WARRANT Original Issue Date: April ___, 2008
EXHIBIT 10.10
WARRANT
Original
Issue Date: April ___, 2008
THIS
CERTIFIES THAT, FOR VALUE RECEIVED, ________ or its registered
assigns (“Holder”) is
entitled to purchase from In
Veritas Medical Diagnostics, Inc. (the “Company”), on the terms and
conditions hereinafter set forth, at any time or from time to time from the date
hereof until 5:00 p.m., Eastern Time, on the seventh anniversary of the Original
Issue Date set forth above, or if such date is not a day on which the Company
(as hereinafter defined) is open for business, then the next succeeding day on
which the Company is open for business (such date is the “Expiration Date”), but not
thereafter, to purchase up to ___________ shares of the Common Stock, par value
$.001 per share (the “Common
Stock”), of the Company, at a purchase price of $0.02 per share (the
“Exercise Price”), such
number of shares and Exercise Price being subject to adjustment upon the
occurrence of the contingencies set forth in this Warrant. Each share
of Common Stock as to which this Warrant is exercisable is a “Warrant Share” and all such
shares are collectively referred to as the “Warrant
Shares.”
Section Exercise
of Warrant; Conversion of Warrant.
(a) This
Warrant may, at the option of Holder, be exercised in whole or in part from time
to time by delivery to the Company on or before 5:00 p.m., Eastern Time, on the
Expiration Date, (i) a written notice of such Holder's election to exercise
this Warrant (the “Exercise
Notice”), which notice may be in the form of the Notice of Exercise
attached hereto, properly executed and completed by Holder or an authorized
officer thereof, and (ii) payment for the Warrant Shares (“Payment”), as
further described in Section 1(b), below (the items specified in (i) and (ii)
are collectively referred to as the “Exercise
Materials”).
(b) Payment
may be made, at the option of Holder, by check payable to the order of the
Company or wire transfer, in an amount equal to the product of the Exercise
Price multiplied
by the number of Warrant Shares specified in the Exercise
Notice.
(c) Notwithstanding
any provisions herein to the contrary, if the Fair Market Value (as defined
below) of one share of Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below), to the extent the Holder does not elect
to pay cash or by promissory note upon the deemed exercise of this Warrant, the
Holder shall be deemed to have elected to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being cancelled) in
which event the Company shall issue to the holder a number of shares of Common
Stock computed using the following formula:
X=Y (A-B)
A
1
Where X= the
number of shares of Common Stock to be issued to the holder
|
|
Y=
|
the
number of shares of Common Stock deemed purchased under the Warrant for
which the Holder is not paying cash
|
|
|
A=
|
the
Fair Market Value of one share of the Company’s Common Stock (at the date
of such calculation)
|
|
|
B=
|
Purchase
Price (as adjusted to the date of such
calculation)
|
For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, subject to
applicable interpretations of the Securities and Exchange Commission, that the
Warrant Shares issued in a cashless exercise transaction shall be deemed to have
been acquired by the Holder, and the holding period for the Warrant Shares shall
be deemed to have commenced, on the date this Warrant was originally
issued.
(c) Fair
Market Value of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(i) If
the Company's Common Stock is traded on an exchange or is quoted on the National
Association of Securities Dealers, Inc. Automated Quotation ("Nasdaq") National
Market System, the Nasdaq SmallCap Market or the American Stock Exchange, Inc.,
then the closing or last sale price, respectively, reported for the last
business day immediately preceding the Determination Date;
(ii) If
the Company's Common Stock is not traded on an exchange or on the Nasdaq
National Market System, the Nasdaq SmallCap Market or the American Stock
Exchange, Inc., but is traded in the over-the-counter market, then the average
of the closing bid and ask prices reported for the last business day immediately
preceding the Determination Date;
(iii) Except
as provided in clause (iv) below, if the Company's Common Stock is not
publicly traded, then as the Holder and the Company agree, or in the absence of
such an agreement, by arbitration in accordance with the rules then standing of
the American Arbitration Association, before a single arbitrator to be chosen
from a panel of persons qualified by education and training to pass on the
matter to be decided; or
(iv) If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's articles of incorporation , then all amounts to be payable per
share to holders of the Common Stock pursuant to the articles of incorporation
in the event of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in liquidation
under the articles of incorporation , assuming for the purposes of this clause
(iv) that all of the shares of Common Stock then issuable upon exercise of
all of the Warrants are outstanding at the Determination Date.
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(d) As
promptly as practicable after its receipt of the Exercise Materials, Company
shall execute or cause to be executed and delivered to Holder a certificate or
certificates representing the number of Warrant Shares specified in the Exercise
Notice, together with cash in lieu of any fraction of a share, and if this
Warrant is partially exercised, a new warrant on the same terms for the
unexercised balance of the Warrant Shares. The stock certificate or
certificates shall be registered in the name of Holder or such other name or
names as shall be designated in the Exercise Notice. The date on
which the Warrant shall be deemed to have been exercised (the “Effective Date”), and the date
the person in whose name any certificate evidencing the Common Stock issued upon
the exercise hereof is issued shall be deemed to have become the holder of
record of such shares, shall be the date the Company receives the Exercise
Materials, irrespective of the date of delivery of a certificate or certificates
evidencing the Common Stock issued upon the exercise or conversion hereof, provided, however, that if the
Exercise Materials are received by the Company on a date on which the stock
transfer books of the Company are closed, the Effective Date shall be the next
succeeding date on which the stock transfer books are open. All shares of
Common Stock issued upon the exercise or conversion of this Warrant will, upon
issuance, be fully paid and nonassessable and free from all taxes, liens, and
charges with respect thereto.
Section
2. Adjustments
to Warrant Shares.
The
number of Warrant Shares issuable upon the exercise hereof shall be subject to
adjustment as follows:
(a) In
the event the Company is a party to a consolidation, share exchange, or merger,
or the sale of all or substantially all of the assets of the Company to, any
person, or in the case of any consolidation or merger of another corporation
into the Company in which the Company is the surviving corporation, and in which
there is a reclassification or change of the shares of Common Stock of the
Company, this Warrant shall after such consolidation, share exchange, merger, or
sale be exercisable for the kind and number of securities or amount and kind of
property of the Company or the corporation or other entity resulting from such
share exchange, merger, or consolidation, or to which such sale shall be made,
as the case may be (the “Successor Company”), to which
a holder of the number of shares of Common Stock deliverable upon the exercise
(immediately prior to the time of such consolidation, share exchange, merger, or
sale) of this Warrant would have been entitled upon such consolidation, share
exchange, merger, or sale; and in any such case appropriate adjustments shall be
made in the application of the provisions set forth herein with respect to the
rights and interests of Holder, such that the provisions set forth herein shall
thereafter correspondingly be made applicable, as nearly as may reasonably be,
in relation to the number and kind of securities or the type and amount of
property thereafter deliverable upon the exercise of this Warrant. The
above provisions shall similarly apply to successive consolidations, share
exchanges, mergers, and sales. Any adjustment required by this Section 2
(a) because of a consolidation, share exchange, merger, or sale shall be set
forth in an undertaking delivered to Holder and executed by the Successor
Company which provides that Holder shall have the right to exercise this Warrant
for the kind and number of securities or amount and kind of property of the
Successor Company or to which the holder of a number of shares of Common Stock
deliverable upon exercise (immediately prior to the time of such consolidation,
share exchange, merger, or sale) of this Warrant would have been entitled upon
such consolidation, share exchange, merger, or sale. Such undertaking
shall also provide for future adjustments to the number of Warrant Shares and
the Exercise Price in accordance with the provisions set forth in Section 2
hereof.
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(b) In
the event the Company should at any time, or from time to time after the
Original Issue Date, fix a record date for the effectuation of a stock split or
subdivision of the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock, or securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”)
without payment of any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the additional shares of
Common Stock issuable upon exercise or exercise thereof), then, as of such
record date (or the date of such dividend, distribution, split, or subdivision
if no record date is fixed), the number of Warrant Shares issuable upon the
exercise hereof shall be proportionately increased and the Exercise Price shall
be appropriately decreased by the same proportion as the increase in the number
of outstanding Common Stock Equivalents of the Company resulting from the
dividend, distribution, split, or subdivision. Notwithstanding the
preceding sentence, no adjustment shall be made to decrease the Exercise Price
below $.001 per Share.
(c) In
the event the Company should at any time or from time to time after the Original
Issue Date, fix a record date for the effectuation of a reverse stock split, or
a transaction having a similar effect on the number of outstanding shares of
Common Stock of the Company, then, as of such record date (or the date of such
reverse stock split or similar transaction if no record date is fixed), the
number of Warrant Shares issuable upon the exercise hereof shall be
proportionately decreased and the Exercise Price shall be appropriately
increased by the same proportion as the decrease of the number of outstanding
Common Stock Equivalents resulting from the reverse stock split or similar
transaction.
(d) In
the event the Company should at any time or from time to time after the Original
Issue Date, fix a record date for a reclassification of its Common Stock, then,
as of such record date (or the date of the reclassification if no record date is
set), this Warrant shall thereafter be convertible into such number and kind of
securities as would have been issuable as the result of such reclassification to
a holder of a number of shares of Common Stock equal to the number of Warrant
Shares issuable upon exercise of this Warrant immediately prior to such
reclassification, and the Exercise Price shall be unchanged.
(e) The
Company will not, by amendment of its Certificate of Incorporation or through
reorganization, consolidation, merger, dissolution, issue, or sale of
securities, sale of assets or any other voluntary action, void or seek to avoid
the observance or performance of any of the terms of the 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 in order to
protect the rights of Holder against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (x) will not create a par
value of any share of stock receivable upon the exercise of the Warrant above
the amount payable therefor upon such exercise, and (y) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares upon the exercise of the
Warrant.
(f) When
any adjustment is required to be made in the number or kind of shares
purchasable upon exercise of the Warrant, or in the Exercise Price, the Company
shall promptly notify Holder of such event and of the number of shares of Common
Stock or other securities or property thereafter purchasable upon exercise of
the Warrants and of the Exercise Price, together with the computation resulting
in such adjustment.
(g) The
Company covenants and agrees that all Warrant Shares which may be issued will,
upon issuance, be validly issued, fully paid, and non-assessable. The
Company further covenants and agrees that the Company will at all times have
authorized and reserved, free from preemptive rights, a sufficient number of
shares of its Common Stock to provide for the exercise of the Warrant in
full.
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Section
3. No
Stockholder Rights.
This
Warrant alone shall not entitle Holder hereof to any voting rights or other
rights as a stockholder of the Company.
Section
4. Transfer
of Securities.
(a) This
Warrant and the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification
thereof, a stock dividend thereon, or otherwise, shall not be transferable
except upon compliance with the provisions of the Securities Act of 1933, as
amended (the “Securities
Act”) and applicable state securities laws with respect to the transfer
of such securities. The Holder, by acceptance of this Warrant, agrees to
be bound by the provisions of Section 4 hereof and to indemnify and hold
harmless the Company against any loss or liability arising from the disposition
of this Warrant or the Warrant Shares issuable upon exercise hereof or any
interest in either thereof in violation of the provisions of this
Warrant.
(b) Each
certificate for the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification
thereof, a stock dividend thereon or otherwise, and each certificate for any
such securities issued to subsequent transferees of any such certificate shall
(unless otherwise permitted by the provisions hereof) be stamped or otherwise
imprinted with a legend in substantially the following form:
“NEITHER
THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW AND NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED UNTIL
(I) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE
STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR
(II) THE COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES
ACT AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER.”
Section
5.
Miscellaneous.
(a) The
terms of this Warrant shall be binding upon and shall inure to the benefit of
any successors or permitted assigns of Holder.
(b) Except
as otherwise provided herein, this Warrant and all rights hereunder are
transferable by the registered holder hereof in person or by duly authorized
attorney on the books of the Company upon surrender of this Warrant, properly
endorsed, to the Company. The Company may deem and treat the registered
holder of this Warrant at any time as the absolute owner hereof for all purposes
and shall not be affected by any notice to the contrary.
(c) Notwithstanding
any provision herein to the contrary, Holder may not exercise, sell, transfer,
or otherwise assign this Warrant unless the Company is provided with an opinion
of counsel satisfactory in form and substance to the Company, to the effect that
such exercise, sale, transfer, or assignment would not violate the Securities
Act or applicable state securities laws.
(d) This
Warrant may be divided into separate warrants covering one share of Common Stock
or any whole multiple thereof, for the total number of shares of Common Stock
then subject to this Warrant at any time, or from time to time, upon the request
of the registered holder of this Warrant and the surrender of the same to the
Company for such purpose. Such subdivided Warrants shall be issued
promptly by the Company following any such request and shall be of the same form
and tenor as this Warrant, except for any requested change in the name of the
registered holder stated herein.
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(e) Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Warrant must be in writing and will be deemed to
have been delivered (a) upon receipt, when delivered personally, (b) upon
receipt, when sent by facsimile, provided a
copy is mailed by U.S. certified mail, return receipt requested, (c) three (3)
days after being sent by U.S. certified mail, return receipt requested, or (d)
one (1) day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the
same.
Notice to Holder shall be
provided to the registered address of Holder appearing on the books
of the Company. Each party shall provide five (5) days prior written
notice to the other party of any change in address, which change shall not be
effective until actual receipt thereof
(f) The
corporate laws of the State of Colorado shall govern all issues concerning the
relative rights of the Company and its stockholders. All other
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by the internal laws of the State of Colorado,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Colorado or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Colorado. If any provision of this Warrant shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Warrant in that
jurisdiction or the validity or enforceability of any provision of this Warrant
in any other jurisdiction.
[Signatures
on the following page]
6
SIGNATURE
PAGE
TO
WARRANT
IN
WITNESS WHEREOF, In Veritas Medical Diagnostics, Inc. has caused this Warrant to
be executed and to be dated as of the date first above written.
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ASSIGNMENT
(To be
Executed by the Registered Holder to effect a Transfer of the foregoing
Warrant)
FOR VALUE
RECEIVED, the undersigned hereby sells, and assigns and transfers unto
___________________________________________________________________________ the
foregoing Warrant and the rights represented thereto to purchase shares of
Common Stock of In Veritas Medical Diagnostics, Xxx.xx accordance with terms and
conditions thereof, and does hereby irrevocably constitute and appoint
________________ Attorney to transfer the said Warrant on the books of the
Company, with full power of substitution.
Holder:
Address
Dated:
__________________, 20__
8
EXERCISE
OR CONVERSION NOTICE
[To be
signed only upon exercise of Warrant]
CC: Escrow
Agent
The
undersigned Holder of the attached Warrant hereby irrevocably elects to exercise
the Warrant for, and to purchase thereunder, _____ shares of Common Stock of In
Veritas Medical Diagnostics, Inc. issuable upon exercise of said Warrant and
hereby surrenders said Warrant.
The
undersigned herewith requests that the certificates for such shares be issued in
the name of, and delivered to the undersigned, whose address is
________________________________.
If
electronic book entry transfer, complete the following:
Account
Number:
Transaction
Code
Number:
Dated:
___________________
Holder:
____________________________________
____________________________________
By:
Name:
Title:
NOTICE
The
signature above must correspond to the name as written upon the face of the
within Warrant in every particular, without alteration or enlargement or any
change whatsoever.
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