company has received
such request;
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, a historical earnings statement
covering the period of at least twelve (12) months, but not more than
eighteen (18) months, beginning with the first month of the first full
fiscal quarter after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11 (a) of
the Securities Act, and will furnish to each such seller at least five
business days prior to the filing thereof a copy of any amendment or
supplement to such registration statement or prospectus and shall not file
any thereof to which any such seller shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules or
regulations thereunder;
(xi) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement;
(xii) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange or
trading system on which any of the Common Stock is then listed;
-9-
<PAGE>
(xiii) Cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall be in a form eligible for
deposit with The Depository Trust Company; and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or holders may request in writing at least
two (2) business days prior to any sale of Registrable Securities;
(xiv) Make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of any registration statement at the
earliest possible moment; and
(xv) Cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter" that is
required to be retained in accordance with the rules and regulations of the
NASD).
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (vii) (3) or (6) of this Section 2.3, such holder will forthwith
discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by clause (vii) of this Section 2.3 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file Copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.
2.4. Underwritten Offerings. (a) Cooperation; Underwriting Agreements. If
---------------------- ------------------------------------
requested by the underwriters for any underwritten offering by holders of
Registrable Securities pursuant to a registration requested under Section 2.1
above, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms as are generally prevailing
in agreements of this type, including, without limitation, indemnities to the
effect and to the extent provided in Section 2.6 below. The holders of the
Registrable Securities will reasonably cooperate with the Company in the
negotiation of the underwriting agreement, provided that nothing herein
contained shall diminish the foregoing obligations of the Company. The holders
of Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and any necessary or appropriate custody
agreements and execute appropriate powers of attorney, and may, at their option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of
-10-
<PAGE>
such holders of Registrable Securities. Any such holder of Registrable
Securities shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such holder, such holder's Registrable
Securities and such holder's intended method of distribution and any other
representation required by law.
(b) Incidental Underwritten Offerings. If the Company at any time
---------------------------------
proposes to register any of its securities under the Securities Act, as
contemplated by Section 2.2 above, and such securities are to be distributed by
or through one or more underwriters, the Company will, if requested by any
holder of Registrable Securities as provided in said Section 2.2 and subject to
the provisions of Section 2.2(b), arrange for such underwriters to include all
the Registrable Securities to be offered and sold by such holder among the
securities to be distributed by such underwriters. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to the
underwriting agreement between the Company and such underwriters and any
necessary or appropriate custody agreements and execute appropriate powers of
attorney, and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation required
by law.
2.5. Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, the underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders, and such
underwriters, respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
2.6. Indemnification. (a) Indemnification by the Company. In the event of
--------------- ------------------------------
any registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless the seller of any
Registrable Securities covered by such registration statement, its directors and
officers, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
seller or any such underwriter within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
seller or any such director or officer or underwriter or controlling Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such
-11-
<PAGE>
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse such seller and each such
director, officer, underwriter and controlling Person for any legal or any other
expenses incurred by them in connection with investigating or defending any such
loss, claim, liability, action or proceeding; provided that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or omission made in such registration
statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such seller specifically stating that it is for use in the preparation
thereof and, provided further that the Company shall not be liable to any Person
who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within the
meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of such seller or any such
director, officer, underwriter or controlling Person and shall survive the
transfer of such securities by such seller and the termination or expiration of
this Agreement.
(b) Indemnification by the Sellers. The Company may require, as a condition
------------------------------
to including any Registrable Securities in any registration statement filed
pursuant to Section 2.3 above, that the Company shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subparagraph (a) of this Section 2.6) the Company, each
director of the Company, each officer of the Company and each other Person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in. reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such seller and the termination or expiration of this Agreement. The
obligations of any seller under this subparagraph (b) shall be limited to the
net proceeds to such seller of the Registrable Securities sold pursuant to the
registration statement to which the loss, claim, damage, judgment, expense or
liability relates.
(c) Contribution. If the indemnification provided for in
------------
subparagraphs (a) and (b) above for any reason is held by a court of competent
jurisdiction to be unavailable to an
-12-
<PAGE>
indemnified party in respect of any losses, claims, damages, judgments, expenses
or liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, judgments, expenses or liabilities in such
proportion as is appropriate to reflect the relative fault, if any, of the
Company and the other selling holders in connection with the statements or
omissions which resulted in such losses, claims, damages, expenses or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the selling holders shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the selling
holders and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
holders, and the underwriters agree that it would not be just and equitable if
contribution pursuant to this subparagraph (c) were determined by pro rata or
per capita allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
sentence. The obligations of any seller under this subparagraph (c) are several,
not joint, and shall be limited to an amount equal to the net proceeds to such
seller of Registrable Securities sold pursuant to the registration statement to
which the loss, claim, damage, judgment expense or liability relates. No person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(d) Notices of Claims and Procedures. Promptly after receipt by an
--------------------------------
indemnified Person of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subparagraphs of this Section
2.6, such indemnified Person will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified Person
to give notice as provided herein shall not relieve the indemnifying party of
his, her or its obligations under the preceding subparagraphs of this Section
2.6, except to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against an
indemnified Person, unless in such indemnified Person's reasonable judgment a
conflict of interest between such indemnified Person and such indemnifying party
may exist in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified Person, and after notice
from the indemnifying party to such indemnified Person of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified Person for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified Person, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified Person of a release from all
liability in respect to such claim or litigation and otherwise in form and
substance reasonably satisfactory to the indemnified Person.
(e) Indemnification Payments. The indemnification required by this Section
------------------------
2.6 shall be made by prompt payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
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<PAGE>
(f) Not Exclusive. The indemnification and contribution provisions of
-------------
Section 2.6 are in addition to any other rights to indemnification or
contribution that an indemnified party may have under law or contract.
2.7. Adjustments Affecting Registrable Securities. The Company will not
--------------------------------------------
effect or permit to occur any combination or subdivision of shares which would
materially adversely affect the ability of the holders of Registrable Securities
to include such Registrable Securities in any registration of its securities
contemplated by this Section 2 or the marketability of such Registrable
Securities under any such registration.
3. Rules 144 and 144A. The Company will file the reports required to be
------------------
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, if the Company is not
required to file such reports, the Company will, upon the request of any holder
of Registrable Securities, make publicly available other information) and will
take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rules 144 and 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any holder of Registrable Securities, the Company will deliver to such holder
a written statement as to whether it has complied with such requirements.
4. Amendments and Waivers. This Agreement may be amended and the Company
----------------------
may take any action herein prohibited or omit to perform any act herein required
to be performed by it, only if the Company shall have obtained the written
consent to such amendment, action or omission to act, of the holder or holders
of eighty percent (80%) or more of the Registrable Securities at the time
outstanding. Each holder of Registrable Securities at the time or thereafter
outstanding shall be bound by a consent authorized by this Section 4.
5. Nominees for Beneficial Owners. In the event that any Registrable
------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at his, her or its election, be treated as the
holder of such Registrable Securities for purposes of any request or other
action by any holder or holders of Registrable Securities pursuant to this
Agreement or any determination of any number or percentage of shares of
Registrable Securities held by any holder or holders of Registrable Securities
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.
6. Notices. All notices and other communications required or permitted
-------
hereunder shall be in writing, and shall be deemed to have been delivered on the
date delivered by hand, telegram, facsimile or by similar means, on the third
(3rd) day following the day when sent by recognized courier or overnight
delivery service (fees prepaid), or on the fifth (5th) day following the day
when deposited in the mail, registered or certified (postage prepaid), addressed
(a) if to Stockholders, to the attention of each Person at the address set forth
on Exhibit 3 of the Subscription Agreement (ASC has the same address as Adam
Smith Investment Partners, L.P.), in the stock records of the Company or such
address, or to the attention of such other Person or Persons, as a Stockholder
shall have furnished to the Company in writing, or (b) if to the Company, Medjet
Inc., 1090 King George Post Road, Edison, New Jersey 08837, Attention:
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<PAGE>
Chariman, fax: (732) 738-3984 with a copy to __________________________, or such
other address, or to the attention of such other Person or Persons, as the
Company shall have furnished to each holder of Registrable Securities at the
time outstanding; provided, however, that any such communication to the Company
may also, at the option of Stockholders, be delivered to any officer of the
Company.
7. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of Stockholders shall also be for the benefit of and enforceable by any
subsequent holder of any Registrable Securities who has executed a copy of this
Agreement or otherwise indicated its agreement to be bound hereby, subject to
the provisions respecting the minimum numbers or percentages of shares of
Registrable Securities required in order to be entitled to certain rights or
take certain actions contained herein. The Company acknowledges that ASC or any
Stockholder may, at any time, transfer any of the Registrable Securities which
they may own, beneficially or of record, to (a) their Affiliates, or (b) their
partner(s), investor(s), security holder(s) or beneficial holder(s) pursuant to
their organization documents or other agreements, and that, upon the
consummation of any such transfer, the provisions of this Agreement shall be
binding upon and inure to the benefit of each transferee of such Registrable
Securities.
8. Descriptive Headings. The descriptive headings of the several sections
--------------------
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
9. Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York, U.S.A., without regard to principles of conflicts of
laws.
10. Counterparts. This Agreement may be executed simultaneously in any
------------
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
11. Termination. This Agreement shall terminate only upon approval of the
-----------
Company and the holders of a majority of the Registrable Securities.
12. Other Registration Rights. The Company shall not at any time from and
-------------------------
after the date of this Agreement grant registration rights to any holder of
shares of the Company's capital stock (other than the rights granted to the
Stockholders under this Agreement) which are equal to or more favorable to such
holders than the rights set forth in this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement,
or have caused this Agreement to be executed and delivered by their respective
duly authorized officers, on the date first above written.
MEDJET INC.
By: /s/ Eugene Gordon
-----------------------------------------
Name: Eugene Gordon
Title: Chairman of the Board and Chief
Executive Officer
ADAM SMITH & COMPANY, INC.
By: /s/ Richard Grossman
____________________________
Name: Richad Grossman
Title: Managing Director
ADAM SMITH INVESTMENT PARTNERS, L.P.
By: ADAM SMITH CAPITAL MANAGEMENT, L.L.C.,
General Partner
By: /s/ Richard Grossman
_________________________________
Name: Richard Grossman
Title: Manager
ADAM SMITH INVESTMENTS, LTD.
By: F.M.C. Limited
By: /s/ Anna Carrington
_________________________________
Name: Anna Carrington
Title:
RICHARD AND ANA GROSSMAN JTWROS
By: /s/ Richard and Ana Grossman
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/s/ Orin Hirschman
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Orin Hirschman
/s/ Paul Packer
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Paul Packer
ADAM-JACK M. DODICK, MD GENERAL PARTNERSHIP
By: Adam Smith Capital Management, L.L.C.,
General Partner
By: /s/ Richard Grossman
__________________________________
Name: Richard Grossman
Title: Manager
/s/ Hershel P. Berkowitz
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Hershel P. Berkowitz
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EXHIBIT 4.5
ADAM SMITH & COMPANY, INC.
101 East 52nd Street
New York, NY 10022
Tel (212) 751-4900
Fax (212) 751-2892
December 3, 1999
Eugene Gordon
Chairman of the Board & CEO
Medjet Inc.
1090 King George Post Road
Edison, New Jersey 08837
Re: Investment Banking Agreement
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Gentlemen:
1. Medjet Inc. and/or related entities (the "Company") hereby engages Adam
Smith & Company, Inc. ("Adam Smith") to provide investment banking services
under the terms described herein. Adam Smith will provide investment banking
services that the Company may reasonably request including providing advice
concerning relations with securities analysts, the evaluation of potential
public or private financings, acquisitions, purchases or sales of major assets
and mergers that have been proposed to the Company and those which may be
proposed to the Company in the future. We shall not be responsible, of course,
for your effectuating any particular transaction. In the event we perform any
functions other than acting as your agent hereunder, such as obtaining funds for
you or placing your securities, acting as tender agent or arranging for
acquisitions or mergers, we shall be entitled to such compensation for such
services as we may hereafter agree upon, in addition to the compensation
provided for in the next paragraph; however, inability to reach agreement shall
not be deemed a breach hereof.
2. In consideration of the execution and delivery of this investment banking
agreement, the Company will irrevocably issue to Adam Smith warrants to purchase
500,000 (five hundred thousand) shares of the Company's common stock ("Common
Stock") at a price of U.S. $3.50 (three dollars and fifty cents) per share. All
warrants referred to herein will be substantially in the form attached hereto as
Exhibit A. The rights granted pursuant to the warrant shall not be affected by
the performance of services hereunder or payment of other compensation for such
services.
3. Adam Smith shall have the right of first refusal during the Term to act as
your investment banker in any transaction(s) such as a merger or sale of the
Company, a sale by the Company of all or substantially all of its assets, an
acquisition of another company or business, a public or
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private financing of the Company, a joint venture or licensing arrangement or
similar transaction (each a "Transaction").
4. In the event that, during the period of the engagement of Adam Smith
hereunder, the Company or any of its officers, directors, employees or
representatives are considering retaining an investment banker or other
financial advisor in connection with a proposed Transaction, the Company will
notify Adam Smith, including providing information concerning the nature of the
proposed Transaction and proposed investment banking compensation, in order that
Adam Smith can evaluate such Transaction and its interest in exercising its
right of first refusal.
5. In the event that for any reason the Company shall fail to pay to Adam
Smith all or any portion of any fees payable hereunder when due, interest shall
accrue and be payable on the unpaid cash balance hereunder from the date then
first due through and including the date when actually collected by Adam Smith,
at a rate equal to fourteen percent (14%) per year.
6. This Agreement shall be effective on the date hereof and shall be in effect
for a minimum of three years following the date hereof (the "Initial Term"). At
the end of the Initial Term, this Agreement shall be automatically extended
until thirty (30) days after written notice is given by either party to
terminate this Agreement (the Initial Term as extended, the "Term").
Notwithstanding anything herein to the contrary, if the Company shall, within
one year immediately following the termination of the Agreement, conclude a
Transaction based on any Transaction that was initiated during the Term and with
respect to which Adam Smith performed any services hereunder, the Company shall
also pay Adam Smith the fee determined above.
7. (a) The Company agrees to indemnify and hold harmless Adam Smith, its
directors, officers, employees, legal counsel, agents and stockholders, (all of
such persons being hereinafter collectively referred to as the "Indemnified
Parties") against any and all losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements (and any and
all actions, suits, proceedings and investigations in respect thereof and any
and all legal and other costs, expenses and disbursements reasonably incurred in
giving testimony or furnishing documents in response to a subpoena or
otherwise), including, without limitation, the reasonable costs, expenses and
disbursements, as and when incurred, of investigating, preparing or defending
any such action, suit, proceeding or investigation (whether or not in connection
with litigation in which an Indemnified Party is a party), directly or
indirectly caused by, relating to, based upon, arising out of or in connection
with (a) Adam Smith's acting for the Company, including, without limitation,
any act or omission by an Indemnified Party in connection with its acceptance of
or the performance or nonperformance of its obligations under the Agreement, as
it may be amended from time to time; (b) any untrue statement or alleged untrue
statement of material fact contained in, or omissions or alleged omissions from,
any information furnished to an Indemnified Party, an investor, lender, provider
of funding or any party to the transaction; or (c) any Consummated Transaction,
provided, however, such indemnity agreement shall not apply to any portion of
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any such loss, claim, damage, obligation, penalty, judgment, award, liability,
cost, expense or disbursement to the extent it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from the gross negligence or willful misconduct of the
particular Indemnified Party. The Company also agrees that an Indemnified Party
shall not have any liability (whether direct or indirect, in contract or tort or
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otherwise) to the Company or to any person claiming through the Company for or
in connection with the engagement of Adam Smith, except to the extent that any
such liability is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from
Adam Smith's gross negligence or willful misconduct.
(b) The provisions shall be in addition to any liability the Company may
otherwise have to any of the Indemnified Parties.
(c) If any action, suit, proceeding or investigation is commenced, as to
which an Indemnified Party proposes to demand indemnification, it shall notify
the Company with reasonable promptness; provided, however, that any failure by
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an Indemnified Party to notify the Company shall not relieve the Company from
its obligations hereunder. Each Indemnified Party shall have the right to
retain counsel of its own choice to represent it, and the Company shall pay the
fees, expenses and disbursements of such counsel; and such counsel shall to the
extent consistent with its professional responsibilities cooperate with the
Company and any counsel designated by the Company. The Company shall be liable
for any settlement of any claim against an Indemnified Party made with the
Company's written consent, which consent shall not be unreasonably withheld.
The Company shall not, without the prior written consent of an Indemnified
Party, settle or compromise any claim, or permit a default or consent to the
entry of any judgment in respect thereof, unless such settlement, compromise or
consent includes, as an unconditional term thereof, the giving by the claimant
to the respective Indemnified Party of an unconditional release from all
liability in respect of such claim.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these Indemnification Provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and the respective Indemnified Party or
Indemnified Parties, as applicable on the other hand, shall contribute to the
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements to which the indemnified persons may be
subject in accordance with the relative benefits received by the Company, on the
one hand, and the respective Indemnified Party or Indemnified Parties, as
applicable on the other hand, and also the relative fault of the Company, on the
one hand, and the respective Indemnified Party or Indemnified Parties, as
applicable on the other hand, in connection with the statements, acts or
omissions which resulted in such losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and disbursements and
the relative equitable considerations shall also be considered. No person found
liable for a fraudulent misrepresentation shall be entitled to contribution from
any person who is not also found liable for such fraudulent misrepresentation.
Notwithstanding the foregoing, the respective Indemnified Party or Indemnified
Parties, as applicable, shall not be obligated to contribute any amount
hereunder that exceeds the amount of fees previously received by the respective
Indemnified Party or Indemnified Parties, as applicable, in connection with the
foregoing.
Neither termination nor completion of the engagement of Adam Smith pursuant
to the Agreement shall affect the provisions of this Section 7 which then shall
remain operative and in full force and effect.
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8. The Company shall bear Adam Smith's reasonable expenses incurred in
connection with performance of its duties hereunder, including without
limitation the reasonable fees and expenses of its outside counsel and travel
expenses; provided that Adam Smith will obtain the Company's prior approval
before incurring travel expenses or retaining experts (other than counsel).
9. Neither the Company nor Adam Smith shall make any public statement about
this agreement or any transactions or services described herein mentioning the
other party without the prior written consent of the other party, unless that
party determines in good faith, on the advice of legal counsel, that public
disclosure is required by law, in which case that party shall consult with the
other party prior to making a statement.
10. The Company represents and warrants to Adam Smith that Adam Smith's
engagement and compensation hereunder has been duly authorized and approved by
the Board of Directors of the Company and this Agreement has been duly executed
and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company.
11. The parties hereto acknowledge and agree that Adam Smith is not acting as
an agent or a fiduciary of the Company or its stockholders in connection with
any services that may be performed hereunder.
12. Any advice rendered by Adam Smith hereunder is solely for the benefit of
the Company's board of directors only and may not be relied upon by any other
person.
13. This Agreement has been executed and delivered in the State of New York and
shall be governed by the laws of such state, without giving effect to the
conflict of laws rules thereunder.
14. This Agreement shall be binding upon, and enforceable against, the
successors and assigns of each of the undersigned.
15. This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Please sign this letter at the place indicated below and return it to the
undersigned.
Very truly yours,
ADAM SMITH & COMPANY, INC.
By: /s/ Richard Grossman
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Managing Director
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AGREED:
MEDJET INC.
By: /s/ Eugene Gordon
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Eugene Gordon
Chairman of the Board & CEO
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
MEDJET ANNOUNCES SALE OF PREFERRED SHARES AND WARRANTS FOR $2 MILLION
EDISON, NJ, (BUSINESS WIRE), December 7, 1999- Medjet Inc. (BB:MDJT) today
announced that it had closed on a private sale of $2,000,000 of its preferred
shares to a small group of investors. The preferred shares are convertible into
Medjet common stock at a fixed price of $1.25 per share. In addition, the buyers
received 1.6 million five-year common stock purchase warrants, each at an
exercise price of $3.50 per share. The Company also entered into an investment
banking agreement with a New York firm affiliated with certain of the investors,
and issued an additional 500,000 warrants on the same terms.
The proceeds will be used by Medjet to continue development of its waterjet
technology for applications in eye surgery and for new products for treatment of
dental caries and for treatment of various skin problems including wrinkle
reduction.
Medjet Inc., located in Edison, New Jersey, is a medical device company with the
goal of developing, licensing, manufacturing and selling new cutting, drilling,
layer removal and shaping instruments for surgical procedures based on its
waterjet technology. Medjet believes that its platform technology may offer
important improvements in surgical capability and performance to the clinic or
operating room.
For further information, contact Eugene Gordon of Medjet Inc., (732) 738-3990,
[email protected]
This press release contains forward-looking statements, including statements
regarding medical devices under development and the expansion and
commercialization of patented technology into other surgical areas. All such
statements involve risks and uncertainties, including, without limitation, the
risks detailed in Medjet's filings and reports with the Securities and Exchange
Commission. Such statements are only predictions and actual events or results
may differ materially.
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE
MEDJET ANNOUNCES LICENSE AGREEMENT WITH ALCON TERMINATED
EDISON, NJ, (BUSINESS WIRE), December 16, 1999--Medjet Inc. (BB:MDJT} today
announced that on December 13, 1999 it received notice of termination of its
refractive surgery license agreement with Nestle S.A. The July 1998 agreement
with Nestle and its Alcon Laboratories, Inc. subsidiary was for an exclusive
worldwide license for the use of Medjet's proprietary microjet technology for
corneal refractive surgery. Eugene I. Gordon, Ph.D., Chairman, Chief Executive
Officer and founder of Medjet, said that Alcon gave Medjet its three-month
notice to terminate its participation as required under the agreement. Alcon,
which was to have begun paying certain royalties to Medjet in 2000, offered no
reason for terminating the license agreement. Dr. Gordon mentioned that, "there
were disagreements over the terms and conditions of the license agreement." He
also said that, "although Alcon will be missed, Medjet will now be able to
pursue its waterjet technology at a pace it will set internally. In addition,
this returns to Medjet the ability to completely control and capitalize on its
own technology."
With the recently announced capital infusion, Medjet will continue development
of its waterjet technology for vision correction applications and other new
products for treatment of dental caries and for treatment of various skin
problems including wrinkle reduction. Medjet may also seek to license its
technology for one or more patented applications.
Medjet Inc., located in Edison, New Jersey, is a medical device company with the
goal of developing, licensing, manufacturing and selling new cutting, drilling,
layer removal and shaping instruments for surgical procedures based on its
waterjet technology. Medjet believes that its platform technology may offer
important improvements in surgical capability and performance to the clinic or
operating room.
For further information, contact Eugene I. Gordon of Medjet Inc., (732)
738-3990, [email protected]
This press release contains forward-looking statements, including statements
regarding medical devices under development and the expansion and
commercialization of patented technology into other surgical areas. All such
statements involve risks and uncertainties, including, without limitation, the
risks detailed in Medjet's filings and reports with the Securities and Exchange
Commission. Such statements are only predictions and actual events or results
may differ materially.
