WARRANT AGENT
AGREEMENT
WARRANT AGENT AGREEMENT (the “
Agreement ”) dated as of ___________, 2006, by and
between ECHO HEALTHCARE ACQUISITION CORP., a Delaware corporation,
with offices at 8000 Towers Crescent Drive, Suite 1300, Vienna, VA
22182 (the “ Company ”), and Corporate Stock
Transfer, Inc. a Colorado corporation, with offices at 320 Cherry
Creek Drive South, Suite 430, Denver, Colorado 80209 (“
CST ” or the “ Warrant Agent
”).
WHEREAS , the Company is engaged in a public offering (a
“ Public Offering ”) of Units (the “
Units ”) and, in connection therewith, has determined
to issue and deliver up to (i) 6,250,000 Warrants (the “
Public Warrant s”) to public investors, with each of
such Public Warrants evidencing the right of the holder thereof to
purchase one share of common stock, par value $.0001 per share, of
the Company’s Common Stock (the “ Common Stock
”) for $6.00, subject to adjustment as described herein, and
(ii) 312,500 Warrants to Morgan Joseph & Co. Inc.
(“Morgan Joseph”) and Roth Capital Partners, LLC.
(“Roth Capital” and together with Morgan Joseph, the
“ Underwriters ”) or their designees (the
“Underwriter s’ Warrants ” and, together
with the Public Warrants, the “ Warrants ”),
with each of such Underwriters’ Warrants evidencing the right
of the holder thereof to purchase one share of Common Stock for
$6.00, subject to adjustment as described herein; and
WHEREAS , the Company has filed with the Securities and
Exchange Commission a Registration Statement, No. 333-126650 on
Form S-1 (as the same may be amended from time to time, the “
Registration Statement ”) for the registration, under
the Securities Act of 1933, as amended (the “ Act
”), of, among other securities, the Warrants and the Common
Stock issuable upon exercise of the Warrants; and
WHEREAS , the Company desires that CST act as the
Warrant Agent for the Company in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the
Warrants, and CST is willing to so act as the Warrant Agent;
and
WHEREAS , the Company desires to provide for the form
and provisions of the Warrants, the terms upon which they shall be
issued and exercised, and the respective rights, limitation of
rights, and immunities of the Company, the Warrant Agent, and the
holders of the Warrants; and
WHEREAS , all acts and things have been done and
performed necessary to make the Warrants, when executed on behalf
of the Company and countersigned by or on behalf of the Warrant
Agent, as provided herein, the valid, binding and legal obligations
of the Company, and to authorize the execution and delivery of this
Agreement.
NOW, THEREFORE
, for the mutual promises contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1.
Appointment of Warrant Agent . The Company hereby appoints
CST to act as Warrant Agent for the Company in accordance with the
provisions hereinafter set forth, and CST hereby accepts such
appointment.
2.
Warrants
2.1.
Form of Warrant . Each Warrant shall be issued in registered
form only, shall be in substantially the form of Exhibit A
hereto, the provisions of which are incorporated herein and shall
be signed by, or bear the facsimile signature of, the Chief
Executive Officer or President and Treasurer, Secretary or
Assistant Secretary of the Company and shall bear a facsimile of
the Company’s seal. In the event the person whose facsimile
signature has been placed upon any Warrant shall have ceased to
serve in the capacity in which such person signed the Warrant
before such Warrant is issued, it may be issued with the same
effect as if he or she had not ceased to be such at the date of
issuance.
2.2.
Effect of Countersignature . Unless and until countersigned
by the Warrant Agent pursuant to this Agreement, a Warrant shall be
invalid and of no effect and may not be exercised by the holder
thereof.
2.3.
Registration
2.3.1.
Warrant Register . The Warrant Agent shall maintain books
(the “ Warrant Register ”), for the registration
of original issuance and the registration of transfer of the
Warrants. Upon the initial issuance of the Warrants, the Warrant
Agent shall issue and register the Warrants in the names of the
respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the
Company.
2.3.2. Registered
Holder . Prior to due presentment for registration of transfer
of any Warrant, the Company and the Warrant Agent may deem and
treat the person in whose name such Warrant shall be registered
upon the Warrant Register (the “ registered holder
”), as the absolute owner of such Warrant and of each Warrant
represented thereby (notwithstanding any notation of ownership or
other writing on the Warrant certificate made by anyone other than
the Company or the Warrant Agent), for the purpose of any exercise
thereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the
contrary.
2.4.
Detachability of Warrants . The securities comprising the
Units will not be detachable and separately transferable until 90
days after the date hereof, unless Morgan Joseph informs the
Company of its decision to allow earlier separate trading (the
“ Separation Date ”), but in no event will
Morgan Joseph allow separate trading of the securities comprising
the Units until the Company files a Current Report on Form 8-K
which includes an audited balance sheet reflecting the receipt by
the Company of the gross proceeds of the Public Offering, including
the proceeds received by the Company from the exercise of the
Underwriter’s over-allotment option, if the over-allotment
option is exercised prior to the filing of the Form 8-K. The
Company shall file a separate Current Report on Form 8-K if the
over-allotment option is exercised in whole or in part after the
consummation of the offering and shall include in this Form 8-K, or
amendment
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thereto, or in a subsequent Form
8-K, information indicating if the representative has allowed
separate trading of common stock and warrants prior to the 90
th day after the date of this prospectus.
2.5. Warrants
and Underwriters’ Warrants. The Underwriters’ Warrants
shall have the same terms and be in the same form as the Public
Warrants except with respect to the Warrant Price as set forth
below in Section 3.1.
3.
Terms and Exercise of Warrants .
3.1.
Warrant Price . Each Warrant shall, when countersigned by
the Warrant Agent, entitle the registered holder thereof, subject
to the provisions of such Warrant and of this Warrant Agreement, to
purchase from the Company the number of shares of Common Stock
stated therein, at the price of $6.00 per whole share, subject to
the adjustments provided in Section 4 hereof and in the last
sentence of this Section 3.1. Each of the Underwriters’
Warrants shall, when countersigned by the Warrant Agent, entitle
the registered holder thereof, subject to the provisions of such
Underwriters’ Warrants and of this Warrant Agreement, to
purchase from the Company the number of shares of Common Stock
stated therein, at the price of $6.00 per whole share, subject to
the adjustments provided in Section 4 hereof. The term
“Warrant Price” as used in this Warrant Agreement
refers to the price per share at which Common Stock may be
purchased at the time a Warrant is exercised. The Company in its
sole discretion may lower the Warrant Price at any time prior to
the Expiration Date, provided that any such reduction shall be
identical in percentage terms among all of the Warrants, except
that any amendment to the terms of the Underwriters’ Warrants
shall be subject to any limitations and conditions that may be
imposed by NASD Corporate Financing Rule 2710.
3.2.
Duration of Warrants . A Warrant may be exercised only
during the period (the “ Exercise Period ”)
commencing on the later of (i) the consummation by the Company of a
merger, capital stock exchange, asset acquisition or other similar
business combination (a “ Business Combination
”) (as described more fully in the Company’s
Registration Statement) and (ii) _________, 2007, and terminating
at 5:00 p.m., New York City time on the earlier to occur of (i)
____________, 2010 or (ii) the date fixed for redemption of the
Warrants as provided in Section 6 of this Agreement (the “
Expiration Date ”). Except with respect to the right
to receive the Redemption Price (as set forth in Section 6
hereunder), each Warrant not exercised on or before the Expiration
Date shall become void, and all rights thereunder and all rights in
respect thereof under this Agreement shall cease at the close of
business on the Expiration Date. The Company in its sole discretion
may extend the duration of the Warrants by delaying the Expiration
Date, provided that any such extension shall be identical in
duration among all of the Warrants, except that any amendment to
the terms of the Underwriters’ Warrants shall be subject to
any limitations and conditions that may be imposed by NASD
Corporate Financing Rule 2710.
3.3.
Exercise of Warrants .
3.3.1.
Payment . Subject to the provisions of the Warrant and this
Warrant Agreement, a Warrant, when countersigned by the Warrant
Agent, may be exercised by
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the registered holder thereof by
surrendering it, at the office of the Warrant Agent, or at the
office of its successor as Warrant Agent, with the subscription
form, as set forth in the Warrant, duly executed, and by paying in
full, in lawful money of the United States, in cash, good certified
check or good bank draft payable to the order of the Company (or as
otherwise agreed to by the Company), the Warrant Price for each
full share of Common Stock as to which the Warrant is exercised and
any and all applicable taxes due in connection with the exercise of
the Warrant, the exchange of the Warrant for the Common Stock, and
the issuance of the Common Stock.
3.3.2.
Issuance of Certificates . As soon as practicable after the
exercise of any Warrant and the clearance of the funds in payment
of the Warrant Price, the Company shall issue to the registered
holder of such Warrant a certificate or certificates for the number
of full shares of Common Stock to which he is entitled, registered
in such name or names as may be directed by him, her or it, and if
such Warrant shall not have been exercised in full, a new
countersigned Warrant for the number of shares as to which such
Warrant shall not have been exercised. Notwithstanding the
foregoing, the Company shall not be obligated to deliver any
securities pursuant to the exercise of a Warrant unless a
registration statement under the Act with respect to the Common
Stock is effective. Warrants may not be exercised by, or securities
issued to, any registered holder in any state in which such
exercise would be unlawful.
3.3.3.
Valid Issuance . All shares of Common Stock issued upon the
proper exercise of a Warrant in conformity with this Agreement
shall be validly issued, fully paid and nonassessable.
3.3.4.
Date of Issuance . Each person in whose name any such
certificate for shares of Common Stock is issued shall for all
purposes be deemed to have become the holder of record of such
shares on the date on which the Warrant was surrendered and payment
of the Warrant Price was made, irrespective of the date of delivery
of such certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on
which the stock transfer books are open.
3.4
Disposition of Proceeds on Exercise of Warrants . The
Warrant Agent shall promptly forward to the Company all monies
received by the Warrant Agent for the purchase of shares of Common
Stock through the exercise of Warrants. The Warrant Agent shall
keep copies of this Agreement available for inspection by holders
of Warrants during normal business hours.
4.
Adjustments .
4.1.
Stock Dividends -
Split-Ups . If after the
date hereof, and subject to the provisions of Section 4.6 below,
the number of outstanding shares of Common Stock is increased by a
stock dividend or distribution payable in shares of Common Stock,
or by a split-up or subdivision of shares of outstanding Common
Stock, or other similar event, then, on the effective date of such
stock dividend, split-up or similar event, the number of shares of
Common Stock
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issuable on exercise of each Warrant
shall be increased in proportion to such increase in outstanding
shares of Common Stock.
4.2.
Aggregation of Shares . If after the date hereof, and
subject to the provisions of Section 4.6, the number of outstanding
shares of Common Stock is decreased by a consolidation,
combination, reverse stock split or reclassification of shares of
Common Stock, or other similar event, then, on the effective date
of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of Common
Stock issuable on exercise of each Warrant shall be decreased in
proportion to such decrease in outstanding shares of Common
Stock.
4.3
Adjustments in Exercise Price . Whenever the number of
shares of Common Stock purchasable upon the exercise of the
Warrants is adjusted, as provided in Section 4.1 and 4.2 above,
then upon such adjustment the Warrant Price in effect immediately
prior to such adjustment shall be adjusted (to the nearest cent) by
multiplying such Warrant Price immediately prior to such adjustment
by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of the
Warrants immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Common Stock
so purchasable immediately thereafter.
For the purposes of any computation
to be made in accordance with the provisions of Section 4.3, Common
Stock issuable by way of dividend or other distribution on any
stock of the Company shall be deemed to have been issued
immediately after the opening of business on the date following the
date fixed for the determination of stockholders entitled to
receive such dividend or other distribution.
4.4.
Replacement of Securities upon Reorganization, etc . In case
of any reclassification or reorganization of the outstanding shares
of Common Stock (other than a change covered by Section 4.1 or 4.2
hereof or that solely affects the par value of such shares of
Common Stock), or in the case of any consolidation of the Company
with or merger of the Company into, another corporation (other than
a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in
the case of any sale or conveyance to another corporation or entity
of the assets or other property of the Company as an entirety or
substantially as an entirety in connection with which the Company
is dissolved, the Warrant holders shall thereafter have the right
to purchase and receive, upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of
Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented thereby, the
kind and amount of shares of stock or other securities or property
(including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, that the Warrant holder would
have received if such Warrant holder had exercised his, her or its
Warrant(s) immediately prior to the consummation
