Contract
THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SUCH ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO RADIENT
PHARMACEUTICALS CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
RADIENT
PHARMACEUTICALS CORPORATION
WARRANT
TO PURCHASE _______ SHARES OF COMMON STOCK
1. Issuance. In
consideration of good and valuable consideration as set forth in the Purchase
Agreement (defined below), including without limitation the Net Purchase Price
(as defined in the Purchase Agreement), the receipt and sufficiency of which is
hereby acknowledged by Radient Pharmaceuticals Corporation, a Delaware
corporation (the “Company”),
___________________, [a(n)
__________________], its successors or registered assigns (the “Holder”),
is hereby granted the right to purchase at any time on or after the Issue Date
(as defined below) until the date which is the last calendar day of the month in
which the fifth anniversary of the Issue Date occurs (the “Expiration
Date”), up to __________ fully paid and non-assessable shares of the
Company’s common stock, par value $0.001 per share (the “Common
Stock”) at the Exercise Price (as defined below). This Warrant
is being issued pursuant to the terms of that certain Note and Warrant Purchase
Agreement of even date herewith (the “Purchase
Agreement”), to which the Company and the Holder (or the Holder’s
predecessor in interest) are parties.
Unless
otherwise indicated herein, capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Purchase Agreement.
This
Warrant was originally issued to the Holder or the Holder’s predecessor in
interest on April 8, 2010 (the “Issue
Date”).
2. Exercise of
Warrants.
2.1 General.
(a)
This Warrant is exercisable in whole or in part at any time and from time to
time commencing on the Issue Date. Such exercise shall be effectuated
by submitting to the Company (either by delivery to the Company or by facsimile
transmission) a completed and duly executed Notice of Exercise (substantially in
the form attached to this Warrant as Exhibit
A). The date such Notice of Exercise is either faxed, emailed
or delivered to the Company shall be the “Exercise
Date,” provided that, if such exercise represents the full exercise of
the outstanding balance of the Warrant, the Holder of this Warrant shall tender
this Warrant to the Company within five (5) Trading Days (as defined below)
thereafter. The Notice of Exercise shall be executed by the Holder of
this Warrant and shall indicate (i) the number of shares then being purchased
pursuant to such exercise, and (ii) if applicable (as provided below), whether
the exercise is a cashless exercise.
For
purposes of this Warrant, the term “Trading
Day” means any day during which the Principal Market (as defined below)
shall be open for business.
(b)
Notwithstanding any other provision contained herein to the contrary, at any
time prior to the Expiration Date if and only if there is no then effective
registration statement for the Warrant Shares, the Holder may elect a “cashless”
exercise of this Warrant for any Warrant Shares whereby the Holder shall be
entitled to receive a number of shares of Common Stock equal to (x) the excess
of the Current Market Value (as defined below) over the aggregate Exercise Price
of the portion of the Warrant then being exercised, divided by (y) the Adjusted
Price of the Common Stock.
For
the purposes of this Warrant, the following terms shall have the following
meanings:
“Adjusted Price of
the Common Stock” shall mean the Conversion Price, as defined in that
certain Convertible Promissory Note issued by the Company in favor of the Holder
on even date herewith, in effect on any relevant Exercise Date.
“Current Market
Value” shall mean an amount equal to the Market Price of the Common
Stock, multiplied by the number of shares of Common Stock specified in the
applicable Notice of Exercise.
“Closing
Price” means the 4:00 P.M. last sale price of the Common Stock on the
Principal Market on the relevant trading day(s), as reported by Bloomberg, LP
(or if that service is not then reporting the relevant information regarding the
Common Stock, a comparable reporting service of national reputation selected by
the Holder and reasonably acceptable to the Company) (“Bloomberg”)
for the relevant date.
“Exercise
Price” shall mean $0.38 per
share.
“Market Price of
the Common Stock” shall mean the higher of: (i) the Closing Price of the
Common Stock on the Issue Date; or (ii) the VWAP of the Common Stock for the
Trading Day that is two Trading Days prior to the Exercise Date.
“VWAP”
shall mean the volume-weighted average price of the Common Stock on the
Principal Trading Market for a particular Trading Day or set of Trading Days, as
the case may be, as reported by Bloomberg.
(c) If
the Notice of Exercise form elects a “cash” exercise (or if the cashless
exercise referred to in the immediately preceding paragraph (b) is not available
in accordance with the terms hereof), the Exercise Price per share of Common
Stock for the shares then being exercised shall be payable, at the election of
the Holder, in cash or by certified or official bank check or by wire transfer
in accordance with instructions provided by the Company at the request of the
Holder.
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(d) Upon
the appropriate payment to the Company, if any, of the Exercise Price for the
shares of Common Stock purchased, together with the surrender of this Warrant
(if required), the Company shall immediately deliver the shares of Common Stock
electronically via Deposit/Withdrawal at Custodian (DWAC) to the account
designated by Holder on the Notice of Exercise. If for any reason the
Company is not able to deliver the shares via DWAC notwithstanding its best
efforts to do so, the Company shall deliver certificates representing the
Warrant Shares to the Holder as provided in the Notice of Exercise (the
certificates delivered in such manner, the “Warrant Share
Certificates”) within three (3) Trading Days (such third Trading Day, a
“Delivery
Date”) of (i) with respect to a “cashless exercise,” the Exercise Date as
the case may be, or, (ii) with respect to a “cash” exercise, the later of the
Exercise Date or the date the payment of the Exercise Price for the relevant
Warrant Shares is received by the Company.
(e) The
Company understands that a delay in the electronic delivery of shares or the
delivery of the Warrant Share Certificates, as the case may be, beyond the
Delivery Date (assuming electronic delivery is not available) could result in
economic loss to the Holder. As compensation to the Holder for such
loss, the Company agrees to pay late payment fees (as liquidated damages and not
as a penalty) to the Holder for late delivery of Warrant Share Certificates in
the amount of $100 per Trading Day after the Delivery Date for each $10,000 of
the total Exercise Price of the Warrant Shares subject to the delivery
default. The Company shall pay any payments incurred under this
Section in immediately available funds upon demand. Furthermore, in
addition to any other remedies which may be available to the Holder, in the
event that the Company fails for any reason to effect delivery of the Warrant
Share Certificates by the Delivery Date, the Holder may revoke all or part of
the relevant Warrant exercise by delivery of a notice to such effect to the
Company, whereupon the Company and the Holder shall each be restored to their
respective positions immediately prior to the exercise of the relevant portion
of this Warrant, except that the liquidated damages described above shall be
payable through the date notice of revocation or rescission is given to the
Company.
(f) The
Holder shall be deemed to be the holder of the shares issuable to it in
accordance with the provisions of this Section 2.1 on the Exercise
Date.
2.2 Ownership
Limitation. Notwithstanding the provisions of this Warrant, in
no event shall the this Warrant be exercisable to the extent that the issuance
of Common Stock upon the exercise thereof, after taking into account the Common
Stock then owned by the Holder and its affiliates, would result in the
beneficial ownership by the Holder and its affiliates of more than 9.99% 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.
3. Mutilation or Loss of
Warrant. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) receipt of reasonably satisfactory
indemnification, and (in the case of mutilation) upon surrender and cancellation
of this Warrant, the Company will execute and deliver a new Warrant of like
tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall
thereupon become void.
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4. Rights of the
Holder. The Holder shall not, by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth
herein.
5. Protection Against Dilution
and Other Adjustments.
5.1 Capital
Adjustments. If
the Company shall at any time prior to the expiration of this Warrant subdivide
the Common Stock, by split-up or stock split, or otherwise, or combine its
Common Stock, or issue additional shares of its Common Stock as a dividend, the
number of Warrant Shares issuable on the exercise of this Warrant shall
forthwith be automatically increased proportionately in the case of a
subdivision, split or stock dividend, or proportionately decreased in the case
of a combination. Appropriate adjustments shall also be made to the
purchase price payable per Warrant Share, but the aggregate purchase price
payable for the total number of Warrant Shares purchasable under this Warrant
(as adjusted) shall remain the same. Any adjustment under this
Section 5.1 shall become effective automatically at the close of business on the
date the subdivision or combination becomes effective, or as of the record date
of such dividend, or in the event that no record date is fixed, upon the making
of such dividend.
5.2 Reclassification,
Reorganization and Consolidation. In case of any reclassification,
capital reorganization, or change in the capital stock of the Company (other
than as a result of a subdivision, combination, or stock dividend provided for
in Section 5.1 above), then the Company shall make appropriate provision so that
the Holder shall have the right at any time prior to the expiration of this
Warrant to purchase, at a total price equal to that payable upon the exercise of
this Warrant, the kind and amount of shares of stock and other securities and
property receivable in connection with such reclassification, reorganization, or
change by a holder of the same number of shares of Common Stock as were
purchasable by the Holder immediately prior to such reclassification,
reorganization, or change. In any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder so that the
provisions hereof shall thereafter be applicable with respect to any shares of
stock or other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the purchase price per Warrant Share
payable hereunder, provided the aggregate purchase price shall remain the
same.
5.3 Computation of Adjusted
Exercise Price. Commencing on the Issue Date and continuing until this
Warrant is either exercised in full or expires, in case the Company shall at any
time after the date hereof issue or sell any (a) shares of Common Stock or
preferred shares convertible into Common Stock, or (b) debt, warrants, options
or other instruments or securities which are convertible into or exercisable for
shares of Common Stock (together herein referred to as “Equity
Securities”), in each case for consideration (or with a conversion price)
per common share less than the Exercise Price in effect immediately prior to the
issuance or sale of such securities or instruments, or without consideration,
then forthwith upon such issuance or sale, the Exercise Price shall (until
another such issuance or sale) be automatically reduced to the price (calculated
to the nearest full cent) equal to the price (or conversion price) of any such
securities or instruments. For the purposes of this Section 5.3, the term
Exercise Price shall mean the Exercise Price per share set forth in Section 1
hereof, as adjusted from time to time pursuant to the provisions of this
Section.
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5.4 Notice of
Adjustment. Promptly upon the occurrence of an event which
would require an adjustment in the number or kind of shares purchasable upon
exercise of this Warrant or in the Exercise Price, and in any event not less
than ten (10) business days after such an occurrence, the Company shall notify
the Holder in writing of the event, disclose to the Holder the new Exercise
Price, the number of Shares or other securities or property thereafter
purchasable upon exercise of this Warrant, and provide to the Holder copies of
all relevant documents related to such event, even if the event was or should be
disclosed publicly.
6. Certificate as to
Adjustments. In each case of any adjustment or readjustment in
the shares of Common Stock issuable on the exercise of the Warrants, the Company
at its expense will promptly cause its Chief Financial Officer or other
appropriate designee to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock issued or sold or deemed to have been issued or sold, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c) the Exercise Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder of the
Warrant and any Warrant Agent of the Company (appointed pursuant to Section 8
hereof).
7. Transfer to Comply with the
Securities Act. This Warrant has not been registered under the
1933 Act and has been issued to the Holder for investment and not with a view to
the distribution of either the Warrant or the Warrant Shares. Neither
this Warrant nor any of the Warrant Shares or any other security issued or
issuable upon exercise of this Warrant may be sold, transferred, pledged or
hypothecated without (i) an effective registration statement under the Act
relating to such security, or (ii) an opinion of counsel reasonably satisfactory
to the Company that registration is not required under the Act. Each
certificate for the Warrant, the Warrant Shares and any other security issued or
issuable upon exercise of this Warrant shall contain a legend on the face
thereof, in form and substance satisfactory to counsel for the Company, setting
forth the restrictions on transfer contained in this Section. Any
such transfer shall be accompanied by a transferor assignment substantially in
the form of Exhibit
B (the “Transferor
Assignment”), executed by the transferor and the transferee and submitted
to the Company. Upon receipt of the duly executed Transferor
Assignment, the Company shall register the Transferee thereon as the new Holder
on the books and records of the Company and such Transferee shall be deemed a
“registered holder” or “registered assign” for all purposes hereunder, and shall
have all the rights of the Holder hereof.
8. Failed
Exercise. In the event that the Holder exercises this Warrant
in whole or in part pursuant to any provision of Section 2 hereof, and the
Company is unable or otherwise fails to deliver all or part of the Warrant
Shares (a “Failed Exercise”) due to limitations imposed on the Company by virtue
of Rule 713 (the “Rule 713 Limitations”), then the Company shall be obligated to
(i) promptly, but in no event later than one hundred twenty (120) days from such
Failed Exercise, obtain the required stockholder approval to remove the Rule 713
Limitations, and (ii) on the first date that such Rule 713 Limitations no longer
apply, deliver to the Holder the number of Warrant Shares required by the Failed
Exercise (without regard to the Rule 713 Limitations); provided, however, that
the Holder may elect to retract the Failed Exercise at any time prior to the
delivery of the Warrant Shares, whereupon the Holder shall retain all rights
under this Warrant as if the Failed Exercise had never occurred.
5
9. Warrant
Agent. The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant
Agent”) for the purpose of issuing Common Stock on the exercise of this
Warrant pursuant hereto, exchanging this Warrant pursuant hereto, and replacing
this Warrant pursuant hereto, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.
10. Transfer on the Company’s
Books. Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.
11. Notices. Any
notice required or permitted hereunder shall be given in manner provided in the
subsection headed “Notices” in the Purchase Agreement, the terms of which are
incorporated herein by reference.
12. Supplements and Amendments;
Whole Agreement. This Warrant may be amended or supplemented
only by an instrument in writing signed by the parties hereto. This
Warrant contains the full understanding of the parties hereto with respect to
the subject matter hereof and thereof and there are no representations,
warranties, agreements or understandings other than expressly contained herein
and therein.
13. Governing
Law. This Warrant shall be governed by, and construed in
accordance with, the internal laws of the State of Illinois, without reference
to the choice of law provisions thereof. The Company and, by
accepting this Warrant, the Holder, each irrevocably submits to the exclusive
jurisdiction of the courts of the State of Illinois located in Xxxx County and
any United States District Court for the Northern District of Illinois for the
purpose of any suit, action, proceeding or judgment relating to or arising out
of this Warrant and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Warrant. The Company and, by
accepting this Warrant, the Holder, each irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court. The Company and, by accepting this
Warrant, the Holder, each irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS
BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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14. Remedies. The
Company stipulates that the remedies at law of the Holder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
15. Counterparts. This
Warrant 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. Signature delivered via facsimile or email shall be
considered original signatures for purposes hereof.
16. Descriptive
Headings. Descriptive headings of the several Sections of this
Warrant are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
[Remainder
of page intentionally left blank]
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IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed by an officer thereunto
duly authorized.
Dated:
April 8, 2010
| RADIENT PHARMACEUTICALS CORPORATION | ||
|
By:
|
___________________________________________ | |
|
Xxxxxxx
X. XxxXxxxxx, Chief Executive
Officer
|
||
EXHIBIT
A
NOTICE OF
EXERCISE OF WARRANT
|
TO:
|
RADIENT
PHARMACEUTICALS CORPORATION
ATTN:
_______________
VIA
FAX TO:
( )______________
|
The
undersigned hereby irrevocably elects to exercise the right, represented by the
Warrant to Purchase Shares of Common Stock dated as of April 8, 2010, to
purchase _________ shares of the Common
Stock, $0.001 par value (“Common
Stock”), of RADIENT
PHARMACEUTICALS CORPORATION, and tenders herewith payment in accordance
with Section 2 of said Common Stock Purchase Warrant, as follows:
|
_______
|
CASH:
$__________________________ = (Exercise Price x
Exercise
|
||
|
Shares)
|
|
||
|
_______
|
Payment
is being made by:
|
||
|
_____
enclosed
check
|
|
||
|
_____
wire
transfer
|
|
||
|
_____
other
|
|
||
|
_______
|
CASHLESS
EXERCISE:
|
||
|
Net
number of Warrant Shares to be issued to Holder:
______*
|
|||
|
*
based on: Current
Market Value - (Exercise Price x Exercise
Shares)
|
|||
| Adjusted Price of Common Stock | |||
|
Where:
|
|||
|
Market
Price of Common Stock [“MP”]
|
=
|
$____________
|
|
|
Current
Market Value [MP x Exercise Shares] =
|
$____________
|
||
|
Exercise
Price
|
=
|
$____________
|
|
|
Adjusted
Price of Common Stock
|
=
|
$____________
|
|
It is the
intention of the Holder to comply with the provisions of Section 2.2 of the
Warrant regarding certain limits on the Holder’s right to exercise
thereunder. The Holder believes this exercise complies with the
provisions of said Section 2.2. Nonetheless, to the extent that,
pursuant to the exercise effected hereby, the Holder would have more shares than
permitted under said Section, this notice should be amended and revised, ab initio, to refer to the
exercise which would result in the issuance of shares consistent with such
provision. Any exercise above such amount is hereby deemed void and
revoked.
As
contemplated by the Warrant, this Notice of Exercise is being sent by facsimile
to the fax number and officer indicated above.
A-1
If this
Notice of Exercise represents the full exercise of the outstanding balance of
the Warrant, the Holder either (1) has previously surrendered the Warrant to the
Company or (2) will surrender (or cause to be surrendered) the Warrant to the
Company at the address indicated above by express courier within five (5)
Trading Days after delivery or facsimile transmission of this Notice of
Exercise.
The
certificates representing the Warrant Shares should be transmitted by the
Company to the Holder
_______
via express courier, or
_______
by electronic transfer
after
receipt of this Notice of Exercise (by facsimile transmission or otherwise)
to:
_____________________________________
_____________________________________
_____________________________________
Dated: _____________________
*
By: ________________________________
________________________________
Printed Name (and title, if
applicable)
A-2
EXHIBIT
B
FORM OF
TRANSFEROR ENDORSEMENT
(To be
signed only on transfer of Warrant)
For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees”
the right represented by the within Warrant to purchase the percentage and
number of shares of Common Stock of RADIENT PHARMACEUTICALS CORPORATION to which
the within Warrant relates specified under the headings “Percentage
Transferred” and “Number
Transferred,” respectively, opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of RADIENT PHARMACEUTICALS CORPORATION with full power of substitution in the
premises.
|
Transferees
|
Percentage Transferred
|
Number Transferred | |
|
Dated:___________,
______
|
|||
| ___________________________________________ | |||
|
[Transferor Name must conform to the name
of
Holder
as specified on face of Warrant]
|
|||
|
By:_________________________________________
|
|||
|
Name:
______________________________________
|
|||
Signed in
the presence of:
_________________________
(Name)
ACCEPTED
AND AGREED:
_________________________
[TRANSFEREE]
By:
_______________________
Name:
_____________________
