EXHIBIT B TO SECURITIES PURCHASE AGREEMENT

 

THE SECURITIES REPRESENTED HEREBY, INCLUDING THE SHARES ISSUABLE UPON EXERCISE
HEREOF, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL FOR THE ISSUER, IS AVAILABLE.

 

SERIES A WARRANT AGREEMENT

 

No. ___

 

eWellness HEALTHCARE Corporation

 

This Warrant Agreement (this “Agreement”) is dated as of October [ ], 2014 (the
“Issue Date”) and entered into by and between eWellness Healthcare Corporation,
a company organized under the laws of State of Nevada and ________________,
(together with its successors and assigns, the “Warrant Holder”).

 

WHEREAS, [on the date hereof], the Company and the Warrant Holder entered into
that certain Securities Purchase Agreement of even date herewith (the “Purchase
Agreement”), pursuant to which, the Warrant Holder, together with the other
Purchasers agreed to purchase certain Securities of the Company, including the
Warrants evidenced by this Agreement;

 

WHEREAS, any words not specifically defined herein, shall have the meaning set
forth in the Purchase Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement and for other good and valuable consideration, the parties agree as
follows:

 

1. Grant of Warrant. The Company hereby, upon the terms and subject to the
conditions of this Agreement, issues to the Warrant Holder a warrant (the
“Warrant”) evidenced by this Agreement to purchase up to [________] shares of
Common Stock (the shares of Common Stock issuable to the Warrant Holder
hereunder (as such amount may be adjusted pursuant to the terms hereof), the
“Warrant Shares”) at an exercise price of $0.35 per share (as such amount may be
adjusted pursuant to the terms hereof, the “Exercise Price”). The Exercise Price
and the number of Warrant Shares for which the Warrant are exercisable shall be
subject to adjustment as described in Section 6.

 

2. Term and Termination of Warrant. The Warrant shall terminate on the third
(3rd) anniversary of the Issue Date (the “Expiration Date”).

 

 

 

 

3. Exercise of the Warrant.

 

(a) Exercise and Payment. The purchase rights represented by the Warrant may be
exercised by the Warrant Holder, in whole or in part at any time following the
the date on which the Commission declares the Registration Statement effective
(the “Exercise Event Date”), and at any time prior to the Expiration Date, the
Holder may exercise this Warrant into shares of the Company’s Common Stock, by
the surrender of the Warrant (together with a duly executed notice of exercise
in the form attached hereto as Exhibit A) at the principal office of the
Company, and by the payment to the Company, at the option of the Warrant Holder
by:

 

(i) wire transfer of immediately available funds, of an amount equal to (A) the
number of shares of Common Stock being purchased upon exercise of the Warrant
multiplied by (B) the then current Exercise Price (the “Warrant Price”);

 

(ii) If at any time after a date which shall be one hundred and eighty (180)
days after the Exercise Effective Date, there is no effective registration
statement registering, or no current prospectus available for, the resale of the
Warrant Shares by the Warrant Holder, then this Warrant may also be exercised,
in whole or in part, at such time by means of a “cashless exercise”, wherein the
Warrant Holder may surrender to the Company that number of Warrant Shares (or
the right to receive such number of shares) having an aggregate Fair Market
Value at such time equal to or greater than the Warrant Price for all shares
then being purchased (including those being surrendered); or

 

(iii) any combination thereof.

 

For purposes of this Agreement, “Fair Market Value” of a share as of a
particular date shall mean: (A) if the Common Stock is traded on an exchange or
the over-the-counter market or otherwise quoted or reported on a national
exchange, the average reported closing price for the five (5) trading days prior
to the date of determination of fair market value, (B) if conversion or exercise
is simultaneous with an underwritten public offering of Common Stock registered
under the Securities Act of 1933, as amended, then the initial public offering
price (before deducting commissions, discounts or expenses) per share sold in
such offer, and (C) otherwise that price determined in good faith and in such
reasonable manner as prescribed by a majority of the Board.

 

(b) Stock Certificates. In the event of the exercise of all or any portion of
the Warrant, certificates for the Warrant Shares so purchased shall be delivered
to the Warrant Holder by the Company at the Company’s own expense within a
reasonable time, which shall in no event be later than five (5) days thereafter
and, unless the Warrant has been fully exercised or has expired, a new Warrant
representing the Warrant Shares with respect to which the Warrant shall not have
been exercised shall be issued to the Warrant Holder within such time.

 

(c) Fractional Warrant Shares. No fractional Warrant Shares will be issued in
connection with any exercise hereunder, but instead the shares shall be rounded
up to the nearest whole share.

 

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(d) Ownership Limitation. Notwithstanding the provisions of this Warrant, in no
event shall this Warrant be exercisable to the extent that the issuance of
Common Stock upon the exercise hereof, after taking into account the Common
Stock then owned by the Warrant Holder and its affiliates, would result in the
beneficial ownership by the Warrant Holder and its affiliates of more than 4.99%
of the outstanding Common Stock of the Company. For purposes of this paragraph,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended.

 

(e) Call Provision. Subject to the provisions of Section 3(d) and this Section
3(e), in the event the Common Stock shall be listed on a U.S. stock exchange and
trade, as determined by the daily closing price, for twenty (20) consecutive
trading days at or above $1.50 per share (the “Redemption Event”), the Company
shall have the right, but not the obligation, to redeem all or any portion of
the outstanding Warrant, at which time the Holder may elect to exercise the
Warrant as set forth in Section 3(a) above. No later than ten (10) Business Days
following a Redemption Event, the Company shall deliver written notice thereof
via facsimile to the Holder (a “Redemption Notice”). At any time during the
period beginning after the date of the Redemption Notice and ending five (5)
Business Days thereafter, the Holder may submit an Exercise Notice to the
Company requesting to exercise all or any portion of this Warrant (“Redemption
Exercise Notice”), to the Company, which Redemption Exercise Notice shall
indicate the portion of the Warrant the Holder is electing to exercise. The
Company shall redeem the then outstanding portion of the Warrant, if any, on the
twentieth (20th) Business Day following the date of the Redemption Notice at the
Exercise Price, in cash or in shares of Common stock, at the Company’s sole
discretion. The payment in cash for any redemptions shall be in compliance with
Rule 419 of the Securities Act. Notwithstanding the foregoing, the Company may
only redeem the Warrants in shares of Common Stock if from the date the Holder
receives the Redemption Notice through and until the date such redemption is
paid in full, the Equity Conditions have been satisfied, unless waived in
writing by the Holder. For purposes of this Article III, Equity Conditions shall
mean during the period in question, (a) the Company shall have duly honored all
exercises and redemptions scheduled to occur or occurring by virtue of one or
more Notices of Exercise of the Holder, if any, (b) the Company shall have paid
all other amounts owing to the Holder in respect of this Note, if any, (c)(i)
there is an effective registration statement pursuant to which the Holder is
permitted to utilize the prospectus thereunder to resell all of the shares of
Warrant Shares (and the Company believes, in good faith, that such effectiveness
will continue uninterrupted for the foreseeable future) or (ii) all of the
Warrant Shares (and shares issuable in lieu of cash payments of interest) may be
resold pursuant to Rule 144 without volume or manner-of-sale restrictions or
current public information requirements as determined by the counsel to the
Company as set forth in a written opinion letter to such effect, addressed and
acceptable to the Holder, (d) the Common Stock is trading on a Trading Market
and all of the Warrant Shares are listed or quoted for trading on such Trading
Market (and the Company believes, in good faith, that trading of the Common
Stock on a Trading Market will continue uninterrupted for the foreseeable
future), (e) there is a sufficient number of authorized but unissued and
otherwise unreserved shares of Common Stock for the issuance of all of the
shares then issuable pursuant to the Warrant, (f) there is no existing Event of
Default and no existing event which, with the passage of time or the giving of
notice, would constitute an Event of Default, (g) there has been no public
announcement of a pending or proposed Change of Control Transaction that has not
been consummated and (h) the Holder is not in possession of any information
provided by the Company that constitutes, or may constitute, material non-public
information. The Company’s right to call the Warrants under this Section 3(e)
shall be exercised ratably among the Holders based on each Holder’s initial
purchase of Warrants.

 

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4. Stock Fully Paid; Reservation of Warrant Shares. All of the Warrant Shares
issuable upon the exercise of the Warrant will, upon issuance and receipt of the
Warrant Price for such Warrant Shares, be duly authorized, validly issued, fully
paid and nonassessable, and will be free and clear of all taxes, liens,
encumbrances and charges with respect to the issue.

 

5. Rights of the Warrant Holder. The Warrant Holder shall have no voting rights
as a stockholder or rights to dividends or other distributions with respect to
Warrant Shares subject to this Agreement until payment in full of the Warrant
Price for Warrant Shares being issued.

 

6. Adjustment of Exercise Price and Number of Warrant Shares. The Exercise Price
and the number of Warrant Shares purchasable upon any exercise of the Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 6.

 

(a) Subdivision or Combination of Stock; Stock Dividend and Stock Conversion.

 

(i) In the event the Company should at any time or from time to time fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock, or a record date for the determination of the holders of
capital stock entitled to receive a dividend or other distribution payable in
Common Stock or other securities or rights convertible into, or rights that
entitle the holders of Common Stock to purchase, Common Stock (hereinafter
referred to as “Common Stock Equivalents”), without payment of any consideration
by such holders for the additional Common Stock or the Common Stock Equivalents
(including the additional Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), (y) the Exercise
Price of the Warrant Shares shall be appropriately decreased (but not below the
then par value per share of Common Stock), or (z) the number of Warrant Shares
shall be increased in proportion to such increase of outstanding Common Stock
and shares of Common Stock issuable with respect to Common Stock Equivalents.

 

(ii) If the number of shares of Common Stock outstanding at any time after the
Issue Date is decreased by a combination of the outstanding Common Stock, then,
upon the record date of such combination, (A) the Exercise Price shall be
appropriately increased, or (B) the number of Warrant Shares shall be decreased
in proportion to such decrease in outstanding Common Stock.

 

(iii) The Company will not modify its certificate of incorporation or effect any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities in a manner that negates or avoids the
rights of the Warrant Holder to exercise its rights hereunder, but will at all
times assist in the carrying out of all the provisions of this Agreement and in
the taking of all such actions as may be necessary or appropriate in order to
protect the Warrant Holder against impairment.

 

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(iv) The foregoing provisions of Section 6(a) shall not apply with regard to:
(i) shares of Common Stock or standard options to purchase Common Stock to
directors, officers or employees of the Company in their capacity as such
pursuant to a board approved stock option plan; (ii) shares of Common Stock
issued upon the conversion or exercise of Common Stock Equivalents (other than
standard options to purchase Common Stock that are covered by clause (i) above)
issued prior to the Issue Date, provided that the conversion or exercise (as the
case may be) of any such Convertible Security is made solely pursuant to the
conversion or exercise (as the case may be) provisions of such Convertible
Security that were in effect on the date immediately prior to the Issue Date,
the conversion or exercise price of any such Convertible Securities (other than
standard options to purchase Common Stock covered by clause (i) above) is not
lowered, none of such Convertible Securities are (other than standard options to
purchase Common Stock covered by clause (i) above) (nor is any provision of any
such Convertible Securities) amended or waived in any manner (whether by the
Company or the holder thereof) to increase the number of shares issuable
thereunder and none of the terms or conditions of any such Convertible
Securities (other than standard options to purchase Common Stock covered by
clause (i) above) are otherwise materially changed or waived (whether by the
Company or the holder thereof) in any manner that adversely affects the Holder;
(iii) the Notes; (iv) the Notes Shares; and (v) shares of Common Stock in
connection with mergers, acquisitions, strategic licensing arrangements,
strategic business partnerships or joint ventures, in each case with
non-affiliated third parties and otherwise on an arm’s-length basis, the purpose
of which is not to raise additional capital.

 

(b) Notice of Adjustment. Promptly after adjustment of the Exercise Price or any
increase or decrease in the number of shares purchasable upon the exercise of
the Warrant, the Company shall give written notice in accordance with Section
11. The notice shall be signed by an authorized officer of the Company and shall
state the effective date of the adjustment and the Exercise Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon any exercise of the Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.

 

(c) Other Notices. In the event that the Company shall propose at any time: (i)
to declare any dividend or distribution upon any class or series of capital
stock, whether in cash, property, stock or other securities (including, without
limitation, pursuant to a split or subdivision of the outstanding shares of
capital stock); (ii) to effect any reclassification or recapitalization of its
capital stock outstanding involving a change in the capital stock; or (iii) to
merge or consolidate with or into any other corporation, or to sell, lease or
convey all or substantially all of its property or business, or to liquidate,
dissolve or wind up; then, in connection with each such event, the Company shall
mail to the Warrant Holder notice of such transaction:

 

5

 

 

(A) at least five (5) business days’ prior written notice in accordance with
Section 11 of the date on which a record shall be taken for such dividend or
distribution (and specifying the date on which the holder of the affected class
or series of capital stock shall be entitled thereto) or for determining the
rights to vote, if any, in respect of the matters referred to in (c)(ii) and
(c)(iii) above; and

 

(B) in the case of the matters referred to in (c)(ii) and (c)(iii) above,
written notice of such impending transaction not later than ten (10) business
days’ prior to any shareholders’ meeting called to approve such transaction, or
ten (10) business days’ prior to the closing of such transaction, whichever is
earlier, and shall also notify the Warrant Holder in writing in accordance with
Section 11 of the final approval of such transaction by the stockholders of the
Company (if such approval is required). The first of such notices shall describe
the terms and conditions of the impending transaction that are material to a
holder of Common Stock (as determined by the Board of Directors of the Company
(the “Board”) in good faith) and specify the date on which a holder of Common
Stock shall be entitled to exchange his, her or its Common Stock for securities
or other property deliverable upon the occurrence of such event) and the Company
shall thereafter give such holder prompt notice of any changes in such terms or
conditions that are material to a holder of Common Stock (as determined by the
Board in good faith). The Company acknowledges that any record date must be set
at a date that would permit the Warrant Holder effectively to exercise its
rights hereunder.

 

(d) Changes in Stock. In case at any time prior to the Expiration Date, the
Company shall be a party to any transaction (including, without limitation, a
merger, consolidation, sale of all or substantially all of the Company’s assets
or recapitalization of its capital stock) in which the previously outstanding
shares of Common Stock shall be changed into or exchanged for different
securities of the Company or common stock or other securities of another
corporation or interests in a noncorporate entity or other property (including
cash) or the Company shall make a distribution on its shares of Common Stock,
other than regular cash dividends on its outstanding stock, or any combination
of any of the foregoing (each such transaction being herein called the
“Transaction” and the date of consummation of the Transaction being herein
called the “Consummation Date”), then as a condition of the consummation of such
Transaction, lawful and adequate provisions shall be made so that the Warrant
Holder, upon the exercise hereof at any time on or after the Consummation Date
and prior to the Expiration Date, shall be entitled to receive, and this
Agreement shall thereafter represent the right to receive, in lieu of the
Warrant Shares issuable upon such exercise prior to the Consummation Date, the
highest amount of securities or other property to which the Warrant Holder would
actually have been entitled as a stockholder upon the consummation of the
Transaction if the Warrant Holder had exercised the Warrant immediately prior
thereto. The provisions of this Section 6(d) shall similarly apply to successive
Transactions.

 

7. Taxes. The Warrant Holder acknowledges that upon exercise of the Warrant the
Warrant Holder may be deemed to have taxable income in respect of the Warrant
and/or the Warrant Shares. The Warrant Holder acknowledges that any income or
other taxes due from it with respect to the Warrant or the Warrant Shares
issuable pursuant to the Warrant shall be the Warrant Holder’s responsibility.

 

8. Reservation of Warrant Shares. From and after the Issue Date, the Company
shall at all times reserve and keep available for issue upon exercise of this
Warrant such number of its authorized but unissued shares of Common Stock as
will be sufficient to permit the exercise in full of this Warrant.

 

6

 

 

9. Registration Rights. Subject to Section 3(a)(2) above, the initial Holder of
this Warrant (and certain assignees thereof) is entitled to the benefit of such
registration rights in respect of the Warrant Shares as are set forth in the
Registration Rights Agreement dated as of [ ] by and among the Company and the
investors listed on the execution page thereof (the “Registration Rights
Agreement”)

 

10. Representations and Warranties.

 

(a) Representations and Warranties by the Company. The representations and
warranties of the Company set forth in Section 3.1 of the Purchase Agreement are
true and correct as of the Issue Date.

 

(b) Representations and Warranties by the Warrant Holder. The representations
and warranties of the Warrant Holder set forth in Section 3.2 of the Purchase
Agreement are true and correct as of the Issue Date.

 

11. Registration Rights. The Company acknowledges that the Warrant Shares are
subject to the registration rights set forth in the Purchase Agreement.

 

12. Transfer Restrictions.

 

(a) Legend. The Securities to be acquired by the Holder pursuant hereto, may not
be sold or transferred unless (A) such shares are sold pursuant to an effective
registration statement under the Securities Act, or (B) the Company or its
transfer agent shall have been furnished with an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the shares to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration or (C) such shares are sold or transferred pursuant to Rule 144
under the Securities Act (or a successor rule) (“Rule 144”) or (D) such shares
are sold or transferred outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, or (E) such shares are transferred to an
“affiliate” (as defined in Rule 144) of the Company who agrees to sell or
otherwise transfer the shares only in accordance with this Section 11. Except as
otherwise provided in this Warrant (and subject to the removal provisions set
forth below), until such time as the Securities issuable upon exercise of the
Holder’s Warrant have been registered under the Act, otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold, each certificate for
shares of the Securities that has not been so included in an effective
registration statement or that has not been sold pursuant to an effective
registration statement or an exemption that permits removal of the legend, shall
bear a legend substantially in the following form, as appropriate:

 

7

 

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B)
OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
U.S. SECURITIES ACT, (C) WITHIN THE UNITED STATES AFTER REGISTRATION OR IN
ACCORDANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S.
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, OR (D) WITHIN THE UNITED STATES IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAWS AND THE HOLDER HAS PRIOR TO SUCH SALE
FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE CORPORATION.

 

(b) Removal of Legend. The legend set forth above shall be removed and the
Company shall issue to the Holder a new certificate therefor free of any
transfer legend if (A) the Company shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Securities
may be made without registration under the Act and the shares are so sold or
transferred, (B) such Holder provides the Company with reasonable assurances
that the Securities (to the extent such securities are deemed to have been
acquired on the same date) can be sold pursuant to Rule 144 or (C) in the case
of the Common Stock issuable upon exercise of the Warrant, such security is
registered for sale by the Holder under an effective registration statement
filed under the Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be immediately sold. The Company shall cause its counsel to issue a legal
opinion promptly after the effective date of any registration statement under
the Act registering the resale of the Common Stock issuable upon exercise of the
Warrant if required to effect the removal of the legend hereunder.

 

13. Miscellaneous. The terms of Article V of the Purchase Agreement are
incorporated herein by reference as if set forth herein.

 

14. Assignability. Notwithstanding Section 11 hereof, subject to the transfer
and securities law restrictions set forth in this Agreement, the Warrant Holder
may assign, convey or transfer, in whole or in part, its rights under this
Agreement and provide written notice to Company of any such assignment,
conveyance or transfer. Upon any transfer, assignment, pledge, hypothecation or
other disposition of the Warrant or of any rights granted hereunder in
accordance with the terms of this Section 13, the Company shall if necessary
issue or re-issue warrant agreements reflecting the appropriate rights and
entitlements of the Warrant Holder and any transferee, assignee or pledgee after
giving effect to such transfer, assignment or pledge.

 

[signatures on following page]

 

8

 

 

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the day
and year first above written.

 

  COMPANY:       eWELLNESS HEALTHCARE CORPORATION         By:     Name: Darwin
Fogt   Title: CEO

 

[Signature Page – Warrant Agreement]

 

 

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

  TO:

eWellness Healthcare Corporation

11825 Major Street

Culver City, California

Attn:

 

1. The undersigned hereby elects to purchase _________ shares of Common Stock,
par value $0.001 per share, of eWellness Healthcare Corporation pursuant to the
terms of the Warrant Agreement dated [ ], 2014, held by the undersigned, and
tenders herewith payment of the purchase price of such shares in full.

 

2. Please issue a certificate or certificates representing said shares of Common
Stock in the name of the undersigned or in such other name as is specified
below:

 

  (Name)         (Address)

 

      (Signature)

 

    Title:           (Date)