Document:

WARRANT AGENT AGREEMENT

 

WARRANT AGENT AGREEMENT (the “Agreement”) dated as of ___________, 2005, 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) 9,375,000 Warrants (the “Public Warrants”) 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) 468,750 Warrants to Roth Capital Partners, LLC.  (“Roth Capital”) or its designees (the
“Representative’s Warrants” and, together with the Public Warrants, the “Warrants”), with each of such Representative’s 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. _____________ 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 Roth Capital informs the Company of its decision to allow earlier separate trading (the “Separation Date”), but in no event will Roth Capital 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.

 

2.5        Warrants and Representative’s Warrants.  The Representative’s 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.

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            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 Representative’s Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions of such Representative’s Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $7.50 per whole share, subject to the adjustments provided in Section 4 hereof and
in the last sentence of this Section 3.1.  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.

 

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) _________, 2006, and terminating at 5:00 p.m., New York City time on the earlier to occur of (i) ____________, 2009 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.

 

	
            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 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 

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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.

 

3.3.5.    Warrant Solicitation and Warrant Solicitation Fee.

 

a.   The Company has engaged Roth Capital, on a non-exclusive basis, as its agent for the solicitation of the exercise of the Warrants.  The Company, at its cost, will (i) assist Roth Capital with respect to such solicitation, if requested by Roth Capital, and (ii) provide Roth Capital, and direct the Company’s transfer agent and the Warrant Agent to deliver to Roth Capital, lists of the record and, to the extent known, beneficial owners of the Company’s Warrants.  The Company hereby instructs the Warrant Agent to cooperate with Roth Capital in every respect in connection with Roth Capital’s solicitation activities, including, but not limited to, providing to Roth Capital, at the Company’s cost, a list of record and beneficial holders of the Warrants and circulating a prospectus or offering circular disclosing the compensation arrangements referenced in
Section 3.3.5(b) below to holders of the Warrants at the time of exercise of the Warrants.  In addition to the conditions set forth in Section 3.3.5(b), Roth Capital shall accept payment of the warrant solicitation fee provided in Section 3.3.5(b) only if it has provided bona fide services to the Company in connection with the exercise of the Warrants and only to the extent that an investor who exercises his Warrants specifically designates, in writing, that Roth Capital solicited his exercise.  In addition to soliciting, either orally or in writing, the exercise of Warrants by a Warrant holder, such services may also include disseminating information, either orally or in writing, to Warrant holders about the Company or the market for the Company’s securities, or assisting in the processing of the exercise of Warrants.

 

b.  In each instance in which a Warrant is exercised, the Warrant Agent shall promptly give written notice of such exercise to the Company and Roth Capital (the “Warrant Agent’s Exercise Notice”).  If, upon the exercise of any Warrant more than one year from the effective date of the Registration Statement, (i) the market price of the Company’s Common Stock is greater than the Warrant Price, (ii) disclosure of compensation arrangements

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between the
Company and Roth Capital with respect to the solicitation of the exercise of the Warrants
was made both at the time of the Public Offering and at the time of exercise (by delivery
of the Prospectus or as otherwise required by applicable law, rule or regulation), (iii)
the holder of the Warrant confirms in writing that the exercise of the Warrant was
solicited by Roth  Capital, (iv) the Warrant was not held in a discretionary account, and
(v) the solicitation of the exercise of the Warrant was not in violation of Regulation M
(as such rule or any successor rule may be in effect as of such time of exercise)
promulgated under the Securities Exchange Act of 1934, as amended, then the Warrant
Agent, simultaneously with the distribution of the Common Stock underlying the Warrants
so exercised in accordance with the instructions from the Company following receipt of
the proceeds to the Company received upon exercise of such Warrant(s), shall, on behalf
of the Company, pay to Roth Capital a fee of 5% of the Warrant Price for Warrants
exercised, or the portion of Warrants exercised, pursuant to Section 3.2, to Roth
Capital; provided that Roth Capital delivers to the Warrant Agent within ten
business days from the date on which Roth Capital has received the Warrant Agent’s
Exercise Notice, a certificate  that the conditions set forth in the preceding clauses
(iii), (iv) and (v) have been satisfied.  Notwithstanding the foregoing, no fee will be
paid to Roth Capital with respect to the exercise by the Underwriters or their affiliates
or the Company’s officers or directors of Warrants purchased by it or them and still
held by them for its or their own account.  Roth Capital and the Company may at any time
during business hours, examine the records of the Warrant Agent, including its ledger of
original Warrant certificates returned to the Warrant Agent upon exercise of Warrants.

 

c.  The provisions of this Section 3.3.5 may not be modified, amended or deleted without the prior written consent of Roth Capital.

 

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 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

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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 of such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4.  The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.

 

4.5.       Notices of Changes in Warrant.  Upon any adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Upon the

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occurrence of
any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the
Company shall give written notice to the Warrant holder, at the last address set forth
for such holder in the warrant register, of the record date or the effective date of the
event.  Failure to give such notice, or any defect therein, shall not affect the legality
or validity of such event. 

 

4.6.       No Fractional Shares.  Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional shares of Common Stock upon exercise of Warrants.  If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise and in lieu of the issuance of any fractional share otherwise issuable, round up to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant holder.

 

4.7.       Form of Warrant.  The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement.  However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

 

	
            5.
 	
            Transfer and Exchange of Warrants.
 

 

5.1.       Registration of Transfer.  Until the Separation Date, the Common Stock and the Warrants that comprise each Unit shall be transferable or exchangeable only as a single Unit.  After the Separation Date, the Warrants shall be transferable separate from the Common Stock issued as a Unit, and the Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer at the office of the Warrant Agent, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer.  Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued to the transferee and the surrendered Warrant shall be cancelled by the Warrant Agent.  The Warrants so
cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

 

5.2.       Procedure for Surrender of Warrants.  Warrants may be surrendered to the Warrant Agent in accordance with Section 5.1, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating
whether the new Warrants must also bear a restrictive legend.

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5.3.       Fractional Warrants.  The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a Warrant certificate for a fraction of a warrant.

 

5.4.       Service Charges.  No service charge shall be made for any exchange or registration of transfer of Warrants.

 

5.5.       Warrant Execution and Countersignature.  The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

 

	
            6.
 	
            Redemption.
 

 

6.1.       Redemption.  Subject to Section 6.4 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company (with the prior consent of Roth Capital), at any time after they become exercisable and prior to their expiration, at the office of the Warrant Agent, upon the notice referred to in Section 6.2, at the price of $.01 per Warrant (the “Redemption Price”), provided that the last sales price of the Common Stock has been at least $11.50 per share, on each of twenty (20) trading days within any thirty (30) trading day period ending on the third business day prior to the date on which notice of redemption is given.  The provisions of this Section 6.1 may not be modified, amended or deleted without the prior written
consent of Roth Capital.

 

6.2.       Date Fixed for, and Notice of, Redemption.  In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption.  Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than 30 days prior to the date fixed for redemption to the registered holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books.  Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice.

 

6.3.       Exercise After Notice of Redemption.  The Warrants may be exercised, for cash in accordance with Section 3 of this Agreement at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the time and date fixed for redemption.  On and after the redemption date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.

 

6.4.       Outstanding Warrants Only.  The Company understands that the redemption rights provided for by this Section 6 apply only to outstanding Warrants.  To the extent a person holds rights to purchase Warrants, such purchase rights shall not be extinguished by redemption.  However, once such purchase rights are exercised, the Company may redeem the Warrants issued upon such exercise provided that the criteria for redemption described herein

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is met.  The
provisions of this Section 6.4 may not be modified, amended or deleted without the prior
written consent of Roth Capital.

 

	
            7.
 	
            Other Provisions Relating to Rights of Holders of Warrants.
 

 

7.1.       No Rights as Stockholder.  A Warrant does not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

 

7.2.       Lost, Stolen, Mutilated, or Destroyed Warrants.  In case any of the Warrants shall be mutilated, lost, stolen or destroyed, the Company may issue, and the Warrant Agent shall countersign and deliver in exchange and substitution for and upon cancellation of the mutilated Warrant, or in lieu of and in substitution for the Warrant lost, stolen or destroyed, on such terms as to indemnity or otherwise as the Company and the Warrant Agent may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), a new Warrant of like denomination, tenor, and date, and representing an equivalent right or interest, as the Warrant so lost, stolen, mutilated, or destroyed, but only upon receipt of evidence satisfactory to the Company and the Warrant Agent of such loss,
theft or destruction and, in case of a lost, stolen or destroyed Warrant, indemnity from the Warrant holder, if requested, also satisfactory to them.  Applicants for such substitute Warrants shall also comply with such other reasonable regulations and pay such reasonable charges as the Company or the Warrant Agent may prescribe.  Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

 

7.3.       Reservation of Common Stock.  The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

 

7.4.       Registration of Common Stock.  The Company agrees that prior to the commencement of the Exercise Period, it shall file with the Securities and Exchange Commission a post-effective amendment to the Registration Statement, or a new registration statement, for the registration, under the Act, of, and it shall take such action as is necessary to qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants.  In either case, the Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement until the expiration of the Warrants in accordance with the provisions of this Agreement.  The provisions of this Section 7.4 may not be modified, amended
or deleted without the prior written consent of Maxim.

 

	
            8.
 	
            Concerning the Warrant Agent and Other Matters.
 

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8.1.       Payment of Taxes.  The Company will pay any documentary stamp taxes attributable to the initial issuance of shares of Common Stock upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of any certificates for Common Stock issued upon the exercise of Warrant(s) in a name other than that of the registered holder of Warrants in respect of which such shares are issued, and in such case, neither the Company nor the Warrant Agent shall be required to issue or deliver any certificate for shares of Common Stock issued upon the exercise of Warrant(s) or any Warrant until the person
requesting the same has paid to the Company the amount of such tax or has established to the Company’s satisfaction that such tax has been paid.

 

	
            8.2.
 	
            Resignation, Consolidation, or Merger of Warrant Agent.
 

 

8.2.1.    Appointment of Successor Warrant Agent.  The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving 60 days’ prior written notice to the Company.  The Warrant Agent may be removed by the Company by written notice to the Warrant Agent and the holders of the Warrants.  If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting as Warrant Agent, the Company shall appoint a successor to the Warrant Agent.  If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by
the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost.  Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority.  After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and
deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the records, property, authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.  Failure to file or mail any notice provided for in this Section, however, or any defect therein, shall not affect the validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.

 

8.2.2.    Notice of Successor Warrant Agent.  In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.

 

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8.2.3.    Merger or Consolidation of Warrant Agent.  Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.

 

8.2.4.    Change of Name of Warrant Agent.  In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrants shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrants so countersigned.  In all such cases such Warrants shall have the full force provided in the Warrants and in the Agreement.

 

	
            8.3.
 	
            Fees and Expenses of Warrant Agent.
 

 

8.3.1.    Remuneration.  The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.

 

8.3.2.    Further Assurances.  The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

 

	
            8.4.
 	
            Liability of Warrant Agent.
 

 

8.4.1.    Reliance on Company Statement.  Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the President or Chairman of the Board of the Company and delivered to the Warrant Agent.  The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.

 

8.4.2.    Indemnity.  The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith.  The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s negligence, willful misconduct, or bad faith.

 

8.4.3.    Exclusions.  The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall

11

it be
responsible to make any adjustments required under the provisions of Section 4 hereof or
responsible for the manner, method, or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this Agreement or any
Warrant or as to whether  any shares of Common Stock will when issued be valid and fully
paid and nonassessable.

 

8.5.       Acceptance of Agency.  The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of the Company’s Common Stock through the exercise of Warrants.

 

	
            9.
 	
            Miscellaneous Provisions.
 

 

9.1.       Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

 

9.2.       Notices.  Unless provided for differently elsewhere in this Agreement, any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, or sent by facsimile transmission (with confirmation of receipt), addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:

 

Echo Healthcare Acquisition Corp. 

8000 Towers Crescent Drive, Suite 1300

Vienna, Virginia 22182

Attention:  Joel Kanter, President

 

	
            with copy to:
 

 

Powell Goldstein LLP

One Atlantic Center, Fourteenth Floor 

1201 W. Peachtree Street, NW

Atlanta, Georgia  30309-3488

Attention:  Richard H. Miller, Esq.

 

Unless provided for differently elsewhere in this Agreement, any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after

12

deposit of such
notice, postage prepaid, or sent by facsimile transmission (with confirmation of receipt)
addressed (until another address is filed in writing by the Warrant Agent with the
Company), as follows:

 

Corporate Stock Transfer, Inc.

320 Cherry Creek Drive South 

Suite 430

Denver, Colorado  80209

Attn:  Carolyn Bell

 

with a copy to:

 

Powell Goldstein LLP

One Atlantic Center, Fourteenth Floor 

1201 W. Peachtree Street, NW

Atlanta, Georgia  30309-3488

Attention:  Richard H. Miller, Esq.

 

and

 

Ellenoff Grossman & Schole LLP

370 Lexington Avenue

New York, New York 10017

Attn: Douglas S. Ellenoff, Esq.

 

and

 

Roth Capital Partners, LLC

24 Corporate Place Drive

Newport Beach, California  92660

Attn:  Christopher Jennings

 

9.3.       Applicable Law.  The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of Delaware, without giving effect to conflict of laws.  The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of Delaware or the United States District Court for the District of Delaware, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.  The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience forum.  Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof.  Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim

13  

9.4.       Persons Having Rights under this Agreement.  Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or entity other than the parties hereto and the registered holders of the Warrants (who shall, for all purposes hereunder, be deemed third party beneficiaries of this Agreement) and, for the purposes of Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof, Roth Capital, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.  Roth Capital shall be deemed to be a third-party beneficiary of this Agreement with respect to Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof.  All covenants, conditions,
stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto (and Roth Capital with respect to the Sections 3.3.5, 6.1, 6.4, 7.4  and 9.2 hereof) and their successors and assigns and of the registered holders of the Warrants.

 

9.5.       Examination of the Warrant Agreement.  A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in _______________, for inspection by the registered holder of any Warrant.  The Warrant Agent may require any such holder to submit his Warrant for inspection by it.

 

9.6.       Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

9.7.       Effect of Headings.  The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.

 

 

[Remainder of Page Intentionally Left Blank]

14 

 

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.

 

 

	
             
 	
             
 	
             
 
	
             
 	
            ECHO HEALTHCARE ACQUISITION CORP.
 
	
            
  
 	
            
  
 	
            
  
 
	
             
 	
            By:  
 	
             
 
	
             
 	
            _______________________________

Name:  Joel Kanter
 
	
             
 	
            Title:  President
 

 

	
             
 	
             
 	
             
 
	
             
 	
            CORPORATE STOCK TRANSFER, INC.
 
	
            
  
 	
            
  
 	
            
  
 
	
             
 	
            By:  
 	
             
 
	
             
 	
            _______________________________

Name:  Carylyn Bell
 
	
             
 	
            Title:  President
 

15

Exhibit A

 

Form of WarrantExhibit 10.1

                       THE PEOPLES BANCTRUST COMPANY, INC.
                       KEY EMPLOYEE RESTRICTED STOCK PLAN

        1.  Purpose. The purpose of the Key Employee  Restricted Stock Plan (the
"Plan") of The Peoples Banctrust Company, Inc. ("Peoples") is to attract, retain
and motivate key employees of Peoples and its  subsidiaries  (collectively,  the
"Company") and to strengthen  the mutuality of interests  between such employees
and Peoples'  shareholders  through grants of restricted shares of common stock,
$.10 par value per share, of Peoples (the "Common  Stock"),  on terms determined
under the Plan.  The shares of Common  Stock  issued  hereunder  and  subject to
restrictions  shall be referred to herein as "Restricted  Stock". As used in the
Plan,  the  term  "subsidiary"  means  any  corporation  of which  Peoples  owns
(directly or  indirectly)  within the meaning of Section  425(f) of the Internal
Revenue Code of 1986, as amended (the "Code"), 50% or more of the total combined
voting power of all classes of stock.

        2.  Administration.

            2.1     Administrators.  The  Plan  shall  be  administered  by the
        Compensation  Committee  of the  Board  of  Directors  of  Peoples  (the
        "Committee").

            2.2     Authority.  The Committee  shall have plenary  authority to
        award  Restricted  Stock  under  the Plan,  to  interpret  the Plan,  to
        establish  any  rules  or  regulations  relating  to the  Plan  that  it
        determines to be appropriate, to enter into agreements with participants
        as  to  the  terms  of  the  Restricted  Stock  (the  "Restricted  Stock
        Agreements")  and to make  any  other  determinations  that it  believes
        necessary or advisable for the proper  administration  of the Plan.  Its
        decisions in matters  relating to the Plan shall be final and conclusive
        on the Company and participants.

        3.  Eligible  Participants.  Key  employees of the Company  shall become
eligible  to receive  Restricted  Stock  under the Plan when  designated  by the
Committee.  Employees may be designated individually or by groups or categories,
as the Committee deems appropriate. Unless and until the Plan is approved by the
shareholders of the Company, the Committee may offer Restricted Stock only as an
inducement  material  to  an  individual's  entering  into  employment  as a key
employee of the Company.

        4.  Shares Subject to the Plan.

            4.1     Number of Shares.  Subject to  adjustment  as  provided  in
        Section 6.3, a total of 6,000 shares of Common Stock are  authorized  to
        be issued as  Restricted  Stock under the Plan. In the event that shares
        of  Restricted  Stock  are  issued  under  the Plan and  thereafter  are
        forfeited such forfeited shares may again be issued under the Plan.

            4.2     Type of Common Stock. Common Stock issued under the Plan may
        be  authorized  and  unissued  shares or issued  shares held as treasury
        shares.

<PAGE>

        5.  Restricted Stock.

            5.1     Grant of Restricted Stock. The Committee may offer shares of
        Restricted  Stock as a material  inducement to prospective key employees
        as the Committee determines pursuant to the terms of Section 3. Any such
        grant  shall not be  effective  until  employment  of such key  employee
        commences.  An award  of  Restricted  Stock  shall  be  subject  to such
        restrictions  on transfer and  forfeitability  provisions and such other
        terms  and  conditions  as the  Committee  may  determine.  An  award of
        Restricted  Stock may also be subject  to the  attainment  of  specified
        performance goals or targets.

            5.2     The  Restricted  Period.  At the time an award of Restricted
        Stock is made,  the  Committee  shall  establish a period of time during
        which the transfer of the shares of Restricted Stock shall be restricted
        (the "Restricted Period").  During the Restricted Period, the Restricted
        Stock  may  not be  sold,  assigned,  transferred,  exchanged,  pledged,
        hypothecated or otherwise encumbered. Each award of Restricted Stock may
        have a different Restricted Period.

            5.3     Escrow.  The participant  receiving  Restricted  Stock shall
        enter into a Restricted  Stock  Agreement with the Company setting forth
        the  conditions  of  the  grant.  Certificates  representing  shares  of
        Restricted  Stock shall be registered in the name of the participant and
        deposited  with the  Company,  together  with a stock power  endorsed in
        blank by the participant.  Each such certificate  shall bear a legend in
        substantially the following form:

                The transferability of this certificate and the shares of Common
                Stock  represented by it are subject to the terms and conditions
                (including  conditions of  forfeiture)  contained in The Peoples
                Banctrust Company,  Inc. Key Employee Restricted Stock Plan (the
                "Plan"),  and an agreement  entered into between the  registered
                owner  and the  Company  thereunder.  A copy of the Plan and the
                agreement is on file at the principal office of the Company.

            5.4     Dividends on Restricted  Stock.  Any and all cash and stock
        dividends  paid with respect to the shares of Restricted  Stock shall be
        subject to any  restrictions on transfer,  forfeitability  provisions or
        reinvestment  requirements  as the  Committee  may,  in its  discretion,
        prescribe in the Restricted Stock Agreement.

            5.5     Forfeiture.  In the event of the forfeiture of any shares of
        Restricted  Stock  under  the terms  provided  in the  Restricted  Stock
        Agreement  (including any additional shares of Restricted Stock that may
        result from the reinvestment of cash and stock dividends, if so provided
        in the  Restricted  Stock  Agreement),  such  forfeited  shares shall be
        surrendered and the certificates cancelled.  The participants shall have
        the same rights and  privileges,  and be subject to the same  forfeiture
        provisions,  with respect to any additional  shares received pursuant to
        Section  6.3  due to a  recapitalization,  merger  or  other  change  in
        capitalization.

            5.6     Expiration of  Restricted  Period.  Upon the  expiration or
        termination of the Restricted  Period and the  satisfaction of any other
        conditions prescribed by the Committee,  the restrictions  applicable to
        the Restricted Stock shall lapse and a stock  certificate for the number
        of shares of  Restricted  Stock with  respect to which the  restrictions
        have  lapsed  shall  be  delivered,  free of all such  restrictions  and
        legends,  except any that may be imposed by law, to the  participant  or
        the participant's estate, as the case may be.

                                       -2-
<PAGE>

            5.7     Rights as a Shareholder. Subject to the terms and conditions
        of the Plan and subject to any  restrictions on the receipt of dividends
        that may be imposed in the Restricted Stock Agreement,  each participant
        receiving  Restricted  Stock shall have all the rights of a  shareholder
        with respect to shares of stock during the Restricted Period,  including
        without limitation, the right to vote any shares of Common Stock.

        6.  General.

            6.1     Duration.  Subject to Section 6.7, the Plan shall remain in
        effect  until all shares of  Restricted  Stock  authorized  to be issued
        under the Plan have been issued and all  restrictions  imposed on shares
        of Restricted  Stock in connection  with their  issuance  under the Plan
        have lapsed.

            6.2     Additional Condition.  Anything in this Plan to the contrary
        notwithstanding: (a) the Company may, if it shall determine it necessary
        or desirable  for any reason,  at the time of the issuance of any shares
        of Restricted Stock require the recipient of the Restricted  Stock, as a
        condition  to the receipt  thereof,  to deliver to the Company a written
        representation  of present intention to acquire the shares of Restricted
        Stock issued pursuant thereto for his own account for investment and not
        for distribution; and (b) if at any time the Company further determines,
        in its sole  discretion,  that prior  notification  to, or the  listing,
        registration or qualification  (or any updating of any such document) of
        any shares of Restricted  Stock is necessary on, The Nasdaq Stock Market
        or any securities  exchange or under any federal or state  securities or
        blue sky law,  or that  the  consent  or  approval  of any  governmental
        regulatory  body is  necessary  or  desirable  as a condition  of, or in
        connection  with,  the issuance of shares of Restricted  Stock  pursuant
        thereto, or the removal of any restrictions imposed on such shares, such
        shares of  Restricted  Stock  shall  not be issued or such  restrictions
        shall not be  removed,  as the case may be, in whole or in part,  unless
        such notice, listing, registration,  qualification,  consent or approval
        shall  have  been  effected  or  obtained  free  of any  conditions  not
        acceptable to the Company.

            6.3     Adjustment.  In the event of any merger,  consolidation  or
        reorganization   of  the   Company   with  any  other   corporation   or
        corporations,  there  shall be  substituted  for each of the  shares  of
        Common Stock then subject to the Plan,  including  shares of  Restricted
        Stock still  subject to  restrictions,  the number and kind of shares of
        stock or other  securities  to which the holders of the shares of Common
        Stock will be entitled pursuant to the transaction.  In the event of any
        recapitalization,  stock dividend, stock split, combination of shares or
        other change in the Common  Stock,  the number of shares of Common Stock
        then subject to the Plan,  including issued shares, shall be adjusted in
        proportion to the change in outstanding  shares of Common Stock.  In the
        event of any such  adjustments,  the shares of Restricted Stock shall be
        adjusted as and to the extent appropriate,  in the reasonable discretion
        of the Committee,  to provide participants with the same relative rights
        before and after such  adjustment.  No substitution or adjustment  shall
        require the Company to issue a fractional  share under this Plan and the
        substitution  or adjustment  shall be limited by deleting any fractional
        share.

                                       -3-
<PAGE>

            6.4     Restricted  Stock  Agreements.  The terms of each Restricted
        Stock grant shall be stated in an agreement  approved by the  Committee.
        The Committee has complete authority to modify the terms of a Restricted
        Stock grant by means of an amendment to the Restricted  Stock Agreement.
        Consent of the  participant to the  modification is required only if the
        modification  materially  impairs the rights previously  provided to the
        participant in the Restricted Stock Agreement.

            6.5     Withholding.

                  A. The  Company  shall  have the  right to  withhold  from any
            shares of  Restricted  Stock or to  collect  as a  condition  of the
            release of  restrictions  on Restricted  Stock any taxes required by
            law to be withheld.  At any time that a  participant  is required to
            pay  to  the  Company  an  amount  required  to  be  withheld  under
            applicable   income  tax  laws  in  connection  with  the  lapse  of
            restrictions on Restricted  Stock,  the participant  may, subject to
            disapproval by the Committee, satisfy this obligation in whole or in
            part by  electing  (the  "Election")  to have the  Company  withhold
            shares of Common Stock  having a value equal to the amount  required
            to be  withheld.  The value of the  shares to be  withheld  shall be
            based on the Fair Market  Value of the Common Stock on the date that
            the amount of tax to be withheld shall be determined ("Tax Date").

                  B.  Each  Election  must be made  prior to the Tax  Date.  The
            Committee may  disapprove of any Election,  may suspend or terminate
            the right to make  Elections,  or may  provide  with  respect to any
            grant of Restricted Stock that the right to make Elections shall not
            apply  to such  grant.  If a  participant  makes an  election  under
            Section 83(b) of the Internal Revenue Code with respect to shares of
            Restricted Stock, an Election is not permitted to be made.

            6.6     No Continued Employment. No participant under the Plan shall
        have any right, because of his or her participation,  to continue in the
        employ of the Company for any period of time or to any right to continue
        his or her present or any other rate of compensation.

            6.7     Amendments  to or  Termination  of the Plan.  The Board may
        amend, suspend or terminate the Plan or any portion thereof at any time.

            6.8     Definition  of Fair Market  Value.  Whenever  "Fair  Market
        Value" of Common Stock shall be determined for purposes of this Plan, it
        shall be the  closing  sale  price on The  Nasdaq  Stock  Market  or any
        securities  exchange on the date of reference  for a share of the Common
        Stock,  or if no sale of the Common  Stock  shall have been made on that
        day, on the next  preceding  day on which there was a sale of the Common
        Stock.

            6.9     Governing  Law. The Plan shall be governed by and construed
        in  accordance  with the laws of the  State of  Alabama,  except  to the
        extent that federal law shall be deemed to apply.

                                       -4-

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