EXHIBIT 4.12
Neither this Warrant nor the shares of Common Stock issuable on exercise of
this Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act or
an opinion of counsel to the effect that such registration is not required.
THE BIOBALANCE CORP.
WARRANT
DATED AS OF: November 7, 2002
Number of Shares: 10,000
Holder:
THIS CERTIFIES THAT the holder of this Warrant ("Holder") is entitled to
purchase from THE BIOBALANCE CORP. a Delaware corporation (hereinafter called
the "Company"), at the exercise price per share set forth below the number of
shares of the Company's common stock set forth above ("Common Stock"). The
exercise price of this Warrant is $1.50 per share. The warrants expire on the
second anniversary of the date hereof.
1. Adjustment Provisions. This Warrant is subject to the following further
---------------------
provisions:
(a) If the Company shall at any time while the Warrant remains outstanding
issue Common Stock by way of dividend or other distribution on any stock of
the Company or effect a stock split or reverse stock split of the
outstanding shares of Common Stock, the Purchase Price shall be
proportionately decreased in the case of such issuance (on the day
following the date fixed for determining shareholders entitled to receive
such dividend or other distribution) or such stock split or increased in
the case of such reverse stock split (on the date that such stock split or
reverse stock split shall become effective), by multiplying the Purchase
Price in effect immediately prior to the stock dividend, stock split or
reverse stock split by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately prior to such stock
dividend, stock split or reverse stock split, and the denominator of which
is the number of shares of Common Stock outstanding immediately after such
stock dividend, stock split or reverse stock split.
(b) In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the Company (other than a
change in par value or as a result of an issuance of Common Stock by way of
dividend or other distribution or of a stock split or reverse stock split),
or in case of any consolidation or merger of the Company with or into
another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding
shares of Common Stock of the Company issuable upon exercise of this
Warrant) or in case of any sale or conveyance to another corporation or
other change of outstanding shares of Common Stock of the Company issuable
upon exercise of the Warrant) or in case of any sale or conveyance to
another corporation of the property of the Company as a entirety or
substantially as an entirety, the Company
shall cause effective provision to be made so that the Holder shall have
the right thereafter, by exercising this Warrant, to purchase the kind and
amount of shares of stock and other securities and property receivable upon
such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance that the Holder would have
obtained had he or it exercised this Warrant immediately prior to such
reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Warrant. The foregoing provisions of
this Section shall similarly apply to successive consolidations, merger,
sales and conveyances.
(c) If the Company shall declare or pay a dividend or other distribution
on any Common Stock, by way of distribution of assets or spin-off (but
other than a dividend payable solely in shares of Common Stock or a
periodic cash dividend payable out of the Company's net income), then the
Purchase Price will be reduced to a price determined by multiplying such
Purchase Price by a fraction, (x) the numerator which shall be the fair
market value of a share of Common Stock immediately prior to declaration of
such dividend or distribution (the "initial value") less the fair market
value of such dividend or distribution applicable to a share of Common
Stock, in each case as determined in good faith by the Board of Directors
of the Company and (y) the denominator of which shall be the aforesaid
initial value.
(d) Upon any adjustment of Purchase Price pursuant to this Section, the
Holder shall thereafter (until another such adjustment) be entitled to
purchase upon the exercise of the Warrant with respect to which such
adjustment occurred, at the new Purchase Price thereof, the number of
shares, calculated to the nearest full share, obtained by multiplying the
number of shares of stock initially issuable upon exercise of such Warrant
by the Purchase Price thereof in effect on the date hereof and dividing the
product so obtained by the new Purchase Price thereof.
2. This Warrant and the Common Stock issuable on exercise of this Warrant (the
"Underlying Shares") may be transferred, sold, assigned or hypothecated,
only if registered by the Company under the Securities Act of 1933 (the
"Act") or if the Company has received from counsel to the Company a written
opinion to the effect that registration of the Warrant or the Underlying
Shares is not necessary in connection with such transfer, sale, assignment
or hypothecation. The Warrant and the Underlying Shares shall be
appropriately legended to reflect this restriction and stop transfer
instructions shall apply. The Holder shall through its counsel provide such
information as is reasonably necessary in connection with such opinion.
3. Registration Rights
--------------------
(a) Piggy-Back Registration Rights. If, at any time the Company proposes
--------------------------------
to prepare and file a registration statement or post-effective amendments
thereto covering the Common Stock of the Company for the Company or for
selling stockholders of the Company (other than in connection with a merger
or acquisition, pursuant to Form S-8 or successor form (collectively, the
"Statement"), the Company will give written notice by registered mail or
facsimile at least ten (10) days prior to the filing of each such
Statement, to the Holder or Holders of the Warrant or warrant Shares of its
intention to do so. If the Holder or Holders of the Warrant or Warrant
Shares notify the Company within five (5) days after receipt of any such
notice ofits or their desire to include all Warrant Shares in the Company
owned by such Holder in such proposed Statement, the Company shall afford
such Holder or Holders the opportunity to have all such Warrant Shares
registered under such Statement at the Company's sole cost and expense and
at no cost expense to such Holder or Holders; provided,
however, that if, in written opinion of the Company's managing underwriter,
the inclusion of the Warrant Shares, when added to the Common Stock being
registered by the Company and any other selling stockholders participating
in such underwritten offering, will exceed the maximum amount of the
Company's Common Stock which can be marketed, (i) at a price reasonably
affecting the entire offering, then the current market value, or (ii)
without otherwise materially adversely affecting the entire offering, then
the Company may exclude from such offering all or a portion of the Warrant
Shares requested to be registered, such exclusion to be proportionate with
any other selling stockholder. A Holder or Holders may not elect register
only a portion of its or their shares. The Company agrees to use its best
efforts to cause such Statement to be filed and to become effective, and to
keep the Prospectus included in such Statement, current either through the
filing of periodic reports under the Exchange Act, or by filing
Post-Effective Amendments to the Statement, so as to permit the public sale
of the Warrant Shares for a period of six (6) consecutive months from the
date such Statement is declared effective by the Securities and Exchange
Commission. The Holder or Holders acknowledge, however, that prior to
effecting any sales of the Warrant Shares, the Holder or Holders will
confirm with the Company that the Prospectus included in the Statement is
up-to-date and that such shares may be lawfully sold. The Holder of the
Warrant Shares has no other registration rights with respect to the
underlying Warrant Shares except those rights specified in Sections 3(a)
and 3(b) of this Warrant.
Notwithstanding the provisions of this Section 3(a), the Company shall have
the right at any time after it shall have given written notice pursuant to
this Section 3(a) (irrespective of whether a written request for inclusion
of any such Warrant Shares shall have been made) to elect not to file any
such proposed Statement, or to withdraw the same after the filing but prior
to the effective date thereof.
(b) Demand Registration Rights. In the event that the Warrants shares are
---------------------------
excluded from registration as described in 3(a) above, the Company will at
its own expense file a registration statement at the next earliest possible
date following completion of its offering and include the shares underlying
the Warrants. Such registration statement may be a post effective
amendment, registration under Form S-3 or any other registration process
available to it under current or then existing SEC guidelines. It is hereby
expressly agreed to between the parties that the Company shall, as soon as
practicable but in any event within 90 days following the initial
registration, cause a registration statement of the Common Stock underlying
the Warrants to be filed under the Securities Exchange Act with respect to
an offering, in part, of the Registrable Securities (a "Demand
Registration"). In the event that the Registration Statement is not filed
by the 90th day following the offering, the Company agrees that it is in
default under the terms of this Agreement. The Holder shall have all rights
and remedies available to him to seek damages as well as to seek specific
performance.
4. Any permitted assignment of this Warrant shall be effected by the Holder by
(i) executing the form of assignment at the end hereof, (ii) surrendering
the Warrant for cancellation at the office of the Company, accompanied by
the opinion of counsel to the Company referred to above; and (iii) unless
in connection with an effective registration statement which covers the
sale of this Warrant and or the shares underlying the Warrant, delivery to
the Company of a statement by the transferee (in a form acceptable to the
Company and its counsel) that such Warrant is being acquired by the Holder
for investment and not with a view to its distribution or resale; whereupon
the Company shall issue,
in the name or names specified by the Holder (including the Holder) new
Warrants representing in the aggregate rights to purchase the same number
of Shares as are purchasable under the Warrant surrendered. Such Warrants
shall be exercisable immediately upon any such assignment of the number of
Warrants assigned. The transferor will pay all relevant transfer taxes.
Replacement warrants shall bear the same legend as is borne by this
Warrant.
4 (a) The term "Holder" should be deemed to include any permitted record
transferee of this Warrant.
5. The Company covenants and agrees that all shares of Common Stock which may
be issued upon exercise hereof will, upon issuance, be duly and validly
issued, fully paid and non-assessable and no personal liability will attach
to the holder thereof. The Company further covenants and agrees that,
during the periods within which this Warrant may be exercised, the Company
will at all times have authorized and reserved a sufficient number of
shares of Common Stock for issuance upon exercise of this Warrant and all
other Warrants.
6. This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
7. In the event that as a result of reorganization, merger, consolidation,
liquidation, recapitalization, stock split, combination of shares or stock
dividends payable with respect to such Common Stock, the outstanding shares
of Common Stock of the Company are at any time increased or decreased or
changed into or exchanged for a different number or kind of share or other
security of the Company or of another corporation, then appropriate
adjustments in the number and kind of such securities then subject to this
Warrant shall be made effective as of the date of such occurrence so that
the position of the Holder upon exercise will be the same as it would have
been had it owned immediately prior to the occurrence of such events the
Common Stock subject to this Warrant. Such adjustment shall be made
successively whenever any event listed above shall occur and the Company
will notify the Holder of the Warrant of each such adjustment. Any fraction
of a share resulting from any adjustment shall be eliminated and the price
per share of the remaining shares subject to this Warrant adjusted
accordingly.
8. The rights represented by this Warrant may be exercised at any time within
the period above specified by (i) surrender of this Warrant (with the
purchase form at the end hereof properly executed) at the principal
executive office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the
address of the Holder appearing on the books of the Company); (ii) payment
to the Company of the exercise price for the number of Shares specified in
the above-mentioned purchase form together with applicable stock transfer
taxes, if any, or, Warrants of the Company with a fair market value equal
to the Purchase Price in payment of the Purchase Price for the number of
whole shares specified. For purposes of making payment of the Purchase
Price by way of Shares of Common Stock of the Company or Warrants of the
Company, the fair market value of any share of Common Stock shall be equal
to the closing price of a Share of Common Stock of NASDAQ or other
principal exchange on which such Shares are listed as of the business day
immediately prior to the day of exercise and the fair market value per
Share of any Warrant shall be equal to the difference between the aforesaid
closing price per Share and the Purchase Price of the Warrant; provided
however, that if at the time of determination the Shares are not listed,
then the fair market value per share shall be deemed to have a value as
determined by a good faith determination of the Board of Directors of the
Company. and (iii) unless in connection with an effective registration
statement which covers the sale of the shares
underlying the Warrant, the delivery to the Company of a statement by the
Holder (in a form acceptable to the Company and its counsel) that such
Shares are being acquired by the Holder for investment and not with a view
to their distribution or resale.
9. The certificates for the Common Stock so purchased shall be delivered to
the Holder within a reasonable time, not exceeding ten (10) business days
after all requisite documentation has been provided, after the rights
represented by this Warrant shall have been so exercised, and shall bear a
restrictive legend with respect to any applicable securities laws.
This Warrant shall be governed by and construed in accordance with the laws
of the State of New York. The New York courts shall have exclusive
jurisdiction over this instrument and the enforcement thereof. Service of
process shall be effective if by certified mail, return receipt requested.
All notices shall be in writing and shall be deemed given upon receipt by
the party to whom addressed. This instrument shall be enforceable by
decrees of specific performances well as other remedies.
IN WITNESS WHEREOF, THE BIOBALANCE CORP. has caused this Warrant to be
signed by its duly authorized officers under Its corporate seal, and to be dated
as of the date set forth above.
THE BIOBALANCE CORP.
By________________________________
Title:____________________________
Date:_____________________________
