Exhibit 4.12
VOID AFTER 5:00 P.M., NEW YORK TIME ON FEBRUARY 27, 2007
WARRANT TO PURCHASE _______ SHARES OF COMMON STOCK
----------------------------------------------------------------------------
WARRANT TO PURCHASE COMMON STOCK
OF
EMPYREAN BIOSCIENCE, INC.
------------------------------------------------------------------------------
THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS
REGISTERED UNDER THE ACT OR AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.
FOR VALUE RECEIVED, Empyrean Bioscience, Inc., a Delaware corporation
(the "Company"), grants the following rights to ___________ ("Holder'):
ARTICLE I.
DEFINITIONS
As used herein, the following terms shall have the following meanings,
unless the context shall otherwise require:
(a) "Common Stock" shall mean the common stock, $.0001 par
value, of the Company.
(b) "Corporate Office" shall mean the office of the Company
(or its successor) at which its principal business shall be administered at any
particular time.
(c) "Exercise Date" shall mean any date upon which the Holder
shall give the Company a Notice of Exercise.
(d) "Exercise Price" shall mean the price to be paid to the
Company for each share of Common Stock to be purchased upon exercise of this
Warrant in accordance with the terms hereof which shall be $0.031.
(e) "Expiration Date" shall mean 5:00 p.m. (New York time) on
February 27, 2007.
(f) "Fair Market Value" of a share of Common Stock as of a
particular date (the "Determination Date") shall mean:
(1) If the Company's Common Stock is traded on an
exchange or is quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System or the NASDAQ SmallCap
Market, then the closing or last sale price, respectively, reported for the
1
last business day immediately preceding the Determination Date.
(2) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ National Market System or the NASDAQ SmallCap Market
but is traded on the NASD OTC Bulletin Board, then the mean of the closing bid
and asked prices reported for the last business day immediately preceding the
Determination Date.
(3) Except as provided in clause (4) below, if the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree or in the absence of agreement by arbitration in accordance with
the rules then standing of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and
training to pass on the matter to be decided.
(4) If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's charter, then all amounts to
be payable per share to holders of the Common Stock pursuant to the charter in
the event of such liquidation, dissolution or winding up, plus all other amounts
to be payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (4) that all of the shares of
Common Stock then issuable upon exercise of all of the Warrants are outstanding
at the Determination Date.
(g) "SEC" shall mean the United States Securities and Exchange
Commission.
(h) "Transfer Agent" shall mean the Company's transfer agent
or its authorized successor.
(i) "Underlying Shares" shall mean the shares of Common Stock
issuable upon exercise of the Warrant.
ARTICLE 2.
EXERCISE AND AGREEMENTS
2.1 EXERCISE OF WARRANT. This Warrant shall entitle Holder to purchase
up to ________ shares of Common Stock (the "Shares") at the Exercise Price. This
Warrant shall be exercisable at any time and from time to time on or after
February 28, 2002 and prior to the Expiration Date (the "Exercise Period"). This
Warrant and the right to purchase shares of Common Stock hereunder shall expire
and become void at the Expiration Date.
2.2 MANNER OF EXERCISE.
(a) Holder may exercise this Warrant at any time and from time
to time during the Exercise Period, in whole or in part (but not in
denominations of fewer than 10,000 shares, except upon an exercise of this
Warrant with respect to the remaining balance of shares purchasable hereunder at
the time of exercise), by delivering to the Company (i) a duly executed Notice
of Exercise in substantially the form attached as Appendix 1 hereto and (ii)
payment in the form of:
(1) a wire transfer or bank cashiers or certified
check payable to the order of the Company for the aggregate Exercise Price of
the shares being purchased;
2
(2) delivery of Warrants, Common Stock and/or Common
Stock receivable upon exercise of the Warrants in accordance with Section (b)
below; or
(3) a combination of any of the foregoing methods,
for the number of Common Shares specified in such form (as such exercise number
shall be adjusted to reflect any adjustment in the total number of shares of
Common Stock issuable to the holder per the terms of this Warrant) and the
holder shall thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock determined
as provided herein.
(b) Notwithstanding any provisions herein to the contrary, if
the Fair Market Value of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, upon consent of the Company, the holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being cancelled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Notice of Exercise in
which event the Company shall issue to the holder a number of shares of Common
Stock computed using the following formula:
X=Y (A-B)
---
A
--------
Where X= the number of shares of Common Stock to be issued
to the holder
Y= the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the
Warrant being exercised (at the date of such
calculation)
A= the Fair Market Value of one share of the
Company's Common Stock (at the date of such
calculation)
B= Exercise Price (as adjusted to the date of such
calculation)
(c) From time to time upon exercise of this Warrant, in whole
or part, in accordance with its terms, the Company will deliver stock
certificates to the Holder representing the number of shares of Common Stock
being purchased pursuant to such exercise, subject to adjustment as described
herein.
(d) Promptly following any exercise of this Warrant, if the
Warrant has not been fully exercised and has not expired, the Company will
deliver to the Holder a new Warrant for the balance of the shares of Common
Stock covered hereby.
2.3 TERMINATION. All rights of the Holder in this Warrant, to the
extent they have not been exercised, shall terminate on the Expiration Date.
2.4 NO RIGHTS PRIOR TO EXERCISE. Prior to its exercise pursuant to
Section 2.2 above, this Warrant shall not entitle the Holder to any voting or
other rights as a holder of shares of Common Stock.
2.5 ADJUSTMENTS. In case of any reclassification, capital
reorganization, stock dividend or other change of outstanding shares of Common
Stock, or in case of any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification,
capital reorganization, stock
3
dividend or other change of outstanding shares or Common Stock) or in case of
any sale or conveyance to another corporation of the property of the Company as,
or substantially as, an entirety (other than a sale/leaseback, mortgage or other
financing transaction), 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 number of shares of stock or other securities or
property (including cash) receivable upon such reclassification, capital
reorganization, stock dividend or other change, consolidation, merger, sale or
conveyance as the Holder would have been entitled to receive had the Holder
exercised this Warrant in full immediately before such reclassification, capital
reorganization, stock dividend or other change, consolidation, merger, sale or
conveyance. Any such provision shall include provision for adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 2.5. The foregoing provisions shall similarly apply to
successive reclassifications, capital reorganizations, stock dividends and other
changes of outstanding shares of Common Stock and to successive consolidations,
mergers, sales or conveyances.
2.6 FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issuable upon exercise or conversion of this Warrant and the number of shares to
be issued shall be rounded down to the nearest whole share. If a fractional
share interest arises upon any exercise or conversion of the Warrant, the
Company shall eliminate such fractional share interest by paying Holder the
amount computed by multiplying the fractional interest by the closing bid price
of a full share of Common Stock on the date of the Notice of Exercise.
ARTICLE 3.
REPRESENTATIONS AND COVENANTS OF THE COMPANY
3.1 REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Holder as follows:
(a) All shares of Common Stock which may be issued upon the
exercise of the purchase right represented by this Warrant shall, upon issuance,
be duly authorized, validly issued, fully-paid and nonassessable, and free of
any liens and encumbrances except for restrictions on transfer provided for
herein or under applicable federal and state securities laws, and not subject to
any pre-emptive rights.
(b) The Company is a corporation duly organized and validly
existing under the laws of the State of Delaware, and has the full power and
authority to issue this Warrant and to comply with the terms hereof. The
execution, delivery and performance by the Company of its obligations under this
Warrant, including, without limitation, the issuance of the shares of Common
Stock upon any exercise of the Warrant have been duly authorized by all
necessary corporate action. This Warrant has been duly executed and delivered by
the Company and is a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting enforceability
of creditors' rights generally and except as the availability of the remedy of
specific enforcement, injunctive relief or other equitable relief is subject to
the discretion of the court before which any proceeding therefore may be
brought.
(c) The Company is not subject to or bound by any provision of
any certificate or articles of incorporation or by-laws, mortgage, deed of
trust, lease, note, bond, indenture, other instrument or agreement, license,
permit, trust, custodianship, other restriction or any applicable provision of
any law, statute, rule, regulation, judgment, order, writ, injunction or decree
of any court, governmental body, administrative agency or arbitrator which could
prevent or be violated by or under which there would be a default (or right of
termination) as a result of the execution, delivery and performance by the
Company of this Warrant.
4
ARTICLE 4.
SECURITIES LAW COMPLIANCE.
The shares of Common Stock will be acquired for Xxxxxx's own account
for investment and not with a view to, or for resale in connection with, any
distribution of the shares within the meaning of the Securities Act of 1933.
Xxxxxx acknowledges that it is aware that the issuance of the shares of Common
Stock upon exercise of this Warrant have not been registered pursuant to the
Securities Act of 1933 (the "Act"), nor is it intended that they be registered
and the Holder has no right to require that they be registered, under the Act or
under any state securities laws. The Holder agrees that the shares of Common
Stock may not be sold in the absence of registration unless such sale is exempt
from registration under the Act and any applicable state securities laws. The
Holder also acknowledges that he shall be responsible for compliance with all
conditions on transfer imposed by any Commissioner of Securities of any state
and for any expenses incurred by the Company for legal or accounting services in
connection with reviewing such proposed transfer or issuing opinions in
connection therewith. The certificate for the shares of Common Stock shall bear
the following restrictive legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE UNITED STATES OF
AMERICA (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES ("STATE ACT"). THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED FOR VALUE, DIRECTLY OR INDIRECTLY, IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT
AND COMPLIANCE WITH APPLICABLE STATE ACTS, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE ACTS, THE
AVAILABILITY OF WHICH IS ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
If (but without any obligation to do so under this Warrant) the Company
proposes to register (including for this purpose a registration effected by the
Company for shareholders other than the Holder) any of its stock or other
securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, or a registration on
any form which does not include substantially the same information as would be
required to be included in a registration statement covering the issuance of the
Underlying Shares, or a registration of an offering of securities, the
underwriter of which objects to registration of additional securities), the
Company shall, at such time, promptly give to Holder written notice of such
registration. Upon the written request of the Holder given within twenty days
after mailing of such notice by the Company, the Company shall cause to be
registered under such registration statement such Underlying Shares as the
Holder has requested to be registered.
ARTICLE 5.
MISCELLANEOUS.
5.1 TRANSFER. This Warrant may not be transferred or assigned, in whole
or in part, at any time, except in compliance with applicable federal and state
securities laws by the transferor and the transferee (including, without
limitation, the delivery of an investment representation letter and a legal
opinion reasonably satisfactory to the Company), provided that this Warrant may
not be transferred or assigned such that either the Holder or any transferee
will, following such transfer or assignment, hold a Warrant for the right to
purchase fewer than 5,000 shares of Common Stock.
5
5.2 TRANSFER PROCEDURE. Subject to the provisions of Section 5.1,
Holder may transfer or assign this Warrant by giving the Company notice setting
forth the name, address and taxpayer identification number of the transferee or
assignee, if applicable (the "Transferee") and surrendering this Warrant to the
Company for reissuance to the Transferee (and the Holder, in the event of a
transfer or assignment of this Warrant in part). (Each of the persons or
entities in whose name any such new Warrant shall be issued is herein referred
to as a Holder").
5.3 LOSS, THEFT, DESTRUCTION OR MUTILATION. If this Warrant shall
become mutilated or defaced or be destroyed, lost or stolen, the Company shall
execute and deliver a new Warrant in exchange for and upon surrender and
cancellation of such mutilated or defaced Warrant or, in lieu of and in
substitution for such Warrant so destroyed, lost or stolen, upon the Holder
filing with the Company evidence to it that such Warrant has been so mutilated,
defaced, destroyed, lost or stolen. However, the Company shall be entitled, as a
condition to the execution and delivery of such new Warrant, to demand indemnity
satisfactory to it and payment of the expenses and charges incurred in
connection with the delivery of such new Warrant. Any Warrant so surrendered to
the Company shall be canceled.
5.4 NOTICES. All notices and other communications from the Company to
the Holder or vice versa shall be deemed delivered and effective when given
personally, by facsimile transmission and confirmed in writing or mailed by
first-class registered or certified mail, postage prepaid at such address and/or
facsimile number as may have been furnished to the Company or the Holder, as the
case may be, in writing by the Company or the Holder from time to time.
5.5 WAIVER. This Warrant and any term hereof may be changed, waived, or
terminated only by an instrument in writing signed by the party against which or
whom enforcement of such change, waiver, discharge or termination is sought.
5.6 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to its
principles regarding conflicts of law.
Dated: Empyrean Bioscience, Inc.
----------------------
Attest: By:
-------------------- --------------------------------------
Xxxxxxx X. Xxxxxxx, President & CEO
6
Appendix 1
NOTICE OF EXERCISE
TO: EMPYREAN BIOSCIENCE, INC.
The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby irrevocably elects to purchase (check applicable box):
___ ________ shares of the Common Stock covered by such Warrant; or
___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):
___ $__________ in lawful money of the United States; and/or
___ the cancellation of such portion of the attached Warrant as is exercisable
for a total of _______ shares of Common Stock (using a Fair Market Value of
$_______ per share for purposes of this calculation); and/or
___ the cancellation of such number of shares of Common Stock as is necessary,
in accordance with the formula set forth in Section 2.2 (b), to exercise this
Warrant with respect to the maximum number of shares of Common Stock
purchaseable pursuant to the cashless exercise procedure set forth in Section
2.2 (b).
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to ____________________ _________ whose address is
_________________________________________________________________.
The undersigned hereby confirms and acknowledges that the shares of Common Stock
to be issued upon this exercise are being acquired solely for the account of the
undersigned and not as a nominee for any other party, and for investment, and
that the undersigned will not offer, sell or otherwise dispose of any such
shares of Common Stock except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any applicable state
securities laws.
Dated:
---------------------- ------------------------------------------
(Signature must conform to name of Holder
as specified on the face of the Warrant)
------------------------------------------
(Address)
7
