Form of Warrant
Exhibit 4.4
Form of Warrant
THIS WARRANT AND ANY SECURITIES TO BE ISSUED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS. THE
WARRANT AND SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND THE LAWS OF ANY APPLICABLE STATE OR OTHER
JURISDICTION, OR AN EXEMPTION THEREFROM, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
| No. W-[_____] | , 200_____ |
WARRANT TO PURCHASE SHARES OF COMMON STOCK
of
CHROMADEX, INC.
of
CHROMADEX, INC.
This certifies that, for value received, [ ], or its registered
assigns (“Holder”), is entitled, subject to the terms set forth below, to purchase from
ChromaDex, Inc., a California corporation (the “Company”), shares (the “Warrant
Shares”) of Common Stock, no par value per share, of the Company (“Common Stock”),
subject to adjustment as set forth herein, at an exercise price (the “Exercise Price”) of
$3.00 per Warrant Share, subject to adjustment as set forth herein. This Warrant is one of a
number of similar Warrants being issued by the Company in connection with the Company’s offering of
up to 4,411,764 shares of Common Stock and Warrants to purchase an additional 2,205,882 shares of
Common Stock pursuant to the terms of the Company’s Confidential Private Placement Memorandum dated
December 18, 2007 (the “PPM”), together with the business plan of the Company, a copy of
which is attached to the PPM as Appendix A.
1. Term of Warrant. Subject to the terms and conditions set forth herein, this
Warrant shall only be exercisable, in whole or in part, during the period (the “Exercise
Period”) beginning on the date hereof (the “Effective Date”) and ending on the fifth
anniversary of the Effective Date.
2. Exercise of Warrant.
a. Subject to the terms and conditions set forth herein, the purchase rights represented by
this Warrant are exercisable by the Holder in whole or in part, at any time, or from time to time,
during the Exercise Period, by the surrender of this Warrant and a notice of exercise in the form
attached hereto as Annex A (the “Notice of Exercise”) duly completed and executed
by or on behalf of the Holder, at the principal executive office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the Holder), and upon
payment of the Exercise Price for each of the Warrant Shares to be issued pursuant to such exercise
(i) in cash or other immediately available funds or (ii) by a cashless exercise in accordance with
Section 2(c). This Warrant may not be exercised for less than 500 Warrant Shares at a time (or
such lesser number of Warrant Shares which may then constitute the maximum number purchasable
pursuant to this Warrant); such number being subject to adjustment for stock splits, stock
dividends, mergers, reclassifications, recapitalizations and the like, occurring on or after the
date hereof.
b. This Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the person entitled to
receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the
holder of record of such Warrant Shares as of the close of business on such date. As promptly as
practicable on or after such date and in any event within 20 days thereafter, the Company at its
expense shall issue and deliver to the person or persons entitled to receive the same a certificate
or certificates for the number of Warrant Shares issuable upon such exercise. In the event that
this Warrant is exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of Warrant Shares for which this Warrant may then
be exercised.
c. Notwithstanding any provisions herein to the contrary, in lieu of exercising this Warrant
through the payment of the Exercise Price with cash or other immediately available funds, the
Holder may elect to receive Warrant Shares with a value equal to the value (as determined below) of
this Warrant (or the portion thereof being exercised) by surrender of this Warrant together with
the properly endorsed Notice of Exercise and notice of such election in which event the Company
shall issue to the Holder a number of Warrant Shares computed using the following formula:
| X = | Y (A-B) A |
|||||
| Where | X = | the number of Warrant Shares to be issued
to the Holder |
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| Y = | the number of Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised | |||||
| A = | the fair market value of one Warrant Share (at the date of such calculation) | |||||
| B = | Exercise Price |
For purposes of the above calculation, the fair market value of one Warrant Share shall mean, if
the Common Stock is traded on a national securities exchange, the Nasdaq Market System or the
over-the-counter market, the average of the last reported sales price on the trading day
immediately preceding the date of valuation at which the Common Stock has traded on such national
securities exchange, the Nasdaq Market System or the average of the bid and asked prices on the
over-the-counter market on the date of valuation. If the Common Stock is not publicly traded, the
fair market value per Warrant Share shall be determined by the Board of Directors of the Company
based upon the fair market value of the Warrant Share if the Company were to be sold as a going
concern and without regard to any discount for the lack of liquidity or on the basis that the
relevant securities do not constitute a majority or controlling interest in the Company.
3. No Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing
fractional Warrant Shares shall be issued upon the exercise of this Warrant. In lieu of any
fractional Warrant Shares to which the Holder would otherwise be entitled, the Company shall make a
cash payment equal to the fair market value (as defined above) of one Warrant Share multiplied by
such fraction.
4. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, the Company at its expense
shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.
5. Rights as Shareholders. The Holder, as a holder of this Warrant, shall not be
deemed the holder of Warrant Shares for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have
been exercised as provided herein.
6. Transfer of Warrant.
a. Warrant Register. The Company will maintain a register (the “Warrant
Register”) containing the names and addresses of the Holder or Holders. Any Holder of this
Warrant or any portion thereof may change its address as shown on the Warrant Register by written
notice to the Company requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to such Holder as shown on
the Warrant Register and at the address shown on the Warrant Register. Until this Warrant is
transferred on the Warrant Register of the Company, the Company may treat the Holder as shown on
the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any
notice to the contrary.
b. Transferability and Nonnegotiability of Warrant. This Warrant may not be
transferred or assigned in whole or in part without compliance with (i) Section 4 (Right of First
Refusal) of the Subscription Agreement dated , 200_____, by and between Holder and the
Company, and (ii) all applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, if such are requested by the Company). Subject to such
compliance, title to this Warrant may be transferred by endorsement by the Holder executing the
assignment form attached hereto as Annex B (the “Assignment Form”) and delivery in
the same manner as a negotiable instrument transferable by endorsement and delivery.
c. Exchange of Warrant Upon a Transfer. Upon surrender of this Warrant for exchange,
properly endorsed on the Assignment Form and subject to compliance with the other provisions of
this Section 6, the Company at its expense shall issue to or on the order of the transferee a new
warrant or warrants of like tenor, in the name of the transferee or as the transferee may direct,
for the number of Warrant Shares then issuable upon exercise hereof.
7. Reservation of Shares. The Company covenants that, during the term this Warrant is
exercisable, the Company will reserve from its authorized and unissued shares of Common Stock a
sufficient number of shares of Common Stock to provide for the issuance of all Warrant Shares
issuable upon the exercise of this Warrant and, from time to time, will take all steps necessary to
provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant. The
Company further covenants that all Warrant Shares that may be issued upon the exercise of rights
represented by this Warrant and payment of the Exercise Price pursuant to Section 2(a)(i) or
Section 2(a)(ii), all as set forth herein, will be fully paid, nonassessable, free of preemptive
rights (other than preemptive rights which have been waived) and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for Warrant Shares upon the
exercise of this Warrant.
8. Adjustment of Exercise Price and Number of Shares. The Exercise Price and
the number of Warrant Shares purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in this Section 8.
Upon each adjustment to the Exercise Price, the Holder shall thereafter be entitled to purchase, at
the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the
product thereof by the Exercise Price resulting from such adjustment.
a. In case the Company shall at any time subdivide its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding shares of Common Stock of
the Company shall be combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased.
b. If at any time or from time to time the holders of Common Stock shall have received or
become entitled to receive, without further payment therefor,
(i) shares of Common Stock or any shares of capital stock or other securities which are
at any time directly or indirectly convertible into or exchangeable for Common Stock, or any
rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by
way of dividend or other distribution,
(ii) any cash paid or payable otherwise than as a cash dividend, or
(iii) shares of Common Stock or additional stock or other securities or other property
(including cash) by way of spinoff, split-up, merger, reclassification, recapitalization,
combination of shares or similar corporate rearrangement (other than shares of Common Stock
issued as a stock split or adjustments in respect of which shall be covered by the terms of
Section 8(a)),
then and in each such case, the Holder hereof shall, upon the exercise of this Warrant, be entitled
to receive, in addition to the number of shares of Common Stock receivable thereupon, and without
payment of any additional consideration therefor, the amount of shares, capital stock, securities
and other property (including cash in the cases referred to in clauses (ii) and (iii) above) which
such Holder would hold on the date of such exercise had Holder been the holder of record of such
Common Stock as of the date on which holders of Common Stock received or became entitled to receive
such shares, capital stock, securities and other property.
c. If any change in the outstanding Common Stock of the Company or any other event occurs as
to which the other provisions of this Section 8 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Holder in accordance with such
provisions, then the Board of Directors of the Company shall make an adjustment in the number and
class of shares issuable under the Warrant, the Exercise Price or the application of such
provisions, so as to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder upon exercise for the same aggregate Exercise Price the total number, class
and kind of shares, capital stock, securities and other property as he would have owned had the
Warrant been exercised for Warrant Shares prior to the event and had he continued to hold such
Warrant Shares until after the event requiring adjustment.
9. The Company’s Repurchase/Cancellation Rights.
a. Repurchase of Warrant Shares. At any time during the period commencing on the date
of Holder’s exercise, whether in whole or in part, of its purchase rights under this Warrant and
ending on the fifth anniversary of the Effective Date (the “Repurchase Period”), the
Company shall have the right, but not the obligation, to purchase and acquire from Holder any or
all of the Warrant Shares so purchased by Holder (the “Outstanding Warrant Shares”) at a
price per Outstanding Warrant Share equal to $4.50 per share (the “Repurchase Price”). The Company may exercise the right granted to it under this Section 9(a) by delivering a written
notice to Holder at any time during the Repurchase Period stating that the Company is exercising
the repurchase right granted to it under this Section 9(a), the number of Outstanding Warrant
Shares to be so repurchased by the Company (the “Repurchased Warrant Shares”), and the
total repurchase price for the Repurchased Warrant Shares. The delivery of such notice by the
Company to Holder shall constitute a binding commitment of the Company to purchase and acquire all
of the Repurchased Warrant Shares for such total repurchase price. The total repurchase price for
the Repurchased Warrant Shares shall be delivered to Holder against delivery by Holder of
certificate(s) evidencing the Repurchased Warrant Shares no later than 30 days after the Company’s
delivery to Holder of the repurchase notice. If the Company does not repurchase all of the
Outstanding Warrant Shares subject to the stock certificate delivered by Holder, then, concurrently
with its delivery of the total repurchase price to Holder, the Company shall also execute and
deliver to Holder a new certificate for the balance of such Outstanding Warrant Shares.
b. Cancellation of Warrant Rights. At any time during the period commencing on the
six-month anniversary of the Effective Date and ending on the fifth anniversary of the Effective
Date (the “Cancellation Period”), the Company shall have the right, but not the obligation,
to terminate and cancel Holder’s purchase rights under this Warrant, whether in whole or in part
(in each case, a “Cancellation”), in consideration of the Company’s payment and delivery to
Holder of cash in the amount of $1.50 (i.e., $4.50 less $3.00) multiplied by the number of Warrant
Shares subject to such Cancellation. The Company may exercise the Cancellation right granted to it
under this Section 9(b) by delivering a written notice to Holder during the Cancellation Period
stating that the Company is exercising its right to Cancellation granted to it under this Section
9(b), and the stating the number of Warrant Shares to be subject to such Cancellation. The
delivery of such notice by the Company to Holder shall constitute a binding commitment of the
Company to terminate and cancel such purchase rights of Holder under this Warrant for the total
cancellation price. The total cancellation price for the Cancellation shall be delivered to Holder
against delivery by Holder of this Warrant no later than 30 days after the Company’s delivery to
Holder of the cancellation notice. If the Cancellation does not terminate and cancel all of
Holder’s purchase rights under this Warrant, then, concurrently with its delivery of the total
cancellation price to Holder, the Company shall also execute and deliver a new warrant of the same
terms and conditions of this Warrant for the remaining Warrant Shares then subject to exercise
under this Warrant.
10. Notices. In case:
a. the Company shall take a record of the holders of its shares of Common Stock for the
purpose of entitling them to receive any dividend or other distribution, or any right to subscribe
for or purchase any shares of any class or any other securities, or to receive any other right, or
b. of any capital reorganization of the Company, any reclassification of the capital stock of
the Company, any consolidation or merger of the Company with or into another entity, or any
conveyance of all or substantially all of the assets of the Company to another corporation, or
c. of any actual or “deemed” liquidation, dissolution or winding up of the Company, including,
without limitation, any of the following transactions: (A) the acquisition of the Company by
another entity by means of any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation) that results in the transfer of 50% or
more of the outstanding voting power of the Company; or (B) a sale of all or substantially all of
the assets of the Company (each, a “Liquidation Event”), or
d. of any sale of the Common Stock in an underwritten public offering pursuant to a
registration statement on Form
S-1 or Form SB 2 or any comparable successor form then in effect
under the Securities Act of 1933, as amended (a “Initial Public Offering”),
then, and in each such case, the Company will mail or cause to be mailed to the Holder or Holders a
notice specifying, as the case may be, (A) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (B) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, Liquidation Event or the Initial Public Offering is to take
place, and the time, if any is to be fixed, as of which the holders of record of shares of Common
Stock shall be entitled to exchange their Warrant Shares for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, Liquidation Event or the Initial Public Offering. Such notice shall be mailed at
least 30 days prior to the date therein specified.
11. Amendments. This Warrant and any term hereof, may be changed, waived, discharged
or terminated only by an instrument signed by the Company and the Holder. No waivers of, or
exceptions to, any term, condition or provisions of this Warrant, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition
or provision.
12. Miscellaneous.
a. This Warrant shall be governed by and construed in accordance with the laws of the State of
California, without reference to the conflict of law principles thereof.
b. This Warrant shall bind the Company, its successors and assigns, and shall benefit and bind
the Holder, the Holder’s successors and permitted assigns.
c. The Section headings in this Warrant have been included solely for ease of reference and
shall not be considered in the interpretation or construction of this Warrant. All references in
this Warrant to “Sections” shall be construed as references to numbered Sections of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and issued by its duly
authorized representative on the date first above written.
| THE “COMPANY”: | ||||||
| CHROMADEX, INC., a California corporation |
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| By: | ||||||
| Its: | ||||||
[Remainder of Page Intentionally Left Blank – Holder’s Signature Page Follows]
HOLDER’S COUNTERPART SIGNATURE PAGE
TO
WARRANT
TO
WARRANT
The undersigned Holder agrees to be bound by the terms of the Warrant of ChromaDex, Inc., a
California corporation, executed by the Company in favor of the undersigned Holder, and agrees to
all of the terms thereof.
FOR HOLDERS THAT ARE INDIVIDUALS:
Date:
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Signature: | |||||||
| Name (please print): | ||||||||
FOR HOLDERS THAT ARE TRUSTS:
Date: |
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| Name of Trust: | ||||||||||
| Signature of Trustee |
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| If applicable: | ||||||||||
| Signature of Co-Trustee |
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FOR HOLDERS THAT ARE CORPORATIONS, LIMITED LIABILITY COMPANIES OR PARTNERSHIPS:
Date: |
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| Name of Entity: | ||||||||||
| Signature: |
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| Title of Signatory: |
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Annex A
NOTICE OF EXERCISE
To: ChromaDex, Inc.
(1) The undersigned hereby (A) elects to purchase
_____
shares of Common Stock of ChromaDex,
Inc. pursuant to the provisions of Section 2(a) of the attached Warrant, and tenders herewith
payment of the purchase price for such shares in full, or (B) elects to exercise this Warrant for
the purchase of
_____
shares of Common Stock, pursuant to the provisions of Section 2(c) of the
attached Warrant.
(2) In exercising this Warrant, the undersigned hereby confirms and acknowledges that the
Warrant Shares to be issued upon exercise hereof are being acquired solely for the account of the
undersigned and not as a nominee for any other party, and for investment, and that the undersigned
will not offer, sell or otherwise dispose of any such Warrant Shares except under circumstances
that will not result in a violation of applicable federal and state securities laws.
(3) Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:
(4) Please issue a new Warrant for the unexercised portion of the attached Warrant in the name
of the undersigned or in such other name as is specified below:
(Date)
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(Signature) |
Annex B
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned under the within
Warrant, with respect to the number of Warrant Shares set forth below:
| Name of Assignee | Address | No. of Warrant Shares | ||
The Assignee acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired for investment and that the Assignee will not offer, sell or otherwise
dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under
circumstances which will not result in a violation of applicable federal and state securities laws.
Date:
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