CORMEDIX INC. SECOND Amended and Restated Warrant To Purchase Common Stock
Exhibit 4.2
NEITHER
THIS SECURITY NOR THE SECURITIES FOR 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.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
SECOND Amended and
Restated
Warrant To Purchase Common Stock
Warrant No.:
AR-10/2013-
This
Second Amended and Restated Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof,
the “Warrant”) of CorMedix Inc. (the “Company”) is issued this 31st day
of December, 2018, and amends and restates the Warrant to Purchase
Common Stock issued by the Company on October 22, 2013 (the
“Issuance Date”)
_________________ (the “Holder”) pursuant to that certain
Securities Purchase Agreement dated October 17, 2013 (the
“Securities Purchase
Agreement”), which Warrant to Purchase Common Stock
was subsequently amended and restated on September 15, 2014. The
Company hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Holder or its permitted assigns is entitled, subject to the terms
set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon exercise of this
Warrant, at any time or times on or after October 22, 2014 (the
“Initial Exercisability
Date”), but not after 11:59 p.m., New York time, on
the Expiration Date (as defined below), ______ (subject to
adjustment as provided herein) fully paid and nonassessable shares
of Common Stock (as defined below) (the “Warrant Shares”).
Except
as otherwise defined herein, capitalized terms in this Warrant
shall have the meanings set forth in Section 16.
1
This
Warrant is one of the Warrants to Purchase Common Stock (the
“SPA Warrants”)
issued pursuant to Section 1 of the Securities Purchase
Agreement.
(a) Mechanics of Exercise. Subject
to the terms and conditions hereof (including, without limitation,
the limitations set forth in Section 1(f)), this Warrant may
be exercised by the Holder on any day on or after the Initial
Exercisability Date, in whole or in part, by delivery (whether via
facsimile or otherwise) of a written notice, in the form attached
hereto as Exhibit A
(the “Exercise
Notice”), of the Holder’s election to exercise
this Warrant. Within one (1) Trading Day following an exercise of
this Warrant as aforesaid, the Holder shall deliver payment to the
Company of an amount equal to the Exercise Price in effect on the
date of such exercise multiplied by the number of Warrant Shares as
to which this Warrant was so exercised (the “Aggregate Exercise Price”) in cash
or via wire transfer of immediately available funds if the Holder
did not notify the Company in such Exercise Notice that such
exercise was made pursuant to a Cashless Exercise (as defined in
Section 1(d)). The Holder shall not be required to deliver the
original of this Warrant in order to effect an exercise hereunder.
Execution and delivery of an Exercise Notice with respect to less
than all of the Warrant Shares shall have the same effect as
cancellation of the original of this Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of
Warrant Shares. Execution and delivery of an Exercise Notice for
all of the then-remaining Warrant Shares shall have the same effect
as cancellation of the original of this Warrant after delivery of
the Warrant Shares in accordance with the terms hereof. On or
before the first (1st) Trading Day
following the date on which the Company has received an Exercise
Notice, the Company shall transmit by facsimile an acknowledgment
of confirmation of receipt of such Exercise Notice, in the form
attached hereto as Exhibit B,
to the Holder and the Company’s transfer agent (the
“Transfer
Agent”). On or before the third (3rd) Trading Day
following the date on which the Company has received such Exercise
Notice, the Company shall (X) provided that the Transfer Agent is
participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program and provided the shares of Common Stock which the
Holder is entitled to are registered on an effective registration
statement or may be sold without any restriction under Rule 144,
upon the request of the Holder, credit such aggregate number of
shares of Common Stock to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance
account with DTC through its Deposit/Withdrawal at Custodian
system, or (Y) if the Transfer Agent is not participating in the
DTC Fast Automated Securities Transfer Program, issue and deliver
to the Holder or, at the Holder’s instruction pursuant to the
Exercise Notice, the Holder’s agent or designee, in each
case, sent by reputable overnight courier to the address as
specified in the applicable Exercise Notice, a certificate,
registered in the Company’s share register in the name of the
Holder or its designee (as indicated in the applicable Exercise
Notice), for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise, which may contain a
restrictive legend if required to comply with applicable securities
laws. Upon delivery of an Exercise Notice, the Holder shall be
deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has
been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery
of the certificates evidencing such Warrant Shares (as the case may
be). If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then,
at the request of the Holder, the Company shall as soon as
practicable and in no event later than three (3) Business Days
after any exercise and at its own expense, issue and deliver to the
Holder (or its designee) a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised. No fractional shares of Common
Stock are to be issued upon the exercise of this Warrant, but
rather the number of shares of Common Stock to be issued shall be
rounded up to the nearest whole number. The Company shall pay any
and all taxes and fees which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this
Warrant.
2
(b) Exercise Price. For purposes of
this Warrant, “Exercise
Price” means $0.001, subject to adjustment as provided
herein.
(c) Company’s Failure to Timely
Deliver Securities. If the Company shall fail, for any
reason or for no reason, to issue to the Holder within the later of
(i) three (3) Trading Days after receipt of the applicable Exercise
Notice and (ii) two (2) Trading Days after the Company’s
receipt of the Aggregate Exercise Price (or valid notice of a
Cashless Exercise) (such later date, the “Share Delivery Deadline”), a
certificate for the number of shares of Common Stock to which the
Holder is entitled and register such shares of Common Stock on the
Company’s share register or to credit the Holder’s
balance account with DTC for such number of shares of Common Stock
to which the Holder is entitled upon the Holder’s exercise of
this Warrant (as the case may be) (a “Delivery Failure”), and if on or
after such Share Delivery Deadline 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 all or any portion of
the number of shares of Common Stock, or a sale of a number of
shares of Common Stock equal to all or any portion of the number of
shares of Common Stock, issuable upon such exercise that the Holder
so anticipated receiving from the Company, then, in addition to all
other remedies available to the Holder, the Company shall, within
three (3) Business Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder in an
amount equal to the Holder’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for
the shares of Common Stock so purchased (including, without
limitation, by any other Person in respect, or on behalf, of the
Holder) (the “Buy-In
Price”), at which point the Company’s obligation
to so issue and deliver such certificate or credit the
Holder’s balance account with DTC for the number of shares of
Common Stock to which the Holder is entitled upon the
Holder’s exercise hereunder (as the case may be) (and to
issue such shares of Common Stock) shall terminate, or (ii)
promptly honor its obligation to so issue and deliver to the Holder
a certificate or certificates representing such shares of Common
Stock or credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder (as the case may be) and
pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of
Common Stock multiplied by (B) the lowest Closing Sale Price of the
Common Stock on any Trading Day during the period commencing on the
date of the applicable Exercise Notice and ending on the date
immediately preceding the date of such issuance and payment under
this clause (ii).
(d) Cashless Exercise.
Notwithstanding anything contained herein to the contrary (other
than Section 1(f) below), if at the time of exercise hereof a
registration statement is not effective (or the prospectus
contained therein is not available for use) for the issuance by the
Company to the Holder of all of the Warrant Shares, then the Holder
may, in its sole discretion, exercise this Warrant in whole or in
part and, in lieu of making the cash payment otherwise contemplated
to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a
“Cashless
Exercise”):
3
Net
Number = (A x B) - (A x
C)
B
For
purposes of the foregoing formula:
A
=
the total number of
shares with respect to which this Warrant is then being
exercised.
B
=
as applicable: (i)
the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the date of the applicable Exercise Notice if
such Exercise Notice is (1) both executed and delivered pursuant to
Section 1(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 1(a) hereof on a Trading
Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the
federal securities laws) on such Trading Day, (ii) the Closing Bid
Price of the Common Stock as of the time of the Holder’s
execution of the applicable Exercise Notice if such Exercise Notice
is executed during “regular trading hours” on a Trading
Day and is delivered within two (2) hours thereafter pursuant to
Section 1(a) hereof or (iii) the Closing Sale Price of the Common
Stock on the date of the applicable Exercise Notice if the date of
such Exercise Notice is a Trading Day and such Exercise Notice is
both executed and delivered pursuant to Section 1(a) hereof after
the close of “regular trading hours” on such Trading
Day.
C
=
the Exercise Price
then in effect for the applicable Warrant Shares at the time of
such exercise.
(e) Disputes. In the case of a
dispute as to the determination of the Exercise Price or the
arithmetic calculation of the number of Warrant Shares to be issued
pursuant to the terms hereof, the Company shall promptly issue to
the Holder the number of Warrant Shares that are not disputed and
resolve such dispute in accordance with
Section 13.
(i) Beneficial Ownership.
Notwithstanding anything to the contrary contained in this Warrant,
this Warrant shall not be exercisable by the Holder hereof to the
extent (but only to the extent) that after giving effect to such
exercise the Holder (together with any of its affiliates) would
beneficially own in excess of 4.99% (the “Maximum Percentage”) of the
Common Stock. To the extent the above limitation applies, the
determination of whether this Warrant shall be exercisable
(vis-à-vis other convertible, exercisable or exchangeable
securities owned by the Holder or any of its affiliates) and of
which such securities shall be convertible, exercisable or
exchangeable (as the case may be, as among all such securities
owned by the Holder) shall, subject to such Maximum Percentage
limitation, be determined on the basis of the first submission to
the Company for conversion, exercise or exchange (as the case may
be). No prior inability to exercise this Warrant pursuant to this
paragraph shall have any effect on the applicability of the
provisions of this paragraph with respect to any subsequent
determination of exercisability. For the purposes of this
paragraph, beneficial ownership and all determinations and
calculations (including, without limitation, with respect to
calculations of percentage ownership) shall be determined in
accordance with Section 13(d) of the 1934 Act (as defined in
the Securities Purchase Agreement) and the rules and regulations
promulgated thereunder. The provisions of this paragraph shall be
implemented in a manner otherwise than in strict conformity with
the terms of this paragraph to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the
intended Maximum Percentage beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable
to properly give effect to such Maximum Percentage limitation. The
limitations contained in this paragraph shall apply to a successor
Holder of this Warrant. The holders of Common Stock shall be third
party beneficiaries of this paragraph and the Company may not amend
or waive this paragraph without the consent of holders of a
majority of its Common Stock. For any reason at any time, upon the
written or oral request of the Holder, the Company shall within one
(1) Business Day confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding, including by
virtue of any prior conversion or exercise of convertible or
exercisable securities into Common Stock, including, without
limitation, pursuant to this Warrant or securities issued pursuant
to the Securities Purchase Agreement. By written notice to the
Company, any Holder may increase or decrease the Maximum Percentage
to any other percentage specified in such notice; provided that (i)
any such increase will not be effective until the 61st day after
such notice is delivered to the Company, and (ii) any such increase
or decrease will apply only to the Holder sending such notice and
not to any other holder of SPA Warrants.
4
(ii) OMITTED.
(g) Insufficient Authorized Shares.
The Company shall at all times keep reserved for issuance under
this Warrant a number of shares of Common Stock at least equal to
the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common
Stock hereunder (without regard to any limitation otherwise
contained herein with respect to the number of shares of Common
Stock that may be acquirable upon exercise of this Warrant). If,
notwithstanding the foregoing, and not in limitation thereof, at
any time while any of the SPA Warrants remain outstanding the
Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon exercise of the SPA Warrants at least a
number of shares of Common Stock (the “Required Reserve Amount”) equal to
the number of shares of Common Stock as shall from time to time be
necessary to effect the exercise of all of the SPA Warrants then
outstanding (an “Authorized
Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s
authorized shares of Common Stock to an amount sufficient to allow
the Company to reserve the Required Reserve Amount for all the SPA
Warrants then outstanding. Without limiting the generality of the
foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later
than seventy-five (75) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its
best efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its
board of directors to recommend to the stockholders that they
approve such proposal. In the event that the Company is prohibited
from issuing shares of Common Stock upon an exercise of this
Warrant due to the failure by the Company to have sufficient shares
of Common Stock available out of the authorized but unissued shares
of Common Stock (such unavailable number of shares of Common Stock,
the “Authorization Failure
Shares”), in lieu of delivering such Authorization
Failure Shares to the Holder, the Company shall pay cash in
exchange for the cancellation of such portion of this Warrant
exercisable into such Authorized Failure Shares at a price equal to
the sum of (i) the product of (x) such number of Authorization
Failure Shares and (y) the greatest Closing Sale Price of the
Common Stock on any Trading Day during the period commencing on the
date the Holder delivers the applicable Exercise Notice with
respect to such Authorization Failure Shares to the Company and
ending on the date immediately preceding the date of such issuance
and payment under this Section 1(g) minus, in the event of a
“cash” exercise of such Warrants, the applicable
Aggregate Exercise Price for such Authorization Failure Shares and
(ii) to the extent 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 Authorization Failure
Shares, any brokerage commissions and other out-of-pocket expenses,
if any, of the Holder incurred in connection
therewith.
2. ADJUSTMENT OF EXERCISE PRICE OF
WARRANT SHARES. The Exercise Price of this Warrant, but
not the number of Warrant Shares issuable hereunder, is subject to
adjustment from time to time as set forth in this
Section 2.
5
(a) Stock Dividends and Splits.
Without limiting any provision of Section 4, if the Company,
at any time on or after the date of the Securities Purchase
Agreement, (i) pays a stock dividend on one or more classes of its
then outstanding shares of Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its
then outstanding shares of Common Stock into a larger number of
shares or (iii) combines (by combination, reverse stock split or
otherwise) one or more classes of its then outstanding shares of
Common Stock into a smaller number of shares, then in each such
case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and
any adjustment pursuant to clause (ii) or (iii) of this paragraph
shall become effective immediately after the effective date of such
subdivision or combination. If any event requiring an adjustment
under this paragraph occurs during the period that an Exercise
Price is calculated hereunder, then the calculation of such
Exercise Price shall be adjusted appropriately to reflect such
event.
(b) OMITTED.
(c) Number of Warrant Shares.
Regardless of any adjustment to the Exercise Price pursuant to
paragraph (a) of this Section 2, the number of Warrant Shares
that may be purchased upon exercise of this Warrant shall not be
increased or decreased.
(d) OMITTED.
(e) OMITTED.
(f) Calculations. All calculations
under this Section 2 shall be made by rounding to the nearest
cent or the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares
shall be considered an issue or sale of Common Stock.
(g) OMITTED.
3. RIGHTS UPON DISTRIBUTION OF
ASSETS. In addition to
any adjustments pursuant to Section 2 above, if the Company
shall declare or make any dividend or other distribution of its
assets (or rights to acquire its assets) to holders of shares of
Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or
other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder
shall be entitled to participate in such Distribution to the same
extent that the Holder would have participated therein if the
Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Maximum Percentage) immediately before the date on which a record
is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are
to be determined for the participation in such Distribution
(provided, however, to the extent that the Holder’s right to
participate in any such Distributions would result in the Holder
exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such Distribution to such extent (or the
beneficial ownership of any such shares of Common Stock as a result
of such Distribution to such extent) and such Distribution to such
extent shall be held in abeyance for the benefit of the Holder
until such time, if ever, as its right thereto would not result in
the Holder exceeding the Maximum Percentage).
6
(a) Purchase Rights. In addition to
any adjustments pursuant to Section 2 above, if at any time
the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or
other property pro rata to all or substantially all of the record
holders of any class of shares of Common Stock (the
“Purchase
Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder
had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Maximum Percentage) immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights (provided, however, to
the extent that the Holder’s right to participate in any such
Purchase Right would result in the Holder exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Maximum
Percentage).
(b) Fundamental Transactions. (1)
The Company shall not enter into or be party to a Fundamental
Transaction unless (i) the Successor Entity (if different than the
Company) assumes in writing all of the obligations of the Company
under this Warrant and the other Transaction Documents (as defined
in the Securities Purchase Agreement) in accordance with the
provisions of this Section 4(b)(1) including agreements to
deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant,
including, without limitation, which is exercisable for a
corresponding number of shares of capital stock equivalent to the
shares of Common Stock acquirable and receivable upon exercise of
this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
adjustments to the number of shares of capital stock and such
exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such
Fundamental Transaction) and (ii) the Successor Entity
(including its Parent Entity) is a publicly traded corporation
whose common stock is quoted on or listed for trading on an
Eligible Market. Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other
Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein. Upon consummation of
each Fundamental Transaction, the Successor Entity (if different
from the Company) shall deliver to the Holder confirmation that
there shall be issued upon exercise of this Warrant at any time
after the consummation of the applicable Fundamental Transaction,
in lieu of the shares of Common Stock (or other securities, cash,
assets or other property (except such items still issuable under
Sections 3 and 4(a) above, which shall continue to be
receivable thereafter)) issuable upon the exercise of this Warrant
prior to the applicable Fundamental Transaction, such shares of
common stock (or its equivalent) of the Successor Entity (including
its Parent Entity) which the Holder would have been entitled to
receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any
limitations on the exercise of this Warrant), as adjusted in
accordance with the provisions of this Warrant. In addition to and
not in substitution for any other rights hereunder, prior to the
consummation of each Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this
Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu
of the shares of the Common Stock (or other securities, cash,
assets or other property (except such items still issuable under
Sections 3 and 4(a) above, which shall continue to be
receivable thereafter)) issuable upon the exercise of the Warrant
prior to such Fundamental Transaction, such shares of stock,
securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which
the Holder would have been entitled to receive upon the happening
of the applicable Fundamental Transaction had this Warrant been
exercised immediately prior to the applicable Fundamental
Transaction (without regard to any limitations on the exercise of
this Warrant). Provision made pursuant to the preceding sentence
shall be in a form and substance reasonably satisfactory to the
Holder.
7
(2)
Notwithstanding the provisions of Section 4(b)(1), the Company
shall have the right to require that Holder waive the requirements
of Section 4(b)(1) (the "Waiver") in an all cash Fundamental
Transaction in exchange for a payment of cash in an amount equal to
the Black Scholes Value, with the Waiver becoming effective, and
this Warrant cancelled, concurrently with such payment of such cash
amount (the "Fundamental
Transaction Amount") to the Holder on the Fundamental
Transaction Closing Date. Notwithstanding anything to the contrary
in this Section 4(b), but subject to Section 1(f), until such time
that the Holder receives the Fundamental Transaction Amount (at
which point this Warrant shall be cancelled), this Warrant may be
exercised, in whole or in part, by the Holder (x) prior to
consummation of the applicable Fundamental Transaction, into Common
Stock pursuant to Section 1, or (y) upon (which may be expressly
conditioned upon the consummation of the applicable Fundamental
Transaction) or after the consummation of the applicable
Fundamental Transaction, into any such shares of stock, securities,
cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights, if applicable) which the
Holder would have been entitled to receive upon the happening of
such Fundamental Transaction had the Warrant been exercised
immediately prior to the consummation of such Fundamental
Transaction.
(c) OMITTED.
(d) Application. The provisions of
this Section 4 shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied
as if this Warrant (and any such subsequent warrants) were fully
exercisable and without regard to any limitations on the exercise
of this Warrant (provided that the Holder shall continue to be
entitled to the benefit of the Maximum Percentage, applied however
with respect to shares of capital stock registered under the 1934
Act and thereafter receivable upon exercise of this Warrant (or any
such other warrant)).
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not,
by amendment of its Certificate of Incorporation (as defined in the
Securities Purchase Agreement), Bylaws (as defined in the
Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement,
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, and will at all times in good faith
carry out all the provisions of this Warrant and take all action as
may be required to protect the rights of the Holder. Without
limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common
Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect, (ii) shall take all such
actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant, and (iii)
shall, so long as any of the SPA Warrants are outstanding, take all
action necessary to reserve and keep available out of its
authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of the SPA Warrants, the maximum
number of shares of Common Stock as shall from time to time be
necessary to effect the exercise of the SPA Warrants then
outstanding (without regard to any limitations on
exercise).
8
6. WARRANT HOLDER NOT DEEMED A
STOCKHOLDER. Except as
otherwise specifically provided herein, the Holder, solely in its
capacity as a holder of this Warrant, shall not be entitled to vote
or receive dividends or be deemed the holder of share capital of
the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in its
capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue
of stock, reclassification of stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive
dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which it is then
entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this
Section 6, the Company shall provide the Holder with copies of
the same notices and other information given to the stockholders of
the Company generally, contemporaneously with the giving thereof to
the stockholders.
7. REISSUANCE OF
WARRANTS.
(a) Transfer of Warrant. If this
Warrant is to be transferred, the Holder shall surrender this
Warrant to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Warrant (in
accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant
Shares being transferred by the Holder and, if less than the total
number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 7(d))
to the Holder representing the right to purchase the number of
Warrant Shares not being transferred.
(b) Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant (as to which a written certification and
the indemnification contemplated below shall suffice as such
evidence), and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in
customary and reasonable form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the Warrant
Shares then underlying this Warrant.
(c) Exchangeable for Multiple
Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a
new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of
Warrant Shares then underlying this Warrant, and each such new
Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such
surrender; provided, however, no warrants for fractional shares of
Common Stock shall be given.
9
(d) Issuance of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to
the terms of this Warrant, such new Warrant (i) shall be of like
tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares
then underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Warrant
Shares designated by the Holder which, when added to the number of
shares of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of
Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date, and (iv) shall have the same
rights and conditions as this Warrant.
8. NOTICES.
Whenever notice is required to be given under this Warrant, unless
otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The
Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefor.
Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon each
adjustment of the Exercise Price and the number of Warrant Shares,
setting forth in reasonable detail, and certifying, the calculation
of such adjustment(s) and (ii) at least fifteen (15) days prior to
the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of
Common Stock, (B) with respect to any grants, issuances or sales of
any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property to holders of shares of
Common Stock or (C) for determining rights to vote with respect to
any Fundamental Transaction, dissolution or liquidation, provided
in each case that such information shall be made known to the
public prior to or in conjunction with such notice being provided
to the Holder and (iii) at least ten (10) Trading Days prior to the
consummation of any Fundamental Transaction. To the extent that any
notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of its
Subsidiaries, the Company shall simultaneously file such notice
with the SEC (as defined in the Securities Purchase Agreement)
pursuant to a Current Report on Form 8-K. It is expressly
understood and agreed that the time of execution specified by the
Holder in each Exercise Notice shall be definitive and may not be
disputed or challenged by the Company.
9. AMENDMENT
AND WAIVER. Except as
otherwise provided herein, the provisions of this Warrant (other
than Section 1(f)) may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained
the written consent of the Holder. The Holder shall be entitled, at
its option, to the benefit of any amendment of (i) any other
similar warrant issued under the Securities Purchase Agreement or
(ii) any other similar warrant. No waiver shall be effective unless
it is in writing and signed by an authorized representative of the
waiving party.
10. SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the
invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as
this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The
parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid
provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable
provision(s).
10
11. GOVERNING
LAW. This Warrant
shall be governed by and construed and enforced in accordance with,
and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed
by, the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other
than the State of New York. The Company hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts
sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Nothing contained herein
shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the
Holder or to enforce a judgment or other court ruling in favor of
the Holder. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
12. CONSTRUCTION;
HEADINGS. This Warrant
shall be deemed to be jointly drafted by the Company and the Holder
and shall not be construed against any Person as the drafter
hereof. The headings of this Warrant are for convenience of
reference and shall not form part of, or affect the interpretation
of, this Warrant. Terms used in this Warrant but defined in the
other Transaction Documents shall have the meanings ascribed to
such terms on the Closing Date in such other Transaction Documents
unless otherwise consented to in writing by the
Holder.
(a)
In the case of a
dispute as to the determination of the Exercise Price, the Closing
Bid Price, the Closing Sale Price, the VWAP or fair market value or
the arithmetic calculation of the number of Warrant Shares (as the
case may be), the Company or the Holder (as the case may be) shall
submit the disputed determinations or arithmetic calculations (as
the case may be) via facsimile (i) within two (2) Business Days
after receipt of the applicable notice giving rise to such dispute
to the Company or the Holder (as the case may be) or (ii) if no
notice gave rise to such dispute, at any time after the Holder
learned of the circumstances giving rise to such dispute. If the
Holder and the Company are unable to agree upon such determination
or calculation (as the case may be) of the Exercise Price, the
Closing Sale Price or fair market value or the number of Warrant
Shares (as the case may be) within three (3) Business Days of such
disputed determination or arithmetic calculation being submitted to
the Company or the Holder (as the case may be), then the Company
shall, within two (2) Business Days submit via facsimile (a) the
disputed determination of the Exercise Price, the Closing Bid
Price, the Closing Sale Price or fair market value (as the case may
be) to an independent, reputable investment bank selected by the
Holder or (b) the disputed arithmetic calculation of the number of
Warrant Shares to an independent accountant selected by the Holder.
The Company shall cause at its expense the investment bank or the
accountant (as the case may be) to perform the determinations or
calculations (as the case may be) and notify the Company and the
Holder of the results no later than ten (10) Business Days from the
time it receives such disputed determinations or calculations (as
the case may be). Such investment bank’s or
accountant’s determination or calculation (as the case may
be) shall be binding upon all parties absent demonstrable
error.
11
(b) The Company
expressly acknowledges and agrees that (i) this Section 13
constitutes an agreement to arbitrate between the Company and the
Holder (and constitutes an arbitration agreement) under the New
York Arbitration Act, as amended, (ii) a dispute relating to the
Exercise Price includes, without limitation, disputes as to (1) the
consideration per share at which an issuance or deemed issuance of
Common Stock occurred, and (2) whether an agreement, instrument,
security or the like constitutes and Option or Convertible
Security, (iii) the terms of this Warrant and each other applicable
Transaction Document shall serve as the basis for the selected
investment bank’s resolution of the applicable dispute, such
investment bank shall be entitled (and is hereby expressly
authorized) to make all findings, determinations and the like that
such investment bank determines are required to be made by such
investment bank in connection with its resolution of such dispute
(including, without limitation, determining (1) the consideration
per share at which an issuance or deemed issuance of Common Stock
occurred, and (2) whether an agreement, instrument, security or the
like constitutes and Option or Convertible Security) and in
resolving such dispute such investment bank shall apply such
findings, determinations and the like to the terms of this Warrant
and any other applicable Transaction Documents, (iv) the terms of
this Warrant and each other applicable Transaction Document shall
serve as the basis for the selected accountant’s or
accounting firm’s performance of the applicable arithmetic
calculation of the number of Warrant Shares, (v) for clarification
purposes and without implication that the contrary would otherwise
be true, disputes relating to matters described in Section 13(a)
shall be governed by Section 13(a) and not by Section 13(b), (vi)
the Holder (and only the Holder), in its sole discretion, shall
have the right to submit any dispute described in this Section 13
to any state or federal court sitting in The City of New York,
Borough of Manhattan in lieu of utilizing the procedures set forth
in this Section 13 and (vii) nothing in this Section 13 shall limit
the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any
matters described in Section 13(a) or Section 13(b).
14. REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies
provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other
Transaction Documents, at law or in equity (including a decree of
specific performance and/or other injunctive relief), and nothing
herein shall limit the right of the Holder to pursue actual damages
for any failure by the Company to comply with the terms of this
Warrant. The Company covenants to the Holder that there shall be no
characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with
respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and
shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). The
Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or
threatened breach, the holder of this Warrant shall be entitled, in
addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required. The
Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to
confirm the Company’s compliance with the terms and
conditions of this Warrant (including, without limitation,
compliance with Section 2 hereof). The issuance of shares and
certificates for shares as contemplated hereby upon the exercise of
this Warrant shall be made without charge to the Holder or such
shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than the
Holder or its agent on its behalf.
12
15. TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned
without the consent of the Company.
16. CERTAIN
DEFINITIONS. For purposes of
this Warrant, the following terms shall have the following
meanings:
(a) “Approved Stock Plan” means any
employee benefit plan (which has been approved by the board of
directors of the Company prior to or subsequent to the date hereof)
pursuant to which shares of Common Stock, standard options to
purchase Common Stock or other equity awards may be issued to any
employee, officer or director for services provided to the Company
in their capacity as such.
(b) “Black Scholes Value” means the
value of the unexercised portion of this Warrant remaining on the
Fundamental Transaction Closing Date, which value is calculated
using the Black Scholes Option Pricing Model obtained from the
“OV” function on Bloomberg utilizing (i) an underlying
price per share equal to the sum of the price per share being
offered in cash in the applicable Change of Control (if any) plus
the value of the non-cash consideration being offered in the
applicable Change of Control (if any), (ii) a strike price equal to
the Exercise Price in effect on the Fundamental Transaction Closing
Date, (iii) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of this
Warrant as of the Fundamental Transaction Closing Date, (iv) a zero
cost of borrow and (v) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function
on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the earliest to occur
of (x) the public disclosure of the applicable Change of Control,
(y) the consummation of the applicable Change of Control and (z)
the date on which the Holder first became aware of the applicable
Change of Control.
(c) “Bloomberg” means Bloomberg,
L.P.
(d) “Business Day” means any day other
than Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain
closed.
(e) “Change of Control” means any
Fundamental Transaction other than (i) any merger of the Company or
any of its, direct or indirect, wholly-owned Subsidiaries with or
into any of the foregoing Persons, (ii) any reorganization,
recapitalization or reclassification of the shares of Common Stock
in which holders of the Company’s voting power immediately
prior to such reorganization, recapitalization or reclassification
continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly
or indirectly, are, in all material respects, the holders of the
voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of
directors (or their equivalent if other than a corporation) of such
entity or entities) after such reorganization, recapitalization or
reclassification, or (iii) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of
incorporation of the Company or any of its
Subsidiaries.
13
(f) “Closing Bid Price” and
“Closing Sale
Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively,
for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price
or the closing trade price (as the case may be) then the last bid
price or last trade price, respectively, of such security prior to
4:00:00 p.m., New York City time, as reported by Bloomberg, or, if
the Principal Market is not the principal securities exchange or
trading market for such security, the last closing bid price or
last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed
or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).
If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price or the Closing Sale Price
(as the case may be) of such security on such date shall be the
fair market value as mutually determined by the Company and the
Holder. If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be
resolved in accordance with the procedures in Section 13. All
such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar
transaction during such period.
(g) “Common Stock” means (i) the
Company’s shares of common stock, $0.001 par value per share,
and (ii) any capital stock into which such common stock shall have
been changed or any share capital resulting from a reclassification
of such common stock.
(h) “Convertible Securities” means any
stock or other security (other than Options) that is at any time
and under any circumstances, directly or indirectly, convertible
into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any shares of Common
Stock.
(i) “Eligible Market” means The New
York Stock Exchange, the NYSE American, the Nasdaq Global Select
Market, the Nasdaq Global Market or the Principal
Market.
(j) “Expiration Date” means the date
that is the five year anniversary of the Initial Exercisability
Date, or, if such date falls on a day other than a Business Day or
on which trading does not take place on the Principal Market (a
“Holiday”), the
next date that is not a Holiday.
(k) “Fundamental Transaction” means
that (i) the Company or any of its Subsidiaries shall, directly or
indirectly, in one or more related transactions, (1) consolidate or
merge with or into (whether or not the Company or any of its
Subsidiaries is the surviving corporation) any other Person, or (2)
sell, lease, license, assign, transfer, convey or otherwise dispose
of all or substantially all of its respective properties or assets
to any other Person, or (3) support any other Person in making a
purchase, tender or exchange offer that is accepted by the holders
of more than 50% of the outstanding shares of Voting Stock of the
Company (not including any shares of Voting Stock of the Company
held by the Person or Persons making or party to, or associated or
affiliated with the Persons making or party to, such purchase,
tender or exchange offer), or (4) consummate a stock or share
purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with any other Person whereby such other
Person acquires more than 50% of the outstanding shares of Voting
Stock of the Company (not including any shares of Voting Stock of
the Company 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 or share purchase agreement or other
business combination).
14
(l) “Fundamental Transaction Closing
Date” means the date of consummation of the applicable
Fundamental Transaction.
(m) “Market Price” means, for any given
date, 90% of the arithmetic average of the ten (10) lowest VWAPs of
the Common Stock during the twenty (20) consecutive Trading Day
period ending two (2) Trading Days immediately prior to such given
date (such period, the “Market Price Measuring Period”).
All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or
similar transactions during such Market Price Measuring
Period.
(n) “Options” means any rights,
warrants or options to subscribe for or purchase shares of Common
Stock or Convertible Securities.
(o) “Parent Entity” of a Person means
an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is
quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity, the Person or Parent Entity with
the largest public market capitalization as of the date of
consummation of the Fundamental Transaction.
(p) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other
entity or a government or any department or agency
thereof.
(q) “Principal Market” means the NYSE
American.
(r) “Subsidiary” means any Person in
which the Company, directly or indirectly, (i) owns any of the
outstanding capital stock or holds any equity or similar interest
of such Person or (ii) controls or operates all or any part of the
business, operations or administration of such Person, and all of
the foregoing.
(s) “Successor Entity” means the Person
(or, if so elected by the Holder, the Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or the
Person (or, if so elected by the Holder, the Parent Entity) with
which such Fundamental Transaction shall have been entered
into.
(t) “Trading Day” means any day on
which the Common Stock is traded on the Principal Market, or, if
the Principal Market is not the principal trading market for the
Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day
on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is
suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not
designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00:00 p.m., New York
time) unless such day is otherwise designated as a Trading Day in
writing by the Holder.
15
(u) “Voting Stock” of a Person means
capital stock of such Person of the class or classes pursuant to
which the holders thereof have the general voting power to elect,
or the general power to appoint, at least a majority of the board
of directors, managers or trustees of such Person (irrespective of
whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency).
(v) “VWAP” means, for any security as of any date,
the dollar volume-weighted average price for such security on the
Principal Market (or, if the Principal Market is not the principal
trading market for such security, then on the principal securities
exchange or securities market on which such security is then
traded) during the period beginning at 9:30:01 a.m., New York City
time, and ending at 4:00:00 p.m., New York City time, as reported
by Bloomberg through its “Volume at Price” function or,
if the foregoing does not apply, the dollar volume-weighted average
price of such security in the over-the-counter market on the
electronic bulletin board for such security during the period
beginning at 9:30:01 a.m., New York City time, and ending at
4:00:00 p.m., New York City time, as reported by Bloomberg, or, if
no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest
Closing Bid Price and the lowest Closing Sale Price of any of the
market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).
If the VWAP cannot be calculated for such security on such date on
any of the foregoing bases, the VWAP of such security on such date
shall be the fair market value as mutually determined by the
Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in
Section 13. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination, or other
similar transaction during such period.
[signature
page follows]
16
IN WITNESS WHEREOF, the Company has
caused this Second Amended and Restated Warrant to Purchase Common
Stock to be duly executed as of the Issuance Date set out
above.
By:
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:Chief
Executive Officer
17
EXHIBIT A
EXERCISE NOTICE
TO BE
EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
SECOND
AMENDED AND RESTATED WARRANT TO PURCHASE COMMON STOCK
The
undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock
(“Warrant
Shares”) of CorMedix Inc., a Delaware corporation (the
“Company”),
evidenced by the Second Amended and Restated Warrant to Purchase
Common Stock No. AR-10/2013-2 (the “Warrant”). Capitalized terms used
herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:
____________
a
“Cash
Exercise” with respect to _________________ Warrant
Shares; and/or
____________
a
“Cashless
Exercise” with respect to _______________ Warrant
Shares.
In the
event that the Holder has elected a Cashless Exercise with respect
to some or all of the Warrant Shares to be issued pursuant hereto,
the Holder hereby represents and warrants that (i) this Exercise
Notice was executed by the Holder at __________ [a.m.][p.m.] on the
date set forth below and (ii) if applicable, the Closing Bid Price
as of such time of execution of this Exercise Notice was
$________.
2. Payment
of Exercise Price. In the event that the Holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the Holder shall pay the Aggregate
Exercise Price in the sum of $___________________ to the Company in
accordance with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to Holder, or
its designee or agent as specified below, __________ Warrant Shares
in accordance with the terms of the Warrant. Delivery shall be made
to Holder, or for its benefit, to the following address or DTC
Account number:
Date:
,
Name of
Registered Holder
By:
18
EXHIBIT B
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs
______________ to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated _________,
20__, from the Company and acknowledged and agreed to by
_______________.
By:
Name:
Title:
19