Exhibit 99.2
COMMON STOCK PURCHASE WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH
SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH RESPECT THERETO.
COMMON STOCK PURCHASE WARRANT
Number of Shares: 40,000
Shares of Common Stock
BIOMERICA, INC.
1. ISSUANCE. This Warrant is issued to the XXXXX XXXXX TRUST DATED
8/21/98, XXXXX XXXXX TRUSTEE ("HOLDER") by BIOMERICA, INC., a Delaware
corporation (hereinafter, with its successors, called the "COMPANY").
2. PURCHASE PRICE; NUMBER OF SHARES. The registered Holder of this
Warrant is entitled, upon surrender of this Warrant with the subscription form
annexed hereto duly executed and the exercise price thereof, at the principal
office of the Company, to purchase from the Company FORTY THOUSAND (40,000)
fully paid and nonassessable shares (the "SHARES") of Common Stock, $0.08 par
value, of the Company (the "COMMON STOCK"), with an exercise price per share of
$.51 (the "PURCHASE PRICE"). Until such time as this Warrant is exercised in
full or expires, the Purchase Price and the securities issuable upon exercise of
this Warrant are subject to adjustment as hereinafter provided. The person or
persons in whose name or names any certificate representing Shares of Common
Stock is issued hereunder shall be deemed to have become the holder of record of
the Shares represented thereby as at the close of business on the date that this
Warrant is exercised with respect to such Shares, whether or not the transfer
books of the Company shall be closed.
3. PAYMENT OF PURCHASE PRICE; ISSUANCE OF SHARES. The purchase price
shall be paid in cash or by check. Upon the exercise of the rights represented
by this Warrant, certificates for the Shares of Stock so purchased shall be
delivered to the Holder as soon as possible and in any event within thirty (30)
days after such exercise and, unless this Warrant has been fully exercised or
expired, a new Warrant representing the portion of Shares, if any, with respect
to which this Warrant shall not have been exercised shall also be issued to the
Holder as soon as possible and in any event within thirty (30) days.
4. PARTIAL EXERCISE. This Warrant may be exercised in part, and the
Holder shall be entitled to receive a new warrant, which shall be dated as of
the date of this Warrant, covering the number of shares in respect of which this
Warrant shall not have been exercised.
5. FRACTIONAL SHARES. In no event shall any fractional share of Common
Stock or Common Stock be issued upon any exercise of this Warrant. If, upon
exercise of this Warrant in its entirety, the Holder would, except as provided
in this Section 5, be entitled to receive a fractional share of Common Stock or
Common Stock, then the Company shall pay the Holder cash equal to the fraction
of such share multiplied by the Purchase Price per share.
6. EXPIRATION DATE; AUTOMATIC EXERCISE. This Warrant shall expire at
5:00 p.m., Pacific Standard Time, on March 31, 2009, and shall be void
thereafter.
7. RESERVED SHARES; VALID ISSUANCE. The Company covenants that it will
at all times from and after the date hereof reserve and keep available such
number of its authorized shares of Common Stock, no par value, of the Company,
free from all preemptive or similar rights therein, as will be sufficient to
permit the exercise of this Warrant in full. The Company further covenants that
such shares as may be issued pursuant to such exercise and/or conversion will,
upon issuance, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
8. STOCK SPLITS AND DIVIDENDS. If after the date hereof the Company
shall subdivide the Common Stock, by stock split or otherwise or combine the
Common Stock, or issue additional shares of Common Stock in payment of a stock
dividend on the Common Stock, the number of shares of Common Stock issuable on
the exercise of this Warrant shall forthwith be proportionately increased in the
case of a stock split or stock dividend, or proportionately decreased in the
case of a combination, and the Purchase Price shall forthwith be proportionately
decreased in the case of stock split or stock dividend, or proportionately
increased in the case of a combination.
9. MERGERS AND RECLASSIFICATIONS. If after the date hereof the Company
shall enter into any Reorganization (as hereinafter defined), then, as a
condition of such Reorganization, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right
to purchase, at a total price not to exceed that payable upon the exercise of
the then-unexercised portion of this Warrant, the kind and amount of shares of
stock and other securities and property receivable upon such Reorganization by a
holder of the number of shares of Common Stock which might have been purchased
by the Holder immediately prior to such Reorganization upon the exercise of the
unexercised portion of this Warrant, and in any case appropriate provisions
shall be made with respect to the rights and interest of the Holder to the end
that the provisions hereof (including without limitation, provisions for the
adjustment of the Purchase Price and the number of shares issuable hereunder and
the provisions relating to the net issue election) shall thereafter be
applicable in relation to any shares of stock or other securities and property
thereafter deliverable upon exercise hereof. For the purposes of this Section 9,
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the term "REORGANIZATION" shall mean any reclassification or capital
reorganization (other than as a result of a subdivision, combination or stock
dividend provided for in Section 8 hereof), or any consolidation of the Company
with, or merger of the Company into, another corporation or other business
organization (other than a merger or consolidation in which the Company is the
surviving corporation or which does not result in any reclassification or change
of the outstanding Common Stock, or pursuant to which less than 50% of the
voting power of the Company is transferred to persons who were not stockholders
of the Company prior to the transaction), or any sale or conveyance to another
corporation or other business organization of all or substantially all of the
assets of the Company.
10. CERTIFICATE OF ADJUSTMENT. Whenever the Purchase Price or the
number of Shares purchasable hereunder is adjusted, as herein provided, the
Company shall promptly deliver to the Holder a certificate of the Company's
chief executive officer setting forth the purchase price and number of shares
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.
11. NOTICES OF RECORD DATE, ETC. In the event of:
(a) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger
involving the Company, or sale or conveyance of all or
substantially all of its assets; or
(b) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then, in each such event, the Company will provide or cause to be provided to
the Holder a written notice thereof at the time such notice is provided to the
holders of the Company's Common Stock.
12. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE COMPANY. This
Warrant is issued and delivered by the Company and accepted by Holder on the
basis of the following representations, warranties and covenants made by the
Company:
A. The Company has all necessary authority to issue, execute and
deliver this Warrant and to perform its obligations hereunder.
This Warrant has been duly authorized, issued, executed and
delivered by the Company and is the valid and binding
obligation of the Company, enforceable in accordance with its
terms, subject to laws of general application related to
bankruptcy, insolvency and the relief of debtors and other
laws of general application affecting enforcement of
creditors' rights generally, rules of law governing specific
performance, injunctive relief or other equitable remedies.
B. The shares of Common Stock issuable upon the exercise of this
Warrant have been duly authorized and reserved for issuance by
the Company and, when issued in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable.
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All representations and warranties of the Company and the Holder hereof
contained herein shall survive the exercise and conversion of this Warrant (or
any part hereof) or the termination or expiration of the rights hereunder.
13. AMENDMENT. The terms of this Warrant may be amended, modified or
waived only with the prior written consent of the Holder and the Company.
14. REPRESENTATIONS AND COVENANTS OF THE HOLDER. This Common Stock
Purchase Warrant has been entered into by the Company in reliance upon the
following representations and covenants of the Holder, which by its execution
hereof the Holder hereby confirms:
A. INVESTMENT PURPOSE. This Warrant and the right to acquire the
Common Stock issuable upon exercise of the Holder's rights
contained herein will be acquired for investment and not with
a view to the sale or distribution of any part thereof, and
the Holder has no present intention of selling or engaging in
any public distribution of the same except pursuant to a
registration or exemption.
B. ACCREDITED INVESTOR. Holder is an "accredited investor" within
the meaning of the Securities and Exchange Commission Rule 501
of Regulation D, as presently in effect.
C. PRIVATE ISSUE. The Holder understands (i) that the Common
Stock issuable upon exercise of the Holder's rights contained
herein is not registered under the 1933 Act or qualified under
applicable state securities laws on the ground that the
issuance contemplated by this Warrant will be exempt from the
registration and qualifications requirements thereof, (ii)
that the Company's reliance on such exemption is predicated on
the representations set forth in this Section 14; and (iii)
that the shares issuable upon exercise of this Warrant shall
bear a legend substantially similar to the legend on the first
page of this Warrant.
D. FINANCIAL RISK. The Holder has such knowledge and experience
in financial and business matters as to be capable of
evaluating the merits and risks of its investment and has the
ability to bear the economic risks of its investment.
15. NOTICES, TRANSFERS, ETC..
A. Any notice or written communication required or permitted to
be given to the Holder may be given by first class mail or
delivered to the Holder at the address most recently provided
by the Holder to the Company.
B. This Warrant may not be transferred by the Holder with respect
to any or all of the shares purchasable hereunder without
compliance with applicable federal and state securities laws.
Upon surrender of this Warrant to the Company, together with
the assignment notice annexed hereto duly executed, for
transfer of this Warrant as an entirety by the Holder, the
Company shall issue a new warrant of the same denomination to
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the assignee. Upon surrender of this Warrant to the Company,
together with the assignment hereof properly endorsed, by the
Holder for transfer with respect to a portion of the shares of
Common Stock purchasable hereunder, the Company shall issue a
new warrant to the assignee, in such denomination as shall be
requested by the Holder hereof, and shall issue to such Holder
a new warrant covering the number of shares in respect of
which this Warrant shall not have been transferred.
C. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor
and denomination, and deliver the same (i) in exchange and
substitution for and upon surrender and cancellation of any
mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen
or destroyed, upon receive of an affidavit of the Holder or
other evidence reasonably satisfactory to the Company of the
loss, theft or destruction of such Warrant and the agreement
of Holder to indemnify the Company with respect to such
matter.
16. NO IMPAIRMENT. The Company will not, by amendment of its Articles
or through any reclassification, capital reorganization, consolidation, merger,
sale or conveyance of assets, dissolution, liquidation, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
of 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 action as may be necessary or appropriate in order to protect the rights of
the Holder, provided however, that no issuance of securities, whether
convertible or otherwise, when made in accordance with the Company's Articles
shall be considered an impairment of the Holder's rights hereunder.
17. GOVERNING LAW. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the State of
California.
18. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.
19. MARKET STAND-OFF AGREEMENT. The Holder of this Warrant, if
requested by the Company or the lead underwriter of any public offering of the
Common Stock or other securities of the Company (the "Lead Underwriter"), hereby
irrevocably agrees not to sell, contract to sell, grant any option to purchase,
transfer the economic risk of ownership in, make any short sale of, pledge or
otherwise transfer or dispose of any interest in any Common Stock or any
securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock (except Common Stock included in such
public offering or acquired on the public market after such offering) during the
one hundred and eighty (180) day period following the effective date of a
registration statement of the Company filed under the Securities Act of 1933, as
amended, or such shorter period of time as the Lead Underwriter shall specify.
The Grantee further agrees to sign such documents as may be requested by the
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Lead Underwriter to further effect the foregoing and agrees that the Company may
impose stop-transfer instructions with respect to such Common Stock subject
until the end of such period. The Company and the Grantee acknowledge that each
Lead Underwriter of a public offering of the Company's stock, during the period
of such offering and for the one hundred and eighty (180) day period thereafter,
is an intended beneficiary of this Section 19.
BIOMERICA, INC.
By ____________________________________
Name Printed: Xxxxxxx X. Xxxxx
Chairman
Dated: March 31, 2004
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ANNEX A
EXERCISE NOTICE
To: BIOMERICA, INC.
Date: _______________
The undersigned hereby elects to exercise the attached Warrant as to shares of
Common Stock covered by this Warrant and hereby tenders the exercise price for
such shares, together with applicable transfer taxes, if any. The certificate(s)
for such shares shall be issued in the name of the undersigned.
The undersigned agrees not to sell or otherwise transfer or dispose of any
Common Stock, Preferred Stock, or other securities of the Company held by the
undersigned during a period of time determined by the Company and its
underwriters (not to exceed 180 days) following the effective date of the
registration statement of the Company filed under the 1933 Act with respect to
the Company's initial public offering. The undersigned further agrees to execute
any standard lock-up agreement that the underwriters require in connection with
such offering. The Company may impose stop-transfer instructions with respect to
the Common Stock, Preferred Stock, or other securities subject to the foregoing
restriction until the end of said period.
In exercising its rights hereby, the undersigned hereby confirms the
representations and statements made in Section 16 of the Warrant with respect to
the shares being acquired upon exercise hereof.
Name of Holder: _____________________________
Signature of Holder: ________________________
Name for Registration: ______________________
Mailing Address: ____________________________
____________________________
____________________________
ANNEX B
ASSIGNMENT
For value received, __________________________ hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
[PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE] the within Warrant, and
does hereby irrevocably constitute and appoint
_________________________________________________ its attorney to transfer the
within Warrant on the books of the within named Company with full power of
substitution on the premises.
Dated: _______________________________
Name of Holder: ______________________
By: ___________________________________
Name Printed: _________________________
Title: ________________________________
In the presence of:
_______________________________________
