Contract
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE
SECURITIES LAWS, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED,
OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
COVERING ANY SUCH TRANSACTION, OR SUCH TRANSACTION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS, SUCH COMPLIANCE, AT THE OPTION
OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION OF
THE
WARRANT XXXXXX'S COUNSEL, IN FORM ACCEPTABLE TO THE CORPORATION, THAT NO
VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED
TRANSFER OR ASSIGNMENT.
FORM
OFCOMMON STOCK PURCHASE WARRANT
No.
W-
|
Shares
|
Issuance
Date:
|
THIS
CERTIFIES that for good and valuable consideration received, __________, or
a
registered assignee (the “Holder”)
is
entitled, upon the terms and subject to the conditions hereinafter set forth,
to
acquire from Auriga Laboratories, Inc., a Delaware corporation (the
“Corporation”),
up to
_________ fully paid and nonassessable shares (the “Warrant
Shares”)
of
common stock, par value $0.001 per share (the “Common
Stock”),
of
the Corporation at a purchase price of U.S. $1.50 per share (the “Exercise
Price”).
1. Term
of Warrant.
Subject
to the other terms and conditions set forth herein, this Warrant shall be
exercisable, in whole or in part, at any time on or after the date hereof and
at
or prior to 11:59 p.m., local time in Los Angeles, California, on September
27,
2011 (the “Expiration
Time”).
2. Exercise
of Warrant.
This
Warrant may be exercised, in whole or in part, by the Holder during normal
business hours on any business day prior to the Expiration Time by delivering
to
the Corporation the following: (i) a duly executed Notice of Exercise (in the
form attached to this Warrant) specifying the number of Warrant Shares to be
purchased, (ii) payment to the Corporation of the Exercise Price for the number
of Warrant Shares specified in the Notice of Exercise by cash, wire transfer
of
immediately available funds to a bank account specified by the Corporation,
or
by certified or bank cashier’s check, and (iii) this Warrant (or an
indemnification undertaking with respect to this Warrant in the case of its
loss, theft or destruction).
3. Registration
and Other Rights.
(a) In
the
event that the Corporation files a registration statement with the Securities
and Exchange Commission covering the sale of its shares of Common Stock (other
than a registration statement on Form S-4, S-8 or similar form), then the Holder
shall have the right to require the Corporation to register the resale of the
Warrant Shares on such registration statement, provided
that
if
such registration is underwritten, the inclusion of such shares shall be subject
to cutback at the discretion of the managing underwriter and provided
further
that the
inclusion of Warrant Shares on any registration statement shall be subject
and
subordinated to the registration rights of any other holders of the
Corproation’s securities. In the event that the Holder requests the registration
of less than all of the Warrant Shares represented hereby, prior to any such
registration, the Holder shall request that the Company issue in exchange
therefore new warrants representing the Warrant Shares in such denominations
as
the Holder shall request; provided, however, that no such certificate
representing any Warrant Shares being registered shall also represent Warrant
Shares not being registered.
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(b) In
the
event that the Corporation (i) issues as a dividend or other similar
distribution (an “Extraordinary
Dividend”)
on all
of its then outstanding Common Stock, (A) securities of the Corporation of
a
class other than Common Stock, (B) rights, warrants or options (individually,
a
“Right”
and
collectively, the “Rights”)
to
acquire any securities of the Corporation (including Common Stock) or (C)
evidences of its indebtedness or assets, or (ii) issues any dividend or other
similar distribution (a “Secondary
Extraordinary Dividend”)
on any
such securities in the form of securities of the Corporation (including Common
Stock) (any securities (other than Rights) issued as an Extraordinary Dividend
or Secondary Extraordinary Dividend or issued upon exercise of any Rights issued
as an Extraordinary Dividend or Secondary Extraordinary Dividend shall be
referred to as “Dividend
Securities”):
(i) this
Warrant shall thereafter be exercisable for (1) the original number of shares
of
Common Stock (subject to adjustment as herein provided), (2) such Dividend
Securities and Rights as would theretofore have been issued in respect of such
shares (adjusted as herein provided) had such shares been outstanding at the
time of such Extraordinary Dividend, and (3) any Dividend Securities that would
theretofore have been issued as a Secondary Extraordinary Dividend in respect
of
such Dividend Securities had such Dividend Securities been outstanding at the
time of such Secondary Extraordinary Dividend; and
(ii) any
Right
issued as an Extraordinary Dividend or a Secondary Extraordinary Dividend shall
(1) expire upon the later of (a) the original expiration date of such Right
or
(b) the 180th day following the exercise of this Warrant, and (2) be exercisable
for (a) the Dividend Securities issuable upon exercise of such Right and (b)
any
property theretofore issued as a Secondary Extraordinary Dividend in respect
of
such Dividend Securities.
(c) In
the
event that at any time while this Warrant is outstanding, the Corporation shall
offer to sell to all of the holders of Common Stock as a class, rights or
options to purchase Common Stock or rights or options to purchase any stock
or
securities convertible into or exchangeable for Common Stock (such exchangeable
or convertible stock or securities being herein called “Convertible
Securities”),
whether or not such rights or options are immediately exercisable, and the
price
per share for which Common Stock is issuable upon the exercise of such rights
or
options or upon conversion or exchange of such Convertible Securities
(determined by dividing (i) the total amount received or receivable by the
Corporation upon issuance and sale of such rights or options, plus the aggregate
amount of additional consideration payable to the Corporation upon the exercise
of all such rights or options, plus, in the case of rights or options which
relate to Convertible Securities, the aggregate amount of additional
consideration, if any, payable upon the conversion or exchange of all such
Convertible Securities, by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of all such rights or options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of all such rights or options) shall be less than the Exercise Price
in
effect immediately prior to the initial sale of any such rights or options,
the
Corporation shall offer to sell to the Holder, at the price and upon the terms
at which such rights or options are offered to holders of its Common Stock,
such
number of such rights or options as the Holder would have been entitled to
purchase had the Holder exercised this Warrant immediately prior to the
commencement of the offering of such rights or options.
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4. Issuance
of Shares; No Fractional Shares of Scrip.
Certificates
for shares of Common Stock purchased hereunder shall be delivered to the Holder
hereof by the Corporation's transfer agent at the Corporation's expense within
a
reasonable time after the date on which this Warrant shall have been exercised
in accordance with the terms hereof. Each certificate so delivered shall be
in
such denominations as may be requested by the Holder hereof and shall be
registered in the name of the Holder or, subject to applicable laws, such other
name as shall be requested by the Holder. If, upon exercise of this Warrant,
fewer than all of the Warrant Shares evidenced by this Warrant are purchased
prior to the Expiration Time, one or more new warrants substantially in the
form
of, and on the terms in, this Warrant will be promptly issued for the remaining
number of Warrant Shares not purchased upon exercise of this Warrant. The
Corporation hereby represents and warrants that all Warrant Shares which may
be
issued upon the exercise of this Warrant will, upon such exercise, be duly
and
validly authorized and issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issuance thereof (other than liens
or
charges created by or imposed upon the Holder of the Warrant Shares). The
Corporation agrees that the shares of Common Stock so issued shall be and will
be deemed to be issued to such Holder as the record owner of such shares as
of
the close of business on the date on which this Warrant shall have been
surrendered for exercise in accordance with the terms hereof, notwithstanding
that the transfer books of the Corporation shall then be closed or certificates
representing such shares of Common Stock shall not then have been actually
delivered to the Holder. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon the exercise of this Warrant, an amount
equal to such fraction multiplied by the then current price at which each share
may be purchased hereunder shall be paid in cash to the Holder of this
Warrant.
5. Charges,
Taxes and Expenses.
Issuance
of certificates for shares of Common Stock upon the exercise of this Warrant
shall be made without charge to the Holder hereof for any issue or transfer
tax
or other incidental expense in respect of the issuance of such certificate,
all
of which taxes and expenses shall be paid by the Corporation, and such
certificates shall be issued in the name of the Holder of this Warrant or in
such name or names as may be directed by the Holder of this Warrant; provided,
however, that in the event certificates for shares of Common Stock are to be
issued in a name other than the name of the Holder of this Warrant, this Warrant
when surrendered for exercise shall be accompanied by an Assignment Form (as
defined below) duly executed by the Holder hereof.
6. No
Rights as Stockholders.
This
Warrant does not entitle the Holder hereof to any voting rights or other rights
as a stockholder of the Corporation prior to the exercise hereof.
7. Exchange
and Registry of Warrant.
This
Warrant is exchangeable, upon the surrender hereof by the registered Holder
at
the above mentioned office or agency of the Corporation, for a new Warrant
of
like tenor and dated as of such exchange. The Corporation shall maintain at
the
above-mentioned office or agency a registry showing the name and address of
the
registered Holder of this Warrant. This Warrant may be surrendered for exchange,
transfer or exercise, in accordance with its terms, at such office or agency
of
the Corporation, and the Corporation shall be entitled to rely in all respects,
prior to written notice to the contrary, upon such registry.
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8. Loss,
Theft, Destruction or Mutilation of Warrant.
Upon
receipt by the Corporation of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant and in case of loss,
theft or destruction of indemnity or security reasonably satisfactory to it,
and
upon reimbursement to the Corporation of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated,
the
Corporation will make and deliver a new Warrant of like date, tenor and
denomination, in lieu of this Warrant.
9. Saturdays,
Sundays and Holidays.
If
the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday
or a Sunday or a legal holiday, then such action may be taken or such right
may
be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday.
10. Merger,
Sale of Assets, Etc.
If
at any
time the Corporation proposes to merge or consolidate with or into any other
corporation, effect any reorganization, or sell or convey all or substantially
all of its assets to any other entity, then, as a condition of such
reorganization, consolidation, merger, sale or conveyance, the Corporation
or its
successor, as the case may be, shall enter into a supplemental
agreement to make lawful and adequate provision whereby the Holder shall have
the right to receive, upon exercise of the Warrant by exchanging the Warrant
for
the kind and amount of equity securities, property, cash, or any combination
thereof, which would have been received upon such reorganization, consolidation,
merger, sale or conveyance by a Holder of a number of shares of common stock
equal to the number of shares issuable upon exercise of the Warrant immediately
prior to such reorganization, consolidation, merger, sale or conveyance.
11. Subdivision,
Combination, Reclassification, Conversion, Etc.
If
the
Corporation at any time shall by subdivision, combination, reclassification
of
securities or otherwise, change the Warrant Shares into the same or a different
number of securities of any class or classes, this Warrant shall thereafter
entitle the Holder to acquire such number and kind of securities as would have
been issuable in respect of the Warrant Shares (or other securities which were
subject to the purchase rights under this Warrant immediately prior to such
subdivision, combination, reclassification or other change) as the result of
such change if this Warrant had been exercised in full for cash immediately
prior to such change. The Exercise Price hereunder shall be adjusted if and
to
the extent necessary to reflect such change. If the Warrant Shares or other
securities issuable upon exercise hereof are subdivided or combined into a
greater or smaller number of shares of such security, the number of shares
issuable hereunder shall be proportionately increased or decreased, as the
case
may be, and the Exercise Price shall be proportionately reduced or increased,
as
the case may be, in both cases according to the ratio which the total number
of
shares of such security to be outstanding immediately after such event bears
to
the total number of shares of such security outstanding immediately prior to
such event. The Corporation shall send the Holder prompt written notice by
registered mail, postage prepaid, of any change in the type of securities
issuable hereunder, any adjustment of the Exercise Price for the securities
issuable hereunder, and any increase or decrease in the number of shares
issuable hereunder, which notice shall be accompanied by an officer’s
certificate setting forth the number of Warrant Shares purchasable upon the
exercise of this Warrant and the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment and
the
computation thereof, which officer’s certificate shall be conclusive evidence of
the correctness of any adjustment absent manifest error.
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12. Notice
In
case,
at any time the Corporation shall propose:
(a) to
declare a dividend (or any other distribution) on shares of Common Stock in
shares of Common Stock or make any other distribution to all holders of Common
Stock; or
(b) to
issue
any rights, warrants or other securities to all holders of Common Stock
entitling them to subscribe for or purchase shares of Common Stock or of any
other subscription rights or warrants; or
(c) to
effect
any reclassification of the Common Stock, any consolidation, merger or binding
share exchange to which the Corporation is a party, or the sale or transfer
of
all or substantially all of the assets of the Corporation; or
(d) to
effect
any voluntary or involuntary dissolution, liquidation or winding up of the
Corporation; or
(e) to
take
any other action which would cause an adjustment to the Exercise Price;
(f) then,
the
Corporation shall cause to be mailed to the Holder at least 15 days before
the
date hereinafter specified, a notice stating (i) the date on which a record
is
to be taken for the purpose of such dividend, distribution, rights or warrants,
or, if a record is not to be taken, the date as of which the holders of shares
of Common Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined, (ii) the date on which any such
reclassification, consolidation, merger, binding share exchange, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and
the
date as of which it is expected that holders of shares of Common Stock of record
shall be entitled to exchange their shares for the applicable consideration,
deliverable upon such reclassification, consolidation, merger, binding share
exchange, sale, transfer, dissolution, liquidation or winding up, or (iii)
the
date of such action which would require an adjustment to the Exercise
Price.
13. Transferability; Compliance
with Securities Laws.
(a) This
Warrant may not be transferred or assigned in whole or in part without
compliance with all applicable federal and state securities laws by the
transferor and transferee (including the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Corporation, if
requested by the Corporation). Subject to such restrictions, prior to the
Expiration Time, this Warrant and all rights hereunder are transferable by
the
Holder hereof, in whole or in part, at the office or agency of the Corporation.
Any such transfer shall be made in person or by the Holder's duly authorized
attorney, upon surrender of this Warrant together with the Assignment Form
attached hereto properly endorsed (the “Assignment
Form”).
5
(b) The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
and
the Warrant Shares issuable upon exercise hereof are being acquired solely
for
the Holder's own account and not as a nominee for any other party, and for
investment, and that the Holder will not offer, sell or otherwise dispose of
this Warrant or any Warrant Shares to be issued upon exercise hereof except
under circumstances that will not result in a violation of the Securities Act
of
1933, as amended, or any state securities laws. Upon exercise of this Warrant,
the Holder shall, if requested by the Corporation, confirm in writing, in a
form
satisfactory to the Corporation, that the Warrant Shares so purchased are being
acquired solely for the Holder's own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or
resale.
(c) Until
the
Warrant Shares have been registered under the Securities Act of 1933, as
amended, this Warrant may not be exercised except by (i) the original purchaser
of this Warrant from the Corporation or (ii) an “accredited investor” as defined
in Rule 501(a) under the Securities Act of 1933, as amended. Each certificate
representing the Common Stock or other securities issued in respect of the
Warrant Shares upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with
a
legend substantially in the following form (in addition to any legend required
under applicable securities laws):
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SAID ACT.
Once
the
Warrant Shares have been registered under the Securities Act of 1933, as
amended, no such restrictive legend shall be required on any securities issued
in respect of the Warrant Shares, unless otherwise required under the Securities
Act of 1933, as amended.
14. Reservation
of Shares of Common Stock.
The
Corporation hereby agrees that during the period that this Warrant is
outstanding, the Corporation will reserve from its authorized and unissued
Common Stock and other securities, solely for the purpose of providing for
the
exercise of the rights to purchase all Warrant Shares granted pursuant to this
Warrant, such number of shares of Common Stock, Dividend Securities and Rights
to permit the exercise in full of this Warrant.
15. Governing
Law.
This
Warrant shall be governed by and construed in accordance with the laws of the
State of Delaware. The Corporation irrevocably consents to the jurisdication
of
the courts of the State of California and of any federal court located in such
State in connection with any action or proceeding arising out of or relating
to
this Warrant, any document or instrument delivered pursuant to, in connection
with or simultaneously with this Warrant, or a breach of this Warrant or any
such document or instrument. In any such action or proceeding, the Company
waives personal service of any summons, complaint or other process.
6
IN
WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by
its
duly authorized officer.
Dated: ______________, 200_ | ||||
AURIGA LABORATORIES, INC. | ||||
By: | /s/ | |||
Xxxxxx
X. Xxxxx, Chairman & CEO
|
||||
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NOTICE
OF EXERCISE
(1) The
undersigned hereby elects to purchase shares of common stock, par value $0.001
per share (the “Common
Stock”),
of
Auriga Laboratories, Inc., a Delaware corporation (the “Corporation”) pursuant
to the terms of the attached Warrant and tenders payment herewith in the amount
of $_________ by tendering cash or delivering a certified check or bank
cashier’s check, payable to the order of the Corporation in accordance with the
terms thereof, together with all applicable transfer taxes, if any.
(2) In
exercising this Warrant, the undersigned hereby confirms and acknowledges that
the shares of Common Stock to be issued upon exercise hereof are being acquired
solely for the account of the undersigned and not as a nominee for any other
party, and for investment and that the undersigned will not offer, sell or
otherwise dispose of any such shares of Common Stock except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
or any state securities laws.
(3) Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
______________________________________
(Name)
______________________________________
(Address)
and,
if
such number of shares of Common Stock shall not be all the shares of Common
Stock covered by the attached Warrant, that a new Warrant for the balance of
the
shares of Common Stock covered by the attached Warrant be registered in the
name
of, and delivered to, the undersigned at the address stated above.
(4) The
undersigned represents that (a) he, she or it is the original purchaser from
the
Corporation of the attached Warrant or an 'accredited investor' within the
meaning of Rule 501(a) under the Securities Act of 1933, as amended and (b)
the
aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection
with, the distribution thereof and that the undersigned has no present intention
of distributing or reselling such shares.
Date:__________________________
______________________________
(Signature)
8
FORM
OF
ASSIGNMENT
(To
be
executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR
VALUE
RECEIVED, __________________ hereby
sells, assigns, and transfers unto __________________ a Warrant to purchase
__________ shares of Common Stock, par value $0.001 per share, of Auriga
Laboratories, Inc., a Delaware corporation (the “Corporation”),
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint __________________
attorney
to transfer such Warrant on the books of the Corporation, with full power of
substitution.
Dated:__________________________
By:_____________________________________
Signature
The
signature on the foregoing Assignment must correspond to the name as written
upon the face of this Warrant in every particular, without alteration or
enlarge-ment or any change whatsoever.