EXHIBIT 4.2
BEIJING MED-PHARM CORPORATION
FORM OF SERIES [A/B] WARRANT FOR COMMON STOCK
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS WARRANT MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES
AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
THE ACT.
Right to purchase [_____________ THOUSAND ______________________ AND 00/100
(____)] shares (subject to adjustment) of the common stock, $.001 par value (the
"STOCK") of BEIJING MED-PHARM CORPORATION, a Delaware corporation (the
"COMPANY").
The Company hereby certifies that, for value received,
[WARRANT HOLDER]
or registered assigns (the "HOLDER"), is entitled to purchase from the
Company at any time or from time to time during the Exercise Period (as
hereinafter defined) an aggregate of [_____] fully paid and nonassessable
shares, subject to adjustment as provided below, of the Stock, on the
payment therefore of the aggregate exercise price which shall be [$1.875
Series A Warrants] [$2.25 Series B Warrants] per share (subject to
adjustment) (the "PER SHARE EXERCISE PRICE") multiplied by the number of
shares of Stock to be issued (the "EXERCISE PRICE"), upon the surrender of
this Warrant duly signed by the registered Holder hereof at the time of
exercise, accompanied by payment of the Exercise Price, upon the terms and
subject to the conditions hereinafter set forth.
The Warrant represented hereby is delivered pursuant to and is subject to
that certain Subscription Agreement accepted by the Company as of October
___, 2005 by and between the Company and the Holder (the "AGREEMENT").
Capitalized terms used herein without definition shall have the meanings
set forth in the Agreement.
EXERCISE OF WARRANT. This Warrant shall be exercisable commencing on the
date hereof and shall expire at the times specified herein under the
heading "EXPIRATION OF WARRANT" (the "EXERCISE PERIOD"). Subject to the
foregoing restrictions, during the Exercise Period this Warrant, the Holder
may, at its option, elect to exercise this Warrant, in whole or in part and
at any time or from time to time during the Exercise Period, by
surrendering this Warrant, with the Exercise of Warrant and Declaration
appended hereto duly executed by or on behalf of the Holder, at the
principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full, in lawful money of
the United States, of the Exercise Price payable in respect of the number
of shares of Stock purchased upon such exercise.
EXPIRATION OF WARRANT. This Warrant shall expire and shall no longer be
exercisable upon the earlier to occur of:
(i) 5:00 p.m., Philadelphia local time, on October 7, 2010; or
(ii) a Change of Control (as defined below); or
(iii) the forty-fifth (45th) day following the Company's delivery
of notice to the Holder of a Trading Price Termination Event
(as defined below).
For purposes hereof, a "TRADING PRICE TERMINATION EVENT" shall mean at any
time that the Company's Stock is listed for trading on a national
securities exchange, the NASDAQ National Market or other nationally
recognized trading system, or is quoted on the Pink Sheets LLC or similar
over-the-counter service, the occurrence of a period of twenty (20)
consecutive trading days during which the quoted bid price of the Company's
Common Stock has been greater than a price equal to two hundred percent
(200%) of the Exercise Price. The Company shall notify the Holder in
writing of the occurrence of any Trading Price Termination Event.
In the event of a proposed Change of Control, the Company shall give the
Holder ten (10) days prior notice of the proposed closing date of the
Change of Control and, to the extent the Warrant has not been exercised by
such date, then this Warrant shall terminate. "CHANGE OF CONTROL" shall
mean:
(i) the acquisition of the Company by another entity by means of
any transaction or series of related transactions
(including, without limitation, any merger, consolidation or
other form of reorganization in which outstanding shares of
the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the
acquiring entity or its subsidiary, but excluding any
transaction effected primarily for the purpose of changing
the Company's jurisdiction of incorporation), unless the
Company's stockholders of record as constituted immediately
prior to such transaction or series of related transactions
will, immediately after such transaction or series of
related transactions hold at least a majority of the voting
power of the surviving or acquiring entity; or
(ii) a sale of all or substantially all of the assets of the
Company.
DELIVERY OF STOCK CERTIFICATE UPON EXERCISE. As soon as practicable after
the exercise of this Warrant and payment of the Exercise Price (which
payment shall be deemed to have occurred when funds are immediately
available to the Company without provisions), the Company will cause to be
issued in the name of and delivered to the registered Holder hereof or its
assigns, or such Holder's nominee or nominees, a certificate or
certificates for the number of full shares of Stock of the Company to which
such Holder shall be entitled upon such exercise (and in the case of a
partial exercise, a Warrant of like tenor for the unexercised portion
remaining subject to exercise prior to the expiration of the Exercise
Period set forth herein). For all corporate purposes, such certificate or
certificates shall be deemed to have been issued and such Holder or such
Holder's designee to be named therein shall be deemed to have become a
holder of record of such shares of Stock as of the date the duly executed
exercise form pursuant to this Warrant, together with full payment of the
Exercise Price, is received by the Company as aforesaid. No fraction of a
share or scrip certificate for such fraction shall be issued upon the
exercise of this Warrant; in lieu thereof, the Company will pay or cause to
be paid to such Holder cash equal to a like fraction at the prevailing fair
market price for such share as determined in good faith by the Company.
ADJUSTMENTS.
(A) REGISTRATION DEFAULT. The Company and the Holder agree that the
Holder will suffer damages if the Company fails to fulfill its
obligations pursuant to Section 5 of the Agreement and that it
would not be possible to ascertain the extent of such damages
with precision. Accordingly, the Company hereby agrees to provide
liquidated damages to the Investor an adjustment to the Per Share
Exercise Price under the following circumstances (each such event
a "REGISTRATION DEFAULT") if the Registration Statement referred
to in Section 5 of the Agreement:
(i) is not filed by the Company on or prior to sixty (60) days
after the Closing Date; or
(ii) is not declared effective by the SEC on or prior to the
180th day after the Closing Date.
In the event that there shall occur a Registration Default as
defined in the Agreement, then the Per Share Exercise Price shall
be reduced by $0.10 for each full thirty (30) day period for
which such Registration Default exists and is continuing.
(B) DIVIDENDS. In the event that a dividend shall be declared upon
the Stock of the Company payable in shares of Stock, the number
of shares of Stock covered by this Warrant shall be adjusted by
adding thereto the number of shares that would have been
distributable thereon if such shares had been outstanding on the
date fixed for determining the stockholders entitled to receive
such stock dividend.
(C) REORGANIZATIONS, CONSOLIDATIONS, MERGERS. Except as otherwise set
forth herein, in the event that the outstanding shares of Stock
of the Company shall be changed into or exchanged for a different
number or kind of shares of stock or other securities of the
Company or of another corporation, whether through
reorganization, recapitalization, stock split-up, combination of
shares, merger or consolidation, then upon exercise of this
Warrant there shall be substituted for the shares of Stock
covered by this Warrant, the number and kind of shares of stock
or other securities that would have been substituted therefor if
such shares had been outstanding on the date fixed for
determining the stockholders entitled to receive such changed or
substituted stock or other securities and the exercise price
shall be proportionately adjusted.
(D) OTHER CHANGES. In the event there shall be any change, other than
specified above, in the number or kind of outstanding shares of
Stock of the Company or of any stock or other securities into
which such Stock shall be changed or for which it shall have been
exchanged, then if the Board of Directors shall determine, in
good faith, that such change equitably requires an adjustment in
the number or kind of shares covered by this Warrant, such
adjustment shall be made by the Board of Directors and shall be
effective and binding for all purposes on this Warrant.
LOST, STOLEN, DESTROYED OR MUTILATED WARRANT. Upon receipt by the Company
of evidence satisfactory (in the exercise of reasonable discretion) to it
of the ownership of and the loss, theft or destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) of indemnity
satisfactory (in the exercise or reasonable discretion) to it, and (in the
case of mutilation) upon the surrender and cancellation thereof, the
Company will issue and deliver, in lieu thereof, a new Warrant of like
tenor.
TRANSFER AND TRANSFER RESTRICTIONS.
(A) OWNER OF WARRANT. The Company may deem and treat the person in
whose name this Warrant is registered as the Holder and owner
hereof (notwithstanding any notations of ownership or writing
hereon made by anyone other than the Company) for all purposes
and shall not be affected by any notice to the contrary until
presentation of this Warrant for registration of transfer as
provided below.
(B) TRANSFER OF WARRANT. The Company agrees to maintain, at its then
principal place of business, books for the registration of the
Warrant and transfers thereof, and, subject to the provisions of
subsections C, D and E below, this Warrant and all rights
hereunder are transferable, in whole or in part, on said books at
said office, upon surrender of this Warrant at said office,
together with a written assignment of this Warrant duly executed
by the Holder hereof or his duly authorized agent or attorney and
funds sufficient to pay any transfer taxes payable upon the
making of such transfer. Upon such surrender and payment, the
Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees
and in the denominations specified in such instrument of
assignment, and this Warrant shall promptly be canceled.
(C) RESTRICTIONS ON EXERCISE AND TRANSFER. Neither this Warrant nor
the shares of Stock issuable upon exercise of this Warrant have
been registered under the Act or any state securities laws.
Therefore, in order to, among other things, insure compliance
with the Act, notwithstanding anything else in the Warrant to
contrary, the Holder of this Warrant, including any successive
Holder, agrees by accepting this Warrant as follows: No Holder
shall sell, assign, transfer, pledge, hypothecate, mortgage,
encumber or dispose of all or any portion of this Warrant (or any
of the shares of Stock that may be issued upon the exercise
hereof). Notwithstanding the foregoing, a Holder may transfer all
or any portion of this Warrant (or any of the shares of Stock
that may be issued upon the exercise hereof):
(I) as part of a registered public offering of the Company's
securities or pursuant to Rule 144 under the Act,
(II) by pledge that creates a mere security interest in all or
any portion of this Warrant (or any of the shares of Stock
which may be issued upon the exercise hereof), provided that
the pledgee thereof agrees in writing in advance to be bound
by and comply with all applicable provisions of this Warrant
to the same extent as if it were the Holder making such
pledge,
(III) either during his lifetime or on death by will or the laws
of descent and distribution to his siblings, ancestors,
descendants or spouse, or any custodian or trustee for the
account of Holder or Xxxxxx's siblings, ancestors,
descendants or spouse, or
(IV) to an affiliate or a partner of Holder, provided, in each
such case, a transferee shall receive and hold all or any
portion of this Warrant (or any of the shares of Stock that
may be issued upon the exercise hereof) subject to the
provisions of this Warrant and there shall be no further
transfer except in accordance herewith.
No party will avoid the provisions of this Warrant by making one
or more transfers to an affiliate of such party and then
disposing of all or any portion of such party's interest in such
affiliate; provided, however, that in any event, this Warrant may
not be sold or transferred in the absence of registration under
the Act unless the Company receives an opinion of counsel
reasonably acceptable to it stating that such sale or transfer is
exempt from the registration and prospectus delivery requirements
of the Act.
(D) LEGEND ON SHARES. Each certificate for shares of Stock issued
upon exercise of this Warrant, unless at the time of exercise
such shares are registered under the Act, shall bear
substantially the following legend (and any additional legend
required under the Act or otherwise):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND MAY NOT BE SOLD, EXCHANGED,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
(II) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT."
Any certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate
issued upon completion of a public distribution pursuant to a
registration statement under the Act of the securities
represented thereby) also shall bear such legend unless, in the
opinion of counsel for the Company, the securities represented
thereby need no longer be subject to the transfer restrictions
contained in this Warrant. The exercise and transfer restriction
provisions of this Warrant shall be binding upon all subsequent
Holders of this Warrant.
COVENANTS. The Company covenants that, so long as this Warrant is
exercisable, the Company will reserve from its authorized and unissued
Stock a sufficient number of shares to provide for the delivery of Stock
pursuant to the exercise of this Warrant. The Company further covenants
that all shares of Stock that shall be so deliverable upon exercise of this
Warrant shall be duly and validly issued and fully paid and nonassessable.
MISCELLANEOUS. This Warrant does not confer upon the Holder any rights of a
stockholder of the Company, including, without limitation, any right to
vote or to consent to or receive notice as a stockholder of the Company.
HEADINGS. The headings in this Warrant are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof.
Dated: October __, 2005 BEIJING MED-PHARM CORPORATION
By:
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Name:
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Title:
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EXERCISE OF WARRANT AND DECLARATION
To: BEIJING MED-PHARM CORPORATION
The undersigned Holder hereby exercises the right to purchase _________________
shares of Common Stock, $.001 par value of Beijing Med-Pharm Corporation, a
Delaware corporation (the "COMPANY"), and delivers to the Company herewith the
Exercise Price.
The undersigned declares and represents to the Company that the intention of
this exercise is to acquire the aforementioned shares for investment only and
not for resale or with a view to the distribution thereof, except as the same
may be made in compliance with all applicable securities laws. The undersigned
has been advised that the shares being issued to the undersigned are not being
registered under the Securities Act of 1933, as amended (the "ACT"), on the
grounds that this transaction is exempt under the Act as not involving any
public offering. As a result of not being registered under the Act, the
undersigned has been advised and agrees that the shares may not be sold or
offered for sale in the absence of an effective registration statement as to the
securities under the Act and any applicable state securities acts or the
availability of an exemption from the registration requirements under the Act
and any applicable state securities acts. The undersigned represents that the
undersigned is an "accredited investor" within the meaning of Rule 501
promulgated under the Act. The undersigned has considered the federal and state
income tax implications of the exercise of this Warrant and the purchase and
subsequent sale of the shares purchased hereby.
You will kindly forward a certificate or certificates for the shares purchased
hereby and, if such shares shall not include all of the shares provided in this
Warrant, a new Warrant of like tenor and date for the balance of the shares
issuable thereunder shall be delivered to the undersigned at the address set
forth below.
Date: Name of Holder
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By:
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Address:
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SCHEDULE OF WARRANTS ISSUED
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NUMBER OF WARRANTS ISSUED EXERCISE PRICE
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524,914 1.875
524,914 2.25
