THIS WARRANT
AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACT
OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS
WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT OR PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACTS.
FORM OF WARRANT TO PURCHASE
COMMON STOCK
(Three-Year Warrant)
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WARRANT NO.
W-XXX
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ISSUED: XXXX ,
2009
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THIS CERTIFIES THAT, for value received,
XXXX (the “ Holder ”), is entitled to
subscribe for and purchase from BIOLARGO, INC., a corporation
organized under the laws of the state of Delaware (the “
Company ”), subject to Section 1(b) hereof, commencing
at the time periods prescribed herein and ending at 5:00 p.m.
California time on June 1, 2012, XXXX shares (the
“ Shares ”) of common stock, par value,
$0.00067, of the Company (the “ Common Stock ”).
The exercise price for each Share subject to this Warrant (the
“ Warrant Price ”) is equal to $1.00. The number
of Shares and the Warrant Price are subject to adjustment from time
to time as provided in Section 4 of this
Warrant.
This Warrant is issued in connection with and as
consideration for the Convertible Note due June 1, 2012 dated
the date hereof and issued by the Company in favor of the Holder,
which Convertible Note has been issued pursuant the Holder’s
investment in the Company.
1. Method of
Exercise; Payment; Issuance of New Warrant .
(a) The purchase right represented by this
Warrant may be exercised by the Holder, in whole or in part,
subject to the limitation set forth below, and from time to time,
by (i) the surrender of this Warrant (with a notice of
exercise in the form attached hereto as Exhibit A ,
duly executed) at the principal office of the Company and
(ii) the payment to the Company, by check or wire transfer of
funds to an account specified in writing by the Company, of an
amount equal to the aggregate Warrant Price. The Shares so
purchased, representing the aggregate number of shares specified in
the executed Exhibit A , shall be delivered to the
Holder within a reasonable time, not exceeding ten
(10) business days, after this Warrant shall have been so
exercised. Upon receipt by the Company of this Warrant at the
office of the Company, in proper form for exercise and accompanied
by the amount equal to the aggregate Warrant Price, the Holder
shall be deemed to be the holder of record of the Shares issuable
upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates
representing such Shares shall not then be actually delivered to
the Holder.
(b) If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery
of such Shares, deliver to the Holder a new Warrant evidencing the
right to purchase the remaining Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant, or, at the request of Holder, appropriate notation
may be made on this Warrant which shall then be returned to
Holder.
2. Stock Fully Paid; Reservation of
Shares . All Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be fully
paid and nonassessable, and free from all preemptive rights, taxes,
liens and charges with respect to the issue thereof; provided,
however, that the Company shall not be required to pay any transfer
taxes with respect to the issue of shares in any name other than
that of the registered holder hereof. During the period within
which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized, and reserved for the
purpose of the issue upon exercise of the purchase rights evidenced
by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant.
The Company shall at all times take all such action and obtain all
such permits or orders as may be necessary to enable the Company
lawfully to issue such Common Stock as duly and validly issued,
fully paid and nonassessable shares upon exercise in full of this
Warrant.
3. Fractional Shares . No
fractional shares of Common Stock will be issued in connection with
any exercise hereunder, but in lieu of such fractional shares the
Company shall make a cash payment therefor upon the basis of the
Fair Market Value of such Shares.
4. Adjustment . This Warrant shall
be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) Adjustment for Stock Splits and
Combinations . If the Company shall at any time or from time to
time after the date hereof effect a subdivision of the outstanding
Common Stock, the Warrant Price then in effect immediately before
that subdivision shall be proportionately decreased. If the Company
shall at any time or from time to time after the date hereof
combine the outstanding Common Stock, the Warrant Price then in
effect immediately before the combination shall be proportionately
increased. Any adjustment under this subsection shall become
effective at the close of business on the date the subdivision or
combination becomes effective.
(b) Adjustment for Certain Dividends
and Distributions . In the event the Company at any time or
from time to time after the date hereof shall make or issue a
dividend or other distribution payable in additional shares of
Common Stock, then and in each such event the Warrant Price shall
be decreased as of the time of such issuance, by multiplying the
Warrant Price by a fraction:
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(x)
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the numerator of which shall be the
total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance; and
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(y)
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the denominator of which shall be
the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance plus the number of
shares of Common Stock issuable in payment of such dividend or
distribution.
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(c) Adjustment of Number of Shares
. Upon each adjustment of the Warrant Price pursuant to either
Section 4 (a) or 4(b) of this Warrant, the number of shares
of Common Stock purchasable upon exercise of this Warrant shall be
adjusted to the number of shares of Common Stock, calculated to the
nearest one hundredth of a share, obtained by multiplying the
number of shares of Common Stock purchasable immediately prior to
such adjustment upon the exercise of the Warrant by the Warrant
Price in effect prior to such adjustment and dividing the product
so obtained by the new Warrant Price.
(d) Adjustment for Reclassification,
Exchange and Substitution . If the Common Stock issuable upon
the exercise of this Warrant are changed into the same or different
number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a
subdivision or combination provided for in Section 4(a)
above, a dividend or distribution provided for in
Section 4(b) above, or a reorganization, merger,
consolidation or sale of assets, provided for in
Section 4(e) below), then and in any such event the
Holder shall have the right thereafter to exercise this Warrant
into the kind and amount of stock and other securities receivable
upon such recapitalization, reclassification or other change, by
holders of the number of shares of Common Stock for which this
Warrant might have been exercised immediately prior to such
recapitalization, reclassification or change.
(e) Reorganization, Mergers,
Consolidations or Sales of Assets . If at any time or from time
to time there is a capital reorganization of the Common Stock
(other than a subdivision or combination provided for in
Section 4(a) above, a dividend or distribution provided
for in Section 4(b) above, or a reclassification or
exchange of shares provided for in Section 4(d) above) or a
merger or consolidation of the Company with or into another entity,
or a sale of all or substantially all of the Company’s
properties and assets to any other person or entity, then, as a
part of such reorganization, merger, consolidation or sale,
provision shall be made so that the Holder shall thereafter be
entitled to receive upon exercise of this Warrant the number of
shares of stock or other securities, money or property of the
Company, or of the successor entity resulting from such merger or
consolidation or sale, to which a holder of Common Stock
deliverable upon conversion would have been entitled on such
capital reorganization, merger, consolidation, or sale. The Company
shall not effect any reorganization, merger, consolidation or sale
unless prior to the consummation thereof each entity or person
(other than the Company) that may be required to deliver any cash,
securities or other property upon the exercise of this Warrant
shall assume, by written instrument delivered to the Holder, the
obligation to deliver to the Holder such cash, securities or other
property as in accordance
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