THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS, AND ARE "RESTRICTED SECURITIES" AS
THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE, OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UPON RECEIPT BY THE
COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Warrant No. EG1
WARRANT TO PURCHASE SHARES OF COMMON STOCK
ISSUE DATE: MARCH 1, 2006
This certifies that ▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual resident of Alberta,
Canada (or any valid transferee thereof, the "Holder"), for value received, is
entitled to purchase from Molecular Diagnostics, Inc. (d/b/a Cytocore), a
Delaware corporation with its principal business office located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (together with its successors
and assigns, the "Company"), subject to the terms and conditions set forth
below, at any time or from time to time on and after the Issue Date as set forth
above and before 3:00 p.m. (Eastern Daylight Time) on July 31, 2009 (the
"Expiration Date"), 300,000 shares of common stock, $.001 par value per share,
of the Company ("Common Stock"), at a price of $0.10 per share. The shares
purchasable upon exercise of this Warrant, and the purchase price per share,
each as adjusted from time to time pursuant to the provisions of this Warrant,
are hereinafter referred to as the "Warrant Shares" and the "Purchase Price,"
respectively.
1. EXERCISE OF THE WARRANT.
(a) EXERCISE. The Holder may, at the Holder's option, elect to
exercise this Warrant, in whole or in part, at any time or from time to time on
or after the Issue Date but prior to 3:00 p.m. (Eastern Daylight Time) on the
Expiration Date, by surrendering this Warrant, with the purchase form appended
hereto as EXHIBIT I duly executed by or on behalf of the Holder, at the
principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full, in lawful money of the
United States, of the Purchase Price payable in respect of the number of Warrant
Shares purchased upon such exercise. In no event shall any such exercise be for
fewer than 10,000 Warrant Shares unless fewer than an aggregate of 10,000
Warrant Shares are then purchasable under all outstanding Warrants held by the
Holder. Payment of the aggregate Purchase Price may be made in cash, certified
or bank check, or wire transfer of immediately available funds.
(b) EXERCISE DATE AND STATUS AS HOLDER OF SHARES. Each exercise of
this Warrant shall be deemed to have been effected immediately prior to the
close of business on the day on which this Warrant shall have been surrendered
to the Company as provided in Subsection 1(a) above (the "Exercise Date"). At
such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in Subsection
1(c) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.
(c) ISSUANCE OF CERTIFICATES. As soon as practicable after the
exercise of this Warrant in whole or in part, and in any event within 10
business days thereafter, the Company, at its expense, will cause to be issued
in the name of, and delivered to, the Holder, or as the Holder (upon payment by
the Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
Warrant Shares to which the Holder shall be entitled upon such exercise plus, in
lieu of any fractional share to which the Holder would otherwise be entitled,
cash in an amount determined pursuant to Section 3 hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the number of Warrant Shares for which this Warrant
was so exercised.
(d) WARRANT SHARES. The Warrant Shares issued upon any such exercise
of this Warrant shall be validly issued, fully paid and non-assessable.
2. ADJUSTMENTS.
(a) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company
shall at any time or from time to time after the Issue Date (or, if this Warrant
was issued upon partial exercise of, or in replacement of, another warrant of
like tenor, then the date on which such original warrant was first issued)
(either such date being referred to as the "Original Issue Date") effect a
subdivision of the outstanding Common Stock, the Purchase Price then in effect
immediately before that subdivision shall be proportionately decreased. If the
Company shall at any time or from time to time after the Original Issue Date
combine the outstanding shares of Common Stock, the Purchase Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this Subsection 2(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(b) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the event
the Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in shares of
Common Stock, then and in each such event the Purchase Price then in effect
immediately before such event shall be decreased as of the time of such issuance
or, in the event such a record date shall have been fixed, as of the close of
business on such record date, by multiplying the Purchase Price then in effect
by a fraction:
(1) the numerator of which shall be the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date, and
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(2) the denominator of which shall be the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution;
PROVIDED, HOWEVER, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Purchase Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Purchase Price shall be
adjusted pursuant to this Subsection 2(b) as of the time of actual payment of
such dividends or distributions.
(c) ADJUSTMENT IN NUMBER OF WARRANT SHARES. When any adjustment is
required to be made to the Purchase Price pursuant to Subsections 2(a) or 2(b),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(d) ADJUSTMENT FOR REORGANIZATION. If there shall occur any
reorganization, recapitalization, reclassification, consolidation or merger
involving the Company in which the Common Stock is converted into or exchanged
for securities, cash or other property (other than a transaction covered by
Subsections 2(a) or 2(b)) (collectively, a "Reorganization"), then, following
such Reorganization, the Holder shall receive upon exercise hereof the kind and
amount of securities, cash or other property which the Holder would have been
entitled to receive pursuant to such Reorganization if such exercise had taken
place immediately prior to such Reorganization. In any such case, appropriate
adjustment (as determined in good faith by the Board) shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the Holder, to the end that the provisions set forth in
this Section 2 (including provisions with respect to changes in and other
adjustments of the Purchase Price) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any securities, cash or other property
thereafter deliverable upon the exercise of this Warrant.
(e) NO ADJUSTMENTS IN CERTAIN CASES. No adjustment in the number of
Warrant Shares purchasable pursuant to this Warrant shall be required unless the
adjustment would require an increase or decrease of at least one percent (1.0%)
in the number of Warrant Shares then purchasable upon the exercise of this
Warrant. Except as provided in this Section 2, no other adjustments in the
number, kind or price of shares constituting Warrant Shares shall be made during
the term, or upon the exercise, of this Warrant. Further, no adjustments shall
be made pursuant to this Section 2 hereof in connection with the grant or
exercise of presently authorized or outstanding options to purchase, or the
issuance of shares of Common Stock under, the Company's director or employee
benefit, option and incentive plans.
(f) TREASURY STOCK. For purposes of this Section 2, shares of Common
Stock owned or held at any relevant time by, or for the account of, the Company,
in its treasury or otherwise, shall not be deemed to be outstanding for purposes
of the calculations and adjustments herein described.
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3. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall pay in cash to the
Holder an amount equal to such fraction multiplied by the fair market value per
share of Common Stock, as determined by the Board of Directors in good faith.
4. INVESTMENT REPRESENTATIONS. The initial Holder represents and warrants
to the Company as follows:
(a) INVESTMENT. The Holder is acquiring this Warrant, and (if and
when such Holder exercises this Warrant) will acquire the Warrant Shares, for
such Holder's own account for investment and not with a view to, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling the same; and the Holder has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or commitment
providing for the disposition thereof.
(b) ACCREDITED INVESTOR. The Holder is an "accredited investor" as
defined in Rule 501(a) under the Act.
(c) EXPERIENCE. The Holder has made such inquiry concerning the
Company and its business and personnel as the Holder has deemed appropriate; and
the Holder has sufficient knowledge and experience in finance and business that
the Holder is capable of evaluating the risks and merits of an investment in the
Company.
5. TRANSFERS, ETC.
(a) This Warrant and the Warrant Shares shall not be offered, sold
or transferred unless either (i) they first shall have been registered under the
Act and any applicable state securities laws, or (ii) the Company first shall
have been furnished with an opinion of legal counsel, satisfactory to the
Company, to the effect that such offer, sale or transfer is exempt from the
registration requirements of the Act and any applicable state securities laws.
(b) Each Warrant and certificate representing Warrant Shares shall
bear a legend substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
any state securities laws, and may not be offered, sold or
otherwise transferred, pledged or hypothecated unless and
until such securities are registered under such act and
applicable state securities laws or an opinion of counsel
reasonably satisfactory to the Company is obtained to the
effect that such registration is not required."
The foregoing legend shall be removed from the certificates representing
any Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144 under the Act.
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(c) The Company will maintain a register containing the name and
address of the Holder of this Warrant. The Holder may change the Holder's
address as shown on the warrant register by written notice to the Company
requesting such change.
(d) Subject to the provisions of clauses (a) and (b) of this Section
5, this Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant with a properly executed assignment (in the form
of EXHIBIT II hereto) at the principal office of the Company (or, if another
office or agency has been designated by the Company for such purpose, then at
such other office or agency). Upon the presentation and surrender of such items
to the Company, the Company shall execute and deliver to the transferee or
transferees of this Warrant a new Warrant or Warrants, in the name of the
transferee or transferees named in the assignment, and this Warrant shall at
that time be canceled to the extent transferred.
6. NO IMPAIRMENT; ADJUSTMENT OF PAR VALUE.
(a) The Company will not, by amendment of its charter 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 action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment.
(b) Before taking any action that would cause an adjustment reducing
the Purchase Price per share below the then par value of the shares of Warrant
Shares issuable upon exercise of the Warrant, the Company will take any
corporate action that may be necessary in order that the Company may validly and
legally issue fully paid and non-assessable shares of such Warrant Shares at
such adjusted price.
7. RECORD DATE, ETC. In the event:
(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the Common Stock of the Company, any consolidation or merger
of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the surviving entity and its Common Stock is not
converted into or exchanged for any other securities or property), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will send or cause to be sent to the
Holder a notice specifying, as the case may be, (i) the record date for such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be sent at least 10 days prior to the record date
or effective date for the event specified in such notice.
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8. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property as from
time to time shall be issuable upon the exercise of this Warrant.
9. EXCHANGE OR REPLACEMENT OF WARRANTS.
(a) Upon the surrender by the Holder of this Warrant, properly
endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 5 hereof, issue and deliver to or
upon the order of the Holder, at the Company's expense, a new Warrant or
Warrants of like tenor, in the name of the Holder or as the Holder (upon payment
by the Holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
(or other securities, cash and/or property) then issuable upon exercise of this
Warrant.
(b) Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and (in the case
of loss, theft or destruction) upon delivery of an indemnity agreement (with
surety if reasonably required) in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation of this
Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.
10. NOTICES. All notices and other communications from the Company to the
Holder in connection herewith shall be mailed by certified or registered mail,
postage prepaid, or sent via a reputable nationwide overnight courier service
guaranteeing next business day delivery, to the address last furnished to the
Company in writing by the Holder. All notices and other communications from the
Holder to the Company in connection herewith shall be mailed by certified or
registered mail, postage prepaid, or sent via a reputable nationwide overnight
courier service guaranteeing next business day delivery, to the Company at its
principal office set forth above. If the Company should at any time change the
location of its principal office to a place other than as set forth above, it
shall give prompt written notice to the Holder and thereafter all references in
this Warrant to the location of its principal office at the particular time
shall be as so specified in such notice. All such notices and communications
shall be deemed delivered (a) three business days after being sent by certified
or registered mail, return receipt requested, postage prepaid, or (b) one
business day after being sent via a reputable nationwide overnight courier
service guaranteeing next business day delivery.
11. NO RIGHTS AS STOCKHOLDER; NO LIABILITY. No provision of this Warrant
shall be construed as conferring upon the Holder hereof the right to vote,
consent, receive dividends or receive notice as a stockholder in respect of
meetings of stockholders for the election of directors of the Company or any
other matter whatsoever as a stockholder of the Company. In the absence of
affirmative action by the Holder hereof to purchase shares of Common Stock, no
provision hereof shall give rise to any liability of such Holder for the
purchase price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
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12. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes, if
any, attributable to the initial issuance of this Warrant or the shares of
Common Stock comprising the Warrant Shares; PROVIDED, HOWEVER, the Company shall
not be required to pay any tax that may be payable in respect of any transfer of
this Warrant or Warrant Shares.
13. AMENDMENT OR WAIVER. Any term of this Warrant may be amended or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought. No waivers of any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision or any other term, condition or provision hereof.
14. SECTION HEADINGS. The section headings in this Warrant are for the
convenience of the parties only and in no way alter, modify, amend, limit or
restrict the contractual obligations of the parties.
15. SEVERABILITY. If any provision of this Warrant shall be held invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other provision of this Warrant and, to this end, the provisions
hereof are severable.
16. ASSIGNMENT. This Warrant shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
17. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the internal laws of the State of Delaware (without reference to
the conflicts of law provisions thereof).
18. SIGNATURES. This Warrant may be executed in one or more counterparts
by facsimile signature.
(Signature appears on next page).
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EFFECTIVE as of the Issue Date indicated above.
MOLECULAR DIAGNOSTICS, INC.
By:
-------------------------------------
Title:
----------------------------------
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EXHIBIT I
PURCHASE FORM
To: Dated:
----------------------- ----------------
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. EG1), hereby elects to purchase ________________ shares of the
Common Stock of Molecular Diagnostics, Inc. (d/b/a Cytocore) by such Warrant.
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 shall
be in the aggregate amount of $ ________________ in cash, certified or bank
check, or wire transfer of immediately available funds.
Signature:
--------------------------------
Address:
---------------------------------
---------------------------------
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EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. EG1) with respect to the number of shares of Common Stock of
Molecular Diagnostics, Inc. (d/b/a Cytocore) covered thereby set forth below,
unto:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
---------------- ------- -------------
Dated: Signature:
------------------------ --------------------------------
Signature Guaranteed:
By:
---------------------------
The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17A under
the Securities Exchange Act of 1934, as amended.
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