APPLIED DNA SCIENCES, INC.
WARRANT AGREEMENT, dated March __, 2006 (the "Agreement"), by and between
Applied DNA Sciences, Inc., a Nevada corporation (the "Company"), and
__________________ (individually the "Warrant Holder" and collectively with
others, the "Warrant Holders").
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the Company and the Warrant Holder hereby agree as follows:
1. Exercise of Warrant. This warrant (the "Warrant") shall entitle the
Warrant Holder thereof to purchase an aggregate of _________ shares of common
stock par value $0.001 per share of the Company ("Common Stock") at an exercise
price of $0.50 per share (the "Exercise Price") per share. This Warrant may be
exercised in whole or in part at any time or from time to time during the period
commencing on March 8, 2006 and expiring at 5:00 p.m., New York City time, on
March 7, 2011 (the "Exercise Term"), or if such day is a day on which banking
institutions in the State of New York are authorized by law to close, then on
the next succeeding day which shall not be such a day, by presentation and
surrender of the Warrant Certificate evidencing the Warrant to be exercised to
the Company at its principal office or at the office of its stock transfer
agent, if any, with the Exercise Form annexed hereto duly executed and
accompanied by payment of the Exercise Price for the number of shares specified
in such form. If any Warrant should be exercised in part only, the Company
shall, upon surrender of the Warrant Certificates for cancellation and
presentment of the Exercise Form, execute and deliver new a Warrant Certificate
or Certificates, as the case may be, evidencing the rights of the Warrant Holder
thereof to purchase the balance of the shares purchasable thereunder. Upon
receipt by the Company of a Warrant Certificate at its office, or by the stock
transfer agent of the Company at its office, in proper form for exercise and
accompanied by the appropriate payment for the shares of Common Stock underlying
the Warrants (the "Warrant Shares"), the Warrant Holder shall be deemed to be
the Warrant Holder of record of such Warrant Shares, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Warrant Holder. Certificates for the Warrant Shares shall be delivered to the
Warrant Holder within a reasonable time following the exercise of the Warrants
in accordance with the foregoing.
2. Alternative Exercise Provisions. Anything contained herein to the
contrary notwithstanding, subject to compliance by the Warrant Holder with the
restrictions on offer and sale referred to in Section 11 hereof, the Warrant
Holder, at his option, may exercise the Warrants, in whole or in part, during
the Exercise Term by delivering to the Company a confirmation slip issued by a
brokerage firm that is a member of the National Association of Securities
Dealers, Inc. or the equivalent governing body for broker -dealers in other
nations, with respect to the sale of those number of Warrant Shares for which
the Warrants are being exercised, and, in such case, the Company shall deliver
certificates representing such Warrant Shares on settlement date at the office
of the Company's stock transfer agent against payment for such Warrant Shares by
such brokerage firm or its clearing broker, made payable to the Company or made
payable to the order of the Warrant Holder and endorsed by the Warrant Holder to
the Company.
3. Reservation and Listing of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of the
Warrants, such number of shares of its Common Stock as shall be required for
issuance and delivery upon exercise of the Warrants. As long as the Warrants
shall be outstanding, the Company shall use its best efforts to cause all shares
of Common Stock issuable upon the exercise of the Warrants to be listed on the
Over The Counter Bulletin Board or on Nasdaq or a national securities exchange,
if such shares of Common Stock, as a class, are theretofore so listed.
4. Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of the Warrants. Any fraction of a
share called for upon any exercise hereof shall be canceled. The Warrant Holder,
by his acceptance hereof, expressly waives any right to receive any fractional
share of stock or fractional Warrant upon exercise of the Warrants.
5. Exchange, Transfer, Assignment or Loss of Warrant. The Warrants are
exchangeable, without expense, at the option of the Warrant Holder, upon
presentation and surrender of the Warrant Certificates evidencing such Warrants
to the Company at its office or at the office of its stock transfer agent, if
any, for other Warrants of different denominations entitling the Warrant Holder
thereof to purchase in the aggregate the same number of shares of Common Stock
as are purchasable thereunder at the same respective Exercise Price. Subject to
Section 11 hereof, upon surrender of this Warrant Agreement to the Company at
its principal office or at the office of its stock transfer agent, if any, with
a duly executed assignment form and funds sufficient to pay the applicable
transfer tax, if any, the Company shall, without charge, execute and deliver new
Warrant Agreement(s) in the name of the assignee named in such instrument of
assignment and the original Warrant Agreement shall promptly be canceled. The
Warrants may be divided or combined with other Warrants which carry the same
rights upon presentation of the Warrant Agreement evidencing such Warrants at
the office of the Company or at the office of its stock transfer agent, if any,
together with a written notice signed by the Warrant Holder hereof specifying
the names and denominations in which new Warrant Agreements are to be issued.
Upon receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of the Warrants, and, in the case of loss, theft or
destruction, of reasonably satisfactory indemnification, and upon surrender and
cancellation of the Warrants, if mutilated, the Company will execute and deliver
new Warrant Agreements of like tenor and date.
6. Rights of the Warrant Holder. The Warrant Holder shall not, by virtue
hereof, be entitled to any rights of a share holder of the Company until
exercise of any Warrants.
7. Adjustments of Purchase Price and Number of Shares.
(a) Subdivision and Combination. If the Company shall at any time
subdivide or combine the outstanding shares of Common Stock by way of stock
split, reverse stock split or the like, the Exercise Price shall forthwith be
proportionately increased or decreased.
(b) Adjustment in Number of Shares. Upon each adjustment of the Exercise
Price pursuant to the provisions of paragraph 7(a), the number of shares of
Common Stock issuable upon the exercise of each Warrant shall be adjusted to the
nearest full share of Common Stock by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
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Common Stock issuable upon exercise of the Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price.
(c) Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger in which the Company is the surviving corporation
and which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or in the
case of a sale or conveyance to another corporation of all or a substantial part
of the property of the Company, the Warrant Holder shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Warrant Holder were the owner of the shares
of Common Stock underlying the Warrants immediately prior to any such events at
a price equal to the product of (x) the number of shares issuable upon exercise
of the Warrants and (y) the Exercise Price in effect immediately prior to the
record date for such reclassification, change, consolidation, merger, sale or
conveyance as if such Warrant Holder had exercised the Warrants.
(d) Dividends and Other Distributions with Respect to Outstanding
Securities. In the event that the Company shall at any time prior to the
exercise of all Warrants declare a dividend (other than a dividend consisting
solely of shares of Common Stock or a cash dividend or distribution payable out
of current or retained earnings) or otherwise distribute to the holders of its
Common Stock any monies, assets, property, rights, evidences of indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity, or any other thing of value, the Warrant Holder of
the unexercised Warrants shall thereafter be entitled, in addition to the shares
of Common Stock or other securities receivable upon the exercise thereof, to
receive, upon the exercise of such Warrants, the same monies, property, assets,
rights, evidences of indebtedness, securities or any other thing of value that
they would have been entitled to receive at the time of such dividend or
distribution. At the time of any such dividend or distribution, the Company
shall make appropriate reserves to ensure the timely performance of the
provisions of this Subsection 7(e).
(e) Warrant Agreement After Adjustment. Irrespective of any change
pursuant to this Section 7 in the Exercise Price or in the number, kind or class
of shares or other securities or other property obtainable upon exercise of the
Warrants, this Warrant Agreement may continue to express as the Exercise Price
and as the number of shares obtainable upon exercise, the same price and number
of shares as are stated herein.
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(f) Statement of Calculation. Whenever the Exercise Price shall be
adjusted pursuant to the provisions of this Section 7, the Company shall
forthwith file at its principal office, a statement signed by an executive
officer of the Company specifying the adjusted Exercise Price determined as
above provided in such section. Such statement shall show in reasonable detail
the method of calculation of such adjustment and the facts requiring the
adjustment and upon which the calculation is based. The Company shall forthwith
cause a notice setting forth the adjusted Exercise Price to be sent by certified
mail, return receipt requested, postage prepaid, to the Warrant Holder.
8. Call Rights. The Company has the right, but not the obligation, to call
this Warrant for $1.25 per share at the earlier of (i) one year from the date
first set forth above or (ii) from and after the date that the Warrant Shares
are registered for public sale in the United States and the Common Stock trades
at or above $1.25 per share for twenty (20) consecutive trading days. The
Company may exercise this right of redemption by written notice to the
registered holder of this Warrant together with payment of $1.25 or its Sterling
equivalent.
9. Definition of "Common Stock." For the purpose of the Warrants, the
term "Common Stock" shall mean, in addition to the class of stock designated as
the Common Stock, $.001 par value, of the Company on the date hereof, any class
of stock resulting from successive changes or reclassifications of the Common
Stock consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. If at any time, as a result of an
adjustment made pursuant to one or more of the provisions of Section 7 hereof,
the shares of stock or other securities or property obtainable upon exercise of
the Warrants shall include securities of the Company other than shares of Common
Stock or securities of another corporation, then thereafter the amount of such
other securities so obtainable shall be subject to adjustment from time to time
in a manner and upon terms as nearly equivalent as practicable to the provisions
with respect to Common Stock contained in Section 7 hereof and all other
provisions of the Warrants with respect to Common Stock shall apply on like
terms to any such other shares or other securities.
10. Registration Under the Securities Act of 1933. The Company will prepare
and file a registration statement with the Securities and Exchange Commission
covering the Warrant Shares and the shares of Common Stock issuable upon
conversion of the 10% Secured Convertible Promissory Notes due September 7, 2007
of the Company within thirty (30) days of the effective date of the Company's
pending registration statement on Form SB-2 (SEC File 333-122848) being declared
effective by the SEC., and it agrees to use its reasonable best efforts to have
the registration statement declared effective by the SEC by no later than one
hundred and eighty (180) days after filing. If the Company fails to file a
registration statement with the SEC on or before the time frame described, the
Warrant Holders will be entitled to liquidated damages in the amount of 2% per
month for each month the Company is delinquent in filing the registration
statement.
11. Restrictions on Offer and Sale. THE OFFER AND SALE OF THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH OR APPROVED OR DISAPPROVED BY
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY AND ARE BEING OFFERED PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE, "SECURITIES ACT").
THE SALE, ASSIGNMENT, CONVEYANCE, PLEDGE, HYPOTHECATION OR TRANSFER OF
THE SECURITIES REPRESENTED BY THIS WARRANT TO U.S. PERSONS, AS DEFINED IN RULE
902(k) OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, IS PROHIBITED
EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S AS PROMULGATED
UNDER THE SECURITIES ACT; (2) PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT;
OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, AND ANY CERTIFICATE REPRESENTING WARRANT SHARES SHALL BEAR A LEGENT TO SUCH
EFFECT.
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12. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Warrant Holder the right to vote or to
consent or to receive notice as a share holder in respect of any meetings of
share holders for the election of directors or any other matter, or as having
any rights whatsoever as a share holder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
(a) The Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) The Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any warrant,
right or option to subscribe therefor; or
(c) A dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business shall be proposed; or
(d) There shall be any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with
another entity;
then, in anyone or more of said events, the Company shall give written
notice of such event at least fifteen (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the share holders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, warrants or options, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, warrants or options, or any
proposed dissolution, liquidation, winding up or sale.
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13. Notices.
(a) All communications under this Agreement shall be in writing and
shall be mailed by certified mail, postage prepaid, return receipt requested, or
telecopied with confirmation of receipt or delivered by hand or by overnight
delivery service:
If to the Company, at:
Applied DNA Operations Management, Inc.
Attn: Xxx Xxxxxxx, Chief Executive Officer
00 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxx Xxxx 00000
If to the Warrant Holder, to the address of such
Warrant Holder as it appears in the stock or
warrant ledger of the Company.
(b) Any notice so addressed, when mailed by registered or certified mail
shall be deemed to be given three days after so mailed, when telecopied shall be
deemed to be given when transmitted, or when delivered by hand or overnight
shall be deemed to be given when hand delivered or on the day following deposit
with the overnight delivery service.
14. Successors. All the covenants and provisions of this Warrant
Agreement by or for the benefit of the Warrant Holder shall inure to the benefit
of his successors and assigns hereunder.
15. Termination. This Warrant Agreement will terminate on the earlier of
(a) the expiration date of the Warrants or (b) the date all of the Warrants
shall have been exercised.
16. Governing Law. This Warrant Agreement shall be deemed to be made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the laws of said State, excluding choice of law principles
thereof.
17. Entire Agreement, Amendment, Waiver. This Warrant Agreement and all
attachments hereto and all incorporation by references set forth herein, set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them. This Warrant
Agreement may be amended, the Company may take any action herein prohibited or
omit to take any action herein required to be performed by it, and any breach of
any covenant, agreement, warranty or representation may be waived, only if the
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Company has obtained the written consent or waiver of the Warrant Holder. No
course of dealing between or among any persons having any interest in this
Warrant Agreement will be deemed effective to modify, amend or discharge any
part of this Warrant Agreement or any rights or obligations of any person under
or by reason of this Warrant Agreement.
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APPLIED DNA SCIENCES, INC.
By: /s/ Xxxxx Xxxxxxx
----------------------
Name: Xxxxx Xxxxxxx
Title: CEO
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APPLIED DNA SCIENCES, INC.
WARRANT EXERCISE FORM
(To be executed upon exercise Warrant)
The undersigned, the record holder of this Warrant, hereby irrevocably
elects to exercise the right, represented by this Warrant, to purchase ___ of
the Warrant Shares and herewith pays the Exercise Price in accordance with the
terms of this Warrant by tendering payment for such Warrant Shares to the order
of APPLIED DNA SCIENCES, INC. in the amount of $_________.
The undersigned requests that a certificate for the Warrant Shares being
purchased be registered in the name of ______________ and that such certificate
be delivered to __________.
Dated:_____________ Signature:_________________________
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