THIS WARRANT (THIS "WARRANT") HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NEITHER THIS
WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, MORTGAGED,
PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE ACT AND APPLICABLE STATE SECURITIES LAWS.
CYTOMEDIX, INC.
WARRANT
Original Issue Date: April 20, 2001
This Warrant is issued in connection with and pursuant to that certain
Common Stock Purchase Agreement (the "PURCHASE AGREEMENT") dated as of April 20,
2001, as amended as of the date hereof, by and between CYTOMEDIX, INC., a
Delaware corporation (the "Company") and FUSION CAPITAL FUND II, LLC (the
"Buyer").
FOR VALUE RECEIVED, the Buyer, the registered holder hereof, or its
permitted assigns (the "Holder"), is entitled to purchase from the Company,
during the period specified in this Warrant, 1,189,320 fully paid and
non-assessable shares (subject to adjustment as hereinafter provided) of Common
Stock (the "WARRANT SHARES"), of the Company at the purchase price per share
provided in Section 1.2 of this Warrant (the "WARRANT EXERCISE PRICE"), all
subject to the terms and conditions set forth in this Warrant. All terms not
otherwise defined herein shall have the meaning ascribed to them in the Purchase
Agreement.
SECTION 1. PERIOD FOR EXERCISE AND EXERCISE PRICE.
1.1 PERIOD FOR EXERCISE. The right to purchase shares of Warrant
Shares represented by this Warrant shall be immediately exercisable, and shall
expire at 5:00 p.m., Chicago local time, April 20, 2006 (the "EXPIRATION DATE").
From and after the Expiration Date this Warrant shall be null and void and of no
further force or effect whatsoever.
1.2 WARRANT EXERCISE PRICE. The Warrant Exercise Price per share
of Warrant Shares shall be $1.00 per share (subject to adjustment as hereinafter
provided).
SECTION 2. EXERCISE OF WARRANT.
2.1 MANNER OF EXERCISE. The Holder may exercise this Warrant, in
whole or in part, immediately, but not after the Expiration Date, during normal
business hours on any business day by surrendering this Warrant to the Company
at the principal office of the Company, accompanied by a Warrant Exercise Form
in substantially the form annexed hereto duly executed by the Buyer and by
payment of the Warrant Exercise Price for the number of shares of Warrant Shares
for which this Warrant is then exercisable, either (i) in immediately available
funds, (ii) by delivery of an instrument evidencing indebtedness owing by the
Company to the Holder in the appropriate amount, (iii) by authorizing the
Company to retain shares of Common Stock which would otherwise be issuable upon
exercise of this Warrant (in accordance with Section 2.4 hereof) or (iv) in a
combination of (i), (ii) or (iii) above, provided, however, that in no event
shall the Holder be entitled to exercise this Warrant for a number of Warrant
Shares in excess of that number of Warrant Shares which, upon giving effect to
such exercise, would cause the aggregate number of shares of Common Stock
beneficially owned by the Holder and its affiliates to exceed 9.9% of the
outstanding shares of the Common Stock following such exercise. For purposes of
the foregoing proviso, the aggregate number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which determination of such proviso is being made, but shall exclude the shares
of Common Stock which would be issuable upon (i) exercise of the remaining,
unexercised Warrants beneficially owned by the Holder and its affiliates and
(ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by the Holder and its
affiliates subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. The Holder may waive the foregoing limitation by written notice to the
Company upon not less than 61 days prior written notice (with such waiver taking
effect only upon the expiration of such 61 day notice period).
2.2 WHEN EXERCISE EFFECTIVE. Each exercise of this Warrant shall
be deemed to have been effected on the day on which all requirements of Section
2.1 shall have been met with respect to such exercise. At such time the person
in whose name any certificate for shares of Warrant Shares shall be issuable
upon such exercise shall be deemed for all corporate purposes to have become the
Holder of record of such shares, regardless of the actual delivery of
certificates evidencing such shares.
2.3 DELIVERY OF STOCK CERTIFICATES. As soon as practicable after
each exercise of this Warrant, and in any event no later than 3 days after such
exercise, the Company at its expense will issue Warrant Shares via credit to the
Buyer's account with DTC for the number of Warrant Shares to which such Buyer is
entitled upon such Buyer's submission of the applicable Warrant Exercise Form
or, if the Transfer Agent is not participating in The DTC Fast Automated
Securities Transfer Program and DWAC system, issue and
surrender to the address as specified in the Warrant Exercise Form, a
certificate, registered in the name of the Buyer or its designee, for the
number of shares of Common Stock to which the Buyer shall be entitled to upon
such exercise.
2.4 CASHLESS EXERCISE. Notwithstanding any provisions herein to
the contrary, the Holder may, by providing notice thereof to the Company along
with the Warrant Exercise Form, elect to exercise the Warrant for a reduced
number of Warrant Shares determined in accordance with the following formula:
X = Y(A-B)
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A
Where:
X = The number of Warrant Shares to be issued to the Holder.
Y = The number of Warrant Shares purchasable under this Warrant (at the date of
such exercise).
A = The fair market value of one share of Common Stock (or other
security for which the Warrant is then exercisable at the date of such
exercise).
B = Exercise Price (as adjusted to the date of such exercise).
For purposes of this Section 2.4, the "fair market value" per share shall be the
average of the closing sale price of the Common Stock for the five trading days
immediately prior to the notice of the exercise of the Warrant.
SECTION 3. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The Warrant
Exercise Price and the kind of securities issuable upon exercise of the Warrant
shall be adjusted from time to time as follows:
3.1 SUBDIVISION OR COMBINATION OF SHARES (STOCK SPLITS). If the
Company at any time effects a subdivision or combination of the outstanding
Common Stock (through a stock split or otherwise), the number of shares of
Warrant Shares shall be increased, in the case of a subdivision, or the number
of shares of Warrant Shares shall be decreased, in the case of a combination, in
the same proportions as the Common Stock is subdivided or combined, in each case
effective automatically upon, and simultaneously with, the effectiveness of the
subdivision or combination which gives rise to the adjustment.
3.2 STOCK DIVIDENDS. If the Company at any time pays a dividend,
or makes any other distribution, to holders of Common Stock payable in shares of
Common Stock, or fixes a record date for the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in shares of
Common Stock, then the number of shares of Warrant Shares in effect immediately
prior to such action shall be proportionately increased so that the Holder
hereof may receive upon exercise of the Warrant the aggregate number of shares
of Common Stock which he or it would have owned immediately following such
action if the Warrant had been exercised immediately
prior to such action. The adjustment shall become effective immediately as of
the date the Company shall take a record of the holders of its Common Stock
for the purpose of receiving such dividend or distribution (or if no such
record is taken, as of the effectiveness of such dividend or distribution).
3.3 RECLASSIFICATION, CONSOLIDATION OR MERGER. If at any time, as
a result of:
(a) a capital reorganization or reclassification (other than a
subdivision, combination or dividend provided for elsewhere in this Section 3),
or
(b) a merger or consolidation of the Company with another
corporation (whether or not the Company is the surviving corporation),
the Common Stock issuable upon exercise of the Warrants shall be changed into
or exchanged for the same or a different number of shares of any class or
classes of stock of the Company or any other corporation, or other securities
convertible into such shares, then, as a part of such reorganization,
reclassification, merger or consolidation, appropriate adjustments shall be
made in the terms of the Warrants (or of any securities into which the
Warrants are exercised or for which the Warrants are exchanged), so that:
(y) the Holders of Warrants or of such substitute securities shall
thereafter be entitled to receive, upon exercise of the Warrants or of such
substitute securities, the kind and amount of shares of stock, other securities,
money and property which such Holders would have received at the time of such
capital reorganization, reclassification, merger, or consolidation, if such
Holders had exercised their Warrants immediately prior to such capital
reorganization, reclassification, merger, or consolidation, and
(z) the Warrants or such substitute securities shall thereafter be
adjusted on terms as nearly equivalent as may be practicable to the adjustments
theretofore provided in this Section 3.3.
No consolidation or merger in which the Company is not the surviving corporation
shall be consummated unless the surviving corporation shall agree, in writing,
to the provisions of this Section 3.3. The provisions of this Section 3.3 shall
similarly apply to successive capital reorganizations, reclassifications,
mergers and consolidations.
3.4 OTHER ACTION AFFECTING COMMON STOCK. If at any time the
Company takes any action affecting its Common Stock, other than an action
described in any of Sections 3.1 - 3.3 which, in the opinion of the Board of
Directors of the Company (the "BOARD"), would have an adverse effect upon the
exercise rights of the Warrants, the Warrant Exercise Price or the kind of
securities issuable upon exercise of the Warrants, or both, shall be adjusted in
such manner and at such time as the Board may in good faith determine to be
equitable in the circumstances; provided, however, that the purpose of this
Section is to prevent the Company from taking any action which has the effect of
diluting the number of shares of Warrant Shares issuable upon exercise of this
Warrant.
3.5 NOTICE OF ADJUSTMENT EVENTS. Whenever the Company contemplates
the occurrence of an event which would give rise to adjustments under this
Section 3, the Company shall mail to each Warrant Holder, at least 20 days prior
to the record date with respect to such event or, if no record date shall be
established, at least 20 days prior to such event, a notice specifying (i) the
nature of the contemplated event, and (ii) the date on which any such record is
to be taken for the purpose of such event, and (iii) the date on which such
event is expected to become effective, and (iv) the time, if any is to be fixed,
when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable in connection with such event.
3.6 NOTICE OF ADJUSTMENTS. Whenever the kind or number of
securities issuable upon exercise of the Warrants, or both, shall be adjusted
pursuant to Section 3, the Company shall deliver a certificate signed by its
Chief Executive Officer and by its Chief Financial Officer, setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board made any determination hereunder),
and the Warrant Exercise Price and the kind of securities issuable upon exercise
of the Warrants after giving effect to such adjustment, and shall cause copies
of such certificate to be mailed (by first class mail postage prepaid) to each
Warrant Holder promptly after each adjustment.
SECTION 4. RESERVATION OF STOCK, ETC. The Company covenants and agrees
that it will at all times have authorized, reserve and keep available, solely
for issuance and delivery upon the exercise of this Warrant, the number of
shares of Warrant Shares from time to time issuable upon the exercise of this
Warrant. The Company further covenants and agrees that this Warrant is, and any
Warrants issued in substitution for or replacement of this Warrant and all
Warrant Shares, will upon issuance be duly authorized and validly issued and, in
the case of Warrant Shares, upon issuance will be fully paid and non-assessable
and free from all preemptive rights of any stockholder, and from all taxes,
liens and charges with respect to the issue thereof (other than transfer taxes)
and, if the Common Stock of the Company is then listed on any national
securities exchanges (as defined in the Exchange Act of 1934, as amended (the
"EXCHANGE ACT")) or quoted on NASDAQ, shall be, subject to the restrictions set
forth in Section 5, duly listed or quoted thereon, as the case may be. In the
event that the number of authorized but unissued shares of such Common Stock
shall not be sufficient to effect the exercise of this entire Warrant into
Warrant Shares, then in addition to such other remedies as shall be available to
the Holder of this Warrant, the Company shall promptly take such corporate
action as may be necessary to increase its authorized but unissued shares of
such Common Stock to such number of shares as shall be sufficient for such
purpose.
SECTION 5. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
5.1 OWNERSHIP OF WARRANTS. The Company may treat the person in
whose
name any Warrant is registered on the register kept at the principal office
of the Company as the owner and Holder thereof for all purposes,
notwithstanding any notice to the contrary, but in all events recognizing any
transfers made in accordance with the terms of this Warrant.
5.2 TRANSFER AND EXCHANGE OF WARRANTS. Upon the surrender of any
Warrant, properly endorsed, for registration of transfer or for exchange at the
principal office of the Company, the Company at its expense will execute and
deliver to the Holder thereof, upon the order of such Holder, a new Warrant or
Warrants of like tenor, in the name of such Holder or as such Holder may direct,
for such number of shares with respect to each such Warrant, the aggregate
number of shares in any event not to exceed the number of shares for which the
Warrant so surrendered had not been exercised.
5.3 EXEMPTION FROM REGISTRATION. If an opinion of counsel provides
that registration is not required for the proposed exercise or transfer of this
Warrant or the proposed transfer of the Warrant Shares and that the proposed
exercise or transfer in the absence of registration would require the Company to
take any action including executing and filing forms or other documents with the
Securities and Exchange Commission (the "SEC") or any state securities agency,
or delivering to the Holder any form or document in order to establish the right
of the Holder to effectuate the proposed exercise or transfer, the Company
agrees promptly, at its expense, to take any such action; and provided, further,
that the Company will reimburse the Holder in full for any expenses (including
but not limited to the fees and disbursements of such counsel, but excluding
brokers' commissions) incurred by the Holder or owner of Warrant Shares on his,
her or its behalf in connection with such exercise or transfer of the Warrant or
transfer of Warrant Shares.
SECTION 6. NO RIGHTS OR LIABILITIES AS SHAREHOLDER. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof any rights
as a shareholder of the Company or as imposing any liabilities on such holder to
purchase any securities or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
SECTION 7. RULE 144 SALES. At the request of any Holder who proposes to
sell securities in compliance with Rule 144 of the SEC, the Company will (i)
forthwith furnish to such Holder a written statement of compliance with the
filing requirements of the SEC as set forth in Rule 144, as such rules may be
amended from time to time and (ii) make available to the public and such Holder
such information as will enable the Holder to make sales pursuant to Rule 144.
SECTION 8. MISCELLANEOUS.
8.1 AMENDMENT AND WAIVER. This Warrant may be amended with, and
only with, the written consent of the Company and the Holder. Any waiver of any
term, covenant, agreement or condition contained in this Warrant shall not be
deemed a waiver of any other term, covenant, agreement or condition, and any
waiver of any default in any such term, covenant, agreement or condition shall
not be deemed a waiver of any later default thereof or of any default of any
other term, covenant, agreement or condition.
8.2 REPRESENTATIONS AND WARRANTIES TO SURVIVE CLOSING. All
representations, warranties and covenants contained herein shall survive the
execution and delivery of this Warrant and the issuance of any Warrant Shares
upon the exercise hereof.
8.3 SEVERABILITY. In the event that any court or any governmental
authority or agency declares all or any part of any Section of this Warrant to
be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any other Section of this Warrant, and in the event that only a
portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of such
Section.
8.4 BINDING EFFECT; NO THIRD PARTY BENEFICIARIES. All provisions
of this Warrant shall be binding upon and inure to the benefit of the parties
and their respective heirs, legatees, executors, administrators, legal
representatives, successors, and permitted transferees and assigns. No person
other than the holder of this Warrant and the Company shall have any legal or
equitable right, remedy or claim under or in respect of, this Warrant.
8.5 NOTICES. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this Warrant
must be in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Trading Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
Cytomedix, Inc.
Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Cour
With a copy to:
Cytomedix, Inc.
Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxxx
If to the Buyer:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
If to the Transfer Agent:
StockTrans, Inc.-
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxxx Xxxxxx
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Trading Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, and recipient facsimile number or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
8.6 TAXES, COSTS AND EXPENSES. The Company covenants and agrees
that it will pay when due and payable any and all federal, state and local taxes
(other than
income taxes) and any other costs and expenses which may be payable in
respect of the preparation, issuance, delivery, exercise, surrender or
transfer of this Warrant pursuant to the terms of this Warrant or the
issuance of any shares of Warrant Shares as a result thereof. If any suit or
action is instituted or attorneys employed to enforce this Warrant or any
part thereof, the Company promises and agrees to pay all costs and expenses
associated therewith, including reasonable attorneys' fees and court costs.
8.7 GOVERNING LAW; JURISDICTION; JURY TRIAL. The corporate laws of
the State of Delaware shall govern all issues concerning the relative rights of
the Company and its shareholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of Illinois, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Illinois. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of Chicago, for the adjudication of any dispute
hereunder or under the other Transaction Documents or in connection herewith or
therewith, or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
8.8 LOSS OF WARRANT. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) of indemnification
in form and substance acceptable to the Company in its reasonable discretion,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver a new Warrant of like tenor and date.
8.9 ENTIRE AGREEMENT. This Warrant and the Purchase Agreement of
even date herewith represent the entire agreement and understanding between the
parties concerning the subject matter hereof and supercede all prior and
contemporaneous agreements, understandings, representations and warranties with
respect thereto.
8.10 HEADINGS. The headings used herein are used for convenience
only and are not to be considered in construing or interpreting this Warrant.
COMPANY:
CYTOMEDIX, INC.
By: /s/ XXXXX X. COUR
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Name: Xxxxx X. Cour
Title: President and Chief Executive Officer
WARRANT EXERCISE FORM
Date:
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Ladies and Gentlemen:
The undersigned, being the registered holder of your Warrant number ______
accompanying this letter, hereby irrevocably exercises such Warrant for _____
shares of Warrant Shares (as defined in said Warrant), and herewith makes
payment therefor in the amount of ($___________ )(via "cash-less exercise" in
accordance with the Warrant), and requests that such shares of Warrant Shares be
issued in the name of, and delivered to (the undersigned)
(_________________________), at the address shown below the signature line
hereof.
If said number of shares shall not be all the shares issuable upon exercise of
the attached Warrant, a new Warrant is to be issued in the name of the
undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
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Printed Name of Registered Warrant Holder
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Signature of Registered Warrant Holder
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Address
