Exhibit 4.3
[FORM OF WARRANT]
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY
THE HOLDER), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
LIBERATOR MEDICAL HOLDINGS, INC.
Warrant To Purchase
Common Stock
Warrant
No.:
Number of Shares of Common Stock:
Date of Issuance: May 22, 2008 (“ Issuance Date
”)
Liberator Medical Holdings, Inc., a
Nevada corporation (the “ Company ”), hereby
certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [
],
the registered holder hereof or its permitted assigns (the "
Holder ”), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as
defined below) then in effect, upon surrender of this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the
“ Warrant ”), at any time or times on or after
the date hereof but not after 11:59 p.m., New York time, on
the Expiration Date (as defined below),
[ ]
([
]) fully paid nonassessable shares of Common Stock (as defined
below) (the “ Warrant Shares ”). This Warrant is
one of the Warrants to purchase Common Stock (the “ SPA
Warrants ”) issued pursuant to Section 1 of that
certain Securities Purchase Agreement, dated as of May 22,
2008 (the " Subscription Date ”), by and among the
Company, as issuer, Liberator Medical Supply, Inc., as guarantor,
and the investors (the “ Buyers ”) referred to
therein (the “ Securities Purchase Agreement ”).
Except as otherwise defined herein, capitalized terms in this
Warrant shall have the meanings set forth in Section 15.
1. EXERCISE OF
WARRANT.
(a)
Mechanics of Exercise . Subject to the terms and conditions
hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder on
any day on or after the date hereof, in whole or in part, by (i)
delivery of a written notice, in the form attached hereto as
Exhibit A (the “ Exercise Notice ”),
of the Holder’s election to exercise this Warrant and (ii)
(A) payment to the Company of an amount equal to the
applicable Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (the “
Aggregate Exercise Price ”) in cash or by wire
transfer of immediately available funds or (B) by notifying
the Company that this Warrant is being exercised pursuant to a
Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to
effect an exercise hereunder. Execution and delivery of the
Exercise Notice with respect to less than all of the Warrant Shares
shall have the same effect as cancellation of the original Warrant
and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. On or before the second (2
nd )
Business Day following the date on which the Company has received
each of the Exercise Notice and the Aggregate Exercise Price (or
notice of a Cashless Exercise) (the “ Exercise Delivery
Documents ”), the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery
Documents to the Holder and the Company’s transfer agent (the
“ Transfer Agent ”). On or before the fifth (5
th )
Trading Day following the date on which the Company has received
all of the Exercise Delivery Documents (the “ Share
Delivery Date ”), the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust
Company (“ DTC ”) Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such
aggregate number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit
Withdrawal Agent Commission system, or (Y) if the Transfer
Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate,
registered in the Company’s share register in the name of the
Holder or its designee, for the number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise. Upon
delivery of the Exercise Delivery Documents, the Holder shall be
deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has
been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery
of the certificates evidencing such Warrant Shares, as the case may
be. If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then
the Company shall as soon as practicable and in no event later than
five (5) Business Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Shares with respect to which this
Warrant is exercised. No fractional
shares
of Common Stock are to be issued upon the exercise of this Warrant,
but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall
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pay any and all
taxes which may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.
(b)
Exercise Price . For purposes of this Warrant, “
Exercise Price ” means One Dollar ($1.00), subject to
adjustment as provided herein.
(c)
Company’s Failure to Timely Deliver Securities . If
within five (5) Trading Days after the Company’s receipt
of the Exercise Delivery Documents the Company shall fail to issue
and deliver a certificate to the Holder or credit the
Holder’s balance account with DTC for the number of shares of
Common Stock to which the Holder is entitled upon such
Holder’s exercise of this Warrant, and if on or after such
Trading Day the Holder purchases (in an open market transaction or
otherwise) Common Stock to deliver in satisfaction of a sale by the
Holder of Common Stock issuable upon such exercise that the Holder
anticipated receiving from the Company (a “ Buy-In
”), then the Company shall, within five (5) Business
Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for
the shares of Common Stock so purchased (the “Buy-In
Price" ), at which point the Company’s obligation to
deliver such certificate (and to issue such Common Stock) shall
terminate, or (ii) promptly honor its obligation to deliver to
the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) the Weighted
Average Price on the date of exercise.
(d)
Cashless Exercise . Notwithstanding anything contained
herein to the contrary, at any time and from time to time on or
after the six (6) month anniversary of the Issuance Date, if a
registration statement covering the resale of the Warrant Shares
that are the subject of the Exercise Notice by the Holder pursuant
to the 1933 Act (the “ Unavailable Warrant Shares
”) is not available for the resale of such Unavailable
Warrant Shares, the Holder may, in its sole discretion, exercise
this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such
exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of
shares of Common Stock determined according to the following
formula (a “ Cashless Exercise ”):
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Net
Number = |
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(A x B) - (A x C) |
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B |
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For purposes of the
foregoing formula: |
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A=
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the total number of shares with
respect to which this Warrant is then being exercised. |
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B=
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the Weighted Average Price of the
shares of Common Stock (as reported by Bloomberg) on the date
immediately preceding the date of the Exercise Notice. |
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C=
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the Exercise Price then in effect for
the applicable Warrant Shares at the time of such exercise. |
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(e)
Disputes . In the case of a dispute as to the determination
of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall promptly issue to the Holder the number
of Warrant Shares that are not disputed and resolve such dispute in
accordance with Section 13.
(f)
Limitations on Exercises; Beneficial Ownership . The Company
shall not effect the exercise of this Warrant, and the Holder shall
not have the right to exercise this Warrant, to the extent that
after giving effect to such exercise, such Person (together with
such Person’s affiliates) would beneficially own in excess of
9.99% (the “ Maximum Percentage ”) of the shares
of Common Stock outstanding immediately after giving effect to such
exercise. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Person
and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which
the determination of such sentence is being made, but shall exclude
shares of Common Stock which would be issuable upon
(x) exercise of the remaining, unexercised portion of this
Warrant beneficially owned by such Person and its affiliates and
(y) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned
by such Person and its affiliates (including, without limitation,
any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. For purposes of this
Warrant, in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company’s most
recent Form 10-K, Form 10-KSB, Form 10-Q, Form 10-QSB, Current
Report on Form 8-K or other public filing with the Securities and
Exchange Commission (“ SEC ”) as the case may
be, (2) a more recent public announcement by the Company or
(3) any other notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. For
any reason at any time, upon the written or oral request of the
Holder, the Company shall within two (2) Business Days confirm
orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company by the
Holder and its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. By written notice
to the Company, the Holder may from time to time increase or
decrease the Maximum Percentage to any other percentage specified
in such notice; provided that any such increase will not be
effective until the sixty-first (61 st ) day after
such notice is delivered to the Company.
(g)
Insufficient Authorized Shares . If at any time while this
Warrant remain outstanding the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to
satisfy its obligation to reserve for issuance upon exercise of
this Warrant at least a number of shares of Common Stock equal to
110% (the
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“ Required Reserve
Amount ”) of the number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of all
of this Warrant then outstanding (an “ Authorized Share
Failure ”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to
reserve the Required Reserve Amount for this Warrant then
outstanding. Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than ninety
(90) days after the occurrence of such Authorized Share
Failure, the Company shall hold a meeting of its stockholders for
the approval of an increase in the number of authorized shares of
Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its
best efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its
board of directors to recommend to the stockholders that they
approve such proposal.
2. ADJUSTMENT OF EXERCISE
PRICE AND NUMBER OF WARRANT SHARES . The Exercise Price and the
number of Warrant Shares shall be adjusted from time to time as
follows:
(a)
Adjustment upon Issuance of shares of Common Stock . If and
whenever the Company issues or sells, or in accordance with this
Section 2 is deemed to have issued or sold, any shares of
Common Stock (including the issuance or sale of shares of Common
Stock owned or held by or for the account of the Company, but
excluding shares of Common Stock issued or sold or deemed to have
been issued or sold by the Company in connection with any Excluded
Securities (as defined in the SPA Securities)) for a consideration
per share less than a price (the “ Applicable Price
”) equal to both the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale and the
Closing Sale Price for any of the ten (10) consecutive Trading
Days immediately preceding such issuance or sale or deemed issuance
or sale (the foregoing a “Dilutive Issuance” ),
then immediately after such Dilutive Issuance, the Exercise Price
in effect immediately prior to such Dilutive Issuance shall be
reduced to an amount equal to the product of (A) the Exercise
Price in effect immediately prior to such Dilutive Issuance and
(B) the quotient determined by dividing (1) the sum of
(I) the product derived by multiplying the lower of (x) the
volume weighted average Closing Sale Price for the ten
(10) consecutive Trading Days immediately preceding such
Dilutive Issuance and (y) the Exercise Price in effect
immediately prior to such Dilutive Issuance (such lower amount, the
“ Adjustment Price ”), by the number of shares
of Common Stock Deemed Outstanding immediately prior to such
Dilutive Issuance plus (II) the consideration, if any,
received by the Company upon such Dilutive Issuance, by
(2) the product derived by multiplying (I) the Adjustment
Price by (II) the number of shares of Common Stock Deemed
Outstanding immediately after such Dilutive Issuance. Upon each
such adjustment of the Exercise Price hereunder, the number of
Warrant Shares shall be adjusted to the number of shares of Common
Stock determined by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant
Shares acquirable upon exercise of this Warrant immediately prior
to such adjustment and dividing the product thereof by the Exercise
Price resulting from such adjustment. For purposes of determining
the adjusted Exercise Price under this Section 2(a), the
following shall be applicable:
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(i) Issuance
of Options . If the Company in any manner grants any Options
and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon
conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the
Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company
at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(a)(i), the
“lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion,
exercise or exchange of such Convertible Securities issuable upon
exercise of any such Option” shall be equal to the sum of the
lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the
granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option. No further adjustment of the
Exercise Price or number of Warrant Shares shall be made upon the
actual issuance of such
shares
of Common Stock or of such Convertible Securities upon the exercise
of such Options or upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such
Convertible Securities.
(ii)
Issuance of Convertible Securities . If the Company in any
manner issues or sells any Convertible Securities and the lowest
price per share for which one share of Common Stock is issuable
upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company
at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this
Section 2(a)(ii), the “lowest price per share for which
one share of Common Stock is issuable upon the conversion, exercise
or exchange thereof” shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon the issuance
or sale of the Convertible Security and upon conversion, exercise
or exchange of such Convertible Security. No further adjustment of
the Exercise Price or number of Warrant Shares shall be made upon
the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities, and if any
such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of this Warrant has
been or is to be made pursuant to other provisions of this
Section 2(a), no further adjustment of the Exercise Price or
number of Warrant Shares shall be made by reason of such issue or
sale.
(iii) Change
in Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion, exercise or exchange of
any
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Convertible
Securities, or the rate at which any Convertible Securities are
convertible into or exercisable or exchangeable for shares of
Common Stock increases or decreases at any time, the Exercise Price
and the number of Warrant Shares in effect at the time of such
increase or decrease shall be adjusted to the Exercise Price and
the number of Warrant Shares which would have been in effect at
such time had such Options or Convertible Securities provided for
such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the
case may be, at the time initially granted, issued or sold. For
purposes of this Section 2(a)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the date of
issuance of this Warrant are increased or decreased in the manner
described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this Section 2(a) shall be made
if such adjustment would result in an increase of the Exercise
Price then in effect or a decrease in the number of Warrant
Shares.
(iv)
Calculation of Consideration Received . In case any Option
is issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction in
which no specific consideration is allocated to such Options by the
parties thereto, the Options will be deemed to have been issued for
a consideration of $0.01. If any shares of Common Stock, Options or
Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor will
be deemed to be the net amount received by the Company therefor. If
any shares of Common Stock, Options or Convertible Securities are
issued or sold for a consideration other than cash, the amount of
such consideration received by the Company will be the fair value
of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by
the Company will be the Weighted Average Price of such security on
the date of receipt. If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the
Company and the Required Holders. If such parties are unable to
reach agreement within ten (10) days after the occurrence of
an event requiring valuation (the “ Valuation Event
”), the fair value of such consideration will be determined
within five (5) Business Days after the tenth (10 th ) day following
the Valuation Event by an independent,
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reputable
appraiser jointly selected by the Company and the Required Holders.
The determination of such appraiser shall be final and binding upon
all parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company.
(v) Record
Date . If the Company takes a record of the holders of shares
of Common Stock for the purpose of entitling them (A
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