Exhibit 10.14
EXHIBIT A
TO SECURITIES PURCHASE AGREEMENT
DATED JULY 5, 2007
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND
HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT.
Warrant No. __________
Issue Date: __________
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
DMI BIOSCIENCES, INC.
THIS certifies that, for value received, COGENCO INTERNATIONAL, INC., a
Colorado corporation, is entitled to purchase from DMI BIOSCIENCES, INC., a
Colorado corporation (the "Company"), subject to the terms and conditions
hereof, up to One Million (1,000,000) shares (the "Warrant Shares") of the
Company's common stock, no par value (the "Common Stock"). This warrant,
together with all warrants hereafter issued in exchange or substitution for this
warrant, is referred to as the "Warrant" and the holder of this Warrant is
referred to as the "Holder." The number of Warrant Shares is subject to
adjustment as hereinafter provided. Notwithstanding anything to the contrary
contained herein, this Warrant shall expire at 5:00 pm EST on December 31, 2008
(the "Termination Date").
1. Exercise of Warrant. (a) The Holder may, at any time prior to the
Termination Date, exercise this Warrant in whole or in part at an exercise price
per share equal to One Dollar ($1.00) per share, subject to adjustment as
provided herein (the "Warrant Price"), by the surrender of this Warrant
(properly endorsed) at the principal office of the Company, or at such other
agency or office of the Company in the state of Colorado as the Company may
designate by notice in writing to the Holder at the address of such Holder
appearing on the books of the Company, and by payment to the Company of the
Warrant Price in lawful money of the United States by check or wire transfer for
each share of Common Stock being purchased. Upon any partial exercise of this
Warrant, there shall be executed and issued to the Holder a new Warrant in
respect of the shares of Common Stock as to which this Warrant shall not have
been exercised. In the event of the exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Shares so purchased, as
applicable, registered in the name of the Holder, shall be delivered to the
Holder hereof as soon as practicable after the rights represented by this
Warrant shall have been so exercised. The mechanics of exercise are as follows:
(b) Delivery of Certificates Upon Exercise. Certificates for shares
purchased or transferred hereunder shall be transmitted by the Company to the
Holder by physical delivery to the address specified by the Holder in the
Warrant Exercise Form within 5 Business Days from the delivery to the Company of
the Warrant 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 is 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 the issuance of such shares, have been paid. 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.
(c) Charges, Taxes and Expenses. The Company shall pay any and all
incidental expenses or taxes, except any applicable withholding, which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant, and except any applicable transfer taxes, which may be
payable with respect to the transfer of Warrant Shares or of this Warrant).
2. Reservation of Warrant Shares. The Company agrees that, prior to the
expiration of this Warrant, it will at all times have authorized and in reserve,
and will keep available, solely for issuance or delivery upon the exercise of
this Warrant, the number of Warrant Shares as from time to time shall be
issuable by the Company upon the exercise of this Warrant.
3. No Stockholder Rights. This Warrant shall not entitle the holder hereof
to any voting rights or other rights as a stockholder of the Company.
4. Transferability of Warrant and Warrant Shares. This Warrant and the
Warrant Shares shall not be sold or transferred unless either (i) they first
shall have been registered under the Act, or (ii) the Company first shall have
been furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act. Notwithstanding the foregoing, no
registration or opinion of counsel shall be required for (i) a transfer by the
Holder which is an entity to a wholly owned subsidiary of such entity, a
transfer by the Holder which is a partnership to a partner of such partnership
or a retired partner of such partnership or to the estate of any such partner or
retired partner, or a transfer by the Holder which is a limited liability
company to a member of such limited liability company or a retired member or to
the estate of any such member or retired member, provided that the transferee in
each case agrees in writing to be subject to the terms of this Warrant, or (ii)
a transfer made in accordance with Rule 144 under the Act.
5. Certain Adjustments. With respect to any rights that Holder has to
exercise this Warrant and convert into shares of Common Stock, Holder shall be
entitled to the following adjustments:
(a) Merger or Consolidation. If at any time there shall be a merger or
a consolidation of the Company with or into another corporation that is not
the Holder, an affiliate of Holder or a direct or indirect subsidiary of
Holder when the Company is not the surviving corporation, then, as part of
such merger or consolidation, lawful provision shall be made so that the
Holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the
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aggregate Warrant Price then in effect, the number of shares of stock or
other securities or property (including cash) of the successor corporation
resulting from such merger or consolidation, to which the holder hereof as
the holder of the stock deliverable upon exercise of this Warrant would
have been entitled in such merger or consolidation if this Warrant had been
exercised immediately before such merger or consolidation. In any such
case, appropriate adjustment shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
holder hereof as the holder of this Warrant after the merger or
consolidation.
(b) Reclassification, Recapitalization, etc. If the Company at any
time shall, by subdivision, combination or reclassification of securities,
recapitalization, automatic conversion, or other similar event affecting
the number or character of outstanding shares of Common Stock, or
otherwise, change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right
to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities that were
subject to the purchase rights under this Warrant immediately prior to such
subdivision, combination, reclassification or other change; provided,
however, that this subsection 5(b) shall not apply to any transaction in
which the Holder, any affiliate of Holder or any direct or indirect
subsidiary of Holder is a party to the transaction other than in such
person's capacity as a shareholder of the Company.
(c) Split or Combination of Common Stock and Stock Dividend. In case
the Company shall at any time subdivide, redivide, recapitalize, split
(forward or reverse) or change its outstanding shares of Common Stock into
a greater number of shares or declare a dividend upon its Common Stock
payable solely in shares of Common Stock, the Warrant Price shall be
proportionately reduced and the number of Warrant Shares proportionately
increased. Conversely, in case the outstanding shares of Common Stock of
the Company shall be combined into a smaller number of shares, the Warrant
Price shall be proportionately increased and the number of Warrant Shares
proportionately reduced. Notwithstanding the foregoing, in no event will
the Warrant Price be reduced below the par value of the Common Stock.
(d) Distribution of Assets. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its
assets) to holders 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 or other similar transaction) (a
"Distribution"), at any time after the issuance of this Warrant, then the
Company will provide notice of the Distribution to the Holder at least 30
days before the record date of such distribution and shall include with
that notice, sufficient information about the Distribution so the Holder
can determine whether to exercise this Warrant.
6. Legend and Stop Transfer Orders. Unless the Warrant Shares have been
registered under the Securities Act, upon exercise of any part of the Warrant,
the Company shall instruct its transfer agent to enter stop transfer orders with
respect to such Warrant Shares, and all certificates or instruments representing
the Warrant Shares shall bear on the face thereof substantially the following
legend:
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THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT, AS AMENDED, OR ANY OTHER APPLICABLE
SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE
SECURITIES ACT.
7. Agreement in Connection with Initial Registration or Public Offering.
The Holder agrees, in connection with the initial registration or public
offering of the Company's securities pursuant to a registration statement under
the Act, (i) not to sell, make short sale of, loan, grant any options for the
purchase of, or otherwise dispose of any shares of Common Stock held by the
Holder (other than any shares included in the offering) without the prior
written consent of the Company for a period of 180 days from the effective date
of such registration statement, and (ii) to execute any agreement reflecting
clause (i) above as may be requested by the Company at the time of such
registration or public offering; provided, however, that all other persons
selling shares of Common Stock in such offering, all persons holding in excess
of 5% of the capital stock of the Company on a fully diluted basis and all
executive officers and directors of the Company shall also have agreed not to
sell publicly their Common Stock under the circumstances and pursuant to the
terms set forth in this paragraph and the Corporation does not permit any such
person to sell, on a percentage of total holdings by such person, more than the
Corporation permits the Holder to sell within that 180 day period.
8. Miscellaneous. This Warrant shall be governed by and construed in
accordance with the laws of the State of Colorado. All the covenants and
provisions of this Warrant by or for the benefit of the Company shall bind and
inure to the benefit of its successors and assigns hereunder. Nothing in this
Warrant shall be construed to give to any person or corporation other than the
Company and the holder of this Warrant any legal or equitable right, remedy or
claim under this Warrant. This Warrant shall be for the sole and exclusive
benefit of the Company and the holder of this Warrant. The section headings
herein are for convenience only and are not part of this Warrant and shall not
affect the interpretation hereof. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officers under its seal, this _____ day of _______, 2007.
DMI BIOSCIENCES INC.
By:
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Name:
Title:
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WARRANT EXERCISE FORM
To Be Executed by the Holder in Order to Exercise Warrant
To: DMI Biosciences, Inc.
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Attention:
Dated:____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant No. ______, hereby irrevocably elects to purchase (check applicable
box):
|_| _________ shares of the Common Stock of DMI Biosciences, Inc. covered
by such Warrant; or
|_| the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in subsection
1(b) (if applicable).
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant. Such payment takes
the form of $______ in lawful money of the United States.
The undersigned hereby requests that certificates for the Warrant Shares
purchased hereby be issued in the name of:
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(please print or type name and address)
(please insert social security or other identifying number)
and be delivered as follows:
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(please print or type name and address)
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(please insert social security or other identifying number)
and if such number of shares of Common Stock shall not be all the shares
evidenced by this Warrant Certificate, that a new Warrant for the balance of
such shares be registered in the name of, and delivered to, Holder.
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Signature of Holder
SIGNATURE GUARANTEE:
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form. 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
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address is ----------------------------------------------------------------
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Dated: ,
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Holder's Signature:
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Holder's Address:
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Signature Guaranteed:
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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 corporation.
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.