NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS WARRANT 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, 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.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
OPTIMIZERx CORPORATION
Expires September 5, 2015
No.:
W-A-01 Number of Shares: 6,000,000
Date of
Issuance: September 5, 2008
FOR VALUE RECEIVED, the undersigned,
OptimizeRx Corporation, a Nevada corporation (together with its
successors and assigns, the “ Company ”), hereby
certifies that Vicis Capital Master Fund or its registered assigns
is entitled to subscribe for and purchase, during the Term (as
hereinafter defined), up to Six Million (6,000,000) shares (subject
to adjustment as hereinafter provided) of the duly authorized,
validly issued, fully paid and non-assessable Common Stock of the
Company, par value $.001 per share (the “ Common Stock
”), at an exercise price per share equal to the Warrant Price
then in effect, subject, however, to the provisions and upon the
terms and conditions hereinafter set forth. This Warrant
has been executed and delivered pursuant to the Securities Purchase
Agreement dated as of September 5, 2008 (the “ Purchase
Agreement ”) by and among the Company and the
purchaser(s) listed therein. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth for
such terms in the Purchase Agreement. Capitalized terms used in
this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section 8 hereof.
1. Term
. The term of this Warrant shall commence on September
5, 2008 and shall expire at 6:00 p.m., Eastern Time, on September
5, 2015 (such period being the “ Term
”).
2. Method
of Exercise; Payment; Issuance of New Warrant; Transfer and
Exchange .
(a) Time of
Exercise . The purchase rights represented by this
Warrant may be exercised in whole or in part during the Term
beginning on the date of issuance hereof.
(b) Method
of Exercise . The Holder hereof may exercise this
Warrant, in whole or in part, by the surrender of this Warrant
(with the exercise form attached hereto duly executed) at the
principal office of the Company, and by the payment to the Company
of an amount of consideration therefor equal to the Warrant Price
in effect on the date of such exercise multiplied by the number of
Warrant Shares with respect to which this Warrant is then being
exercised, payable at such Holder’s election (i) by certified
or official bank check or by wire transfer to an account designated
by the Company, (ii) by “cashless exercise” in
accordance with the provisions of subsection (c) of this Section 2,
but only when a registration statement under the Securities Act
providing for the resale of the Warrant Shares is not then in
effect, or (iii) when permitted by clause (ii), by a combination of
the foregoing methods of payment selected by the Holder of this
Warrant.
(c) Cashless
Exercise . Notwithstanding any provisions herein to
the contrary and commencing six-months following the Original Issue
Date if (i) the Per Share Market Value of one share of Common Stock
is greater than the Warrant Price (at the date of calculation as
set forth below) and (ii) a registration statement under the
Securities Act providing for the resale of the Warrant Shares is
not in effect in accordance with the terms of the Registration
Rights Agreement at the time of exercise, in lieu of exercising
this Warrant by payment of cash, the Holder may exercise this
Warrant by a cashless exercise and shall receive the number of
shares of Common Stock equal to an amount (as determined below) by
surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise in which
event the Company shall issue to the Holder a number of shares of
Common Stock computed using the following formula:
|
Where
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X =
|
the number of
shares of Common Stock to be issued to the Holder.
|
|
|
|
|
|
|
|
the number of
shares of Common Stock purchasable upon exercise of all of the
Warrant or, if only a portion of the Warrant is being exercised,
the portion of the Warrant being exercised.
|
|
|
|
the Warrant
Price.
|
|
|
|
|
|
|
B =
|
the Per Share
Market Value of one share of Common Stock.
|
(d) Issuance
of Stock Certificates . In the event of any exercise
of this Warrant in accordance with and subject to the terms and
conditions hereof, certificates for the Warrant Shares so purchased
shall be dated the date of such exercise and delivered to the
Holder hereof within a reasonable time, not exceeding three (3)
Trading Days after such exercise (the “ Delivery Date
”) or, at the request of the Holder (provided that a
registration statement under the Securities Act providing for the
resale of the Warrant Shares is then in effect), issued and
delivered to the Depository Trust Company (“ DTC
”) account on the Holder’s behalf via the Deposit
Withdrawal Agent Commission System (“ DWAC ”)
within a reasonable time, not exceeding three (3) Trading Days
after such exercise, and the Holder hereof shall be deemed for all
purposes to be the holder of the Warrant Shares so purchased as of
the date of such exercise. Notwithstanding the foregoing
to the contrary, the Company or its transfer agent shall only be
obligated to issue and deliver the shares to the DTC on a
holder’s behalf via DWAC if such exercise is in connection
with a sale and the Company and its transfer agent are
participating in DTC through the DWAC system. The Holder
shall deliver this original Warrant, or an indemnification
undertaking with respect to such Warrant in the case of its loss,
theft or destruction, at such time that this Warrant is fully
exercised. With respect to partial exercises of this
Warrant, the Company shall keep written records for the Holder of
the number of Warrant Shares exercised as of each date of
exercise
(e)
Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise .
(i) The
Company understands that a delay in the delivery of the shares of
Common Stock upon exercise of this Warrant beyond the Delivery Date
could result in economic loss to the Holder. If the
Company fails to deliver to the Holder such shares via DWAC or a
certificate or certificates pursuant to this Section hereunder by
the Delivery Date, the Company shall pay to the Holder, in cash,
for each $500 of Warrant Shares (based on the Closing Price of the
Common Stock on the date such Securities are submitted to the
Company’s transfer agent), $5 per Trading Day (increasing to
$10 per Trading Day five (5) Trading Days after such damages have
begun to accrue and increasing to $15 per Trading Day ten (10)
Trading Days after such damages have begun to accrue) for each
Trading Day after the Delivery Date until such certificate is
delivered (which amount shall be paid as liquidated damages and not
as a penalty). Nothing herein shall limit a
Holder’s right to pursue actual damages for the
Company’s failure to deliver certificates representing any
Securities as required by the Transaction Documents, and the Holder
shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. Notwithstanding anything to
the contrary contained herein, the Holder shall be entitled to
withdraw an Exercise Notice, and upon such withdrawal the Company
shall only be obligated to pay the liquidated damages accrued in
accordance with this Section 2(e)(i) through the date the Exercise
Notice is withdrawn.
(ii) In addition
to any other rights available to the Holder, if the Company fails
to cause its transfer agent to transmit to the Holder a certificate
or certificates representing the Warrant Shares pursuant to an
exercise on or before the Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “
Buy-In” ), then the Company shall (1) pay in cash to
the Holder the amount by which (x) the Holder’s total
purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the
number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise
at issue times (B) the price at which the sell order giving rise to
such purchase obligation was executed, and (2) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an
attempted exercise of shares of Common Stock with an aggregate sale
price giving rise to such purchase obligation of $10,000, under
clause (1) of the immediately preceding sentence the Company shall
be required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the
Company. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of this Warrant as required
pursuant to the terms hereof.
(f)
Transferability of Warrant . Subject to Section
2(h) hereof, this Warrant may be transferred by a Holder, in whole
or in part, subject only to the restrictions specified in the
Purchase Agreement. If transferred pursuant to this
paragraph, this Warrant may be transferred on the books of the
Company by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of
the Company, properly endorsed (by the Holder executing an
assignment in the form attached hereto) and upon payment of any
necessary transfer tax or other governmental charge imposed upon
such transfer. This Warrant is exchangeable at the
principal office of the Company for Warrants to purchase the same
aggregate number of Warrant Shares, each new Warrant to represent
the right to purchase such number of Warrant Shares as the Holder
hereof shall designate at the time of such exchange. All
Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except
as to the number of Warrant Shares issuable pursuant
thereto.
(g)
Continuing Rights of Holder . The Company will,
at the time of or at any time after each exercise of this Warrant,
upon the request of the Holder hereof, acknowledge in writing the
extent, if any, of its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this
Warrant, provided that if any such Holder shall fail to make
any such request, the failure shall not affect the continuing
obligation of the Company to afford such rights to such
Holder.
(h)
Compliance with Securities Laws.
(i) The Holder
of this Warrant, by acceptance hereof, acknowledges that this
Warrant and the Warrant Shares to be issued upon exercise hereof
are being acquired solely for the Holder’s own account and
not as a nominee for any other party, and for investment, and that
the Holder will not offer, sell or otherwise dispose of this
Warrant or any Warrant Shares to be issued upon exercise hereof
except pursuant to an effective registration statement, or an
exemption from registration, under the Securities Act and any
applicable state securities laws.
(ii) Except
as provided in paragraph (iii) below, this Warrant and all
certificates representing Warrant Shares issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially
the following form:
NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE 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, 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.
(iii) The Company
agrees to reissue this Warrant or certificates representing any of
the Warrant Shares, without the legend set forth above if at such
time, prior to making any transfer of any such securities, the
Holder shall give written notice to the Company describing the
manner and terms of such transfer. Such proposed
transfer will not be effected until: (a) either (i) the Company has
received an opinion of counsel reasonably satisfactory to the
Company, to the effect that the registration of such securities
under the Securities Act is not required in connection with such
proposed transfer, (ii) a registration statement under the
Securities Act covering such proposed disposition has been filed by
the Company with the Securities and Exchange Commission and has
become effective under the Securities Act, (iii) the Company has
received other evidence reasonably satisfactory to the Company that
such registration and qualification under the Securities Act and
state securities laws are not required, or (iv) the Holder provides
the Company with reasonable assurances that such security can be
sold pursuant to Rule 144 under the Securities Act; and (b) either
(i) the Company has received an opinion of counsel reasonably
satisfactory to the Company, to the effect that registration
or
qualification under the securities or
“blue sky” laws of any state is not required in
connection with such proposed disposition, or (ii) compliance with
applicable state securities or “blue sky” laws has been
effected or a valid exemption exists with respect
thereto. The Company will respond to any such notice
from a holder within three (3) Trading Days. In the case
of any proposed transfer under this Section 2(h), the Company will
use reasonable efforts to comply with any such applicable state
securities or “blue sky” laws, but shall in no event be
required, (x) to qualify to do business in any state where it is
not then qualified, (y) to take any action that would subject it to
tax or to the general service of process in any state where it is
not then subject, or (z) to comply with state securities or
“blue sky” laws of any state for which registration by
coordination is unavailable to the Company. The
restrictions on transfer contained in this Section 2(h) shall be in
addition to, and not by way of limitation of, any other
restrictions on transfer contained in any other section of this
Warrant. Whenever a certificate representing the Warrant
Shares is required to be issued to a the Holder without a legend,
in lieu of delivering physical certificates representing the
Warrant Shares, the Company shall cause its transfer agent to
electronically transmit the Warrant Shares to the Holder by
crediting the account of the Holder’s Prime Broker with DTC
through its DWAC system (to the extent not inconsistent with any
provisions of this Warrant or the Purchase Agreement).
(i) No
Mandatory Redemption . This Warrant may not be
called or redeemed by the Company without the written consent of
the Holder.
3. Stock
Fully Paid; Reservation and Listing of Shares; Covenants
.
(a) Stock
Fully Paid . The Company represents, warrants,
covenants and agrees that all Warrant Shares which may be issued
upon the exercise of this Warrant or otherwise hereunder will, when
issued in accordance with the terms of this Warrant, be duly
authorized, validly issued, fully paid and non-assessable and free
from all taxes, liens and charges created by or through the
Company. The Company further covenants and agrees that
during the period within which this Warrant may be exercised, the
Company will at all times have authorized and reserved for the
purpose of the issuance upon exercise of this Warrant a number of
authorized but unissued shares of Common Stock equal to at least
one hundred percent (100%) of the number of shares of Common Stock
issuable upon exercise of this Warrant without regard to any
limitations on exercise.
(b)
Reservation . If any shares of Common Stock
required to be reserved for issuance upon exercise of this Warrant
or as otherwise provided hereunder require registration or
qualification with any Governmental Authority under any federal or
state law before such shares may be so issued, the Company will in
good faith use its best efforts as expeditiously as possible at its
expense to cause such shares to be duly registered or
qualified. If the Company shall list any shares of
Common Stock on any securities exchange or market it will, at its
expense, list thereon, and maintain and increase when necessary
such listing, of, all Warrant Shares from time to time issued upon
exercise of this Warrant or as otherwise provided hereunder
(provided that such Warrant Shares has been registered pursuant to
a registration statement under the Securities Act then in effect),
and, to the extent permissible under the applicable securities
exchange rules, all unissued Warrant Shares which are at any time
issuable hereunder, so long as any shares of Common Stock shall be
so listed. The Company will also so list on each
securities exchange or market, and will maintain such listing of,
any other securities which the Holder of this Warrant shall be
entitled to receive upon the exercise of this Warrant if at the
time any securities of the same class shall be listed on such
securities exchange or market by the Company.
(c) Loss,
Theft, Destruction of Warrants . Upon receipt of
evidence satisfactory to the Company of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and, in the
case of any such loss, theft or destruction, upon receipt of
indemnity or security satisfactory to the Company or, in the case
of any such mutilation, upon surrender and cancellation of such
Warrant, the Company will make and deliver, in lieu of such lost,
stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same number of shares of
Common Stock.
(d) Payment
of Taxes . The Company will pay any documentary
stamp taxes attributable to the initial issuance of the Warrant
Shares issuable upon exercise of this Warrant; provided ,
however , that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates
representing Warrant Shares in a name other than that of the Holder
in respect to which such shares are issued.
4.
Adjustment of Warrant Price and Number of Shares Issuable Upon
Exercise . The Warrant Price and the number of
shares purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4. Upon each adjustment of
the Warrant Price, the Holder of this Warrant shall thereafter be
entitled to purchase, at the Warrant Price resulting from such
adjustment, the number of shares obtained by multiplying the
Warrant Price in effect immediately prior to such adjustment by the
number of shares purchasable pursuant hereto immediately prior to
such adjustment, and dividing the product thereof by the Warrant
Price resulting from such adjustment.
(a) If the
Company issues or sells, or in accordance with this Section 4
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 for a consideration per
share (the “ New Issuance Price ”) less than a
price (the “ Applicable Price ”) equal to the
Warrant Price in effect immediately prior to such issue or sale
(the foregoing a “ Dilutive Issuance ”), then
immediately after such Dilutive Issuance, the Warrant Price then in
effect shall be reduced to the New Issuance Price. For
purposes of determining the adjusted Warrant Price under this
Section 4, the following shall be applicable:
(i) Issuance
of Options . If the Company in any manner grants or
sells any Options (defined below) 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 or exchange or exercise of
any Convertible Securities (defined below) issuable upon exercise
of such Option is less than the Applicable Price, then all of such
shares of Common Stock underlying such Option 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 4(a), the
“lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion
or exchange or exercise of any Convertible Securities issuable upon
exercise of 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
granting or sale of the Option, upon exercise of the Option and
upon conversion or exchange or exercise of any Convertible Security
issuable upon exercise of such Option. No further
adjustment of the price of conversion shall be made upon the actual
issuance and/or sale of such share of Common Stock or of such
Convertible Securities upon the exercise of such Options or upon
the actual issuance and/or sale of such Common Stock upon
conversion or exchange or exercise of such Convertible
Securities. “ Convertible Security ”
or “ Convertible Securities ” means any stock or
other securities (other than Options) directly or indirectly
convertible into or exercisable or exchangeable for shares of
Common Stock, and “ Option ” or “
Options ” means any rights, warrants or options to
subscribe for or purchase shares of Common Stock or 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 such conversion or exchange or exercise thereof is less than
the Applicable Price, then all shares of Common Stock issuable upon
conversion of such Convertible Securities 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 4(a)(ii), the “lowest price per share for which
one share of Common Stock is issuable upon such conversion or
exchange or exercise” 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
issuance or sale of the Convertible Security and upon the
conversion or exchange or exercise of such Convertible
Security. No further adjustment of the Warrant Price
shall be made upon the actual issuance of such share of Common
Stock upon conversion or exchange or exercise 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 the price of conversion had been or are to be made
pursuant to other provisions of this Section 4, no further
adjustment of the Warrant Price 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, exchange
or exercise of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exchangeable or
exercisable for Common Stock changes at any time, the Warrant Price
in effect at the time of such change shall be adjusted to the
Warrant Price which would have been in effect at such time had such
Options or Convertible Securities provided for such changed
purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or
sold. For purposes of this Section 4(a)(iii), if
the terms of any Option or Convertible Security that was
outstanding as of the Issuance Date are issued are changed in the
manner described in the immediately preceding sentence, then such
Option or Convertible Security and the Common Stock deemed issuable
upon exercise, conversion or exchange thereof shall be deemed to
have been issued as of the date of such change. No
adjustment shall be made if such adjustment would result in an
increase of the Warrant Price then in effect.