Exhibit 10.11
INVESTOR WARRANT
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE ASSIGNED UNLESS SO REGISTERED OR AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT IS AVAILABLE. NEITHER THIS WARRANT NOR THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF ARE TRANSFERABLE EXCEPT AS EXPRESSLY SET FORTH
HEREIN. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE FOR
THIS WARRANT.
WARRANT AGREEMENT
FOR COMMON STOCK OF
BIOACCELERATE HOLDINGS, INC.
Warrant No. ____ Warrant to purchase an aggregate of
Date of Issuance: _________ __, 2005 __________ shares of Common Stock
THIS CERTIFIES that, for value received, _________________________,
or his/her/its permitted transferees, successors or assigns (collectively, the
"Holder"), is entitled to purchase from BIOACCELERATE HOLDINGS, INC., a Nevada
corporation (the "Company"), at any time, and from time to time, during the
exercise period referred to in Section 1 hereof, __________________________
(____________) fully paid, validly issued and nonassessable shares (the "Warrant
Shares") of common stock of the Company, par value $0.00l per share (the "Common
Stock"), at the exercise price of Two Dollars ($2.00) per share (the "Warrant
Share Price"). Securities issuable upon exercise of this Warrant and the Warrant
Share Price payable therefor are subject to adjustment from time to time as
hereinafter set forth. As used herein, the term "Warrant" shall include any
warrant or warrants hereafter issued in consequence of the exercise of this
Warrant Agreement in part or transfer of this Warrant in whole or in part.
Capitalized terms used herein and not defined have the respective meanings given
to them in that certain Securities Purchase Agreement, dated the date hereof, by
and among the Company and the other parties named therein. As used herein, the
term "Holders" shall include holders of all Warrants.
The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the "Warrant Register"), in the name
of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, and the Company shall not be affected by notice to the contrary.
Subject to Section 4 of this Warrant and the applicable provisions
of the Securities Purchase Agreement and applicable law, the Company shall
register any permitted transfer of any portion of this Warrant in the Warrant
Register, upon surrender of this Warrant, with the Form of Assignment attached
hereto duly completed and signed, to the Transfer Agent (as defined herein) or
to the Company. Upon any such registration or permitted transfer, a new warrant
to purchase Common Stock, in substantially the form of this Warrant (any such
new warrant, a "New Warrant"), evidencing the portion of this Warrant so
transferred shall be issued to the permitted transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant by
the permitted transferee thereof shall be deemed the acceptance by such
permitted transferee of all of the rights and obligations of a holder of a
Warrant. Any permitted transfer or assignment of this Warrant and Warrant Shares
obtained by the Holder in exercise of this Warrant is subject to any applicable
restrictions under the Securities Purchase Agreement, if any, and the
requirements that such securities be registered under the Securities Act and
applicable state securities laws or exempt from registration under such laws,
and the provisions of Section 5 of this Warrant.
1. Exercise; Payment for Ownership Interest.
(a) Upon the terms and subject to the conditions set forth herein,
this Warrant may be exercised in whole or in part by the Holder hereof at any
time, or from time to time, on or after the date hereof and on or prior to the
earlier to occur of (i) the "Early Expiration Date," as such term is hereinafter
defined, and (ii) 5:00:00 p.m. New York local time on ___________ __, 2008 (the
"Expiration Date"), by presentation and surrender of this Warrant to the
principal offices of the Company, or at the office of its Transfer Agent, if
any, together with the Purchase Form annexed hereto, duly executed, and
accompanied by payment to the Company of an amount equal to the Warrant Share
Price multiplied by the number of Warrant Shares as to which this Warrant is
then being exercised in immediately available funds in U.S. dollars by certified
or official bank check or wire transfer of the cash purchase price; provided,
however, that in each case, the minimum number of Warrant Shares as to which
this Warrant is being exercised shall be the lesser of (i) 5,000 Warrant Shares
or (ii) all Warrant Shares then held by the Holder on an as exercised basis;
provided, further, that in the event of any merger, consolidation or sale, lease
or transfer of all or substantially all of the assets of the Company, prior to
the Expiration Date, the Holder shall have the right to exercise this Warrant
commencing at such time through the Expiration Date into the kind and amount of
shares of stock and other securities and property (including cash) receivable by
a holder of the number of shares of Common Stock into which this Warrant might
have been exercisable immediately prior thereto. Any transfer of Warrant Shares
obtained by the Holder in exercise of this Warrant is subject to the requirement
that such transfer be in compliance with the applicable provisions of the
Securities Purchase Agreement, if any, and that such securities be registered
under the Securities Act, and applicable state securities laws or exempt from
registration under such laws. The Holder of this Warrant shall be deemed to be a
stockholder of the Warrant Shares as to which this Warrant is exercised in
accordance herewith effective immediately after the close of business on the
date on which the Holder shall have delivered to the Company this Warrant in
proper form for exercise and payment in U.S. dollars by certified or official
bank check or wire transfer of immediately available funds of the cash purchase
price for the number of Warrant Shares as to which the exercise is being made,
notwithstanding that the stock transfer books of the Company shall be then
closed or that certificates representing such Warrant Shares shall not then be
physically delivered to the Holder. The Company shall not enter into any merger,
consolidation or sale, lease or transfer of all or substantially all of the
assets of the Company unless effective provision shall be made so as to give
effect to the provisions set forth in this subsection (a).
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(i) As used herein, "Early Expiration Date" means ten (10)
business days after delivery of written notice by the Company to the
Holder that during the preceding thirty (30) consecutive trading days
(x) the Market Price (as defined herein) for a share of Common Stock
was equal to or greater than Three Hundred Percent (300%) of the
then-applicable Warrant Share Price, (y) the average trading volume of
the Common Stock was at least One Hundred Thousand (100,000) shares
per day (subject to adjustment of such trading volume threshold in the
event of stock splits, reverse stock splits, stock dividends,
recapitalizations or similar events), and (z) the Warrant Shares are
registered at the time of the Early Expiration Date under an effective
registration statement.
(ii) As used herein, "Market Price" means, with respect to any
applicable security as of any applicable date, (i) the last closing
trade price of such security on whichever national securities exchange
or trading market (including, without limitation, the Nasdaq and the
OTC Bulletin Board) is the principal trading market where such security
is listed by the Company for trading (the "Principal Market"), as
reported by Bloomberg, or (ii) if the Principal Market should operate
on an extended hours basis and does not designate the closing trade
price, then the last trade price of such security prior to the
commencement of extended trading hours on the applicable date, but in
no event later than 4:30:00 p.m., New York local time, as reported by
Bloomberg, or (iii) if no last trade price is reported for such
security by Bloomberg, the average of the bid prices, on the one hand,
and the ask prices, on the other hand, of all market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.). The applicable trading market for
such calculation, whether it is the Principal Market or the "pink
sheets", is hereafter referred to as the "Trading Market". The Company
shall make all determinations pursuant to this paragraph in good faith.
In the absence of any available public quotations for the Common Stock,
the Board shall determine in good faith the fair value of the Common
Stock, which determination shall be set forth in a certificate by the
Secretary of the Company.
(iii) As used herein, "Trading Day" means a day on which the
principal Trading Market with respect to the Common Stock is open for
the transaction of business.
(b) If this Warrant shall be exercised in part only, the Company,
upon surrender of this Warrant for cancellation, shall execute and deliver,
promptly (but in no event more than ten business days after such surrender), a
new Warrant evidencing the rights of the Holder thereof to purchase the balance
of the Warrant Shares purchasable hereunder as to which the Warrant has not been
exercised. If this Warrant is exercised in part, such exercise shall be for a
whole number of Warrant Shares. Upon any exercise and surrender of this Warrant,
the Company (i) will issue and deliver to the Holder a certificate or
certificates in the name of the Holder for the largest whole number of Warrant
Shares to which the Holder shall be entitled and, if this Warrant is exercised
in whole, in lieu of any fractional Warrant Share to which the Holder otherwise
might be entitled, cash in an amount equal to the fair value of such fractional
Warrant Share (determined in such reasonable and equitable manner as the Board
of Directors of the Company (the "Board") shall in good faith determine), and
(ii) will deliver promptly thereafter (but in no event more than ten business
days thereafter) to the Holder such other securities, properties and cash which
the Holder may be entitled to receive upon such exercise, or the proportionate
part thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant.
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2. Anti-Dilution Provisions. The Warrant Share Price in effect at any time
and the number and kind of securities issuable upon exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of certain
events as follows:
2.1 Adjustments.
(a) Definition of Additional Stock. The term "Additional Shares of Common
Stock" includes all shares of Common Stock issued by the Company after the Date
of Issuance, other than:
(i) Shares of Common Stock (subject to appropriate adjustment
for any stock dividend, stock split, combination or other similar
recapitalization affecting such shares) issuable or issued to the
Company's employees, directors or consultants pursuant to a stock
option plan or restricted stock plan or other compensation plan
approved by the Board;
(ii) Shares of Common Stock issued or issuable pursuant to
securities outstanding at the Date of Issuance or agreements to issue
such securities or underlying shares of Common Stock which agreements
are outstanding at the Date of Issuance;
(iii) Shares of Common Stock issued or issuable pursuant to
subsection 2.1(b)(iv) below;
(iv) Shares of Common Stock issuable upon exercise of options
or warrants, or upon conversion of convertible securities or other
rights, outstanding as of the Date of Issuance, as well as options and
warrants and shares of Common Stock issued or issuable upon exercise of
options or warrants issued in connection with the sale by the Company
of the Company's Series A Convertible Preferred Stock and the Company's
Permitted Preferred Stock, as such term is hereinafter defined, and the
shares of the Company's Series A Convertible Preferred Stock and the
Company's Permitted Preferred Stock, and the shares of Common Stock
issued or issuable upon conversion of shares of the Company's Series A
Convertible Preferred Stock or the Company's Permitted Preferred Stock;
and
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(v) Securities and options, warrants and rights to purchase
securities issued (a) to financial institutions or lessors in
connections with commercial credit agreements, equipment financings or
similar transactions or (b) to other corporations, persons or entities
in connection with acquisitions, mergers or similar business
combinations, partnership arrangements, strategic alliances, licensing
arrangements or similar non-capital raising transactions approved by
the Company's Board of Directors, including within this exception
securities and option, warrants and rights to purchase securities
issued to raise capital provided that the use of proceeds is to
consummate such non-capital raising transactions.
As used in this Warrant, the term "Permitted Preferred Stock" shall
mean shares of the Company's preferred stock, if any, which the Company may
hereafter issue and sell, and the shares of Common Stock issued upon conversion
of such shares of Permitted Preferred Stock, provided, that any such preferred
stock shall only be "Permitted Preferred Stock" if it shall satisfy both of the
following two conditions: (i) the aggregate issue price of any such shares of
other preferred stock, when added to the aggregate issue price of the Company's
Series A Convertible Preferred Stock, shall not exceed $30,000,000; and (ii) any
such other preferred stock shall be have substantially the same rights and
preferences as, and shall be pari passu with, the Company's Series A Convertible
Preferred Stock;
(b) Dividend, Subdivision, Combination or Reclassification of Common
Stock. In the event that the Company shall at any time or from time to time
after the issuance of this Warrant but prior to the exercise hereof:
(i) make a dividend or distribution on the outstanding shares
of Common Stock payable in capital stock;
(ii) subdivide or reclassify or reorganize its outstanding shares
of Common Stock into a greater number of shares;
(iii) combine or reclassify or reorganize its outstanding shares of
Common Stock into a smaller number of shares; or
(iv) issue, by reclassification of its Common Stock or other
reorganization, any Additional Shares of Common Stock;
then the number and kind of Warrant Shares purchasable upon exercise of this
Warrant shall be adjusted so that the Holder upon exercise hereof shall be
entitled to receive the kind and number of Warrant Shares or other securities of
the Company that the Holder would have owned or have been entitled to receive
after the happening of any of the events described above had this Warrant been
exercised immediately prior to the happening of such event or any record date
with respect thereto. Whenever the number of Warrant Shares purchasable upon
exercise hereof is adjusted as herein provided, the Warrant Price shall be
adjusted by multiplying the Warrant Price by a fraction, the numerator of which
is equal to the number of shares of Common Stock purchasable prior to the
adjustment and the denominator of which is equal to the number of shares of
Common Stock purchasable after the adjustment. An adjustment made pursuant to
this Section 2.1(b) shall become effective immediately after the record date in
the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or issuance.
If, as a result of an adjustment made pursuant to this Section 2.1(b), the
Holder of this Warrant thereafter surrendered for exercise shall become entitled
to receive shares of two or more classes of capital stock or shares of Common
Stock and any other class of capital stock of the Company, the Board (whose good
faith determination shall be applied fairly and ratably to all Holders of
Warrants and shall be conclusive and shall be described in a written notice to
all Holders of Warrants promptly after such adjustment) shall determine in good
faith the allocation of the adjusted Warrant Share Price between or among the
shares of such classes of capital stock or shares of Common Stock and such other
class of capital stock.
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The adjustment to the number of Warrant Shares purchasable upon the
exercise of this Warrant described in this Section 2.1(b) shall be made each
time any event listed in paragraphs (i) through (iv) of this Section 2.1(b)
occurs.
(c) Issuance of Common Stock Below Warrant Share Price. If the Company
shall issue any Additional Shares of Common Stock after the date hereof
(excluding any such issuance for which an adjustment is made under the foregoing
subsection (b)), for no consideration or for a consideration per share less than
the Warrant Share Price in effect on the date of and immediately prior to such
issue, then in such event, the Warrant Share Price shall be reduced,
concurrently with such issue, to a price equal to the quotient obtained by
dividing:
(A) an amount equal to (x) the total number of shares of Common
Stock outstanding immediately prior to such issuance or sale
multiplied by the Warrant Share Price in effect immediately prior to
such issuance or sale, plus (y) the aggregate consideration (before
deduction of transaction expenses or commission or underwriting
discounts or allowances in connection therewith) received or deemed to
be received by the Company, if any, upon such issuance or sale, by
(B) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For purposes of the foregoing calculation, the total number of shares of Common
Stock outstanding at the relevant calculation times shall be deemed to include
both (i) the total number of shares of Common Stock outstanding and (ii) the
total number of shares of Common Stock into which the Company's outstanding
shares of Series A Convertible Preferred Stock may then be converted.
(d) Issuance of Options and Convertible Securities Deemed Issuance of
Additional Shares of Common Stock. If the Company, at any time or from time to
time after the Date of Issuance, shall issue any options, warrants or other
rights to purchase Common Stock (collectively, "Options") or securities that, by
their terms, directly or indirectly, are convertible into or exchangeable for
shares of Common Stock ("Convertible Securities") (in each case other than those
securities excluded, pursuant to Section 2.1(a), from the definition of
"Additional Shares of Common Stock") or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, in each case other than those securities
excluded, pursuant to Section 2.1(a), from the definition of "Additional Shares
of Common Stock", then the maximum number of shares of Common Stock (as set
forth in the instrument relating thereto without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided that in any such case in which Additional
Shares of Common Stock are deemed to be issued pursuant to this Section 2.1(d):
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(i) no further adjustment in the Warrant Share Price shall be made
upon the subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange of
such Convertible Securities and, upon the expiration of any such Option
or the termination of any such right to convert or exchange such
Convertible Securities, the Warrant Share Price then in effect
hereunder shall forthwith be increased to the Warrant Share Price which
would have been in effect at the time of such expiration or termination
had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued,
and the Common Stock issuable thereunder shall no longer be deemed to
be outstanding;
(ii) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Warrant Share Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon any
such increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options or the
rights of conversion or exchange under such Convertible Securities,
provided that no readjustment pursuant to this clause (ii) shall have
the effect of increasing the Warrant Share Price to an amount which
exceeds the lower of (A) the Warrant Share Price on the original
adjustment date, or (B) the Warrant Share Price that would have
resulted from any issuance of Additional Shares of Common Stock between
the original adjustment date and such readjustment date;
(iii) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any decrease in the
consideration payable to the Company, or increase in the number of
shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Warrant Share Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon any
such decrease or increase becoming effective, be recomputed to reflect
such decrease or increase insofar as it affects such Options or the
rights of conversion or exchange under such Convertible Securities,
provided that no readjustment pursuant to this clause (iii) shall have
the effect of decreasing the Warrant Share Price to an amount which
exceeds the lower of (A) the Warrant Share Price on the original
adjustment date, or (B) the Warrant Share Price that would have
resulted from any issuance of Additional Shares of Common Stock between
the original adjustment date and such readjustment date; and
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(iv) if such Options or Convertible Securities cover shares which
are excluded from the definition of Additional Shares of Common Stock
by Section 2.1(a), then this Section 2.1(d) shall not apply to those
underlying shares.
(e) Determination of Consideration. For purposes of Subsections 2.1(c) and
2.1(d), the consideration received by the Company for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(1) insofar as it consists of cash, be computed at the
aggregate of cash received by the Company, excluding
amounts paid or payable for accrued interest or accrued
dividends;
(2) insofar as it consists of property other than cash, be
computed at the fair market value thereof at the time of
such issue, as determined in good faith by the Board;
and
in the event Additional Shares of Common Stock are issued together with other
shares or securities or other assets of the Company for consideration which
covers both, be the proportion of such consideration so received, computed as
provided in clauses (1) and (2) above, as determined in good faith by the Board.
(B) Options and Convertible Securities. The consideration per
share received by the Company for Additional Shares of Common Stock deemed to
have been issued pursuant to Subsection 2.1(d), relating to Options and
Convertible Securities, shall be determined by dividing
(1) the total amount, if any, received or receivable by the
Company as consideration for the issue of such Options
or Convertible Securities, plus the minimum aggregate
amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment
of such consideration) payable to the Company upon the
exercise of such Options or the conversion or exchange
of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, by
(2) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange
of such Convertible Securities.
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In the event that at any time, as a result of an adjustment made pursuant
to this Section 2.1, the Holder of this Warrant thereafter shall become entitled
to receive any shares of the Company, other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained herein.
(f) Extraordinary Distributions. In case the Company shall at any time or
from time to time, after the issuance of the Warrant but prior to the exercise
hereof, distribute to all holders of its Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation and the Common Stock is not
changed or exchanged) cash, evidences of indebtedness, securities or other
property or assets (excluding any such event for which adjustment is made under
Section 2) or rights or warrants to subscribe for or purchase any of the
foregoing, then, and in each such case, the Holder shall be entitled to
participate in any such distribution based on the number of shares of Common
Stock it would have been entitled to receive had the Warrant been exercised
immediately prior to the occurrence of such distribution, as if the Holder were
the owner of such shares of Common Stock at the time of such distribution.
Notwithstanding the foregoing, this Section 2.1(f) shall be of no force or
effect until and unless such time as the Company shall grant a similar right to
holders of warrants issued after the date hereof, at which time the Holders
shall be entitled to the same protection for extraordinary dividends as granted
to such future holders of warrants, if any.
2.2 Other Action Affecting Warrant Shares. If the Company takes any
action affecting its shares of Common Stock after the date hereof, that would be
covered by Section 2.1 but for the manner in which such action is taken or
structured, which would in any way diminish the value of this Warrant, then the
Warrant Share Price shall be adjusted in such manner as the Board shall in good
faith determine to be equitable under the circumstances.
2.3 Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Warrant Share Price pursuant to this Section 2, the Company
at its expense will as promptly as possible, but in any event within ten (10)
business days, compute such adjustment or readjustment in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment or
readjustment, including a statement of the adjusted Warrant Share Price or
adjusted number of shares of Common Stock, if any, issuable upon exercise of
each Warrant, describing in reasonable detail the transaction giving rise to
such adjustments and showing in detail the facts upon which such adjustment or
readjustment is based. The Company will forthwith mail, by first class mail,
postage prepaid, a copy of each such certificate to the Holder of this Warrant
at the address of such Holder as shown on the books of the Company, and to its
Transfer Agent.
2.4 Other Notices. If at any time:
(a) the Company shall (i) offer for subscription pro rata to the
holders of shares of the Common Stock any additional equity in the Company or
other rights; or (ii) pay a dividend in additional shares of the Common Stock or
distribute securities or other property or assets to the holders of shares of
the Common Stock (including, without limitation, cash, evidences of indebtedness
and equity and debt securities);
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(b) there shall be any capital reorganization or reclassification or
consolidation or merger of the Company with, or sale, transfer or lease of all
or substantially all of its assets to, another entity; or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, to the Holder of this Warrant at the address of such
Holder as shown on the books of the Company, (x) at least 10 days' prior written
notice of the date on which the books of the Company shall close or a record
shall be taken for such subscription rights, dividend, distribution or issuance;
provided that such ten (10) day period shall be increased to thirty (30) days in
the case of Section 2.4(a)(ii), and (y) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, at least 10 days' prior written notice of the date when the same
shall take place if no stockholder vote is required and at least 10 days' prior
written notice of the record date for stockholders entitled to vote upon such
matter if a stockholder vote is required. Such notice in accordance with the
foregoing clause (x) shall also specify, in the case of any such subscription
rights, the date on which the holders of shares of Common Stock shall be
entitled to exercise their rights with respect thereto, and such notice in
accordance with the foregoing clause (y) shall also specify the date on which
the holders of shares of Common Stock shall be entitled to exchange their shares
of Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be.
2.5 Adjustment Calculations. No adjustment in the Warrant Share
Price shall be required unless such adjustment would require an increase or
decrease of at least one cent ($0.01) in such price; provided, however, that any
adjustments which by reason of this Section 2.5 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment
required to be made hereunder. All calculations under this Section 2 shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.
2.6 Appraisal. If a majority in interest of the Holders reasonably
disagrees with any of the Board's determinations referred to in this Section 2
(each, a "Determination"), and such majority of Holders shall notify the Company
of its disagreement by furnishing to the Company a written notice setting forth
in reasonable detail the fact of such dispute, the basis for such dispute, and
such Holders' alternative calculation (such notice, a "Determination Dispute
Notice"), and such Determination Dispute Notice is received by the Company
within seven (7) days of the Company having given notice of the Determination to
the Holders, then the Company and a majority in interest of such Holders (the
"Warrant Representative") shall resolve such Determination Dispute in accordance
with the terms and provisions of this Section 2.6. The Holders agree that this
Section 2.6 sets forth the exclusive mechanism for the Holders to make any such
dispute and to resolve the same, and shall not be entitled to make any such
dispute in any other manner. The Company and the Warrant Representative shall
use good faith efforts to mutually agree upon the designation of a single
Qualified Appraiser (as defined below) within seven (7) business days of the
receipt by the Company of a valid Determination Dispute Notice received by the
Company in within the time period set forth above in this Section 2.6. If such a
single Qualified Appraiser is designated, that person shall make a
Determination. If the Company and the Warrant Representative do not so agree
upon the designation of a single Qualified Appraiser within such period, then
within five (5) business days following the end of such period, each of the
Company and the Warrant Representative by written notice to the other shall
designate a Qualified Appraiser (or if any party fails to so select a Qualified
Appraiser within the time period specified, the Person selected by the other
party shall be the Qualified Appraiser) and the two Qualified Appraisers so
designated shall within ten (10) business days of their designation jointly
designate a third Qualified Appraiser, and such third Qualified Appraiser so
designated, solely, shall independently make a Determination. The parties may
submit the basis for their respective views to the Appraiser in writing. In such
event, each party shall furnish its submission to the other party at the same
time as the submission is furnished to the Qualified Appraiser, and the other
party shall have two (2) business days within which to furnish a single rebuttal
to such original submission. The Qualified Appraiser may consider such
submissions in reaching the Determination. If there is only a single Qualified
Appraiser, the fees and expenses of the Qualified Appraiser shall be paid
equally by the Company and the Warrant Representative. If three Qualified
Appraisers are appointed, the Company shall pay the fees and expenses of the
Qualified Appraiser which it appoints, the Warrant Representative shall pay the
fees and expenses of the Qualified Appraiser which it appoints, and the fees and
expenses of the third Qualified Appraiser shall be shared equally by the Company
and the Warrant Representative. The designated Qualified Appraiser shall make
the Determination not later than ten (10) business days following the
appointment of the Qualified Appraiser making the Determination. The
Determination made by the applicable Qualified Appraiser shall be final,
conclusive and binding on the parties hereto. None of the Qualified Appraisers
shall be affiliated with any of the Company, the Warrant Representative or
another Qualified Appraiser. For the purposes of this Agreement, "Qualified
Appraiser" shall mean an individual who is engaged on a regular basis (although
not necessarily full time) in valuing securities or arrangements similar to this
Agreement, as the case may be, and may include (but shall not be limited to)
professional business appraisers, investment bankers or accountants.
-10-
3. No Voting Rights as Stockholders or Liabilities. Except as otherwise
provided herein, this Warrant shall not be deemed to confer upon the Holder any
right to vote or to consent to or receive notice as a stockholder of the
Company, as such, in respect of any matters whatsoever, or any other rights or
liabilities as a stockholder, prior to the exercise hereof. Nothing contained in
this Warrant shall be deemed as imposing any liabilities on the Holder to
purchase any securities whether such liabilities are asserted by the Company or
by creditors or stockholders of the Company or otherwise.
4. Warrants and Warrant Shares Not Transferable Except as Expressly
Provided in This Section. This Warrant and the underlying shares of Common Stock
may not be offered, sold or transferred except in compliance with the applicable
terms of the Securities Purchase Agreement, if any, and the Securities Act, and
any applicable state securities laws, or an exception therefrom, and then only
against receipt of an agreement of the person to whom such offer or sale or
transfer is made to comply with the provisions of this Warrant with respect to
any resale or other disposition of such securities; provided that no such
agreement shall be required from any person purchasing this Warrant or the
underlying shares of Common Stock pursuant to a registration statement effective
under the Securities Act. No such disposition shall occur without an opinion of
such Holder's counsel, which opinion shall be reasonably satisfactory to the
Company's counsel. Notwithstanding the foregoing, this Warrant shall not be
transferable unless the number of shares of underlying shares of Common Stock
which may be acquired upon the exercise of this Warrant and any other Warrant to
be transferred to the same party in the same transfer by the transferee is equal
to the lesser of (i) 120,000 shares of Common Stock, or (ii) if, and only if,
the transferee acquired the Warrant (or Warrants) in the offering by the Company
pursuant to which the Warrants were issued, the number of Warrants acquired by
the transferee in the offering.
-11-
5. Warrants Exchangeable; Assignment; Loss, Theft, Destruction, Etc. This
Warrant is exchangeable, without expense, upon surrender hereof by the Holder
hereof at the principal offices of the Company, or at the office of its Transfer
Agent, if any, for new Warrants of like tenor representing in the aggregate the
right to subscribe for and purchase the Warrant Shares which may be subscribed
for and purchased hereunder, each such new Warrant to represent the right to
subscribe for and purchase such Warrant Shares as shall be designated by such
Holder hereof at the time of such surrender. Upon surrender of this Warrant to
the Company at its principal office, or at the office of its Transfer Agent, if
any, with an instrument of assignment duly executed and funds sufficient to pay
any transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be cancelled; provided, that no such assignment
shall be effected except in accordance with the terms and conditions of the
Securities Purchase Agreement and Section 4 of this Warrant. This Warrant may be
divided or combined with other warrants which carry the same rights upon
presentation hereof at the principal office of the Company, or at the office of
its Transfer Agent, if any, together with a written notice specifying the names
and denominations in which new Warrants are to be issued and signed by the
Holder hereof; provided, that no such assignment, transfer or other disposition
of this Warrant shall be effected except in accordance with the terms and
conditions of the Securities Purchase Agreement and Section 4 of this Warrant.
The term "Warrant" as used herein includes any Warrants into which this Warrant
may be divided or exchanged. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction, upon delivery of indemnity
reasonably satisfactory to the Company, or, in the case of any such mutilation,
upon surrender or cancellation of this Warrant, the Company will issue to the
Holder hereof a new Warrant of like tenor, in lieu of this Warrant, representing
the right to subscribe for and purchase the Warrant Shares which may be
subscribed for and purchased hereunder. Any such new Warrant executed and
delivered shall constitute an additional contractual obligation of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
6. Legends; Investment Representations. Any certificate evidencing the
securities issued upon exercise of this Warrant shall bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY OTHER SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED UNLESS SO REGISTERED OR
AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY OTHER APPLICABLE
SECURITIES LAWS IS AVAILABLE.
-12-
7. Modifications and Waivers. The Holder of this Warrant acknowledges and
agrees that the terms of this Warrant may be amended, modified or waived only by
the written agreement between the Holder and the Company.
8. Expenses. The Company shall pay all expenses and other charges payable
in connection with the preparation, issuance and delivery of this Warrant and
all substitute Warrants. The Holder shall pay all taxes in connection with any
sale, assignment or other transfer of this Warrant.
9. Books. The Company shall maintain, at the office or agency of the
Company maintained by the Company, books for the registration and transfer of
the Warrant.
10. Reservation of Warrant Shares. The Company covenants and agrees that
it will at all times reserve and keep available, free from preemptive rights,
out of the aggregate of its authorized but unissued Common Stock or its
authorized and issued Common Stock held in its treasury, solely for the purpose
of enabling it to satisfy any obligation to issue Warrant Shares upon exercise
of this Warrant, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of this Warrant. The Company or, if appointed, the
transfer agent for the Common Stock (the "Transfer Agent"), and every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of any of the rights of purchase aforesaid will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
as shall be required for such purpose. The Company will keep a copy of this
Warrant on file with the Transfer Agent and with every subsequent transfer agent
for any shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by this Warrant. The Company will furnish such
Transfer Agent a copy of all notices of adjustments and certificates related
thereto transmitted to the Holder pursuant to Section 2 hereof. The Company
covenants that all Warrant Shares which may be issued upon exercise of this
Warrant will, upon issue, be validly issued, fully paid and nonassessable, not
subject to any preemptive rights, and free from all taxes, liens, security
interests, charges, and other encumbrances with respect to the issuance thereof.
11. Registration. Pursuant to a certain Registration Rights Agreement of
even date herewith between the Company and the Holder, among other parties, the
Company is required to register under the Securities Act the Warrant Shares
which may be acquired by such Holder. Any permitted transferee must become a
party to said Registration Rights Agreement in order to have the benefit of the
same.
12. Listing on Securities Exchanges; Registration. If, and so long as, any
class of the Company's Common Stock shall be listed on any national securities
exchange (as defined in the Exchange Act) or NASDAQ or the OTC Bulletin Board,
the Company shall use its reasonable best efforts to, at its expense, obtain and
maintain the approval for listing upon official notice of issuance of all
Warrant Shares and maintain the listing of Warrant Shares after their issuance;
and the Company will so list on such national securities exchange or NASDAQ or
the OTC Bulletin Board, if applicable, will register under the Exchange Act (or
any similar statute then in effect), and will maintain such listing of, any
other securities that at any time are issuable upon exercise of this Warrant if
and at the time any securities of the same class shall be listed on such
national securities exchange or NASDAQ or OTC Bulletin Board by the Company.
-13-
13. No Dilution or Impairment. The Company will not act for the purpose of
avoiding or seeking to avoid the observance or performance of any of the terms
of this Warrant, by amendment of its certificate or articles of incorporation or
other organizational documents or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other action, but will, at all times, in good faith, assist in the carrying out
of all such terms. Without limiting the generality of the foregoing, the Company
will not increase the par value of any shares of stock receivable on the
exercise of this Warrant above the amount payable therefor on such exercise.
14. Miscellaneous.
14.1 Notices. All notices and other communications shall be mailed
by first-class certified or registered mail, postage prepaid, sent by reputable
overnight delivery, delivered by hand or sent by facsimile as follows:
If to the Company:
Bioaccelerate Holdings, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Reference: Series A Preferred Private Placement
Telephone: (000) 000-0000
Facsimile: (000) 000 0000
If to the Holder:
The address and/or facsimile furnished to the Company
in writing by the last registered Holder of this
Warrant who shall have furnished an address and/or
facsimile to the Company in writing;
except that any of the foregoing may from time to time by written notice to the
other designate another address which shall thereupon become its effective
address for the purposes of this paragraph. Any notices, requests or consents
hereunder shall be deemed given, and any instruments delivered, five days after
they have been mailed by first-class certified or registered mail U.S. Mail,
postage prepaid, or upon receipt if delivered by a reputable overnight courier
or if delivered personally or by facsimile transmission.
14.2 Entire Agreement. This Warrant, including the exhibits and
documents referred to herein which are a part hereof, contain the entire
understanding of the parties hereto with respect to the subject matter and may
be amended only by a written instrument executed by the parties hereto or their
successors or assigns. Any paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Warrant.
-14-
14.3 Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of New York with respect to contracts
made and to be fully performed therein, without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that any suit or proceeding
arising under this Warrant, or in connection with the consummation of the
transactions contemplated hereby, shall be brought solely in a federal or state
court located in the County of New York and State of New York. By its execution
hereof, both the Company and the undersigned hereby consent and irrevocably
submit to the in personam jurisdiction of the federal and state courts located
in the County of New York and State of New York and agree that any process in
any suit or proceeding commenced in such courts under this Warrant may be served
upon it personally or by certified or registered mail, return receipt requested,
or by Federal Express or other courier service, with the same force and effect
as if personally served upon the applicable party in New York and in the city or
county in which such other court is located. The parties hereto each waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense of lack of in personam jurisdiction with respect
thereto.
14.4 Headings. The headings of this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
[the balance of this page is intentionally left blank]
-15-
IN WITNESS WHEREOF, this Warrant Agreement has been executed as of
the date first written above.
BIOACCELERATE HOLDINGS, INC.
By:
----------------------------------------
Name:
Title:
-16-
PURCHASE FORM
Dated: __________
The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing _____ Warrant Shares and hereby makes full cash payment of
$_____________ in payment of the exercise price thereof. The undersigned has had
the opportunity to ask questions of and receive answers from the officers of
Bioaccelerate Holdings, Inc. (the "Company") regarding the affairs of the
Company and related matters, and has had the opportunity to obtain additional
information necessary to verify the accuracy of all information so obtained.
[The undersigned understands that the shares have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any other
jurisdiction, and hereby represents to the Company that the undersigned is
acquiring the shares for its own account, for investment, and not with a view
to, or for sale in connection with, the distribution of any such shares.] [This
may not apply depending upon whether a registration statement is effective.]
---------------------------------
(Signature)
---------------------------------
(Print or type name)
---------------------------------
(Address)
---------------------------------
---------------------------------
NOTICE: The signature of this Purchase Form must correspond with the name as
written upon the face of the within Warrant, or upon the assignment thereof, if
applicable, in every particular, without alteration, enlargement or any change
whatsoever.
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________ the right represented by the within
Warrant to purchase ________ shares of Common Stock of _____________ to which
the within Warrant relates and appoints _____________ attorney to transfer said
right on the books of ___________________ with full power of substitution in the
premises.
Dated:
__________________ ___, 200__
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)
Address of Transferee:
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In the presence of:
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CONSENT OF ASSIGNEE
I HEREBY CONSENT to abide by the terms and conditions of the within
Warrant.
Dated:
------------
(Signature of Assignee)
(Print or type name)
