EXHIBIT 10.12
WARRANT AGREMEMENT BETWEEN
BIOQUEST INTERNATIONAL, INC.
AND
DUNCAN, BLUM & ASSOCIATES
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Securities Counsel Warrant Certificate No. _________ 15,000 Warrants
VOID AFTER THREE YEARS AFTER THE IPO IS REGISTERED WITH THE SEC
WARRANT CERTIFICATE FOR PURCHASE OF
15,000 BIOQUEST INTERNATIONAL, INC. SHARES
OF COMMON STOCK
THIS WARRANT AND ANY SHARES AGENT ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED UNTIL (1)
A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (THE "ACT") SHALL HAVE
BECOME EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY THE ISSUER OF AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION
UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS
SUCH TRANSFER IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.
This certifies that FOR VALUE RECEIVED, Carl Duncan or registered assigns
(the "Registered Holder") is the owner of the number of Warrants ("Warrants")
specified above. Each Warrant initially entitles the Registered Holder to
purchase, subject to the terms and conditions set forth in Section 1 of this
Warrant Certificate 15,000 shares of common stock of BioQuest International
Inc., a Virginia corporation (the "Company"), at any time commencing the
Effectiveness Date and prior to the Expiration Date (as hereinafter defined),
upon the presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the corporate office
of the Company as the initial Warrant Agent or its successor, accompanied by
payment of an amount equal to $0.01 for each Warrant (the "Purchase Price") in
lawful money of the United States of America in cash or by official bank or
certified check made payable to BioQuest International, Inc. The Company may, at
its election, reduce the Purchase Price.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional Shares will be issued. In the case of the
exercise of less than all the Warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and shall execute and
deliver a new Warrant Certificate or Warrant Certificates of like tenor, which
the Warrant Agent shall countersign, for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 P.M. Eastern Standard Time
("EST") three years after the IPO is registered with the SEC. If such date shall
in the Commonwealth of Virginia be a holiday or a day on which the banks are
authorized to close, then the Expiration Date shall mean 5:00 P.M. EST the next
following day which in the State of New York is not a holiday or a day on which
banks are authorized to close. The Company may, at its election, extend the
Expiration Date.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment with any tax or other governmental
charge imposed in connection therewith, for registration of transfer of this
Warrant Certificate at such office, a new Warrant Certificate or Warrant
Certificates representing an equal aggregate number of Warrants will be issued
to the transferee in exchange therefore, subject to the limitations provided in
the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any of the rights of a Shareholder of the
Company including, without limitation, the right to vote or to receive dividends
or other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company.
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Prior to due presentment for registration of transfer hereof, the Company
may deem and treat the Registered Holder as the absolute owner hereof and of
each Warrant represented hereby (notwithstanding any notations of ownership or
writing hereon made by anyone other than a duly authorized officer of the
Company) for all purposes and shall not be affected by any notice to the
contrary.
Warrants represented by this Warrant Certificate shall possess the
following rights:
1. Exchange of Warrants.
In the event of a possible exchange of the Shares of the Company into
common stock and/or subsequent public offering(s) of the Company's securities,
the provisions of Section 2 hereof will govern in certain circumstances
described therein.
2. Adjustment of Exercise Price and Number of Shares or Warrants.
(a) Subject to the exceptions referred to in Section 2(e) below, in the
event the Company shall, at any time or from time to time after the date hereof,
sell any Shares for a consideration per share less than the current fair market
value per share of the Common Stock on the date of the sale or issue any Shares
as a dividend or distribution to the Shareholders of the Company or subdivide or
combine the outstanding Shares into a greater or lesser number of Shares (any
such sale, issuance, subdivision or combination being herein called a "Change of
Shares"), then, and thereafter upon each further Change of Shares, the Purchase
Price in effect immediately prior to such Change of Shares shall be changed to a
price (including any applicable fraction of a cent) determined by multiplying
the Purchase Price in effect immediately prior thereto by a fraction, the
numerator of which shall be the sum of the number of Shares outstanding
immediately prior to the issuance of such additional Shares and the denominator
of which shall be the sum of the number of Shares outstanding immediately after
the issuance of such additional Shares. Such adjustment shall be made
successively whenever such an issuance is made.
Upon each adjustment of the Purchase Price, the total number of Shares
purchasable upon the exercise of each Warrant shall (subject to the provisions
contained in Section 2(b) hereof) be such number of Shares (calculated to the
nearest tenth) purchasable at the Purchase Price immediately prior to such
adjustment multiplied by a fraction, the numerator of which shall be the
Purchase Price in effect immediately prior to such adjustment and the
denominator of which shall be the Purchase Price in effect immediately after
such adjustment.
The number of Shares outstanding at any given time shall not include Shares
owned or held by or for the account of the Company and the sale or issuance of
such treasury Shares or the distribution of any such treasury Shares shall not
be considered a Change of Shares for purposes of said sections.
(b) In case of any reclassification, capital reorganization or other change
of outstanding Shares or in case of any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding Shares)
or in case of any sale or conveyance to another corporation of the property of
the Company as or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause effective
provision to be made so that each holder of a Warrant then outstanding shall
have the right thereafter, by exercising such Warrant, to purchase the kind and
number of shares of stock, Shares or other securities or property (including
cash) receivable upon such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance by a holder of the number of
Shares that might have been purchased upon exercise of such Warrant immediately
prior to such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance. Any such provision shall include
provision for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 2. The foregoing
provisions shall similarly apply to successive reclassifications, capital
reorganizations and other changes of outstanding Shares and to successive
consolidations, mergers, sales or conveyances.
(c) Irrespective of any adjustments or changes in the Purchase Price or the
number of Shares purchasable upon exercise of the Warrants, the Warrant
Certificates theretofore and thereafter issued shall continue to express the
Purchase Price per share and the number of Shares purchasable thereunder as the
Purchase Price per share, and the number of Shares purchasable were expressed in
the Warrant Certificates when the same were originally issued.
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(d) After each adjustment of the Purchase Price pursuant to this Section 2,
the Company will promptly prepare a certificate signed by the Chairman or
President of the Company setting forth: (i) the Purchase Price as so adjusted;
(ii) the number of Shares purchasable upon exercise of each Warrant after such
adjustment and, if the Company shall have elected to adjust the number of
Warrants, the number of Warrants to which the registered holder of each Warrant
shall then be entitled; and (iii) a brief statement of the facts accounting for
such adjustment. The Company will promptly file such certificate with the
Warrant Agent and cause a brief summary thereof to be sent by ordinary first
class mail to each registered holder of Warrants at his last address as it shall
appear on the registry books of the Warrant Agent. No failure to mail such
notice nor any defect therein or in the mailing thereof shall affect the
validity thereof except as to the holder to whom the Company failed to mail such
notice or except as to the holder whose notice was defective. The affidavit of
an officer of the Company that such notice has been mailed shall, in the absence
of fraud, be prima facie evidence of the facts stated therein.
(e) No adjustment to the Purchase Price of the Warrants or to the number of
Shares purchasable upon the exercise of each Warrant will be made upon the
re-capitalization contemplated in the Memorandum to be effected on or before the
final closing of the offering contemplated therein (the "Offering").
(f) As used in this Section 2, the term "Shares" shall mean and include the
Company's Shares authorized on the date of the Memorandum and shall also include
any Shares thereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders (the "Shareholders") thereof
to participate in dividends and in the distribution of assets upon the voluntary
liquidation, dissolution or winding up of the Company.
(g) Any determination as to whether an adjustment in the Purchase Price in
effect hereunder is required pursuant to Section 2 or as to the amount of any
such adjustment, if required, shall be binding upon the holders of the Warrants
and the Company if made in good faith by the Company.
(h) If and whenever the Company shall declare any dividends or
distributions or grant to the Shareholders, as such, rights or warrants to
subscribe for or to purchase or any options for the purchase of, Shares or
securities convertible into or exchangeable for or carrying a right, warrant or
option to purchase Shares, the Company shall notify each of the then Registered
Holders of the Warrants of such event prior to its occurrence to enable such
Registered Holders to exercise their Warrants and participate as Shareholders in
such event.
3. Cashless Exercise of Warrants.
At any time during the Warrant Exercise Term, the Holder may, at its
option, exchange this Warrant, in whole or in part (a "Warrant Exchange"), into
Warrant Certificate by surrendering this Warrant at the principal office of the
Company, accompanied by a notice stating such Holder's intent to effect such
exchange, the number of Shares to be exchanged and the date on which the Holder
requests that such Warrant Exchange occur (the "Notice of Exchange"). The
Warrant Exchange shall take place on the date specified in the Notice of
Exchange or, if later, within five (5) days of the date the Notice of Exchange
is received by the Company (the "Exchange Date"). Certificates for the shares
issuable upon such Warrant Exchange and, if applicable, a new warrant of like
tenor evidencing the balance of the shares remaining subject to this warrant,
shall be issued as of the Exchange Date and delivered to the Holder within three
(3) business days following the Exchange Date. In connection with any Warrant
Exchange, this Warrant shall represent the right to subscribe for and acquire
the number of shares (rounded to the next highest integer) equal to (1) the
number of shares specified by the Holder in its Notice of Exchange (the "Total
Number") less (2) the number of Shares equal to the quotient obtained by
dividing (a) the product of the Total Number and the existing Exercise Price (as
hereinafter defined) by (b) the Market Price of a share of Common Stock, as
defined in the next sentence. As used herein, the phrase "Market Price" at any
date shall be deemed to be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the last reported sale
prices for the last three trading days, in either case as reported by the
principal securities exchange on which the Common Stock is listed or admitted to
trading or as reported by NASDAQ or if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on NASDAQ, the
closing bid price on the NASDAQ Electronic Bulletin Board or as otherwise
furnished by the National Association of Securities Dealers, Inc. (the "NASD")
or similar organization if the NASD is no longer reporting such information or,
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if no such bid information is reported, as determined in good faith by
resolution of the Board of Directors of the Company, based on the best
information available to it for the two days immediately preceding such issuance
or sale and the day of such issuance or sale.
4. Piggy-Back Registration Rights.
(a) Subject to (b) below, at any time that the Company proposes to file
a Company Registration Statement under the Securities Act of 1933, as amended
(the "Act") (the "Registration Statement"), either for its own account or for
the account of a stockholder or stockholders, the Company shall give the
Placement Agents written notice of its intention to do so and of the intended
method of sale (the "Registration Notice") within a reasonable time prior to the
anticipated filing date of the Company's Registration Statement effecting such
Company registration. The Placement Agents may request inclusion of any Warrants
(hereafter "Restricted Securities") in such registration statement by delivering
to the Company, within ten (10) business days after receipt of the Registration
Notice, a written notice (the "Piggyback Notice") stating the number of
Restricted Securities proposed to be included and that such shares are to be
included in any underwriting only on the same terms and conditions as the shares
of Common Stock otherwise being sold through underwriters under such Company
Registration Statement. The Company shall use its best efforts to cause all
Restricted Securities specified in the Piggyback Notice to be included in the
Company Registration Statement and any related offering, all to the extent
requisite to permit the sale by the Placement Agents of its Restricted
Securities in accordance with the method of sale applicable to the other shares
of Common Stock included in such Company Registration Statement; provided,
however, that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Company
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of the
Placement Agents' Restricted Securities, the Company may, at its election, give
written notice of such determination to the Placement Agents and, thereupon:
(i) in the ease of a determination not to register, shall be relieved
of its obligation to register the Placement Agents' Restricted Securities in
connection with such registration (but not from its obligation to pay the
registration expenses in connection therewith); and
(ii) in the case of a delay in registering, shall be permitted to delay
registering the Placement Agents' Restricted Securities for the same period as
the delay in registering such other securities.
(b) The Company's obligation to include Restricted Securities in a
Company's Registration Statement shall be subject to the following limitations:
(i) The Company may elect, at its sole option and for any reason, not
to register the Placement Agents' Restricted Shares, provided however, that this
right is limited to one (1) time and relative to one (1) particular Company
Registration Statement.
(ii) The Company shall not be obligated to include any Restricted
Securities in a Registration Statement filed on Form S-4, Form S-8 or such other
similar successor forms then in effect under the Securities Act.
(iii) If a Company Registration Statement involves an underwritten
offering and the managing placement agent advises the Company in writing that in
its opinion, the number of securities requested to be included in such Company
Registration Statement exceeds the number which can be sold in such offering
without adversely affecting the offering, the Company shall include in such
Company Registration Statement the number of such securities which the Company
is so advised can be sold in such offering without adversely affecting the
offering, determined as follows:
(A) first, the securities proposed by the Company to be sold for
it own account, and
(B) second, any Restricted Securities requested to be included
in such registration and any other securities of the Company in accordance with
the priorities, if and then existing among the holders of such securities pro
rata among the holders thereof requesting such registration on the basis of the
number of shares of such securities requested to be included by such holders.
(iv) The Company shall not be obligated to include Restricted
Securities in more than one (1) Company Registration Statement.
(c) To the extent the Placement Agents' Restricted Securities are intended
to be included in a Company Registration Statement, the Placement Agents may
include any of its Restricted Securities in such Company Registration Statement
pursuant to this Agreement only if the Placement Agents furnishes to the Company
in writing, within ten (10) business days after receipt of a written request
therefore, such information specified in Item 507 of Regulation S-K under the
Act or such other information as the Company may reasonably request for use in
connection with the Company Registration Statement or Prospectus or preliminary
Prospectus included therein and in any application to the NASD. The Placement
Agent(s) as to which the Company Registration Statement is being effected agree
to furnish promptly to the Company all information required to be disclosed in
order to make all information previously furnished to the Company be not
materially misleading.
(b) The rights granted herein are non-transferable and may not be exercised
by any subsequent holder of the Warrants. This Warrant Certificate shall be
governed by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed on September 18, 2000, manually by Peter J. Ewens, its Chief
Executive Officer, thereunto duly authorized and a facsimile of its corporate
seal to be imprinted hereon.
BIOQUEST INTERNATIONAL, INC.
By: /s/ Peter J. Ewens Corporate Seal
----------------------------------------
Peter J. Ewens, Chief Executive Officer
<PAGE>
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
Warrants represented by this Warrant Certificate and purchase the securities
issuable upon the exercise of such Warrants, and requests that certificates for
such securities shall be issued in the name of (and be delivered to):
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
(if applicable)
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[Please print or type name and address]
and, if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
The undersigned represents that the exercise of the within Warrant was
solicited by a member of the National Association of Securities Dealers, Inc.
(the "NASD"). (If not solicited by an NASD member, please write "UNSOLICITED" in
the space below or leave the space blank.)
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[Name of NASD Member]
Dated: ________________________________
By: ________________________________
Signature Guaranteed
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<PAGE>
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ___________________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
(if applicable)
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[Please print or type name and address]
_______________________ of the Warrants represented by this Warrant Certificate,
and hereby irrevocably constitutes and appoints
______________________________________________ his lawful Attorney-in-Fact to
transfer this Warrant Certificate on the books of the Company, with full power
of substitution in the premises.
Dated: ________________________________
By: ________________________________
Signature Guaranteed
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THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST CONTANY OR A MEMBER FIRM OF THE
AMERICAN, NEW YORK, PACIFIC OR MIDWEST STOCK EXCHANGES.
