EXHIBIT 4.2
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR QUANTRX BIOMEDICAL CORPORATION SHALL HAVE
RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
QUANTRX BIOMEDICAL CORPORATION
Expires _________________, 2010
No.: __-___ Number of Shares:_____________
Date of Issuance:___________, 2005
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth,
the undersigned, QuantRx Biomedical Corporation, a Nevada corporation (together
with its successors and assigns, the "Issuer"), hereby certifies that
_______________________________ or its registered assigns is entitled to
subscribe for and purchase, during the period specified in this Warrant, up to
____________________________________ (_____________) shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth. Capitalized
terms used in this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section 9 hereof.
1. Term. The right to subscribe for and purchase shares of
Warrant Stock represented hereby shall commence on _____________, 2005 and shall
expire at 5:00 p.m., eastern time, on ___________, 2010 (such period being the
"Term").
2. Method of Exercise Payment; Issuance of New Warrant; Transfer
and Exchange.
(a) Time of Exercise. The purchase rights represented by
this Warrant may be exercised in whole or in part at any time and from time to
time during the Term.
(b) Method of Exercise. The Holder hereof may exercise
this Warrant, in whole or in part, by the surrender of this Warrant (with the
exercise form attached hereto duly executed) at the principal office of the
Issuer, and by the payment to the Issuer of an amount of consideration therefor
equal to the Warrant Price in effect on the date of such exercise multiplied by
the number of shares of Warrant Stock with respect to which this Warrant is then
being exercised, payable at such Holder's election (i) by certified or official
bank check or by wire transfer to an account designated by the Issuer, (ii) by
"cashless exercise" in accordance with the provisions of subsection (c) of this
Section 2, but only when a registration statement under Securities Act providing
for the resale of the Warrant Stock is not then in effect, or (iii) by a
combination of the foregoing methods of payment selected by the Holder of this
Warrant.
(c) Cashless Exercise. Notwithstanding any provisions
herein to the contrary and commencing one (1) year following the Original Issue
Date, if (i) the Per Share Market Value of one share of Common Stock is greater
than the Warrant Price (at the date of calculation as set forth below) and (ii)
a registration statement under the Securities Act providing for the resale of
the Warrant Stock either (A) has not been declared effective by the Securities
and Exchange Commission by the date such registration statement is required to
be effective pursuant to the Registration Rights Agreement (as defined in the
Purchase Agreement), or (B) is not effective at the time of exercise of this
Warrant, in lieu of exercising this Warrant by payment of cash, the Holder may
exercise this Warrant by a cashless exercise and shall receive the number of
shares of Common Stock equal to an amount (as determined below) by surrender of
this Warrant at the principal office of the Issuer together with the properly
endorsed Notice of Exercise in which event the Issuer shall issue to the Holder
a number of shares of Common Stock computed using the following formula:
X = Y - (A)(Y)
-------
B
Where X = the number of shares of Common Stock to be
issued to the Holder.
Y the number of shares of Common Stock
purchasable upon exercise of all of the
Warrant or, if only a portion of the Warrant
is being exercised, the portion of the Warrant
being exercised.
A = the Warrant Price.
B = the Per Share Market Value of one share of
Common Stock.
(d) Issuance of Stock Certificates. In the event of any
exercise of the rights represented by this Warrant in accordance with and
subject to the terms and conditions hereof, (i) certificates for the shares of
Warrant Stock so purchased shall be dated the date of such exercise and
delivered to the Holder hereof within a reasonable time, not exceeding five (5)
Trading Days
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after such exercise or, at the request of the Holder (provided that a
registration statement under the Securities Act providing for the resale of the
Warrant Stock is then in effect), issued and delivered to the Depository Trust
Company ("DTC") account on the Holder's behalf via the Deposit Withdrawal Agent
Commission System ("DWAC") within a reasonable time, not exceeding five (5)
Trading Days after such exercise, and the Holder hereof shall be deemed for all
purposes to be the holder of the shares of Warrant Stock so purchased as of the
date of such exercise and (ii) unless this Warrant has expired, a new Warrant
representing the number of shares of Warrant Stock, if any, with respect to
which this Warrant shall not then have been exercised (less any amount thereof
which shall have been canceled in payment or partial payment of the Warrant
Price as hereinabove provided) shall also be issued to the Holder hereof at the
Issuer's expense within such time.
(e) Transferability of Warrant. Subject to Section 2(g),
this Warrant may be transferred by a Holder without the consent of the Issuer.
If transferred pursuant to this paragraph and subject to the provisions of
subsection (g) of this Section 2, this Warrant may be transferred on the books
of the Issuer by the Holder hereof in person or by duly authorized attorney,
upon surrender of this Warrant at the principal office of the Issuer, properly
endorsed (by the Holder executing an assignment in the form attached hereto) and
upon payment of any necessary transfer tax or other governmental charge imposed
upon such transfer. This Warrant is exchangeable at the principal office of the
Issuer for Warrants for the purchase of the same aggregate number of shares of
Warrant Stock, each new Warrant to represent the right to purchase such number
of shares of Warrant Stock as the Holder hereof shall designate at the time of
such exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(f) Continuing Rights of Holder. The Issuer will, at the
time of or at any time after each exercise of this Warrant, upon the request of
the Holder hereof, acknowledge in writing the extent, if any, of its continuing
obligation to afford to such Holder all rights to which such Holder shall
continue to be entitled after such exercise in accordance with the terms of this
Warrant, provided that if any such Holder shall fail to make any such request,
the failure shall not affect the continuing obligation of the Issuer to afford
such rights to such Holder.
(g) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance
hereof, acknowledges that this Warrant or the shares of Warrant Stock
to be issued upon exercise hereof are being acquired solely for the
Holder's own account and not as a nominee for any other party, and for
investment, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Warrant Stock to be issued
upon exercise hereof except pursuant to an effective registration
statement, or an exemption from registration, under the Securities Act
and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below,
this Warrant and all certificates representing shares of Warrant Stock
issued upon exercise hereof shall be stamped or imprinted with a legend
in substantially the following form:
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THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND
UNDER APPLICABLE STATE SECURITIES LAWS OR QUANTRX BIOMEDICAL
CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED.
(iii) The Issuer agrees to reissue this Warrant or
certificates representing any of the Warrant Stock, without the legend
set forth above if at such time, prior to making any transfer of any
such securities, the Holder shall give written notice to the Issuer
describing the manner and terms of such transfer and removal as the
Issuer may reasonably request. Such proposed transfer and removal will
not be effected until: (a) either (i) the Issuer has received an
opinion of counsel reasonably satisfactory to the Issuer, to the effect
that the registration of such securities under the Securities Act is
not required in connection with such proposed transfer, (ii) a
registration statement under the Securities Act covering such proposed
disposition has been filed by the Issuer with the Securities and
Exchange Commission and has become effective under the Securities Act,
(iii) the Issuer has received other evidence reasonably satisfactory to
the Issuer that such registration and qualification under the
Securities Act and state securities laws are not required, or (iv) the
Holder provides the Issuer with reasonable assurances that such
security can be sold pursuant to Rule 144 under the Securities Act; and
(b) either (i) the Issuer has received an opinion of counsel reasonably
satisfactory to the Issuer, to the effect that registration or
qualification under the securities or "blue sky" laws of any state is
not required in connection with such proposed disposition, or (ii)
compliance with applicable state securities or "blue sky" laws has been
effected or a valid exemption exists with respect thereto. The Issuer
will respond to any such notice from a holder within ten (10) business
days. In the case of any proposed transfer under this Section 2(g), the
Issuer will use reasonable efforts to comply with any such applicable
state securities or "blue sky" laws, but shall in no event be required,
(x) to qualify to do business in any state where it is not then
qualified, or (y) to take any action that would subject it to tax or to
the general service of process in any state where it is not then
subject. The restrictions on transfer contained in this Section 2(g)
shall be in addition to, and not by way of limitation of, any other
restrictions on transfer contained in any other section of this
Warrant.
(h) In no event may the Holder exercise this Warrant in
whole or in part unless the Holder is an "accredited investor" as defined in
Regulation D under the Securities Act.
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3. Stock Fully Paid; Reservation and Listing of Shares;
Covenants.
(a) Stock Fully Paid. The Issuer represents, warrants,
covenants and agrees that all shares of Warrant Stock that may be issued upon
the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable and free from all
taxes, liens and charges created by or through the Issuer. The Issuer further
covenants and agrees that during the period within which this Warrant may be
exercised, the Issuer will at all times have authorized and reserved for the
purpose of the issue upon exercise of this Warrant a sufficient number of shares
of Common Stock to provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to
be reserved for issuance upon exercise of this Warrant or as otherwise provided
hereunder require registration or qualification with any governmental authority
under any federal or state law before such shares may be so issued, the Issuer
will in good faith use its best efforts as expeditiously as possible at its
expense to cause such shares to be duly registered or qualified. If the Issuer
shall list any shares of Common Stock on any securities exchange or market it
will, at its expense, list thereon, maintain and increase when necessary such
listing, of, all shares of Warrant Stock from time to time issued upon exercise
of this Warrant or as otherwise provided hereunder, and, to the extent
permissible under the applicable securities exchange rules, all unissued shares
of Warrant Stock which are at any time issuable hereunder, so long as any shares
of Common Stock shall be so listed. The Issuer will also so list on each
securities exchange or market, and will maintain such listing of, any other
securities which the Holder of this Warrant shall be entitled to receive upon
the exercise of this Warrant if at the time any securities of the same class
shall be listed on such securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action
including, without limitation, amending the Articles of Incorporation or the
by-laws of the Issuer, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder hereof.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of
evidence satisfactory to the Issuer of the ownership of and the loss, theft,
destruction or mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon receipt of indemnity or security satisfactory to the
Issuer or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
5
4. Adjustment of Warrant Price and Warrant Share Number. The
number of shares of Common Stock for which this Warrant is exercisable, and the
price at which such shares may be purchased upon exercise of this Warrant, shall
be subject to adjustment from time to time as set forth in this Section 4. The
Issuer shall give the Holder notice of any event described below which requires
an adjustment pursuant to this Section 4 in accordance with Section 5.
(a) Recapitalization, Reorganization, Reclassification,
Consolidation, Merger or Sale.
(i) In case the Issuer after the Original Issue
Date shall do any of the following (each, a "Triggering Event"): (a)
consolidate with or merge into any other Person and the Issuer shall
not be the continuing or surviving corporation of such consolidation or
merger, or (b) permit any other Person to consolidate with or merge
into the Issuer and the Issuer shall be the continuing or surviving
Person but, in connection with such consolidation or merger, any
Capital Stock of the Issuer shall be changed into or exchanged for
Securities of any other Person or cash or any other property, or (c)
transfer all or substantially all of its properties or assets to any
other Person, or (d) effect a capital reorganization or
reclassification of its Capital Stock, then, and in the case of each
such Triggering Event, proper provision shall be made so that, upon the
basis and the terms and in the manner provided in this Warrant, the
Holder of this Warrant shall be entitled upon the exercise hereof at
any time after the consummation of such Triggering Event, to the extent
this Warrant is not exercised prior to such Triggering Event, to
receive at the Warrant Price in effect at the time immediately prior to
the consummation of such Triggering Event in lieu of the Common Stock
issuable upon such exercise of this Warrant prior to such Triggering
Event, the Securities, cash and property to which such Holder would
have been entitled upon the consummation of such Triggering Event if
such Holder had exercised the rights represented by this Warrant
immediately prior thereto, subject to adjustments (subsequent to such
corporate action) as nearly equivalent as possible to the adjustments
provided for elsewhere in this Section 4.
(ii) Notwithstanding anything contained in this
Warrant to the contrary, the Issuer will not effect any Triggering
Event if, prior to the consummation thereof, each Person (other than
the Issuer) which may be required to deliver any Securities, cash or
property upon the exercise of this Warrant as provided herein shall
assume, by written instrument delivered to, and reasonably satisfactory
to, the Holder of this Warrant, (A) the obligations of the Issuer under
this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall
not release the Issuer from, any continuing obligations of the Issuer
under this Warrant) and (B) the obligation to deliver to such Holder
such shares of Securities, cash or property as, in accordance with the
foregoing provisions of this subsection (a), such Holder shall be
entitled to receive, and such Person shall have similarly delivered to
such Holder an opinion of counsel for such Person stating that this
Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of
this subsection (a)) shall be applicable to the Securities, cash or
property which such Person may be required to deliver upon any exercise
of this Warrant or the exercise of any rights pursuant hereto.
6
(b) Stock Dividends, Subdivisions and Combinations. If at
any time the Issuer shall:
(i) take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend payable
in, or other distribution of, Additional Shares of Common Stock,
(ii) subdivide its outstanding shares of Common
Stock into a larger number of shares of Common Stock, or
(iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock,
then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment.
(c) Certain Other Distributions. If at any time the Issuer
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive any dividend or other distribution of:
(i) cash (other than a cash dividend payable out
of earnings or earned surplus legally available for the payment of
dividends under the laws of the jurisdiction of incorporation of the
Issuer),
(ii) any evidences of its indebtedness, any shares
of stock of any class or any other securities or property of any nature
whatsoever (other than cash, Common Stock Equivalents or Additional
Shares of Common Stock), or
(iii) any warrants or other rights to subscribe for
or purchase any evidences of its indebtedness, any shares of stock of
any class or any other securities or property of any nature whatsoever
(other than cash, Common Stock Equivalents or Additional Shares of
Common Stock),
then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board of Directors of the
Issuer and supported by an opinion
7
from an investment banking firm of recognized national standing acceptable to
the Holder) of any and all such evidences of indebtedness, shares of stock,
other securities or property or warrants or other subscription or purchase
rights so distributable, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Common Stock for
which this Warrant is exercisable immediately after such adjustment. A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 4(c) and, if the
outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such change
shall be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section 4(b).
(d) Issuance of Additional Shares of Common Stock.
(i) In the event the Issuer shall at any time
following the Original Issue Date issue any Additional Shares of Common
Stock (otherwise than as provided in the foregoing subsections (a)
through (c) of this Section 4), at a price per share less than the
Warrant Price then in effect or without consideration, then the Warrant
Price upon each such issuance shall be adjusted to that price
determined by multiplying the Warrant Price then in effect by a
fraction:
(A) the numerator of which shall be equal
to the sum of (x) the number of shares of Outstanding Common
Stock immediately prior to the issuance of such Additional
Shares of Common Stock plus (y) the number of shares of
Common Stock (rounded to the nearest whole share) which the
aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at
a price per share equal to the Warrant Price then in effect,
and
(B) the denominator of which shall be equal
to the number of shares of Outstanding Common Stock
immediately after the issuance of such Additional Shares of
Common Stock.
(ii) No adjustment of the number of shares of
Common Stock for which this Warrant shall be exercisable
shall be made under paragraph (i) of Section 4(d) upon the
issuance of any Additional Shares of Common Stock which are
issued pursuant to the exercise of any Common Stock
Equivalents, if any such adjustment shall previously have
been made upon the issuance of such Common Stock Equivalents
or upon the issuance of any warrant or other rights therefor
pursuant to Sections 4(e) or 4(f), or in connection with any
Permitted Issuances.
(e) Issuance of Warrants or Other Rights. If at any time
the Issuer shall take a record of the Holders of its Common Stock for the
purpose of entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Issuer is the
surviving corporation) issue or sell any warrants or options, whether or not
immediately exercisable, and the Warrant Consideration (hereafter defined) per
share for which Common
8
Stock is issuable upon the exercise of such warrant or option shall be less than
the Warrant Price in effect immediately prior to the time of such issue or sale,
then the Warrant Price then in effect immediately prior to the time of such
issue or sale, shall be adjusted to that price (rounded to the nearest cent)
determined by multiplying the Warrant Price by a fraction: (1) the numerator of
which shall be equal to the sum of (A) the number of shares of Common Stock
outstanding immediately prior to the issuance or sale of such warrants or
options plus (B) the number of shares of Common Stock (rounded to the nearest
whole share) which the Warrant Consideration multiplied by the number of shares
of Common Stock issuable upon the exercise or conversion of all such warrants or
options, would purchase at a price per share equal to the Warrant Price then in
effect, and (2) the denominator of which shall be equal to the number of shares
of Common Stock that would be outstanding assuming the exercise or conversion of
all such warrants and options. No adjustments of the Warrant Price then in
effect shall be made upon the actual issue of such Common Stock or of such
Common Stock Equivalents upon exercise of such warrants or other rights or upon
the actual issue of such Common Stock upon such conversion or exchange of such
Common Stock Equivalents. No adjustments of the Warrant Price shall be required
under this Section 4(e) in connection with any Permitted Issuances.
(f) Issuance of Common Stock Equivalents. If at any time
the Issuer shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Issuer is the
surviving corporation) issue or sell, any Common Stock Equivalents, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
and the Common Stock Equivalent Consideration (hereafter defined) per share for
which Common Stock is issuable upon such conversion or exchange shall be less
than the Warrant Price in effect immediately prior to the time of such issue or
sale, then the Warrant Price then in effect immediately prior to the time of
such issue or sale, shall upon each such issuance or sale be adjusted to that
price (rounded to the nearest cent) determined by multiplying the Warrant Price
by a fraction: (1) the numerator of which shall be equal to the sum of (A) the
number of shares of Common Stock outstanding immediately prior to the issuance
or sale of such Common Stock Equivalents plus (B) the number of shares of Common
Stock (rounded to the nearest whole share) which the Common Stock Equivalent
Consideration multiplied by the number of shares of Common Stock issuable upon
the exercise or conversion of all such Common Stock Equivalents, would purchase
at a price per share equal to the Warrant Price then in effect, and (2) the
denominator of which shall be equal to the number of shares of Common Stock that
would be outstanding assuming the exercise or conversion of all such Common
Stock Equivalents. No further adjustment of the Warrant Price then in effect
shall be made under this Section 4(f) upon the issuance of any Common Stock
Equivalents which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights therefor, if any such adjustment shall
previously have been made upon the issuance of such warrants or other rights
pursuant to Section 4(e). No further adjustments of the Warrant Price then in
effect shall be made upon the actual issue of such Common Stock upon conversion
or exchange of such Common Stock Equivalents. No adjustments of the Warrant
Price shall be required under this Section 4(f) in connection with any Permitted
Issuances.
(g) Superseding Adjustment. If, at any time after any
adjustment of the number of shares of Common Stock for which this Warrant is
exercisable and the Warrant Price then in
9
effect shall have been made pursuant to Section 4(e) or Section 4(f) as the
result of any issuance of warrants, other rights or Common Stock Equivalents,
and (i) such warrants or other rights, or the right of conversion or exchange in
such other Common Stock Equivalents, shall expire, and all or a portion of such
warrants or other rights, or the right of conversion or exchange with respect to
all or a portion of such other Common Stock Equivalents, as the case may be
shall not have been exercised, or (ii) the consideration per share for which
shares of Common Stock are issuable pursuant to such Common Stock Equivalents,
shall be increased solely by virtue of provisions therein contained for an
automatic increase in such consideration per share upon the occurrence of a
specified date or event, then for each outstanding Warrant such previous
adjustment shall be rescinded and annulled and the Additional Shares of Common
Stock which were deemed to have been issued by virtue of the computation made in
connection with the adjustment so rescinded and annulled shall no longer be
deemed to have been issued by virtue of such computation. Upon the occurrence of
an event set forth in this Section 4(g) above, there shall be a recomputation
made of the effect of such Common Stock Equivalents on the basis of: (i)
treating the number of Additional Shares of Common Stock or other property, if
any, theretofore actually issued or issuable pursuant to the previous exercise
of any such warrants or other rights or any such right of conversion or
exchange, as having been issued on the date or dates of any such exercise and
for the consideration actually received and receivable therefor, and (ii)
treating any such Common Stock Equivalents which then remain outstanding as
having been granted or issued immediately after the time of such increase of the
consideration per share for which shares of Common Stock or other property are
issuable under such Common Stock Equivalents; whereupon a new adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect shall be made, which new adjustment shall supersede
the previous adjustment so rescinded and annulled.
(h) Purchase of Common Stock by the Issuer. If the Issuer
at any time while this Warrant is outstanding shall, directly or indirectly
through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any
shares of Common Stock at a price per share greater than the Per Share Market
Value, then the Warrant Price upon each such purchase, redemption or acquisition
shall be adjusted to that price determined by multiplying such Warrant Price by
a fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such purchase, redemption or acquisition. For the purposes of this
subsection (h), the date as of which the Per Share Market Price shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (h), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
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(i) Other Provisions applicable to Adjustments under this
Section. The following provisions shall be applicable to the making of
adjustments of the number of shares of Common Stock for which this Warrant is
exercisable and the Warrant Price then in effect provided for in this Section 4:
(i) Computation of Consideration. To the extent
that any Additional Shares of Common Stock or any Common
Stock Equivalents (or any warrants or other rights therefor)
shall be issued for cash consideration, the consideration
received by the Issuer therefor shall be the amount of the
cash received by the Issuer therefor, or, if such Additional
Shares of Common Stock or Common Stock Equivalents are
offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or
Common Stock Equivalents are sold to underwriters or dealers
for public offering without a subscription offering, the
initial public offering price (in any such case subtracting
any amounts paid or receivable for accrued interest or
accrued dividends and without taking into account any
compensation, discounts or expenses paid or incurred by the
Issuer for and in the underwriting of, or otherwise in
connection with, the issuance thereof). To the extent that
such issuance shall be for a consideration other than cash,
then, except as herein otherwise expressly provided, the
amount of such consideration shall be deemed to be the fair
value of such consideration at the time of such issuance as
determined in good faith by the Board of Directors of the
Issuer. The consideration for any Additional Shares of Common
Stock issuable pursuant to any warrants or other rights to
subscribe for or purchase the same shall be the consideration
received by the Issuer for issuing such warrants or other
rights divided by the number of shares of Common Stock
issuable upon the exercise of such warrant or right plus the
additional consideration payable to the Issuer upon exercise
of such warrant or other right for one share of Common Stock
(together the "Warrant Consideration"). The consideration for
any Additional Shares of Common Stock issuable pursuant to
the terms of any Common Stock Equivalents shall be the
consideration received by the Issuer for issuing such Common
Stock Equivalent, divided by the number of shares of Common
Stock issuable upon the conversion or other exercise of such
Common Stock Equivalent, plus the additional consideration,
if any, payable to the Issuer upon the exercise of the right
of conversion or exchange in such Common Stock Equivalent for
one share of Common Stock (together the "Common Stock
Equivalent Consideration"). In case of the issuance at any
time of any Additional Shares of Common Stock or Common Stock
Equivalents in payment or satisfaction of any dividends upon
any class of stock other than Common Stock, the Issuer shall
be deemed to have received for such Additional Shares of
Common Stock or Common Stock Equivalents a consideration
equal to the amount of such dividend so paid or satisfied.
(ii) When Adjustments to Be Made. The adjustments
required by this Section 4 shall be made whenever and as
often as any specified event requiring an adjustment shall
occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable that would
otherwise be required may be postponed (except in the case of
a subdivision or combination of shares of the Common Stock,
as provided for in Section 4(b)) up to, but not beyond the
date of exercise if such adjustment either by itself or with
other adjustments not previously made adds or subtracts less
than one percent (1%) of the shares of Common Stock for which
this Warrant is exercisable immediately prior to the making
of such adjustment. Any adjustment representing a change of
less than such minimum amount (except as aforesaid) which is
postponed shall be carried forward and made as soon as such
adjustment,
11
together with other adjustments required by this Section 4
and not previously made, would result in a minimum adjustment
or on the date of exercise. For the purpose of any
adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its
occurrence.
(iii) Fractional Interests. In computing adjustments
under this Section 4, fractional interests in Common Stock
shall be taken into account to the nearest one one-hundredth
(1/100th) of a share.
(iv) When Adjustment Not Required. If the Issuer
shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made
in respect thereof shall be rescinded and annulled.
(j) Form of Warrant after Adjustments. The form of this
Warrant need not be changed because of any adjustments in the Warrant Price or
the number and kind of Securities purchasable upon the exercise of this Warrant.
(k) Escrow of Warrant Stock. If after any property becomes
distributable pursuant to this Section 4 by reason of the taking of any record
of the holders of Common Stock, but prior to the occurrence of the event for
which such record is taken, and the Holder exercises this Warrant, any shares of
Common Stock issuable upon exercise by reason of such adjustment shall be deemed
the last shares of Common Stock for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to the Holder upon and to the extent that the event actually takes place, upon
payment of the current Warrant Price. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant
Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of
this Section 5, each an "adjustment"), the Issuer shall cause an executive
officer to prepare and execute a certificate 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
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten (10) days after receipt of notice from
such Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer
12
shall have no such right of objection. The firm selected by the Holder of this
Warrant as provided in the preceding sentence shall be instructed to deliver a
written opinion as to such matters to the Issuer and such Holder within thirty
(30) days after submission to it of such dispute. Such opinion shall be final
and binding on the parties hereto.
6. Fractional Shares. No fractional shares of Warrant Stock will
be issued in connection with and exercise hereof, but in lieu of such fractional
shares, the Issuer shall make a cash payment therefor equal in amount to the
product of the applicable fraction multiplied by the Per Share Market Value then
in effect.
7. Call. Notwithstanding anything herein to the contrary,
commencing one (1) year following the date the Registration Statement (as
defined below) is declared effective by the Securities and Exchange Commission,
the Issuer may call up to one hundred percent (100%) of this Warrant then still
outstanding by providing the Holder of this Warrant written notice pursuant to
Section 13 (the "Call Notice"); provided, that, in connection with any call by
the Issuer under this Section 7, (A) the Per Share Market Value of the Common
Stock has been greater than $3.00 for a period of twenty (20) consecutive
Trading Days immediately prior to the date of delivery of the Call Notice (a
"Call Notice Period"); (B) a registration statement under the Securities Act
providing for the resale of the (i) Warrant Stock and (ii) the shares of Common
Stock and the shares of Common Stock issuable upon conversion of the Issuer's
Series A Preferred Stock which are not saleable in the public securities market
pursuant to the exemption from registration under the Securities Act provided by
Rule 144(k) of Regulation D, issued pursuant to the Purchase Agreement, (the
"Registration Statement") is then in effect and has been effective, without
lapse or suspension of any kind, for a period of sixty (60) consecutive calendar
days, (C) trading in the Common Stock shall not have been suspended by the
Securities and Exchange Commission or the OTC Bulletin Board (or other exchange
or market on which the Common Stock is trading) and (D) the Issuer is in
material compliance with the terms and conditions of this Warrant and the other
Loan Documents (as defined in the Purchase Agreement); provided, further, that
the Registration Statement must be effective from the date of delivery of the
Call Notice until the date which is the later of (i) the date the Holder
exercises the Warrant pursuant to the Call Notice and (ii) the 20th day after
the Holder receives the Call Notice (the "Early Termination Date"). The rights
and privileges granted pursuant to this Warrant with respect to the shares of
Warrant Stock subject to the Call Notice (the "Called Warrant Shares") shall
expire on the Early Termination Date if this Warrant is not exercised with
respect to such Called Warrant Shares prior to such Early Termination Date. In
the event this Warrant is not exercised with respect to the Called Warrant
Shares, the Issuer shall remit to the Holder of this Warrant (i) $.01 per Called
Warrant Share and (ii) a new Warrant representing the number of shares of
Warrant Stock, if any, which shall not have been subject to the Call Notice upon
the Holder tendering to the Issuer the applicable Warrant certificate.
8. Certain Exercise Restrictions.
(a) Notwithstanding anything to the contrary set forth in
this Warrant, at no time may a Holder of this Warrant exercise this Warrant if
the number of shares of Common Stock to be issued pursuant to such exercise
would cause the number of shares of Common
13
Stock owned by the Holder at such time to exceed, when aggregated with all other
shares of Common Stock owned by such Holder at such time, the number of shares
of Common Stock which would result in such Holder beneficially owning (as
determined in accordance with Section 13(d) of the Exchange Act and the rules
thereunder) in excess of 4.9% of all of the Common Stock outstanding at such
time; provided, however, that upon the Holder of this Warrant providing the
Issuer with seventy-five (75) days notice (pursuant to Section 13 hereof) (the
"Waiver Notice") that such Holder would like to waive this Section 8(a) with
regard to any or all shares of Common Stock issuable upon exercise of this
Warrant, this Section 8(a) will be of no force or effect with regard to all or a
portion of the Warrant referenced in the Waiver Notice; provided, further, that
this provision shall be of no further force or effect (i) during the
seventy-five (75) days immediately preceding the expiration of the term of this
Warrant or (ii) upon the Holder's receipt of a Call Notice.
(b) Notwithstanding anything to the contrary set forth in
this Warrant, at no time may a Holder of this Warrant exercise this Warrant if
the number of shares of Common Stock to be issued pursuant to such exercise
would cause the number of shares of Common Stock owned by the Holder at such
time to exceed, when aggregated with all other shares of Common Stock owned by
such Holder at such time, the number of shares of Common Stock which would
result in such Holder beneficially owning (as determined in accordance with
Section 13(d) of the Exchange Act and the rules thereunder) in excess of 9.9% of
all of the Common Stock outstanding at such time; provided, however, that upon a
holder of this Warrant providing the Issuer with a Waiver Notice that such
holder would like to waive this Section 8(b) with regard to any or all shares of
Common Stock issuable upon exercise of this Warrant, this Section 8(b) shall be
of no force or effect with regard to those shares of Warrant Stock referenced in
the Waiver Notice; provided, further, that this provision shall be of no further
force or effect (i) during the seventy-five (75) days immediately preceding the
expiration of the term of this Warrant or (ii) upon the Holder's receipt of a
Call Notice.
9. Definitions. For the purposes of this Warrant, the following
terms have the following meanings:
"Additional Shares of Common Stock" means all shares of
Common Stock (including Common Stock Equivalents) issued by the
Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date,
except for Permitted Issuances.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares,
interests, participations or other equivalents of or interests in
(however designated) corporate stock, including, without limitation,
shares of preferred or preference stock, (ii) all partnership
interests (whether general or limited) in any Person which is a
partnership, (iii) all membership interests or limited liability
company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Issuer as in effect on the Original Issue Date,
and as hereafter from time to time amended,
14
modified, supplemented or restated in accordance with the terms
hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, par value $.001 per
share, of the Issuer and any other Capital Stock into which such
stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or
warrant, option or other right to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Security.
"Common Stock Equivalent Consideration" has the meaning
specified in Section 4 (i) (i) hereof.
"Convertible Securities" means evidences of Indebtedness,
shares of Capital Stock or other Securities which are or may be at
any time convertible into or exchangeable for Additional Shares of
Common Stock. The term "Convertible Security" means one of the
Convertible Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Authority" means any governmental, regulatory
or self-regulatory entity, department, body, official, authority,
commission, board, agency or instrumentality, whether federal, state
or local, and whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own
any Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or
major regional investment banking firm or firm of independent
certified public accountants of recognized standing (which may be
the firm that regularly examines the financial statements of the
Issuer) that is regularly engaged in the business of appraising the
Capital Stock or assets of corporations or other entities as going
concerns, and which is not affiliated with either the Issuer or the
Holder of any Warrant.
"Issuer" means QuantRx Biomedical Corporation, a Nevada
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable
under the Warrants at the time outstanding.
"Original Issue Date" means __________, 2005.
"OTC Bulletin Board" means the over-the-counter electronic
bulletin board.
15
"Other Common" means any other Capital Stock of the Issuer of
any class which shall be authorized at any time after the date of
this Warrant (other than Common Stock) and which shall have the
right to participate in the distribution of earnings and assets of
the Issuer without limitation as to amount.
"Outstanding Common Stock" means, at any given time, the
aggregate amount of outstanding shares of Common Stock, assuming
full exercise, conversion or exchange (as applicable) of all
options, warrants and other Securities which are convertible into or
exercisable or exchangeable for, and any right to subscribe for,
shares of Common Stock that are outstanding at such time.
"Permitted Issuances" means (i) the issuance of the Warrant
Stock; (ii) issuances in connection with strategic license
agreements or other partnering arrangements so long as such
issuances are not for the exclusive purpose of raising capital;
(iii) issuances (other than for cash) in connection with a merger,
acquisition or consolidation of the Issuer or any of its
Subsidiaries; (iv) issuances in connection with a bona fide firm
underwritten public offering by the Issuer of its shares of Common
Stock; (v) issuances after the Original Issue Date by the Issuer of
Securities that result from commitments of the Issuer that are
either described in the Issuer's periodic filings with the
Securities and Exchange Commission or otherwise arose on or prior to
the date hereof; (vi) issuances after the Original Issue Date of so
many shares of Common Stock and the grant of options and warrants
after the Original Issue Date to the Issuer's officers, directors
and employees ("Issuer's Personnel" and each such issuance and grant
an "Issuance and/or Grant to Issuer Personnel"), which
(A) shares of Common Stock issued to Issuer
Personnel plus
(B) the shares of Common Stock issuable
upon the exercise of such options and warrants granted to
Issuer Personnel,
in aggregate, would not exceed 10% (the "Issuance Limit") of the
aggregate of the number of the Issuer's shares of Common Stock
(C) outstanding plus
(D) issuable upon the exercise, conversion or
exchange of all Common Stock Equivalents outstanding
(excluding, however, from this subclause D shares issuable
upon exercise of warrants and options which are more than
125% of the Per Share Market Value of the Common Stock at the
time of such Issuance and/or Grant to Issuer Personnel),
at the time the Permitted Issuance and/or Grant to Issuer Personnel
is being calculated; provided that (1) the exercise price of such
options and warrants at the time granted to Issuer Personnel shall
not be less than the then Per Share Market Value of the Common Stock
and (2) during the period from the Original Issuance Date through
the twelve-month anniversary of the Original Issuance Date, the
Issuance and/or Grant to Issuer
16
Personnel shall not in the aggregate exceed one-third of the
Issuance Limit at the time of such Issuance and/or Grant to Issuer
Personnel, and during the period from the Original Issuance Date
through the twenty-four month anniversary of the Original Issuance
Date, the Issuance and/or Grant to Issuer Personnel shall not in
aggregate exceed two-thirds of the then Issuance Limit at the time
of such Issuance and/or Grant to Issuer Personnel; (vii) common
stock or warrants to third party providers of goods or services
provided or in satisfaction of outstanding liabilities, as approved
by the Company's Board of Directors; (viii) securities issued upon
the exercise, conversion or exchange of any Common Stock Equivalents
outstanding on the Original Issue Date and shares of Common Stock
hereafter issued upon the exercise of options hereafter granted
pursuant to the Company's stock option plan as it now exists; (ix)
any warrants, shares of Common Stock or other securities issued to a
placement agent and its designees for the transactions contemplated
by the Purchase Agreement or in any other sales of the Company's
securities and any securities issued in connection with any
financial advisory agreements of the Issuer and the shares of Common
Stock issued upon exercise of any such warrants or conversion of any
such other securities and (x) any Securities issued in connection
with the Qualified Financing (as defined in the 8% Convertible
Promissory Note issued by the Issuer on the date hereof.
"Person" means an individual, corporation, limited liability
company, partnership, joint stock company, trust, unincorporated
organization, joint venture, Governmental Authority or other entity
of whatever nature.
"Per Share Market Value" means on any particular date (a) the
closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the OTC Bulletin Board or in
the National Quotation Bureau Incorporated or similar organization
or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation
Bureau Incorporated (or similar organization or agency succeeding to
its functions of reporting prices), then the average of the "Pink
Sheet" quotes for the relevant conversion period, as determined in
good faith by the holder, or (c) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock as
determined by the Board in good faith; provided, however, that the
Majority Holders, after receipt of the determination by the Board,
shall have the right to select, jointly with the Issuer, an
Independent Appraiser, in which case, the fair market value shall be
the determination by such Independent Appraiser; and provided,
further that all determinations of the Per Share Market Value shall
be appropriately adjusted for any stock dividends, stock splits or
other similar transactions during such period. The determination of
fair market value shall be based upon the fair market value of the
Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant
factors determinative of value, and shall be final and binding on
all parties. In determining the fair market value of any shares of
Common Stock, no consideration shall be given to any restrictions on
transfer of the Common Stock imposed by agreement or by federal or
state securities laws, or to the existence or absence of, or any
limitations on, voting rights.
17
"Purchase Agreement" means the Loan Letter Agreement dated as
of ___________, 2005 among the Issuer and the lenders party thereto.
"Securities" means any debt or equity securities of the
Issuer, whether now or hereafter authorized, any instrument
convertible into or exchangeable for Securities or a Security, and
any option, warrant or other right to purchase or acquire any
Security. "Security" means one of the Securities.
"Securities Act" means the Securities Act of 1933, as
amended, or any similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose
outstanding Voting Stock shall at the time be owned directly or
indirectly by the Issuer or by one or more of its Subsidiaries, or
by the Issuer and one or more of its Subsidiaries.
"Term" has the meaning specified in Section 1 hereof.
"Trading Day" means (a) a day on which the Common Stock is
traded on the OTC Bulletin Board, or (b) if the Common Stock is not
traded on the OTC Bulletin Board, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); provided, however,
that in the event that the Common Stock is not listed or quoted as
set forth in (a) or (b) hereof, then Trading Day shall mean any day
except Saturday, Sunday and any day which shall be a legal holiday
or a day on which banking institutions in the State of New York are
authorized or required by law or other government action to close.
"Voting Stock" means, as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however
designated) having ordinary voting power for the election of a
majority of the members of the Board of Directors (or other
governing body) of such corporation, other than Capital Stock having
such power only by reason of the happening of a contingency.
"Warrants" means the Warrants issued and sold pursuant to the
Purchase Agreement, including, without limitation, this Warrant, and
any other warrants of like tenor issued in substitution or exchange
for any thereof pursuant to the provisions of Section 2(c), 2(d) or
2(e) hereof or of any of such other Warrants.
"Warrant Consideration" has the meaning specified in Section
4(i)(i) hereof.
"Warrant Price" initially means U.S. $1.50, as such price may
be adjusted from time to time as shall result from the adjustments
specified in this Warrant, including Section 4 hereto.
"Warrant Share Number" means at any time the aggregate number
of shares of Warrant Stock which may at such time be purchased upon
exercise of this Warrant, after
18
giving effect to all prior adjustments and increases to such number
made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of
any Warrant or Warrants or otherwise issuable pursuant to any
Warrant or Warrants.
10. Other Notices. In case at any time:
(A) the Issuer shall make any distributions
to the holders of Common Stock; or
(B) the Issuer shall authorize the granting
to all holders of its Common Stock of rights to subscribe for
or purchase any shares of Capital Stock of any class or of
any Common Stock Equivalents or other rights; or
(C) there shall be any reclassification of
the Capital Stock of the Issuer; or
(D) there shall be any capital
reorganization by the Issuer; or
(E) there shall be any (i) consolidation or
merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's
property, assets or business (except a merger or other
reorganization in which the Issuer shall be the surviving
corporation and its shares of Capital Stock shall continue to
be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a
wholly-owned Subsidiary); or
(F) there shall be a voluntary or
involuntary dissolution, liquidation or winding-up of the
Issuer or any partial liquidation of the Issuer or
distribution to holders of Common Stock;
then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least ten (10)
days prior to the action in question and not less than ten (10) days prior to
the record date or the date on which the Issuer's transfer books are closed in
respect thereto. This Warrant entitles the Holder to receive
19
copies of all financial and other information distributed or required to be
distributed to the holders of the Common Stock.
11. Amendment and Waiver. Any term, covenant, agreement or
condition in this Warrant may be amended, or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 11 without the consent of the Holder of this Warrant.
12. Governing Law. This Warrant shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction. This Warrant
shall not be interpreted or construed with any presumption against the party
causing this Warrant to be drafted.
13. Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earlier of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice prior to 5:00 p.m., eastern
time, on a Trading Day, (ii) the Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice later than 5:00 p.m., eastern time, on any
date and earlier than 11:59 p.m., eastern time, on such date, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service or (iv) actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be with
respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
QuantRx Biomedical Corporation
000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxxxxx
Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.
14. Warrant Agent. The Issuer may, by written notice to each
Holder of this Warrant, appoint an agent having an office in New York, New York
for the purpose of issuing shares of Warrant Stock on the exercise of this
Warrant pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant
pursuant to subsection (d) of Section 2 hereof or replacing this Warrant
pursuant to subsection (d) of Section 3 hereof, or any of the foregoing, and
thereafter any such
20
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.
15. Remedies. The Issuer stipulates that the remedies at law of
the Holder of this Warrant in the event of any default or threatened default by
the Issuer in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
16. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock.
17. Modification and Severability. If, in any action before any
court or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
18. Headings. The headings of the Sections of this Warrant are
for convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
19. No Rights of Stockholder. The Holder shall not have, solely
on account of such status, any rights of a stockholder of the Issuer, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Issuer, except as provided in this Warrant.
21
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the
day and year first above written.
QUANTRX BIOMEDICAL CORPORATION
By:
------------------------------------
Name:
Title:
22
EXERCISE FORM
WARRANT
QUANTRX BIOMEDICAL CORPORATION
The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of QuantRx
Biomedical Corporation covered by the within Warrant.
Dated: Signature
----------------- ----------------------------------
Address
---------------------
---------------------
Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise determined in accordance with Section 16
of the Securities Exchange Act of 1934, as amended:
-------------------------
ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.
Dated: Signature
----------------- ----------------------------------
Address
---------------------
---------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.
Dated: Signature
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Address
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FOR USE BY THE ISSUER ONLY:
23
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.
