Exhibit 10.3
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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. 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.
COMMON
STOCK PURCHASE WARRANT
ADVANCED CELL TECHNOLOGY,
INC.
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Warrant
Shares:
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Initial Exercise
Date: March ,
2008
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THIS COMMON STOCK PURCHASE WARRANT (the “
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 date hereof (the
“ Initial Exercise Date ”) and on or prior to
the close of business on the five year anniversary of the Initial
Exercise Date (the “ Termination Date ”) but not
thereafter, to subscribe for and purchase from Advanced Cell
Technology, Inc., a Delaware corporation (the “
Company ”), up to
shares (the “ Warrant Shares ”) of Common
Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).
Section 1 .
Definitions . Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “ Purchase
Agreement ”), dated
March , 2008, among the
Company and the purchasers signatory thereto.
Section 2 .
Exercise .
a)
Exercise of Warrant . Exercise of the purchase rights
represented by this Warrant may be made, in whole or in part, at
any time or times on or after the Initial Exercise Date and on or
before the Termination Date by delivery to the Company (or such
other office or agency of the Company as it may designate by notice
in writing to the registered Holder at the address of the Holder
appearing on the books of the
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Company) of a duly executed facsimile copy of
the Notice of Exercise Form annexed hereto; and, within 3
Trading Days of the date said Notice of Exercise is delivered to
the Company, the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire
transfer or cashier’s check drawn on a United States
bank. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in
full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within 3 Trading Days of the date the
final Notice of Exercise is delivered to the Company. Partial
exercises of this Warrant resulting in purchases of a portion of
the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver any
objection to any Notice of Exercise Form within 1 Business 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 and
any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given
time may be less than the amount stated on the face
hereof.
b)
Exercise Price . The exercise price per share of the
Common Stock under this Warrant shall be $0.165 , subject to
adjustment hereunder (the “ Exercise Price
”).
c)
Cashless Exercise . If at any time after the earlier
of (i) the six month anniversary of the date of the Purchase
Agreement and (ii) the completion of the then-applicable
holding period required by Rule 144, or any successor
provision then in effect, there is no effective registration
statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder, then this Warrant may
also be exercised at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the VWAP on the Trading Day
immediately preceding the date of such election;
(B) = the Exercise Price of this
Warrant, as adjusted; and
(X) = the number of Warrant Shares
issuable upon exercise of this Warrant in accordance with the terms
of this Warrant by means of a cash exercise rather than a cashless
exercise.
Notwithstanding anything herein to the
contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this
Section 2(c).
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d)
Exercise Limitations . The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any
other person or entity acting as a group together with the Holder
or any of the Holder’s Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates and (B) exercise
or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any
other Common Stock Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its affiliates.
Except as set forth in the preceding sentence, for purposes of this
Section 2(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and the Holder is
solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation
contained in this Section 2(d) applies, the determination
of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of
which portion of this Warrant is exercisable shall be in the sole
discretion of the Holder, and the submission of a Notice of
Exercise shall be deemed to be the Holder’s determination of
whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of
which portion of this Warrant is exercisable, in each case subject
to the Beneficial Ownership Limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any
group status as contemplated above shall be determined in
accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. For
purposes of this Section 2(d), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report, as the case
may be, (B) a more recent public announcement by the Company
or (C) any other notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in
writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Warrant, by the Holder or its Affiliates since the date as of which
such number of outstanding shares of Common Stock was
reported. The “ Beneficial Ownership Limitation
” shall be 4.99% of the number of shares of the Common
Stock
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outstanding immediately after giving effect to
the issuance of shares of Common Stock issuable upon exercise of
this Warrant. The Holder, upon not less than 61 days’
prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this
Section 2(d), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant
held by the Holder and the provisions of this
Section 2(d) shall continue to apply. Any
such increase or decrease will not be effective until the 61
st day after such notice is delivered to the Company.
The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(d) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this Warrant.
e)
Mechanics of Exercise .
i.
Delivery of Certificates Upon Exercise . Certificates
for shares purchased hereunder shall be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s
prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“ DWAC ”) system if
the Company is then a participant in such system and the shares are
eligible for resale without volume or manner-of-sale limitations
pursuant to Rule 144, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise
within 3 Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this Warrant (if required)
and payment of the aggregate Exercise Price as set forth above (the
“ Warrant Share Delivery Date ”). This
Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company. The Warrant Shares
shall be deemed to have been issued, and Holder or any other person
so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the
Exercise Price (or by cashless exercise, if permitted) and all
taxes required to be paid by the Holder, if any, pursuant to
Section 2(e)(vi) prior to the issuance of such shares,
have been paid. If the Company fails for any reason to deliver to
the Holder certificates evidencing the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such certificates are delivered.
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ii.
Delivery of New Warrants Upon Exercise . If this
Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii.
Rescission Rights . If the Company fails to cause the
Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to
Section 2(e)(i) by the Warrant Share Delivery Date, then,
the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise . In addition to any other
rights available to the Holder, if the Company fails to cause the
Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after
such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a
“ Buy-In ”), then the Company shall (A) pay
in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased
exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if
the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the
immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a 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
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the
Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
v.
No Fractional Shares or Scrip . No fractional shares
or scrip representing fractional shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which
Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election, either pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.
vi.
Charges, Taxes and Expenses . Issuance of certificates
for Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates 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 certificates for Warrant Shares are to be issued in a
name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder and the
Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental
thereto.
vii.
Closing of Books . The Company will not close its
stockholder books or records in any manner which prevents the
timely exercise of this Warrant, pursuant to the terms hereof.
Section 3 .
Certain Adjustments .
a)
Stock Dividends and Splits . If the Company, at any time
while this Warrant is outstanding: (i) pays a stock dividend
or otherwise make a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding
shares of Common Stock into a larger number of shares,
(iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares
or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made
pursuant to this Section 3(a) shall become effective
immediately after the record
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date for the determination of stockholders
entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
b)
Subsequent Equity Sales . If the Company or any Subsidiary
thereof, as applicable, at any time while this Warrant is
outstanding, shall sell or grant any option to purchase, or sell or
grant any right to reprice, or otherwise dispose of or issue (or
announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equi
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