FORM OF PURCHASE WARRANT]
Exhibit
10.12
[FORM
OF PURCHASE WARRANT]
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. 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.
APPLIED
DNA SCIENCES, INC.
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Warrant
No. [___]
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Issue
Date: July 15, 2010
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THIS PURCHASE WARRANT
certifies that, for value received, [_____________] (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 the Issue Date and on or prior to
the close of business on July 15, 2017 (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Applied DNA Sciences,
Inc., a Delaware corporation (the “Company”), at the
Exercise Price (as defined below) then in effect, either, at the option of the
Holder: (a) Senior Secured Convertible Notes in substantially the form attached
hereto as Exhibit A (the “Notes”), (b) such
number of fully paid, validly issued and nonassessable shares of common stock,
$0.001 par value per share (the “Common Stock”), of
the Company which are not Subsequent Securities (as defined in the Notes) into
which the Notes could have converted had the Holder elected to receive Notes in
the principal amount of this Warrant that the Holder shall exercise on the
applicable Exercise Date (as defined below), (c) in the event the applicable
Exercise Date occurs after a closing of a Subsequent Financing (as defined in
the Notes) and in the event the Holder elects to receive Subsequent Financing
Securities upon exercise hereof, such number of fully paid, validly issued and
nonassessable Subsequent Financing Securities into which the Notes could have
converted had the Holder elected to receive Notes in the principal amount of
this Warrant that the Holder shall exercise on the applicable Exercise Date, or
(d) in the event the applicable Exercise Date occurs after a closing of a
Qualified Financing (as defined in the Notes) and in the event the Holder elects
to receive Qualified Financing Securities (as defined in the Notes) upon
exercise hereof, such number of fully paid, validly issued and nonassessable
Qualified Financing Securities into which the Notes could have converted had the
Holder elected to receive Notes in the principal amount of this Warrant that the
Holder shall exercise on the applicable Exercise Date. As used herein
“Underlying
Securities” means, the principal amount of Notes, shares of Common Stock,
Subsequent Financing Securities or Qualified Financing Securities, as the case
may be, issuable upon exercise of this Warrant.
Section
1.
Exercise of
Warrant.
(a) Process. 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 Issue Date and on or before the
Termination Date by delivery to the Company (the date of such delivery, the
“Exercise
Date”) of a duly executed facsimile copy of the Notice of Exercise
attached hereto as Exhibit B (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). 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 the entire
Underlying Securities 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 (as defined below) 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 Underlying
Securities available hereunder shall have the effect of lowering the Underlying
Securities purchasable hereunder by the Underlying Securities
purchased. The Holder and the Company shall maintain records showing
the Underlying Securities purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Trading Day of receipt of such notice. In the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The
Holder may provide this Warrant, or an affidavit of lost security, to the
Company within a reasonable period after the delivery of any Notice of Exercise
related to any partial exercise of this Warrant, and the Company, at its
expense, will promptly and, in any event within three (3) Trading Days
thereafter, issue and deliver to the Holder a new Warrant of like tenor,
registered in the name of the Holder and exercisable, in the aggregate, for the
remaining Underlying Securities available for purchase under this
Warrant. 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 Underlying Securities hereunder, the
Underlying Securities available for purchase hereunder at any given time may be
less than the amount stated on the face hereof. As used herein (i)
“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), and (ii) “Principal Market”
means the OTC Bulletin Board.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price”
means:
(i)
In the
event the Holder elects to receive Notes upon exercise hereof, up to [______]
in principal amount of Notes;
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(ii)
In the
event the Holder elects to receive shares of Common Stock that are not
Subsequent Financing Securities, $0.04405 per share;
(iii)
In the
event the Holder elects to receive Subsequent Financing Securities, 80% of the
purchase price paid by the investors in the Subsequent Financing for the
Subsequent Financing Securities; and
(iv)
In the
event the Holder elects to receive Qualified Financing Securities, 80% of the
purchase price paid by the investors in a Qualified Financing for the Qualified
Financing Securities.
(c)
Cash
Exercise. This Warrant may be exercised in whole or in part at
any time prior to the Termination Date, by delivery of the following to the
Company:
(i)
A duly
completed and executed Notice of Exercise in the form attached hereto as Exhibit
B; and
(ii)
The
aggregate purchase price for the Underlying Securities with respect to which
this Warrant is being exercised, in lawful money of the United States, in one,
or a combination, of the following methods: (1) cash, (2) certified check or
bank draft payable to the order of the Company, or (3) by wire transfer of
immediately available funds.
(d)
Cashless
Exercise.
(i) Cashless Exercise for
Underlying Securities Classified as Debt. If at any time prior
to the Termination Date the Holder elects to exercise this Warrant for
Underlying Securities that are classified as debt on the Company’s balance
sheet, and on the Trading Day prior to the Exercise Date the closing price of
the Common Stock is greater than the then applicable conversion price of such
Underlying Securities, the Holder of this Warrant may elect to exercise this
Warrant in whole or in part by means of a “cashless exercise.” In the
event of a “cashless exercise,” by delivery to the Company of a duly completed
and executed Notice of Exercise in the form attached hereto, the Holder shall be
entitled to receive, without payment of any consideration, an Underlying
Security in the principal amount equal to the difference between (A) the face
amount of the Warrant being exercised minus (B) the quotient of (1) the product
of (x) the face amount of the Warrant being exercised and (y) the then
conversion price of the Underlying Security, divided by (2) the volume weighted
average closing price of the Common Stock for the five (5) consecutive Trading
Day period ending on the Trading Day immediately preceding the date of such
election.
(ii) Cashless Exercise for
Underlying Securities Classified as Equity. If at any time
prior to the Termination Date the Holder elects to exercise this Warrant for
Underlying Securities that are classified as equity on the Company’s balance
sheet, the Holder of this Warrant may elect to exercise this Warrant in whole or
in part by means of a “cashless exercise” in which event the Company shall issue
to the Holder the number of Underlying Securities determined as
follows:
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X =
Y [(A-B)/A]
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where:
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X =
the number of Underlying Securities to be issued to the
Holder.
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Y =
the number of Underlying Securities with respect to which this Warrant is
being exercised.
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A =
the volume weighted average closing price of the Common Stock for the five
(5) consecutive Trading Day period ending on the Trading Day immediately
preceding the date of such election.
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B =
the Exercise Price.
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(e) Delivery of Underlying
Securities; etc.
(i) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
five (5) Trading Days after the Exercise Date) (the “Delivery Date”) issue
and deliver (or cause to be issued and delivered) to the Holder the Underlying
Securities issuable upon such exercise. The Holder, or any person permissibly
designated by the Holder to receive the Underlying Securities, shall be deemed
to have become the holder of record of such Underlying Securities as of the
Exercise Date.
(ii) To the
extent permitted by law, the Company’s obligations to issue and deliver the
Underlying Securities in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other person, and irrespective of any other circumstance that might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Underlying Securities. Nothing herein shall limit the Holder’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 the
Underlying Securities issuable upon exercise of this Warrant as required
pursuant to the terms hereof.
(iii) If the
Company fails to transmit to the Holder Underlying Securities pursuant to this
Section 1(e) by the fifth Trading Day immediately following the Delivery Date,
then the Holder will have the right to rescind such exercise.
(iv) Issuance
of Underlying Securities 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 Underlying Securities, all of which taxes and expenses shall be paid by the
Company, and such Underlying Securities 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 Underlying Securities 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 as Exhibit C duly executed by the
Holder.
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(f) Changes to Other
Notes.
(i)
If, at
any time while this Warrant is outstanding, the Company effects any transaction
whereby the notes (the “Other Notes”) issued
pursuant to that certain Securities Purchase Agreement, dated as of July 15,
2010, by and among the Company and the Buyers named therein are amended,
modified or otherwise changed into or exchanged for other securities, then, upon
any subsequent exercise of this Warrant, the Holder shall have the right to
receive the amount and kind of such amended, modified, changed or exchanged
securities that the Holder would have been entitled to receive had the Holder
exercised this Warrant for the Other Notes immediately prior to such
event.
(ii) At any
time while this Warrant is outstanding and none of the Other Notes are
outstanding, the Holder shall have the right to receive an adjustment to the
conversion price of the Notes issuable upon exercise of this Warrant that the
holders of the Other Notes would have been entitled to receive if the Other
Notes were outstanding.
(g) Notice to Allow Exercise by
the Holder. 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, of 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
mailed to the Holder at its last address as it shall appear upon the Warrant
Register (as defined below) of the Company, at least 20 calendar days prior to
the applicable record or effective date hereinafter specified, a notice stating
(x) 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 mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Subject to applicable law, the Holder is 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. Notwithstanding the foregoing, the delivery of the notice
described in this Section 1(g) is not intended to and shall not bestow upon the
Holder any voting rights whatsoever with respect to the Warrant.
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Section
2. Transfer of
Warrant.
(a) Transferability. Subject
to compliance with any applicable federal or state securities laws, this Warrant
and all rights hereunder 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 as Exhibit C 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 in the name of the assignee
or assignees 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. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Underlying Securities without
having a new Warrant issued.
(b) New
Warrant. 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 2(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 Issue Date and shall be
identical with this Warrant except as to the Underlying Securities 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.
Section
3. Registration
Rights
(a) Demand
Registration.
(i) If, at
any time, the Company shall receive a written request from the Holder that the
Company effect the registration under the Securities Act of 1933, as amended
(the “Securities
Act”), of shares of Common Stock issuable upon exercise hereof or
issuable upon conversion of the Notes, Subsequent Financing Securities or
Qualified Financing Securities (the “Registrable
Securities”), then the Company will use its reasonable efforts to effect,
as expeditiously as possible, the registration under the Securities Act of the
Registrable Securities that the Company has been so requested to register by the
Holder to the extent necessary to permit the disposition (in accordance with the
intended methods thereof) of the Registrable Securities so to be registered;
provided, that the
Company shall not be obligated to effect more than one (1) Demand Registration
pursuant to this Section 3(a).
(ii) The
Company will be liable for and pay all expenses in connection with any Demand
Registration.
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(b) Piggyback
Registration.
(i) If the
Company proposes to register any Common Stock under the Securities Act (other
than a registration on Form S-8 or S-4, or any successor or similar forms,
relating to Common Stock issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Company or in
connection with a direct or indirect acquisition by the Company of another
person), whether or not for sale for its own account, it will each such time
give written notice at least ten (10) Trading Days prior to the anticipated
filing date of the registration statement relating to such registration to the
Holder, which notice shall set forth the Holder’s rights under this Section 3(b)
and shall offer the Holder the opportunity to include in such registration
statement the number of Registrable Securities as the Holder may
request. Upon the written request of the Holder made within ten (10)
days after the receipt of notice from the Company (which request shall specify
the number of Registrable Securities intended to be disposed of by the Holder),
the Company will use its reasonable efforts to effect the registration under the
Securities Act of all Registrable Securities that the Company has been so
requested to register by the Holder; provided that if, at any time
after giving written notice of its intention to register any securities pursuant
to this Section 3(b) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company shall give
written notice to the Holder and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such
registration. No registration effected under this Section 3(b) shall
relieve the Company of its obligations to effect a Demand Registration to the
extent required by Section 3(a).
(ii) The
Company will be liable for and pay all expenses in connection with each
registration of Registrable Securities pursuant to this Section
3(b).
(c) Registration
Procedures.
(i) Whenever
the Holder requests that any Registrable Securities be registered pursuant to
Sections 3(a) or (b) hereof, the Company will as expeditiously as possible
prepare and file with the Securities and Exchange Commission (the “SEC”) a registration
statement on any form reasonably acceptable to the Holder for which the Company
then qualifies or that counsel for the Company shall deem appropriate and which
form shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
thereof, and use its reasonable efforts to cause such filed registration
statement to become and remain effective until the earlier of (A) the date as of
which the Holder may sell all of the Registrable Securities covered by such
registration statement without restriction or limitation pursuant to Rule 144
and without the requirement to be in compliance with Rule 144(c)(1) (or any
successor thereto) promulgated under the Securities Act or (B) the date on which
the Holder shall have sold all of the Registrable Securities covered by such
registration statement (the “Registration
Period”). The Company shall ensure that each registration
statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading. The Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to a registration statement and the prospectus used in connection
with such registration statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the Securities Act, as may be necessary to keep such
registration statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof as set forth in such
Registration Statement.
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(ii) The
Company shall permit the Holder to review (A) a registration statement at least
three (3) Trading Days prior to its filing with the SEC and (B) all amendments
and supplements to all registration statements (except for Annual Reports on
Form 10-K and Quarterly Reports on Form 10-Q or any similar or successor
reports) within a reasonable number of days prior to their filing with the
SEC. The Company shall furnish to the Holder whose Registrable
Securities are included in a registration statement, without charge, (1) copies
of any correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any registration statement, (2) promptly after the
same is prepared and filed with the SEC, one copy of any registration statement
and any amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by the Holder, and all
exhibits and (3) upon the effectiveness of any registration statement, such
number of copies of the prospectus included in such registration statement and
all amendments and supplements thereto as the Holder may reasonably
request.
(iii) The
Company shall use its reasonable efforts to (A) register and qualify, unless an
exemption from registration and qualification applies, the resale by the Holder
under such other securities or “blue sky” laws of all applicable jurisdictions
in the United States, (B) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (C) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (D) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to (1) make any change to its certificate of incorporation or bylaws, (2)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (3) subject itself to general
taxation in any such jurisdiction, or (4) file a general consent to service of
process in any such jurisdiction. The Company shall promptly notify
the Holder of the receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of notice of the initiation or threatening
of any proceeding for such purpose.
(iv) The
Company shall notify the Holder in writing of the happening of any event, as
promptly as reasonably practicable after becoming aware of such event, as a
result of which the prospectus included in a registration statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), promptly prepare a supplement or amendment to such
registration statement to correct such untrue statement or omission, and deliver
such number of copies of such supplement or amendment to the Holder as the
Holder may reasonably request. The Company shall also promptly notify
the Holder in writing (A) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a registration statement or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to each the Holder by facsimile or e-mail on
the same day of such effectiveness and by overnight mail), (B) of any request by
the SEC for amendments or supplements to a registration statement or related
prospectus or related information, and (C) of the Company’s reasonable
determination that a post-effective amendment to a registration statement would
be appropriate.
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(v) If the
Holder is required under applicable securities laws to be described in the
registration statement as an underwriter, at the reasonable request of the
Holder, the Company shall furnish to the Holder, on the date of the
effectiveness of the registration statement and thereafter from time to time on
such dates as the Holder may reasonably request (A) a letter, dated as of such
date, from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Holder, and
(B) an opinion, dated as of such date, of counsel representing the Company for
purposes of such registration statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
Holder.
(vi) Upon the
written request of the Holder in connection with the Holder’s due diligence
requirements, if any, the Company shall make available for inspection by the
Holder or agents retained by the Holder (collectively, the “Inspectors”), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the “Records”), as shall
be reasonably deemed necessary by each Inspector, and cause the Company’s
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each
Inspector shall agree to hold in strict confidence and shall not make any
disclosure (except to the Holder) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (A) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
registration statement or is otherwise required under the Securities Act, (B)
the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or
(C) the information in such Records has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Holder agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein shall be deemed to limit the Holder’s
ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.
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(vii) The
Company shall hold in confidence and not make any disclosure of information
concerning the Holder provided to the Company unless (A) disclosure of such
information is necessary to comply with federal or state securities laws, (B)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any registration statement, (C) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (D) such
information has been made generally available to the public other than by
disclosure in violation of this Warrant. The Company agrees that it
shall, upon learning that disclosure of such information concerning the Holder
is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to the Holder and allow the
Holder, at the Holder’s expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such
information.
(viii)
The
Company shall use its reasonable efforts either to cause all of the Registrable
Securities covered by a registration statement to be listed or quoted on each
securities exchange, bulletin board or quotation system on which securities of
the same class or series issued by the Company are then listed or
quoted.
(ix) The
Company shall cooperate with the Holder and, to the extent applicable,
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be offered
pursuant to a registration statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Holder may reasonably
request and registered in such names as the Holder may request.
(x) If
requested by the Holder, the Company shall (A) as soon as reasonably practicable
incorporate in a prospectus supplement or post-effective amendment such
information as the Holder reasonably requests to be included therein relating to
the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(B) as soon as reasonably practicable make all required filings of such
prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; and (C) as soon as reasonably practicable, supplement or make
amendments to any registration statement if reasonably requested by the
Holder.
(xi)
The
Company shall use its reasonable efforts to cause the Registrable Securities to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
(xii)
The
Company shall otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration
hereunder.
(xiii)
Within
two (2) Trading Days after a registration statement which covers Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Holder) confirmation that such
registration statement has been declared effective by the SEC.
10
Section
4. Miscellaneous.
(a) 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, and upon surrender and cancellation
of such Warrant, if mutilated, the Company will make and deliver a new Warrant
of like tenor and dated as of such cancellation, in lieu of such
Warrant.
(b) 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 Trading Day, then such action may be taken or such right may be exercised
on the next succeeding Trading Day.
(c) Company
Covenants.
(i) The
Company covenants that during the period the Warrant is outstanding and
exercisable, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for, either (1) the exercise in full of
any purchase rights under this Warrant, or (2) the conversion of the Notes,
Subsequent Financing Securities or Qualified Financing Securities in full 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 Underlying
Securities to execute and issue the necessary Underlying Securities 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
Underlying Securities may be issued as provided herein without violation of any
applicable law or regulation. The Company covenants that all
Underlying Securities 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, be duly authorized, validly issued 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).
(ii) 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 the Holder as set forth in
this Warrant against impairment.
11
(d) Governing
Law. 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 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. In the
event that any provision of this Warrant is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform to such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this
Warrant. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, 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.
(e) Restrictions. The
Holder acknowledges that the Underlying Securities acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale imposed by
state and federal securities laws and shall bear a restrictive legend in
substantially the following form:
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS CONVERTIBLE 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. 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.
(f) Notices. Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Warrant must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Trading Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications
shall be:
12
If to the
Company:
Applied
DNA Sciences, Inc.
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: Chief
Financial Officer
If to the
Holder:
Etico
Capital LP
The
Chrysler Building
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(g) Limitation of
Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to purchase Underlying
Securities, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the Exercise Price of any
Underlying Security of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(h) 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.
(i) 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 of the Company and the successors and
permitted assigns of the Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Underlying
Securities.
(j) Amendment;
Waiver. No provision of this Warrant may be waived or amended
other than by written instrument signed by the Company and the Holder and their
successors and assigns.
(k) 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.
13
(l) 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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE
PAGE FOLLOWS]
14
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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APPLIED
DNA SCIENCES, INC.
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By:
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Name:
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Title:
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EXHIBIT
A
FORM
OF NOTE
EXHIBIT
B
NOTICE
OF EXERCISE
TO: Applied
DNA Sciences, Inc.
1.
[ ] (Check if applicable) The undersigned hereby elects to
purchase [$________ in principal amount of Senior Secured Convertible Notes],
[___________ shares of Common Stock, $0.001 par value per share, of the Company]
[_____________ Subsequent Financing Securities of the Company] [____________
Qualified Financing Securities of the Company] pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price related to
such principal amount in full in lawful money of the United States.
Or
1.
[ ] (Check if applicable) The undersigned hereby elects to
purchase [Senior Secured Convertible Notes of the Company] [shares of Common
Stock, $0.001 par value per share, of the Company] [Subsequent Financing
Securities of the Company] [____________ Qualified Financing Securities of the
Company] as a cashless exercise of $[_________] of the total Exercise Price of
this Warrant.
2.
Please issue [a Note] [Common Stock] [Subsequent Financing Securities]
[Qualified Financing Securities] in the name of the undersigned or in
such other name as is specified below:
The
[Note] [Common Stock] [Subsequent Financing Securities] [Qualified
Financing Securities] Notes shall be delivered by physical delivery
to:
3.
Accredited
Investor. The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE
OF HOLDER]
Name of
Investing
Entity: _____________________________________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
_______________________________________________________________________________
Name of
Authorized Signatory:
_________________________________________________________________________________________________
Title of
Authorized Signatory:
__________________________________________________________________________________________________
Date: _____________________________________________________________________________________________________________________
EXHIBIT
C
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, [____] all of or [_______] of the [principal amount of the Senior
Secured Convertible Notes] [Common Stock] [Subsequent Financing Securities]
[Qualified Financing Securities] issuable upon exercise of the foregoing Warrant
and all rights evidenced thereby are hereby assigned to
____________________________________________________________________
whose address is
_________________________________________________________________________________
..
_________________________________________________________________________________
Dated: _______________ , ____
Holder’s
Signature: ________________________________
Holder’s
Address: ________________________________
________________________________