COMMON STOCK PURCHASE WARRANT Q BIOMED INC.
Warrant
Shares:
_______
Initial Exercise Date: _______, 2018
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, _____________ or its assigns (the
“Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after ________,
2018 (the “Initial
Exercise Date”) and on or prior to the close of
business on the five (5) year anniversary of the Initial Exercise
Date (the “Termination Date”) but
not thereafter, to subscribe for and purchase from Q BioMed Inc., a
Nevada corporation (the “Company”), up to ______
shares (as subject to adjustment hereunder, the “Warrant Shares”) of the
Company’s common stock, par value $0.001 per share (the
“Common
Stock”). The purchase price of one share of
Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1.Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the
“Purchase
Agreement”), dated _______, 2018, among the Company
and the purchasers signatory thereto.
Section 2.Exercise.
a)Exercise
of Warrant. Exercise of the purchase rights
represented by this Warrant may be made, in whole or in part, at
any time or times on or after the Initial Exercise Date and on or
before the Termination Date by delivery to the Company (or such
other office or agency of the Company as it may designate by notice
in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile
copy (or e-mail attachment) of the Notice of Exercise in the form
annexed hereto. Within the earlier of (i) three (3)
Trading Days and (ii) the number of Trading Days comprising the
Standard Settlement Period (as defined in Section 2(d)(i) herein)
following the date of exercise as aforesaid, the Holder shall
deliver the aggregate Exercise Price for the shares specified in
the applicable Notice of Exercise (the “Purchase
Price”) by wire transfer or cashier’s check drawn on a
United States bank unless the cashless exercise procedure specified
in Section 2(c) below is specified in the applicable Notice of
Exercise. No ink-original Notice of Exercise shall be
required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise form be
required. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of
the Warrant Shares available hereunder and the Warrant has been
exercised in full, in which case, the Holder shall surrender this
Warrant to the Company for cancellation within three (3) Trading
Days of the date the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases
of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number
of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased. The
Holder and the Company shall maintain records showing the number of
Warrant Shares purchased and the date of such purchases. The
Company shall deliver any objection to any Notice of Exercise
within two (2) Business Days of receipt of such
notice. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given
time may be less than the amount stated on the face
hereof.
b)Exercise
Price. The exercise price per share of the Common
Stock under this Warrant shall be $_____, subject to adjustment hereunder
(the “Exercise
Price”).
c)Cashless
Exercise. If at any time after the six-month
anniversary of the Closing Date, there is no effective Registration
Statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder, then this Warrant may
also be exercised, in whole or in part, at such time by means of a
“cashless exercise” in which the Holder shall be
entitled to receive a number of Warrant Shares equal to the
quotient obtained by dividing [(A-B) (X)] by (A),
where:
(A) =
as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such
Notice of Exercise is (1) both executed and delivered pursuant to
Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(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, or (ii) the VWAP on
the date of the applicable Notice of Exercise if the date of such
Notice of Exercise is a Trading Day and such Notice of Exercise is
both executed and delivered pursuant to Section 1(a) hereof after
the close of “regular trading hours” on such Trading
Day;
(B) =
the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) =
the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
characteristics of the Warrants being exercised, and the holding
period of the Warrant Shares being issued may be tacked on to the
holding period of this Warrant provided that no provision of
Section 3(a)(9) would invalidate such tacking. The
Company agrees not to take any position contrary to this Section
2(c).
“Bid
Price” means, for any date, the price determined by
the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price
of the Common Stock for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on OTCQB or OTCQX as
applicable, (c) if the Common Stock is not then listed or quoted
for trading on OTCQB or OTCQX and if prices for the Common Stock
are then reported in the OTC Pink Market published by OTC Markets
Group, Inc. (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Holders of a
majority in interest of the Warrants then outstanding and
reasonably acceptable to the Company.
“Trading
Day” means a day in which the principal Trading Market
for the Common Stock is open.
“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted
as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)
if the Common Stock is not then listed or quoted for trading on a
Trading Market and if prices for the Common Stock are then reported
on the OTC Pink Market published by OTC Markets Group, Inc. (or a
similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the
Common Stock so reported, or (c) in all other cases, the fair
market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Holders of a
majority in interest of the Warrants then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.
1
d)
Mechanics of
Exercise.
▇.▇▇▇▇▇▇▇▇
of Warrant Shares Upon Exercise. The Company
shall cause the Warrant Shares purchased hereunder to be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s or its designee’s balance
account with The Depository Trust Company through its Deposit or
Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B)
this Warrant is being exercised via cashless exercise and there is
an available exemption from registration under the 1933 Act for the
resale of the Warrant Shares, and otherwise by physical delivery of
a certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to
the address specified by the Holder in the Notice of Exercise by
the date that is the earlier of (i) three (3) Trading Days after
the delivery to the Company of the Notice of Exercise and the
Purchase Price, if such exercise is not “cashless” and
(ii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise
and the Purchase Price, if such exercise is not cashless (such
date, the “Warrant
Share Delivery Date”). Upon delivery of
the Notice of Exercise and the Purchase Price, 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 of delivery of the Warrant
Shares. If the Company fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the
Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares subject to such exercise (based on the
Purchase Price), $5 per Trading Day (increasing to $10 per Trading
Day on the fifth Trading Day after such liquidated damages begin to
accrue) for each Trading Day after such Warrant Share Delivery Date
until such Warrant Shares are delivered or Holder rescinds such
exercise. The Company agrees to maintain a transfer agent that is a
participant in the FAST program so long as this Warrant remains
outstanding and exercisable. As used herein,
“Standard Settlement
Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of
Exercise.
▇▇.▇▇▇▇▇▇▇▇
of New Warrants Upon Exercise. If this Warrant
shall have been exercised in part, the Company shall, at the
request of a Holder and upon surrender of this Warrant certificate,
at the time of delivery of the Warrant Shares, deliver to the
Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant.
iii.Rescission
Rights. If the Company fails to cause the
Transfer Agent to transmit to the Holder the Warrant Shares
pursuant to Section 2(d)(i) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such
exercise.
iv.Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to any other rights
available to the Holder, if the Company fails to cause the Transfer
Agent to transmit to the Holder the Warrant Shares in accordance
with the provisions of Section 2(d)(i) above pursuant to an
exercise on or before the Warrant Share Delivery Date (other than
any such failure that is solely due to any action or inaction by
the Holder with respect to such exercise), and if after such date
the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the
immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a
▇▇▇▇▇▇’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of
Common Stock upon exercise of the Warrant as required pursuant to
the terms hereof.
▇.▇▇
Fractional Shares or Scrip. No fractional shares
or scrip representing fractional shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such
exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price or round up to the
next whole share.
vi.Charges,
Taxes and Expenses. Issuance of Warrant Shares
shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such Warrant Shares, all of which taxes and expenses shall be
paid by the Company, and such Warrant Shares 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 that
Warrant Shares are to be issued in a name other than the name of
the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer
Agent fees required for same-day processing of any Notice of
Exercise and all fees to the Depository Trust Company (or another
established clearing corporation performing similar functions)
required for same-day electronic delivery of the Warrant
Shares.
vii.Closing
of Books. The Company will not close its
stockholder books or records in any manner which prevents the
timely exercise of this Warrant, pursuant to the terms
hereof.
e)▇▇▇▇▇▇’s
Exercise Limitations. The Company shall not
effect any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of this Warrant, pursuant to
Section 2 or otherwise, to the extent that after giving effect to
such issuance after exercise as set forth on the applicable Notice
of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates (such Persons,
“Attribution
Parties”)), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For
purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates and
Attribution Parties shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which
such determination is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (i) exercise of
the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties
and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without
limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any
of its Affiliates or Attribution Parties. Except as set forth
in the preceding sentence, for purposes of this Section 2(e),
beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is
not representing to the Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and the Holder is
solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of
whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and
Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the
submission of a Notice of Exercise shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with
any Affiliates and Attribution Parties) and of which portion of
this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to
verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in
determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock
as reflected in (A) the Company’s most recent periodic or
annual report filed with the Commission, as the case may be, (B) a
more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding. Upon the
written or oral request of a Holder, the Company shall within two
Trading Days confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of
the Company, including this Warrant, by the Holder or its
Affiliates or Attribution Parties since the date as of which such
number of outstanding shares of Common Stock was
reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of this
Warrant. The Holder, upon notice to the Company, may
increase or decrease the Beneficial Ownership Limitation provisions
of this Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant
held by the Holder and the provisions of this Section 2(e) shall
continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such notice is delivered to
the Company. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(e) to correct this
paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The
limitations contained in this paragraph shall apply to a successor
holder of this Warrant.
2
Section 3.Certain
Adjustments.
a)Stock
Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock
or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares or (iv) issues by
reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares
issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to
this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or reclassification.
b)Subsequent
Rights Offerings. In
addition to any adjustments pursuant to Section 3(a) above, if at
any time the Company grants, issues or sells any Common Stock
Equivalents 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 Beneficial Ownership Limitation)
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 Beneficial Ownership
Limitation, 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 Beneficial
Ownership Limitation).
c)Fundamental
Transaction. If, at any time while this Warrant is
outstanding (i) the Company effects any merger or consolidation of
the Company with or into another Person, in which the Company is
not the survivor or the stockholders of the Company immediately
prior to such merger or consolidation do not own, directly or
indirectly, at least 50% of the voting securities of the surviving
entity, (ii) the Company effects any sale of all or substantially
all of its assets or a majority of its Common Stock is acquired by
a third party, in each case, in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by
the Company or another Person) is completed pursuant to which all
or substantially all of the holders of Common Stock are permitted
to tender or exchange their shares for other securities, cash or
property, (iv) the Company effects any reclassification of the
Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by
Section 3(a) above) (in any such case, a “Fundamental
Transaction”) or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share
purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental
Transaction”), then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as is equal to the
Black Scholes Value of the remaining unexercised portion of this
Warrant on the date of such Fundamental Transaction (the
“Alternate
Consideration”). The Company shall not effect any such
Fundamental Transaction unless prior to or simultaneously with the
consummation thereof, any successor to the Company, surviving
entity or the corporation purchasing or otherwise acquiring such
assets or other appropriate corporation or Person shall assume the
obligation to deliver to the Holder, such Alternate Consideration
as, in accordance with the foregoing provisions, the Holder may be
entitled to receive, and the other obligations under this Warrant.
The provisions of this paragraph (c) shall similarly apply to
subsequent transactions analogous of a Fundamental Transaction
type. For purposes hereof, “Black Scholes Value ” means
the value of the Warrant based on the Black Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg
determined as of the day immediately following the public
announcement of the applicable Fundamental Transaction and
reflecting (i) 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 such date of request and (ii) an expected volatility
equal to the volatility percentage obtained from the HVT function
on Bloomberg for a daily period equal to the remaining term of this
Warrant as of such date of request determined as of the Trading Day
immediately prior to the announcement of the Fundamental
Transaction.
e)Calculations.
All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.
f)Notice
to Holder.
i.Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by facsimile or email a notice
setting forth the Exercise Price after such adjustment and any
resulting adjustment to the number of Warrant Shares and setting
forth a brief statement of the facts requiring such
adjustment.
ii.Notice
to Allow Exercise by ▇▇▇▇▇▇. If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the
Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address
as it shall appear upon the Warrant Register of the Company, at
least 10 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent
that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of
the Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form
8-K. The Holder shall remain entitled to exercise this
Warrant during the period commencing on the date of such notice to
the effective date of the event triggering such notice except as
may otherwise be expressly set forth herein.
3
Section 4.Transfer
of Warrant.
a)Transferability. This
Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the
Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of
such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be
cancelled. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender
this Warrant to the Company unless the Holder has assigned this
Warrant in full, in which case, the Holder shall surrender this
Warrant to the Company within three (3) Trading Days of the date
the Holder delivers an assignment form to the Company assigning
this Warrant full. The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant
issued.
b)New
Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance
with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a
new Warrant or Warrants in exchange for the Warrant or Warrants to
be divided or combined in accordance with such notice. All Warrants
issued on transfers or exchanges shall be dated the original
issuance date and shall be identical with this Warrant except as to
the number of Warrant Shares issuable pursuant
thereto.
c)Warrant
Register. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the
“Warrant
Register”), in the name of the record Holder hereof
from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for
the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
d)Transfer
Restrictions. If, at the time
of the surrender of this Warrant in connection with any transfer of
this Warrant, the transfer of this Warrant shall not be either (i)
registered pursuant to an effective registration statement under
the Securities Act and under applicable state securities or blue
sky laws or (ii) eligible for resale pursuant to Rule 144, the
Company may require, as a condition of allowing such transfer, that
the Holder or transferee of this Warrant, as the case may be,
comply with the provisions of Section 9(g) of the Purchase
Agreement.
e)Representation
by the Holder. The Holder, by the acceptance
hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares
issuable upon such exercise, for its own account and not with a
view to or for distributing or reselling such Warrant Shares or any
part thereof in violation of the Securities Act or any applicable
state securities law, except pursuant to sales registered or
exempted under the Securities Act.
Section 5.Miscellaneous.
a)No
Rights as Stockholder Until Exercise. This
Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the
exercise hereof as set forth in Section 2(d)(i), except as
expressly set forth in Section 3.
b)Loss,
Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
c)Saturdays,
Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then, such
action may be taken or such right may be exercised on the next
succeeding Business Day.
d)Authorized
Shares.
The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary Warrant Shares upon
the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed. The Company
covenants that all Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant will,
upon exercise of the purchase rights represented by this Warrant
and payment for such Warrant Shares in accordance herewith, be duly
authorized, validly issued, fully paid and nonassessable and free
from all taxes, liens and charges created by the Company in respect
of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such
issue).
Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any
Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such
action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction
thereof, as may be, necessary to enable the Company to perform its
obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.
e)Jurisdiction.
All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement,
including, without limitation, that all questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the
State of New York, without regard to the principles of conflicts of
law thereof.
f)Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered and an exemption from
registration under the 1933 Act is not available, will have
restrictions upon resale imposed by state and federal securities
laws.
g)Nonwaiver
and Expenses. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the
Holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant or the Purchase
Agreement, if the Company willfully and knowingly fails to comply
with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such
amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by the Holder in
collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies
hereunder.
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h)Notices. Any
notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase
Agreement.
i)Limitation
of Liability. No provision hereof, in the absence
of any affirmative action by the Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
j)Remedies. The
Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this
Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific
performance that a remedy at law would be adequate.
k)Successors
and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors
and permitted assigns of the Company and the successors and
permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of any Holder from time
to time of this Warrant and shall be enforceable by the Holder or
holder of Warrant Shares.
l)Amendment. This
Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company and the Holder.
m)Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.
n)Headings. The
headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this
Warrant.
********************
(Signature Page Follows)
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IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.
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By:__________________________________________
Name:
Title:
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NOTICE OF EXERCISE
(1)The
undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.
(2)Payment
shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ] if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3)Please
issue said Warrant Shares in the name of the undersigned or in such
other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account
Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of Investing Entity:
_________________________________________________
Name of
Authorized Signatory:
___________________________________________________________________
Title
of Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply
required information. Do not use this form to purchase
shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
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Name:
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(Please Print)
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Address:
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Phone
Number:
Email
Address:
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(Please
Print)
______________________________________
______________________________________
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Dated: _______________ __, ______
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Holder’s Signature:
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Holder’s Address:
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