CORMEDIX INC. THIRD AMENDED AND RESTATED WARRANT TO PURCHASE COMMON STOCK
Exhibit 4.3
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.
THIRD AMENDED AND RESTATED
WARRANT TO PURCHASE COMMON STOCK
Warrant
No.: AR-5/2013-2
This
Third 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 May 30, 2013 (the “Issuance
Date”) to
Manchester Securities Corp. (the “Holder”), pursuant to that certain
Securities Purchase Agreement dated May 23, 2013 (the “Securities Purchase
Agreement”), which
Warrant to Purchase Common Stock was subsequently amended and
restated on September 15, 2014 and March 3, 2015. 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 May 30, 2014 (the
“Initial Exercisability
Date”), but not
after 11:59 p.m., New York time, on the Expiration Date (as defined
below), 500,000 (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.
This
Warrant is one of the Warrants to Purchase Common Stock (the
“SPA Warrants”) issued pursuant to Section 1 of
the Securities Purchase Agreement.
1.
EXERCISE OF
WARRANT.
(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.
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(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”):
Net
Number = (A x B) - (A x
C)
B
For
purposes of the foregoing formula:
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A
=
|
the
total number of shares with respect to which this Warrant is then
being exercised.
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|
|
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.
|
|
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C
=
|
the
Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise.
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(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.
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(f)
Limitations on
Exercises.
(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 9.99% (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.
(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 sixty
(60) 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) 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.
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2.
ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise
Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in
this Section 2.
(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. Simultaneously with 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 be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable
hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to
such adjustment (without regard to any limitations on exercise
contained herein).
(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).
4.
PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(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).
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(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.
(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)).
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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).
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.
(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.
6
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).
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.
7
13.
DISPUTE
RESOLUTION
(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 Company and approved by the Holder or (b) the
disputed arithmetic calculation of the number of Warrant Shares to
the Company’s
independent, outside accountant. 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.
(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(b) 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.
8
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.
(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.
9
(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 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).
(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.
10
(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 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]
11
IN WITNESS WHEREOF, the
Company has caused this Third Amended and Restated Warrant to
Purchase Common Stock to be duly executed as of the Issuance Date
set out above.
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By:
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Khoso
Baluch
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Chief
Executive Officer
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12
EXHIBIT A
EXERCISE NOTICE
TO BE
EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
THIRD 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 Third Amended
and Restated Warrant to Purchase Common Stock No. AR-5/2013-2 (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:
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a
“Cash Exercise” with respect to _________________
Warrant Shares; and/or
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____________
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a
“Cashless Exercise” with respect to _______________
Warrant Shares.
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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:
13
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 _______________.
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Date:_____________________________
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By:
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__________________________________
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Name:
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__________________________________
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Title:
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__________________________________
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14