COMMON STOCK PURCHASE WARRANT To Purchase [ ] Shares of Common Stock of ARTES MEDICAL, INC.
Exhibit 4.24
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
To Purchase [ ] Shares of Common Stock of
ARTES MEDICAL, INC.
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Empire
Asset Management Company (the “Holder”), is entitled, upon the terms and subject to the limitations
on exercise and the conditions hereinafter set forth, at any time on or after the sixth (6th) month
anniversary of the date hereof (the “Initial Exercise Date”) and on or prior to the close of
business on the fifth (5th) year anniversary of the date of issuance of this Warrant (the
“Termination Date”) but not thereafter, to subscribe for and purchase from Artes Medical, Inc., a
Delaware corporation (the “Company”), up to [ ] shares (the “Warrant Shares”) of Common
Stock, par value $0.001 per share, of the Company (the “Common Stock”). The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).
1. Definitions. The Holder and the Company are parties to that certain Placement
Agent Agreement, dated as of September 17, 2008 (the “Placement Agent Agreement”). Pursuant to the
Placement Agent Agreement, the Holder has acted as placement agent in connection with the
transactions contemplated by the Subscription Agreements (the “Subscription Agreements”), of even
date herewith, by and among the Company and the investors identified on the signature pages to the
Subscription Agreements. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in the Subscription Agreements.
2. Exercise.
(a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on
or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (or such other office or agency of
the Company as it may designate by notice in writing to the registered Holder at the address
of such Holder appearing on the books of the Company); provided, however, within five (5) Trading
Days of the date said Notice of Exercise is delivered to the Company, the Holder shall have
surrendered this Warrant to the Company and the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn
on a United States bank.
(b) Exercise Price. The exercise price of the Common Stock under this Warrant shall
be $[___1], subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless Exercise. This Warrant may be exercised at any time by means of a
“cashless exercise” in which the Holder shall be entitled to receive a certificate for the number
of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = the VWAP (as defined below) on the Trading Day immediately preceding the date of such election; | ||
| (B) | = the Exercise Price of this Warrant, as adjusted; and | ||
| (X) | = the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise. |
“VWAP” means, for any date, the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b)
if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common
Stock are then quoted on the OTC Bulletin Board, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common
Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Company.
(d) Exercise Limitations. Holder shall not have the right to exercise any portion of
this Warrant, pursuant to Section 2(c) or otherwise, to the extent that after giving effect to such
issuance after exercise, Holder (together with Holder’s affiliates), as set forth on the applicable
Notice of Exercise, would beneficially own in excess of 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to such issuance. For
| 1 | There will two separate placement agent warrants with different exercise prices. The placement agent warrant related to the common stock will have an exercise price equal to the purchase price, and the placement agent warrant related to shares of common stock underlying the investor warrants will have an exercise price equal to the exercise price contained in the investor warrants. |
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purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by
Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by Holder or any of its
affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other shares of Shares or Warrants)
subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by Holder or any of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act, it being acknowledged by Holder that the Company is not
representing to Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and Holder is solely responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in this Section 2(d) applies, the
determination of whether this Warrant is exercisable (in relation to other securities owned by
▇▇▇▇▇▇) and of which a portion of this Warrant is exercisable shall be in the sole discretion of
Holder, and the submission of a Notice of Exercise shall be deemed to be each Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by
▇▇▇▇▇▇) and of which portion of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination. For purposes of this Section 2(d), in determining the number of outstanding
shares of Common Stock, Holder may rely on the number of outstanding shares of Common Stock as
reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company or the Company’s
transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or
oral request of ▇▇▇▇▇▇, the Company shall within two Trading Days confirm orally and in writing to
Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by Holder or its affiliates since
the date as of which such number of outstanding shares of Common Stock was reported. The
provisions of this Section 2(d) may be waived by ▇▇▇▇▇▇, at the election of Holder, upon not less
than 61 days’ prior notice to the Company, and the provisions of this Section 2(d) shall continue
to apply until such 61st day (or such later date, as determined by ▇▇▇▇▇▇, as may be
specified in such notice of waiver).
(e) Mechanics of Exercise.
(i) Authorization of Warrant Shares. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges imposed by the Company in
respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
(ii) Delivery of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
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its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in
such system, and otherwise by physical delivery to the address specified by the Holder in the
Notice of Exercise within three (3) Trading Days from the delivery to the Company of the Notice of
Exercise Form, surrender of this Warrant and payment of the aggregate Exercise Price as set forth
above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the
date the Exercise Price and completed Notice of Exercise are received by the Company. The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all
taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vi) prior to the issuance
of such shares, have been paid.
(iii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant.
(iv) Buy-In Rights. In addition to any other rights available to a Holder, if the
Company fails to deliver to the Holder a certificate representing Warrant Shares by the fifth
Trading Day after the date on which delivery of such certificate is required by this Warrant, and
if after such fifth Trading Day the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
five Trading Days after the Holder’s request, honor its obligation to deliver to the Holder a
certificate or certificates representing such Common Stock and pay cash to the Holder in an amount
equal to the excess (if any) of the amount equal to the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased over the product of (A)
such number of shares of Common Stock, times (B) the Closing Price on the date of the event giving
rise to the Company’s obligation to deliver such certificate.
(v) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share
which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
(vi) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event certificates for Warrant
Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the
Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
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(vii) Closing of Books. The Company will not close its stockholder books or records
prior to the Termination Date in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
3. Certain Adjustments.
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions on shares
of its Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event
and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
(b) Subsequent Placements. Subject to Section 3(i), if the Company, at any time during
the one year period following the date of this Warrant (the “Participation Right Period”), shall
complete a Subsequent Placement at an effective price per share less than the then effective
Exercise Price (such lower price, the “Base Share Price” and such issuances collectively, a
“Dilutive Issuance”), as adjusted hereunder (if the holder of the Equity Securities so issued shall
at any time, whether by operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per
share which is issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance),
then, the Exercise Price shall be reduced and only reduced to equal the Base Share Price. Such
adjustment shall be made during the Participation Right Period whenever such Equity Securities are
issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued during the
Participation Right Period under this Section 3(b) in respect of Exempt Issuances. During the
Participation Right Period, the Company shall notify the Holder in writing as promptly as
reasonably possible following the issuance of any Equity Securities subject to this section,
indicating therein the applicable issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For
purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant
to this Section 3(b), upon the occurrence of any Dilutive Issuance during the Participation Right
Period, after the date of such Dilutive Issuance the Holder is entitled to the Base Share Price
regardless of whether the Holder accurately refers to the Base Share Price in the Notice of
Exercise.
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(c) Additional Issuances of Equity Securities. Subject to Section 3(i), if the
Company, at any time after the Participation Right Period and while this Warrant is outstanding,
shall issue any Equity Securities (otherwise than as provided in the foregoing subsections (a)
through (b) of this Section 3 and other than Exempt Issuances) at a price per share less than the
then effective Exercise Price or without consideration, then the Exercise Price upon each such
issuance shall be adjusted to that price (rounded to the nearest cent) determined by multiplying
the Exercise Price then in effect by a fraction:
(i) the numerator of which shall be equal to the sum of (x) the number of shares of
outstanding Common Stock immediately prior to the issuance of such Equity Securities plus (y) the
number of shares of Common Stock which the aggregate consideration for the total number of such
Equity Securities so issued would purchase at a price per share equal to the Exercise Price then in
effect, and
(ii) the denominator of which shall be equal to the number of shares of outstanding Common
Stock immediately after the issuance of such Equity Securities.
The provisions of Section 3(c) shall not apply to any issuance of Equity Securities for which
an adjustment is provided under Sections 3(a) or 3(b).
(d) Warrant Shares. Subject to Section 3(i), simultaneously with any adjustment to
the Exercise Price pursuant to Section 3(c), the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be increased or decreased proportionately, as applicable, so
that after such adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased, as applicable, number of Warrant Shares shall be the same as the aggregate Exercise
Price in effect immediately prior to such adjustment.
(e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (A)
the Company effects any merger or consolidation of the Company with or into another Person (other
than a transaction effected solely to change the domicile of the Company), (B) the Company effects
any sale of all or substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, (D) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock purchase agreement or other business combination) or (E) the Company
effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction
upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the
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“Alternate Consideration”) receivable upon or as a result of such Fundamental Transaction by a
Holder, of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such event. For purposes of any such exercise, the determination of the Exercise Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to
exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this Section 3(e) and insuring that this Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent transaction analogous to
a Fundamental Transaction.
(f) Calculations. All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the
number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be
the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.
(g) Voluntary Adjustment By Company. Subject to Section 3(i), the Company may at any
time during the term of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the board of directors of the Company.
(h) Notice to Holders.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to
this Section 3, the Company shall promptly as reasonably possible mail to each Holder a notice
setting forth the Exercise Price after such adjustment. If the Company issues a variable rate
security, the Company shall be deemed to have issued Equity Securities at the lowest possible
conversion or exercise price at which such securities may be converted or exercised in the case of
a Variable Rate Transaction (as defined in the following sentence). The term “Variable Rate
Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or
other price that is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or equity securities, or
(B) with a conversion, exercise or exchange price that is subject to being reset at some future
date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into any agreement, including, but
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not limited to, an equity line of credit, whereby the Company may sell securities at a future
determined price.
(ii) Notice to Allow Exercise by ▇▇▇▇▇▇. If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company;
then, in each case, the Company shall cause to be mailed to the Holder at its last address as it
shall appear upon the Warrant Register of the Company, at least five (5) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. The Holder is entitled to exercise this Warrant during
the 5-day period commencing on the date of such notice to the effective date of the event
triggering such notice.
(i) Stockholder Approval. If the Company has not obtained such approval as may be
required by the applicable rules and regulations of the Nasdaq Global Market (or any successor
entity) from the stockholders of the Company with respect to the transactions contemplated by the
Transaction Documents, including the issuance of all of the Warrant Shares in excess of 19.99% of
the issued and outstanding Common Stock on the Closing Date (“Stockholder Approval”), then neither
the Exercise Price of this Warrant nor the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be adjusted as provided in Sections 3(b), 3(c), 3(d) and 3(g). The
Company shall hold a special meeting of stockholders at the earliest practical date following its
next annual meeting of stockholders, but in no event later than the Initial Exercise Date, for the
purpose of obtaining Stockholder Approval, with the recommendation of the Company’s Board of
Directors that such proposal be approved, and the Company shall solicit proxies from its
stockholders in connection therewith in the same manner as all other management proposals in such
proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such
proposal. If the Company does not obtain Stockholder Approval at the meeting called for such
purpose, the Company shall include the proposal in the Company’s proxy statement for every meeting
thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval is
obtained or the Warrants are no longer outstanding.
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4. Transfer of Warrant.
(a) Transferability. Subject to compliance with any applicable securities laws and
the conditions set forth in Sections 5(a) and 4(d) hereof and to the provisions of the Subscription
Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of
such transfer. Upon such surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such
notice.
(c) Warrant Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.
(d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act of 1933 (the “Securities
Act”) and under applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case
may be, furnish to the Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable transactions) to the effect
that such transfer may be made without registration under the Securities Act and under applicable
state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company and (iii) that the
transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a qualified institutional buyer as defined in Rule
144A(a) under the Securities Act.
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5. Miscellaneous.
(a) Title to Warrant. Prior to the Termination Date and subject to compliance with
applicable laws and Section 4 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the Holder in person
or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form
annexed hereto properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.
(b) No Rights as Shareholder Until Exercise. Except as may be specifically set forth
herein, this Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price (or by means of a cashless exercise), the Warrant
Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or payment.
(c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the
case of the Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver
a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.
(d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or
a legal holiday, then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.
(e) Authorized Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants 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 the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed.
Except and to the extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or 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 actions as may be
10
necessary or appropriate to protect the rights of ▇▇▇▇▇▇ as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will (a) not increase
the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its obligations under
this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
(f) Jurisdiction. All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the provisions of the
Subscription Agreement.
(g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.
(h) Nonwaiver. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate
on the Termination Date.
(i) Notices. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Subscription Agreement.
(j) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
(k) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.
(l) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.
11
(m) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.
(n) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.
[Remainder of page left intentionally blank]
12
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized as of the date first set forth above.
| ARTES MEDICAL, INC. | ||||
| By: | ||||
| Print Name: | ||||
| Title: | ||||
NOTICE OF EXERCISE
TO: ARTES MEDICAL, INC.
(1) The undersigned hereby elects to purchase Warrant Shares of the Company pursuant
to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).
(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:
The Warrant Shares shall be delivered to the following:
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to
whose address is
.
Dated: ,
| Holder’s Signature: | ||||||
| Holder’s Address: | ||||||
Signature Guaranteed:
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign the foregoing
Warrant.