VOID AFTER 5:00 P.M., NEW YORK, NEW YORK LOCAL TIME ON MAY 19,
2010
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF (COLLECTIVELY THE "SECURITIES") HAVE BEEN
ACQUIRED FOR INVESTMENT ONLY AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE
SECURITIES LAW, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO DIASENSE INC. THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
DIASENSE INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
TO PURCHASE SHARES OF COMMON STOCK
Certificate No. XW-001
May 19, 2005
This Warrant Certificate certifies that Xxxxxx Xxxxx an
individual residing at 00 Xxxxx Xxxx, Xxxxxxx, XX 00000 is the
registered Holder (the "Holder") of one million, two hundred and
twenty-seven thousand (1,227,000) Common Stock Purchase Warrants
(the "Warrants") to purchase shares of the common stock, $.01 par
value (the "Common Stock") of DIASENSE INC., a Pennsylvania
corporation (the "Company"). These Warrants are being issued in
connection with a certain consulting agreement between the
Company and the Holder dated as of May 19, 2005 (the "Consulting
Agreement").
This Warrant Certificate is subject to the following terms
and conditions:
1. EXERCISE OF WARRANT.
(A) Each Warrant enables the Holder, subject to the
provisions of this Warrant Certificate to purchase from the
Company at any time and from time to time commencing on the date
hereof (the "Initial Exercise Date") through and including 5:00
p.m., New York local time on MAY 19, 2010 (the "Expiration Date")
one (1) fully paid and non-assessable share of Common Stock
("Shares") upon due presentation and surrender of this Warrant
Certificate accompanied by payment of the purchase price of $0.01
per Share (the "Exercise Price"), in accordance with the vesting
provisions set forth in subsection (B) hereof. Payment of the
Exercise Price shall be made in lawful money of the United States
of America by certified check payable to the Company at its
principal office at 0000 Xxxxxxx Xxxx Xxxx, Xxxx. 0000;
Xxxxxxxxxx, XX 00000. As hereinafter provided, the Exercise
Price and number of Shares purchasable upon the exercise of the
Warrants are subject to modification or adjustment upon the
happening of certain events.
(B) This Warrant Certificate is exercisable by the
Holder in person or by attorney duly authorized in writing at the
principal office of the Company in the following amounts:
1) 100,000 Warrants are exercisable at any time on
or after the Initial Exercise Date and until the
Expiration Date;
2) 150,000 Warrants are exercisable at such time
as phase 1 of the development of the non-invasive
glucose sensor is completed and until the
Expiration Date, provided the Holder is providing
services to the Company under the Consulting
Agreement.
3) 250,000 Warrants are exercisable at such time
as phase 2 of the development of the non-invasive
glucose sensor is completed and until the
Expiration Date, provided the Holder is providing
services to the Company under the Consulting
Agreement.
4) 727,000 Warrants are exercisable at such time
as a working prototype of the non-invasive glucose
sensor is complete and functional.
2. EXCHANGE, FRACTIONAL SHARES, TRANSFER.
(A) Upon surrender to the Company, this Warrant
Certificate may be exchanged for another Warrant Certificate or
Warrant Certificates evidencing a like aggregate number of
Warrants. If this Warrant Certificate shall be exercised in
part, the Holder shall be entitled to receive upon surrender
hereof another Warrant Certificate or Warrant Certificates
evidencing the number of Warrants not exercised;
(B) Anything herein to the contrary notwithstanding,
in no event shall the Company be obligated to issue Warrant
Certificates evidencing other than a whole number of Warrants or
issue certificates evidencing other than a whole number of Shares
upon the exercise of this Warrant Certificate; provided, however,
that the Company shall pay with respect to any such fraction of a
Share an amount of cash based upon the current Market Price (or
book value, if there shall be no Market Price) for Shares
purchasable upon exercise hereof, as determined in accordance
with the following sentence. Market Price for the purpose of
this Section 2(B) shall mean (i) the closing sale price, for
sixty (60) consecutive business days of the Common Stock as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or (ii) the last reported sale price,
for sixty (60) consecutive business days on the primary exchange
on which the Common Stock is traded, if the Common Stock is
traded on a national securities exchange;
(C) the Company may deem and treat the person in whose
name this Warrant Certificate is registered as the absolute true
and lawful owner hereof for all purposes whatsoever; and
(D) This Warrant Certificate is not transferable
except in accordance with Section 9 hereof.
3. RIGHTS OF A HOLDER. No Holder shall be deemed to be
the Holder of Common Stock or any other securities of the Company
that may at any time be issuable on the exercise hereof for any
purpose nor shall anything contained herein be construed to
confer upon the Holder 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 (whether
upon any reorganization, issuance of stock, reclassification or
conversion of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings or to
receive dividends or subscription rights or otherwise until a
Warrant shall have been exercised and the Common Stock
purchasable upon the exercise thereof shall have become issuable.
4. REGISTRATION. The Company shall maintain books for the
registration of Warrants. The Company shall issue and register
the Warrants in the name(s) of the Holder(s). The Warrants shall
be signed manually by the Chairman, Chief Executive Officer,
President or any Vice President on the one hand, and another
officer of the Company on the other hand. Warrants may be
exchanged at the option of the Holder, when surrendered at the
office of the Company, for another Warrant, or other Warrants of
different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Shares. Subject
to the terms of this Warrant Certificate, upon such surrender and
payment of the Exercise Price at any time after the Initial
Exercise Date, the Company shall issue and deliver with all
reasonable dispatch to or upon the written order of the Holder of
such Warrants and in such name or names as such Holder may
designate, a certificate or certificates for the number of full
Shares so purchased upon the exercise of such Warrants. Such
certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed
to have become the Holder of record of such Shares as of the date
of the surrender of such Warrants and payment of the Exercise
Price; provided, however, that if, at the date of surrender and
payment, the transfer books of the Common Stock shall be closed,
the certificates for the Shares shall be issuable as of the date
on which such books shall be opened and until such date the
Company shall be under no duty to deliver any certificate for
such Shares; provided, further, however, that such transfer
books, unless otherwise required by law or by applicable rule of
any national securities exchange, shall not be closed at any one
time for a period longer than 20 days.
5. STAMP TAX. The Company will pay any documentary stamp
taxes attributable to the initial issuance of the Shares issuable
upon the exercise of the Warrants; provided, however, that the
Company shall not be required to pay any tax or taxes which may
be payable in respect of any transfer involved in the issuance or
delivery of any certificates for Shares in a name other than that
of the Holder in respect of which such Shares are issued, and in
such case the Company shall not be required to issue or deliver
any certificate for Shares or any Warrant until the person
requesting the same has paid to the Company the amount of such
tax or has established to the Company's satisfaction that such
tax has been paid.
6. LOST, STOLEN OR MUTILATED CERTIFICATES. In case this
Warrant Certificate shall be mutilated, lost, stolen or
destroyed, the Company may, in its discretion, issue and deliver
in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and substitution for
the lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate of like tenor representing an equivalent right or
interest, but only upon receipt of evidence satisfactory to the
Company of such loss, theft or destruction and an indemnity, if
requested, also satisfactory to it.
7. RESERVED SHARES. The Company warrants that there have
been reserved, and covenants that at all times in the future, it
shall keep reserved, out of the authorized and unissued Common
Stock, such number of Shares sufficient to provide for the
exercise of the rights of purchase represented by this Warrant
Certificate. The Company agrees that all Shares issuable upon
exercise of the Warrants shall be, at the time of delivery of the
certificates for such Shares, validly issued and outstanding,
fully paid and non-assessable and that the issuance of such
Shares will not give rise to preemptive rights in favor of
existing stockholders.
8. DIVIDENDS RECLASSIFICATIONS, ETC.
(A) Dividends; Reclassifications, etc. In the event
that the Company shall, at any time prior to the exercise of this
Warrant: (i) declare or pay to the holders of the Common Stock a
dividend payable in any kind of shares of stock of the Company;
or (ii) change or divide or otherwise reclassify its Common Stock
into the same or a different number of shares with or without par
value, or in shares of any class or classes; or (iii) transfer
its property as an entirety or substantially as an entirety to
any other company; (iv) merge with or consolidate with or into
any other corporation or entity; or (v) make any distribution of
its assets to holders of its Common Stock as a liquidation or
partial liquidation dividend or by way of return of capital;
then, upon the subsequent exercise of this Warrant, the Holder
shall receive, in addition to or in substitution for the shares
of Common Stock to which it would otherwise be entitled upon such
exercise, such additional shares of stock or scrip of the
Company, or such reclassified shares of stock of the Company, or
such shares of the securities or property of the Company
resulting from such transfer, or such assets of the Company,
which it would have been entitled to receive had it exercised
this Warrant prior to the happening of any of the foregoing
events.
(B) Notice of Certain Transactions. If, at any time
while this Warrant is outstanding, the Company shall pay any
dividend payable in cash or in Common Stock, shall offer to the
holders of its Common Stock for subscription or purchase by them
any shares of stock of any class or any other rights, or shall
enter into an agreement to merge or consolidate with another
corporation, the Company shall cause notice thereof to be mailed
to the registered holder of this Warrant at its address appearing
on the registration books of the Company, at least 10 days prior
to the record date as of which holders of Common Stock shall
participate in such dividend, distribution or subscription or
other rights or at least 10 days prior to the effective date of
the merger or consolidation. Failure to give notice as required
by this Section, or any defect therein, shall not affect the
legality or validity of any dividend, distribution or
subscription or other right.
(C) Carry Forwards. Anything in this Section 8 to the
contrary notwithstanding, no adjustment in the Exercise Price
shall be required unless such adjustment would require an
increase or decrease of at least 10% in such Exercise Price;
provided, however, that any adjustments which by reason of this
Subsection (C) are not required to be made shall be carried
forward and taken into account in making subsequent adjustments.
All calculations under this Section 8 shall be made to the
nearest cent or to the nearest tenth of a share, as the case may
be.
(D) Notice of Adjustments. Upon any adjustment of the
Exercise Price, then and in each such case the Company shall
promptly deliver a notice to the registered Holder of this
Warrant, which notice shall state the Exercise Price resulting
from such adjustment and the increase or decrease, if any, in the
number of Shares purchasable at such price upon the exercise
hereof, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.
(A) The Holder of this Warrant Certificate, and each
transferee of any Shares, by his acceptance thereof, agrees that
(a) no public distribution of Shares will be made in violation of
the Act, and (b) during such period as the delivery of a
prospectus with respect to Shares may be required by the Act, no
public distribution of Shares will be made in a manner or on
terms different from those set forth in, or without delivery of,
a prospectus then meeting the requirements of Section 10 of the
Act and in compliance with applicable state securities laws. The
Holder of this Warrant Certificate and each transferee hereof
further agrees that if any distribution of any of the Warrants or
Shares is proposed to be made by them otherwise than by delivery
of a prospectus meeting the requirements of Section 10 of the
Act, such action shall be taken only after submission to the
Company of an opinion of counsel, reasonably satisfactory in form
and substance to the Company's counsel, to the effect that the
proposed distribution will not be in violation of the Act or of
applicable state law. Furthermore, it shall be a condition to
the transfer of the Warrants that any transferee thereof deliver
to the Company his written agreement to accept and be bound by
all of the terms and conditions contained in this Warrant
Certificate.
(B) This Shares issued on exercise of this Warrant may
not be sold or otherwise disposed of except as follows:
(1) To a person who, in the opinion of counsel
for the Holder reasonably acceptable to the Company, is a person
to whom Shares may legally be transferred without registration
and without the delivery of a current prospectus under the Act
with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this
Section 10 with respect to any resale or other disposition of
such securities, which agreement shall be satisfactory in form
and substance to the Company and its counsel; provided that the
foregoing shall not apply to any such Warrant, Shares as to which
such Holder shall have received an opinion letter from counsel to
the Company as to the exemption thereof from the registration
under the Act pursuant to Rule 144(k) under the Act; or
(2) To any person upon delivery of a prospectus
then meeting the requirements of the Act relating to such
securities and the offering thereof for such sale or disposition.
(C) Each certificate for Shares issued upon exercise
of this Warrant shall bear a legend relating to the
non-registered status of such Shares under the Act, unless at the
time of exercise of this Warrant such Shares are subject to a
currently effective registration statement under the Act.
10. MISCELLANEOUS.
(A) Law to Govern. This Warrant shall be governed by
and construed in accordance with the substantive laws of the
State of Pennsylvania, without giving effect to conflict of laws
principles.
(B) Entire Agreement. This Warrant Certificate
constitutes and expresses the entire understanding between the
parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions whether express or
implied, oral or written. Neither this Warrant Certificate nor
any portion or provision hereof may be changed, waived or amended
orally or in any manner other than by an agreement in writing
signed by the Holder and the Company.
(C) Notices. Except as otherwise provided in this
Warrant Certificate, all notices, requests, demands and other
communications required or permitted under this Warrant
Certificate or by law shall be in writing and shall be deemed to
have been duly given, made and received only when delivered
against receipt or when deposited in the United States mails,
certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Company : DIASENSE INC.
0000 Xxxxxxx Xxxx Xxxx, Xxxx. 0000
Xxxxxxxxxx, XX 00000
Attn: ____________________
With a copy to: Xxxxxx X. XxXxxxx, Esq.
Xxxx Xxxxx LLP
000 Xxxxxxxxx Xxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
If to Holder: to the address set forth on Page 1.
(D) SEVERABILITY. If any provision of this Warrant
Certificate is prohibited by or is unlawful or unenforceable
under any applicable law of any jurisdiction, such provision
shall, as to such jurisdiction be in effect to the extent of such
prohibition without invalidating the remaining provisions hereof;
provided, however, that any such prohibition in any jurisdiction
shall not invalidate such provision in any other jurisdiction;
and provided, further that where the provisions of any such
applicable law may be waived, that they hereby are waived by the
Company and the Holder to the full extent permitted by law and to
the extent that this Warrant Certificate shall be deemed to be a
valid and binding agreement in accordance with its terms.
IN WITNESS WHEREOF, DIASENSE INC., has caused this Warrant
to be signed by its duly authorized officers under its corporate
seal as of this 19th day of May 2005.
DIASENSE INC.
By:/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, CEO
[Corporate Seal]
PURCHASE FORM
To: DIASENSE INC.
0000 Xxxxxxx Xxxx Xxxx, Xxxx. 0000
Xxxxxxxxxx, XX 00000
Date:_________________________
The undersigned hereby irrevocably elects to exercise the
attached Warrant Certificate, Certificate No. XW- 001 , to the
extent of Shares of Common Stock, $.0l par
value per share of DIASENSE INC., and hereby makes payment of $
in payment of the aggregate exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name:
(Please typewrite or print in block letters)
Address:
Social Security Number or Tax I.D. Number of Holder
Dated:
IMPORTANT-READ CAREFULLY Sign Here
_____________________________________________________
The signature(s) to this Purchase Form must
correspond with the name(s) as written upon the
face of the Warrant Certificate(s) in every
_____________________________________________________
particular without alteration or enlargement
(PERSON(S) EXECUTING THIS POWER SIGN(S) HERE)
or any change whatever. Signature guarantee
should be made by a member or member or-
ganization of the New York Stock Exchange,
SIGNATURE GUARANTEED
members of other Exchanges having signa-
tures on file with the Company's transfer agent
or by a commercial bank or trust company having its
principal office or correspondent in the City
of New York belonging to the Medallian Stamp Program.
