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Exhibit 4.1
(Warrant)
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A
GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
Right to Purchase _________ shares of Common
Stock of Aethlon Medical, Inc. (subject to
adjustment as provided herein)
COMMON STOCK PURCHASE WARRANT
No.2009-A-001
Issue Date: August 24, 2009
AETHLON MEDICAL,
INC., a corporation organized under the laws of the
State of Nevada (the "COMPANY"), hereby certifies that, for value
received,
__________________, or its assigns (the "HOLDER"), is entitled,
subject to the
terms set forth below, to purchase from the Company at any time
after the Issue
Date until 5:00 p.m., E.S.T on the third anniversary of the Issue
Date (the
"EXPIRATION DATE"), up to ___________ fully paid and non-assessable
shares of
Common Stock at a per share purchase price of $0.50. The
aforedescribed purchase
price per share, as adjusted from time to time as herein provided,
is referred
to herein as the "PURCHASE PRICE." The number and character of such
shares of
Common Stock and the Purchase Price are subject to adjustment as
provided
herein. The Company may reduce the Purchase Price for some or all
of the
Warrants, temporarily or permanently, provided such reduction is
made as to all
outstanding Warrants for all Holders of such Warrants. Capitalized
terms used
and not otherwise defined herein shall have the meanings set forth
in that
certain Subscription Agreement (the "SUBSCRIPTION AGREEMENT"),
dated as of
August 24, 2009, entered into by the Company, the Holder and the
other
signatories thereto.
As used herein the
following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term
"COMPANY" shall mean Aethlon Medical, Inc., a Nevada
corporation, and any corporation which shall succeed or assume the
obligations
of Aethlon Medical, Inc. hereunder.
(b) The term
"COMMON STOCK" includes (i) the Company's Common Stock,
$0.001 par value per share, as authorized on the date of the
Subscription
Agreement, and (ii) any other securities into which or for which
any of the
securities described in (i) may be converted or exchanged pursuant
to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.
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(c) The term
"OTHER SECURITIES" refers to any stock (other than Common
Stock) and other securities of the Company or any other person
(corporate or
otherwise) which the holder of the Warrant at any time shall be
entitled to
receive, or shall have received, on the exercise of the Warrant, in
lieu of or
in addition to Common Stock, or which at any time shall be issuable
or shall
have been issued in exchange for or in replacement of Common Stock
or Other
Securities pursuant to SECTION 4 or otherwise.
(d) The term
"WARRANT SHARES" shall mean the Common Stock issuable upon
exercise of this Warrant.
1. EXERCISE OF
WARRANT.
1.1. NUMBER OF SHARES ISSUABLE UPON EXERCISE. From and after
the Issue Date through and including the Expiration Date, the
Holder hereof
shall be entitled to receive, upon exercise of this Warrant in
whole in
accordance with the terms of SECTION 1.2 or upon exercise of this
Warrant in
part in accordance with SECTION 1.3, shares of Common Stock of the
Company,
subject to adjustment pursuant to SECTION 4 below and SECTIONS 11.4
and 12(B) of
the Subscription Agreement.
1.2. FULL EXERCISE. This
Warrant may be exercised in full by the
Holder hereof by delivery to the Company of an original or
facsimile copy of the
form of subscription attached as EXHIBIT A hereto (the
"SUBSCRIPTION FORM") duly
executed by such Holder and delivery within two days thereafter of
payment, in
cash, wire transfer or by certified or official bank check payable
to the order
of the Company, in the amount obtained by multiplying the number of
shares of
Common Stock for which this Warrant is then exercisable by the
Purchase Price
then in effect. The original Warrant is not required to be
surrendered to the
Company until it has been fully exercised.
1.3. PARTIAL EXERCISE. This Warrant may be exercised in part
(but not for a fractional share) by delivery of a Subscription Form
in the
manner and at the place provided in SECTION 1.2, except that the
amount payable
by the Holder on such partial exercise shall be the amount obtained
by
multiplying (a) the number of whole shares of Common Stock
designated by the
Holder in the Subscription Form by (b) the Purchase Price then in
effect. On any
such partial exercise, provided the Holder has surrendered the
original Warrant,
the Company, at its expense, will forthwith issue and deliver to or
upon the
order of the Holder hereof a new Warrant of like tenor, in the name
of the
Holder hereof or as such Holder (upon payment by such Holder of any
applicable
transfer taxes) may request, the whole number of shares of Common
Stock for
which such Warrant may still be exercised.
1.4. FAIR MARKET VALUE. For purposes of this Warrant, the FAIR
MARKET VALUE of a share of Common Stock as of a particular date
(the
"DETERMINATION DATE") shall mean:
(a) If the Company's Common Stock is traded on an
exchange or is quoted on the NASDAQ Global Market, NASDAQ Global
Select Market,
the NASDAQ Capital Market, the New York Stock Exchange or the
American Stock
Exchange, LLC, then the average of the closing sale prices of the
Common Stock
for the five (5) Trading Days immediately prior to (but not
including) the
Determination Date;
(b) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ Global Market, NASDAQ Global Select
Market, the NASDAQ
Capital Market, the New York Stock Exchange or the American Stock
Exchange,
Inc., but is traded on the OTC Bulletin Board or in the
over-the-counter market
or Pink Sheets, then the average of the closing bid and ask prices
reported for
the five (5) Trading Days immediately prior to (but not including)
the
Determination Date;
(c) Except as provided in clause (d) below and SECTION 3.1, if
the Company's Common Stock is not publicly traded, then as the
Holder and the
Company agree, or in the absence of such an agreement, by
arbitration in
accordance with the rules then standing of the American Arbitration
Association,
before a single arbitrator to be chosen from a panel of persons
qualified by
education and training to pass on the matter to be decided; or
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(d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation,
dissolution
or winding up pursuant to the Company's charter, then all amounts
to be payable
per share to holders of the Common Stock pursuant to the charter in
the event of
such liquidation, dissolution or winding up, plus all other amounts
to be
payable per share in respect of the Common Stock in liquidation
under the
charter, assuming for the purposes of this clause (d) that all of
the shares of
Common Stock then issuable upon exercise of all of the Warrants are
outstanding
at the Determination Date.
1.5. COMPANY ACKNOWLEDGMENT. The Company will, at the time of
the
exercise of the Warrant, upon the request of the Holder hereof,
acknowledge in
writing its continuing obligation to afford to such Holder any
rights to which
such Holder shall continue to be entitled after such exercise in
accordance with
the provisions of this Warrant. If the Holder shall fail to make
any such
request, such failure shall not affect the continuing obligation of
the Company
to afford to such Holder any such rights.
1.6. DELIVERY OF STOCK CERTIFICATES, ETC. ON EXERCISE. The
Company
agrees that, provided the full purchase price listed in the
Subscription Form is
received as specified in SECTION 1.2, the shares of Common Stock
purchased upon
exercise of this Warrant shall be deemed to be issued to the Holder
hereof as
the record owner of such shares as of the close of business on the
date on which
delivery of a Subscription Form shall have occurred and payment
made for such
shares as aforesaid. As soon as practicable after the exercise of
this Warrant
in full or in part, and in any event within three (3) business days
thereafter
("WARRANT SHARE DELIVERY DATE"), the Company at its expense
(including the
payment by it of any applicable issue taxes) will cause to be
issued in the name
of and delivered to the Holder hereof, or as such Holder (upon
payment by such
Holder of any applicable transfer taxes) may direct in compliance
with
applicable securities laws, a certificate or certificates for the
number of duly
and validly issued, fully paid and non-assessable shares of Common
Stock (or
Other Securities) to which such Holder shall be entitled on such
exercise, plus,
in lieu of any fractional share to which such Holder would
otherwise be
entitled, cash equal to such fraction multiplied by the then Fair
Market Value
of one full share of Common Stock, together with any other stock or
other
securities and property (including cash, where applicable) to which
such Holder
is entitled upon such exercise pursuant to SECTION 1 or otherwise.
The Company
understands that a delay in the delivery of the Warrant Shares
after the Warrant
Share Delivery Date could result in economic loss to the Holder. As
compensation
to the Holder for such loss, the Company agrees to pay (as
liquidated damages
and not as a penalty) to the Holder for late issuance of Warrant
Shares upon
exercise of this Warrant the proportionate amount of $100 per
business day after
the Warrant Share Delivery Date for each $10,000 of Purchase Price
of Warrant
Shares for which this Warrant is exercised which are not timely
delivered. The
Company shall pay any payments incurred under this Section in
immediately
available funds upon demand. Furthermore, in addition to any other
remedies
which may be available to the Holder, in the event that the Company
fails for
any reason to effect delivery of the Warrant Shares by the Warrant
Share
Delivery Date, the Holder may revoke all or part of the relevant
Warrant
exercise by delivery of a notice to such effect to the Company,
whereupon the
Company and the Holder shall each be restored to their respective
positions
immediately prior to the exercise of the relevant portion of this
Warrant,
except that the liquidated damages described above shall be payable
through the
date notice of revocation or rescission is given to the
Company.
1.7. BUY-IN. In addition to any other rights available to the
Holder, if the Company fails to deliver to a Holder the Warrant
Shares as
required pursuant to this Warrant, and the Holder or a broker on
the Holder's
behalf, purchases (in an open market transaction or otherwise)
shares of common
stock to deliver in satisfaction of a sale by such Holder of the
Warrant Shares
which the Holder was entitled to receive from the Company (a
"BUY-IN"), then the
Company shall pay in cash to the Holder (in addition to any
remedies available
to or elected by the Holder) the amount by which (A) the Holder's
total purchase
price (including brokerage commissions, if any) for the shares of
common stock
so purchased exceeds (B) the aggregate Purchase Price of the
Warrant Shares
required to have been delivered together with interest thereon at a
rate of 15%
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per annum, accruing until such amount and any accrued interest
thereon is paid
in full (which amount shall be paid as liquidated damages and not
as a penalty).
For example, if a Holder purchases shares of Common Stock having a
total
purchase price of $11,000 to cover a Buy-In with respect to $10,000
of Purchase
Price of Warrant Shares to have been received upon exercise of this
Warrant, the
Company shall be required to pay the Holder $1,000, plus interest.
The Holder
shall provide the Company written notice indicating the amounts
payable to the
Holder in respect of the Buy-In.
2. CASHLESS
EXERCISE.
(a) Payment upon exercise may be made at the option of the
Holder either in (i) cash, wire transfer or by certified or
official bank check
payable to the order of the Company equal to the applicable
aggregate Purchase
Price, (ii) by delivery of Common Stock issuable upon exercise of
the Warrants
in accordance with Section (b) below or (iii) by a combination of
any of the
foregoing methods, for the number of Common Stock specified in such
form (as
such exercise number shall be adjusted to reflect any adjustment in
the total
number of shares of Common Stock issuable to the holder per the
terms of this
Warrant) and the holder shall thereupon be entitled to receive the
number of
duly authorized, validly issued, fully-paid and non-assessable
shares of Common
Stock (or Other Securities) determined as provided herein.
Notwithstanding the
immediately preceding sentence, payment upon exercise may be made
in the manner
described in Section 2(b) below, only with respect to Warrant
Shares NOT
included for unrestricted public resale in an effective
Registration Statement
on the date notice of exercise is given by the Holder.
(b) If the Fair Market Value of one share of Common Stock is
greater than the Purchase Price (at the date of calculation as set
forth below),
in lieu of exercising this Warrant for cash, the holder may elect
to receive
shares equal to the value (as determined below) of this Warrant (or
the portion
thereof being cancelled) by delivery of a properly endorsed
Subscription Form
delivered to the Company by any means described in SECTION 13, in
which event
the Company shall issue to the holder a number of shares of Common
Stock
computed using the following formula:
X=Y (A-B)
--------
A
Where X = the number of
shares of Common Stock to be
issued to the Holder
Y = the number of shares of
Common Stock
purchasable under the Warrant or, if only a
portion
of the Warrant is being exercised,
the portion of the Warrant being exercised
(at the date of such calculation)
A = Fair Market Value
B = Purchase Price (as adjusted
to the date of
such calculation)
For purposes of
Rule 144 promulgated under the 1933 Act, it is
intended, understood and acknowledged that the Warrant Shares
issued in a
cashless exercise transaction in the manner described above shall
be deemed to
have been acquired by the Hold
