Exhibit 10.11
Warrant dated as of August 11, 2004 between Enhance Biotech, Inc. and
Bioaccelerate, Inc.
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ( THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (1) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH LAWS, OR (2)
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS IS
AVAILABLE AND THE COMPANY HAS RECEIVED EITHER AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR OTHER
EVIDENCE THAT IS SATISFACTORY TO THE COMPANY, WHICH EVIDENCE ESTABLISHES THAT
ANY SUCH DISPOSITION WILL NOT VIOLATE THE SECURITIES ACT, SUCH LAWS OR ANY RULE
OR REGULATION PROMULGATED THEREUNDER.
Warrant No.______
Warrant to Purchase
1,500,000 Shares of Common Stock
of Enhance Biotech, Inc.
Exercisable on or before
5:00 P.M, Eastern Standard Time, August 10, 2009
FOR VALUE RECEIVED, ENHANCE BIOTECH, INC., a corporation organized and
existing under the laws of the State of Delaware (the "Company"), promises to
issue in the name of, and sell and deliver to Bioaccelerate, Inc or its
registered assigns (in each case, the "Holder"), a certificate or certificates
for an aggregate of One Million, Five hundred thousand, (1,500,000) shares (the
"Warrant Shares") of the Company's common stock upon compliance with the terms
of this warrant (the "Warrant") and payment therefor of the exercise price of
$3.00 per Warrant Share (the "Exercise Price"). The number of Warrant Shares and
the Exercise Price shall be adjusted from time to time as set forth below. This
Warrant shall be exercisable upon execution and at any time prior to 5:00 p.m.,
Eastern Standard Time, on August 10, 2009_ (the "Exercise Period") and shall be
void thereafter. This Warrant is also subject to the following terms and
conditions.
1. EXERCISE OF WARRANT.
(a) General Method of Exercise. This Warrant may be exercised in
whole or in part at any time during the Exercise Period by delivery to the
Company's principal office (or such other office as the Company may designate by
written notice to the Holder), not later than two (2) business days before the
date on which this Warrant is to be exercised (the "Exercise Date"), of all of
the following:
(i) a Form of Exercise Notice (the "Form of Exercise") annexed
hereto, duly executed by the Holder and setting forth (A) the Exercise Date, (B)
the number of Warrant Shares as to which this Warrant is to be exercised on the
Exercise Date;
(ii) either cash, a certified or official bank check payable
to the Company in funds immediately available on the Exercise Date or a wire
transfer for the account of the Company, in an amount equal to the Exercise
Price multiplied by the number of Warrant Shares of the Company's common stock
as to which this Warrant is to be exercised on the Exercise Date; and
(iii) this Warrant.
(b) Issuance of Certificates and New Warrant. Within a reasonable
time not in excess of twenty (20) days after the Exercise Date, the Company
shall deliver to the Holder:
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(i) a certificate for the number of shares of the Company's
common stock such Holder elected to purchase on the Exercise Date; or
(ii) if this Warrant was not exercised in full, a new Warrant
of like tenor in the name of the Holder evidencing the right to purchase the
number of Warrant Shares as to which this Warrant has not been exercised, both
of which shall be delivered to the Holder at the address designated in the Form
of Exercise. Any new Warrant shall be dated with this Warrant's original issue
date.
Any certificates so delivered shall be in such denominations as may be
requested by the Holder hereof, shall be registered in the name of such
Holder and shall bear a restrictive legend if not registered.
2. ADJUSTMENTS.
(a) Subdivision or Combination of Shares. If the Company is
recapitalized through the subdivision or combination of its outstanding shares
of common stock into a larger or smaller number of shares, the number of Warrant
Shares shall be increased or reduced, as of the record date for such
recapitalization, in the same proportion as the increase or decrease in the
outstanding shares of common stock, and the Exercise Price shall be adjusted so
that the aggregate amount payable for the purchase of all of the Warrant Shares
issuable hereunder immediately after the record date for such recapitalization
shall equal the aggregate amount so payable immediately before such record date.
(b) Dividends in Common Stock or Securities Convertible into Common
Stock. If the Company declares a dividend or distribution on common stock
payable in common stock or securities convertible into common stock, the number
of shares of common stock for which this Warrant may be exercised shall be
increased, as of the record date for determining which holders of common stock
shall be entitled to receive such dividend, in proportion to the increase in the
number of outstanding shares (and shares of common stock issuable upon
conversion of all such securities convertible into common stock) of common stock
as a result of such dividend or distribution, and the Exercise Price shall be
adjusted so that the aggregate amount payable for the purchase of all the
Warrant Shares issuable hereunder immediately after the record date for such
dividend or distribution shall equal the aggregate amount so payable immediately
before such record date.
(c) Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of the Warrant or the Exercise Price of the
Warrant Shares is adjusted as provided herein, the Company shall mail to the
Holder a notice of such adjustment or adjustments, prepared and signed by the
Chief Executive Officer, Chief Financial Officer or Secretary of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
the Warrant and the Exercise Price of such Warrant Shares after such adjustment,
a brief statement of the facts requiring such adjustment, and the computation by
which such adjustment was made. Upon an adjustment described herein, the Company
may elect to issue a new Warrant reflecting such adjustment, and if the Company
so elects, the Holder will return this Warrant to the Company in exchange for
such new Warrant.
(d) The provisions of this Section 2 are for the purpose of, and
shall be interpreted to the effect that, upon any exercise of this Warrant, the
Holder shall be entitled to receive the same amount and kind of securities and
other property that it would have been entitled to receive as the owner at all
times subsequent to the date hereof of the number of shares of common stock
issuable upon conversion of the Warrant Shares purchased upon any such exercise.
(e) It is agreed and understood that no adjustments shall be made
hereunder solely as a result of the issuance by the Company of (i) common stock
issued pursuant to any future public or private issuance of stock, or (ii)
common stock issued upon the exercise of warrants or options and other
convertible securities granted by the Company.
(f) No adjustment of the Exercise Price shall be made in an amount
of less than 1% of the Exercise Price in effect at the time such adjustment is
otherwise required to be made, but any such lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustments so carried forward, shall amount
to not less than 1% of such Exercise Price.
(g) Irrespective of any adjustment or change in the Exercise Price,
or the number of shares of common stock actually purchasable under each Warrant
of like tenor, the Warrants theretofore and thereafter issued may continue to
express the Exercise Price per Share and the number of Warrant Shares
purchasable thereunder as the Exercise Price per Share and the number of Warrant
Shares purchasable were expressed on the Warrants when initially issued.
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3. COVENANTS OF THE COMPANY. The Company hereby covenants and agrees that,
prior to the expiration of this Warrant by exercise or by its term:
(a) The Company will not by amendment of its Articles of
Incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act or deed, avoid or seek to avoid
the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company, but will at all
times in good faith assist, insofar as it is able, in the carrying out of all
provisions of this Warrant and in the taking of all other actions that may be
necessary to protect the rights of the Holder hereunder; provided, however, that
the proposed merger of the Company or a subsidiary of the Company with Ardent
Pharmaceuticals, Inc. shall be deemed not to violate this subsection (a).
(b) The Company shall at all times reserve and keep available, out
of its authorized and unissued capital stock, such numbers of shares of common
stock as shall, from time to time, be sufficient for the exercise of the
Warrants.
(c) All Warrant Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and non-assessable, and free from all taxes, liens and charges with respect
to the issue thereof (other than taxes in respect of any transfer
contemporaneously with such issue).
4. COMPLIANCE WITH LAWS. If, at the time of the surrender of this Warrant
in connection with any exercise, transfer, or exchange of this Warrant, this
Warrant or the Warrant Shares are not registered under both the Securities Act
and applicable state securities laws, the Company may require, as a condition of
allowing such exercise, transfer or exchange, a representation by the Holder
that the transferee of this Warrant, in whole or in part, or any Warrant Shares,
is an "accredited investor" as defined in Rule 501(a) promulgated under the
Securities Act.
5. TRANSFER AND EXCHANGE.
(a) Transfer. This Warrant is not transferable without the Company's
prior written consent. Upon receipt of such consent, this Warrant is
transferable on the books of the Company at its principal office by the
registered Holder hereof only upon surrender of this Warrant properly endorsed.
The Company shall issue and deliver to the transferee a new Warrant or Warrants
representing the Warrant so transferred. Upon any partial transfer, the Company
will issue and deliver to the Holder a new Warrant or Warrants with respect to
the Warrants not so transferred. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the registered
Holder hereof as the owner and Holder hereof for all purposes, and the Company
shall not be affected by any notice to the contrary.
(b) Exchange. This Warrant, at any time prior to the exercise
hereof, upon presentation and surrender to the Company may be exchanged, along
with other Warrants of like tenor registered in the name of the same Holder, for
another Warrant or other Warrants of like tenor in the name of such Holder
exercisable for the same aggregate number of Warrant Shares as the Warrant or
Warrants surrendered.
6. LOSS, THEFT, DESTRUCTION OR MUTILATION. In case this Warrant shall
become mutilated or defaced or be destroyed, lost or stolen, the Company shall
execute and deliver a new Warrant in exchange for and upon surrender and
cancellation of such mutilated or defaced Warrant or in lieu of and substitution
for such Warrant so destroyed, lost or stolen, upon the Holder of such Warrant
filing with the Company such evidence satisfactory to it that such Warrant has
been so mutilated, defaced, destroyed, lost or stolen and of the ownership
thereof by the Holder; provided, however, that the Company shall be entitled, as
a condition to the execution and delivery of such new Warrant, to demand
indemnity satisfactory to it and payment of expenses and charges incurred in
connection with the delivery of such new Warrant. All Warrants so surrendered to
the Company shall be canceled.
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7. NO RIGHTS AS SHAREHOLDER. This Warrant shall not entitle the Holder to
any rights as a stockholder of the Company, either at law or in equity. The
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
8. RECORD OWNER. At the time of the surrender of this Warrant, together
with the Form of Exercise properly executed and payment of the Exercise Price,
the person exercising this Warrant shall be deemed to be the holder of record of
the shares of common stock deliverable upon such exercise, in whole or in part,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of common stock shall not
then be actually delivered to such person.
9. FRACTIONAL SHARES. The Company shall not issue any fractional Warrant
Shares or scrip representing fractional Warrant Shares upon the exercise of this
Warrant. With respect to any fraction of a share called for on such exercise,
the Holder may elect to receive, and the Company shall pay to the Holder, an
amount in cash equal to such fraction multiplied by the Exercise Price. In the
alternative, the Holder may elect to remit to the Company an amount in cash
equal to the difference between such fraction and one, multiplied by the
Exercise Price, and the Company will issue the Holder one share of common stock
in addition to the number of whole Warrant Shares required by the exercise of
the Warrant.
10. MAILING OF NOTICES. All notices and other communications required
hereunder shall be sent by registered or certified mail, (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five (5) days after being placed in the mail, if mailed, or
upon receipt or refusal of receipt, if delivered personally or by courier, or by
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
Attention: Xxxxxx X. Xxxxxxxxx
Enhance Biotech, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX, 00000
Or such other addresses as the Company furnishes by notice to the Holder
in accordance with this Section 10.
If to the Holder, at such address as such Holder shall have provided in
writing to the Company, or at such other address as such Holder furnishes by
notice given in accordance with this Section 10.
11. PIGGYBACK REGISTRATION. If the Company determines, in its discretion,
to register any of its securities under the Act, either for its own account or
the account of a security holder on a form in which the shares underlying the
Warrants may be included, other than (i) a registration relating to employee
benefit plans, (ii) a registration relating to a Rule 145 of the Act or similar
transaction, or (iii) a registration on any form that does not include
substantially the same information as could be required to be included in a
registration statement covering the sale of the shares underlying the Warrants,
the Company will include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all of the shares underlying the Warrants.
12. NO REGISTRATION UNDER THE SECURITIES ACT. Because this Warrant has not
been registered under the Securities Act, it and all replacement Warrants and
the Warrant Shares shall bear the following legend:
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE
EXERCISE OF THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF UNLESS (1) PURSUANT TO
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AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND SUCH LAWS, OR (2) AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT AND SUCH LAWS IS AVAILABLE AND
THE COMPANY HAS RECEIVED EITHER AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED
IN CONNECTION WITH THE DISPOSITION OR SUCH OTHER
EVIDENCE THAT IS SATISFACTORY TO THE COMPANY, WHICH
EVIDENCE ESTABLISHES THAT ANY SUCH DISPOSITION WILL NOT
VIOLATE THE SECURITIES ACT, SUCH LAWS OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER.
13. GOVERNING LAW; JURISDICTION. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. Each of the Company
and the Holder irrevocably consents to the jurisdiction of the United States
federal courts and state courts located in the State of New York in any suit or
proceeding based on or arising under this Warrant.
14. ENTIRE AGREEMENT. The Company and the Holder of this Warrant hereby
represent and warrant that this Warrant is intended to and does contain and
embody all of the understandings and agreements, both written and oral, of the
parties hereto with respect to the subject matter of this Warrant, and that
there exists no oral agreement or understanding, express or implied, whereby the
absolute, final and unconditional character and nature of this Warrant shall be
in any way invalidated, empowered or affected.
15. AMENDMENT; NO WAIVERS. Any provision of this Warrant may be amended or
waived only if such amendment or waiver is in writing and signed, in the case of
an amendment, by the Company and the Holder or, in the case of a waiver, by the
party against whom the waiver is to be effective. No failure or delay by either
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
16. HEADINGS. The headings and captions in this Warrant are included for
convenience of reference only and shall be ignored in the construction and
interpretation thereof.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this Amended Warrant which was originally executed on 31st October
2003, on this the 26th day of July, 2004.
ENHANCE BIOTECH, INC.,
a Delaware corporation
By: /s/ Xxxxxxxxxxx Every
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Its: President and CEO
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, XX, 00000
Acknowledged and Accepted:
WARRANT HOLDER
By: /s/ Xxx Xxxx
Its: CEO of Bioaccelerate, Inc.
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
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FORM OF EXERCISE NOTICE
To: Enhance Biotech, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX, 00000
Pursuant to the terms of the attached Warrant, the undersigned hereby
irrevocably exercises the right to purchase _________________ shares of the
common stock of Enhance Biotech, Inc., a corporation organized under the laws of
the State of Delaware (the "Company"), and tenders herewith payment of the
Exercise Price in full, in the amount of $____________, in cash, by certified or
official bank check or by wire transfer for the account of the Company.
The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any common stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.
Exercise Date:__________________________ ___________________________________
Signature of Holder
____________________________________
Name of Holder (Print)
Address:
____________________________________
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