Exhibit 10.7
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT
”) OR UNDER THE SECURITIES LAWS OF ANY STATE OR JURISDICTION
AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED
UNLESS REGISTERED OR QUALIFIED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION, IN
REASONABLY ACCEPTABLE FORM AND SCOPE, OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, THAT REGISTRATION, QUALIFICATION OR
OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER ANY SUCH LAWS.
CRDENTIA
CORP.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
(Expires June 30,
2013)
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Warrant
No. CV-2
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525,000 Shares of Common Stock
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FOR
VALUE RECEIVED, subject to the provisions set forth below, the
undersigned, CRDENTIA CORP., a Delaware corporation (the “
Company ”), hereby certifies that ComVest Capital,
LLC, a Delaware limited liability company, or its registered
assigns (the “ Holder ”), is entitled to
purchase from the Company up to five hundred twenty-five thousand
(525,000) fully paid and nonassessable shares (the “
Warrant Shares ”) of the Company’s common stock,
$.0001 par value per share (the “ Common Shares
”), for cash at a price of $0.35 per share (the “
Exercise Price ”) at any time and from time to time
from and after the date hereof, and until 5:00 p.m. (Central
time) on June 30, 2013 (the “ Expiration Date
”), upon surrender to the Company at its principal office (or
at such other location as the Company may advise the Holder in
writing) of this Warrant properly endorsed with the Notice of
Exercise attached hereto duly filled in and signed and, if
applicable, upon payment in cash or by check of the aggregate
Exercise Price for the number of shares for which this Warrant is
being exercised determined in accordance with the provisions
hereof. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment as provided in
Section 3 of this Warrant.
This Warrant is issued pursuant to that certain
Amended and Restated Term Loan Agreement dated as of June 30,
2008 by and between ComVest Capital, LLC and the Company (the
“ Loan Agreement ”).
1.
Exercise of
Warrant.
1.1.
Exercise
. This Warrant shall
be exercisable at any time and from time to time from the date
hereof until the Expiration Date, and this Warrant shall expire on
the Expiration Date. Upon exercise of this Warrant, the
Exercise Price shall be payable in cash or by check. This
Warrant may be exercised in whole or in part so long as any
exercise in part hereof would not involve the issuance of
fractional Warrant Shares or the payment of fractional cents.
If exercised in part, the Company shall deliver to the Holder a new
Warrant, identical in form to
this Warrant, in the
name of the Holder, evidencing the right to purchase the number of
Warrant Shares as to which this Warrant has not been exercised,
which new Warrant shall be signed by an appropriate officer of the
Company. The term “Warrant” as used herein shall
include any subsequent Warrant issued as provided
herein.
1.2.
Exercise Procedures; Delivery
of Certificate . Upon surrender of this Warrant with a
duly executed Notice of Exercise in the form of Annex A
attached hereto, together with payment of the Exercise Price for
the Warrant Shares purchased, at the Company’s principal
executive offices (the “ Designated Office ”),
the Holder shall be entitled to receive a certificate or
certificates for the Warrant Shares so purchased. The Company
agrees that the Warrant Shares shall be deemed to have been issued
to the Holder as of the close of business on the date on which this
Warrant shall have been surrendered together with the Notice of
Exercise and payment for such Warrant Shares.
1.3.
Cashless Exercise
. Anything elsewhere
contained herein to the contrary notwithstanding, in lieu of
payment of the Exercise Price, a Holder may exercise this Warrant,
in whole or in part, by presentation and surrender of this Warrant
to the Company, together with a Cashless Exercise Form in the
form attached hereto as Annex B (or a reasonable
facsimile thereof) duly executed (a “ Cashless
Exercise ”). Such presentation and surrender shall
be deemed a waiver of the Holder’s obligation to pay all or
any portion of the Exercise Price, as the case may be. In the
event of a Cashless Exercise, the Holder shall exchange this
Warrant for that number of Common Shares determined by multiplying
the number of Common Shares for which this Warrant is being
exercised by a fraction, (a) the numerator of which shall be
the difference between (i) the then current market price per
Common Share, and (ii) the Exercise Price, and (b) the
denominator of which shall be the then current market price per
Common Share. For purposes of any computation under this
Section l.3, the then current market price per Common Share at
any date shall be deemed to be the average of the daily trading
price for the ten (10) consecutive trading days immediately
prior to the Cashless Exercise. If, during such measuring
period, there shall occur any event which gives rise to any
adjustment of the Exercise Price, then a corresponding adjustment
shall be made with respect to the closing prices of the Common
Shares for the days prior to the Effective Date of such adjustment
event. As used herein, the term “trading price”
on any relevant date means (A) if the Common Stock is listed
for trading on the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Global Market, or the NASDAQ Global Select
Market, the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of the Common Stock
(regular way), or (B) if the Common Stock is not so listed but
quotations for the Common Stock are reported on the OTC Bulletin
Board, the most recent closing price as reported on the OTC
Bulletin Board.
1.4.
Holder’s Put
Options .
(a) In the event that and at such time as the Company or any
of its stockholders enters into a binding agreement with respect to
any Sale (as such term is defined in the Loan Agreement) or enters
into any underwriting agreement or files any registration statement
in respect of a public offering of Common Shares registered with
the Securities and Exchange Commission (a “ Public
Offering ”), or (if sooner) on that date which is thirty
(30) days prior to any payment or required payment in full of the
Obligations (as such term is defined in the Loan Agreement), the
Company shall, in addition to any notice required under the Loan
Agreement or the Registration Rights Agreement (as such term is
defined in the Loan Agreement), give written notice to the Holder
(or, if applicable, the holder of the Warrant
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Shares) setting forth in reasonable detail the
circumstances and material terms of the subject Sale agreement,
Public Offering agreement, underwriting agreement, or registration
statement, or the pendency of such payment (as the case may
be). Subject to and in accordance with the provisions of this
Section 1.4, the Holder shall have the right and option (the
“ Initial Put Option ”), exercisable at any time
(i) prior to the date of consummation of the proposed Sale or
Public Offering or such payment in full (as set forth in the
Company’s notice hereunder), (ii) prior to the Term
Notes Maturity Date (as such term is defined in the Loan
Agreement), or (iii) upon the occurrence and during the
continuance of an Event of Default (as such term is defined in the
Loan Agreement) or any other event or circumstance which causes,
effects or requires any payment in full under the Loan Agreement
(each, a “ Triggering Event ”), to require the
Company to redeem and purchase, for a cash purchase price of
$420,000 (the “ Initial Option Purchase Price
”), 80% of this Warrant (or, if applicable, 80% of the
Warrant Shares) from the Holder (which term, for purposes of this
Section 1.4, shall include each holder of Warrant
Shares). The Option Purchase Price shall be payable
simultaneously with the consummation of the Triggering Event and
the payment of the other Obligations under the Loan
Agreement. In addition, if the Initial Put Option is not
exercised, the Holder shall have the further right and option,
exercisable upon thirty (30) days’ written notice to the
Company given at any time during the period from (A) the
earlier of the lapse or expiration of the Initial Put Option or
March 1, 2011 through (B) June 30, 2012, to require
the Company to redeem and purchase 80% of this Warrant (or, if
applicable, 80% of the Warrant Shares) for a cash purchase price of
$516,000; and if such option is not exercised, the Holder shall
have the further right and option, exercisable upon thirty (30)
days’ written notice to the Company given at any time from
July 1, 2012 through June 30, 2013, to require the
Company to redeem and purchase 80% of this Warrant (or, if
applicable, 80% of the Warrant Shares) for a cash purchase of
$635,000; and such options, together with the Initial Put Option,
are each referred to herein as a “ Put Option ”,
and the respective purchase prices applicable to such additional
Put Options, together with the Initial Option Purchase Price, are
each referred to herein as an “ Option Purchase Price
”.
(b)
Each Put Option shall be
exercisable at any time within the applicable time frame provided
in Section 1.4(a) above, by the Holder providing a
completed Put Option exercise form in the form attached hereto as
Annex C (or a reasonable facsimile thereof) duly executed,
to the Company at the Designated Office. Upon payment of the
applicable Option Purchase Price by the Company to the Holder, the
Holder shall surrender this Warrant (or the
certificate(s) representing the Warrant Shares, as applicable)
to the Company, against delivery to the Holder of a replacement
Warrant (or certificate(s) representing Warrant Shares, as
applicable) representing the portion of this Warrant or the Warrant
Shares (as applicable) not purchased by the Company
hereunder.
(c)
In the event that any
proposed Sale or Public Offering which gave rise to the exercise of
the Initial Put Option is abandoned or is not consummated for any
reason or for no reason, then such exercise of the Initial Put
Option shall be null and void ab initio , and
(i) the Initial Put Option shall thereafter be applicable and
exercisable in connection with any subsequent proposed Sale or
Public Offering, or any other Triggering Event, in accordance with
this Section 1.4, and (ii) the further Put Options
provided in the last sentence of Section 1.4(b) above
shall remain unimpaired.
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2.
Transfer; Issuance of Stock
Certificates; Restrictive Legends .
2.1.
Transfer
. Each transfer of
this Warrant and all rights hereunder, in whole or in part, shall
be registered on the books of the Company to be maintained for such
purpose, upon surrender of this Warrant at the Designated Office,
together with a written assignment of this Warrant in the form of
Annex C attached hereto duly executed by the Holder or
its agent or attorney. Upon such surrender and delivery, the
Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not
so assigned, if any. A Warrant may be exercised by the new
Holder for the purchase of Warrant Shares without having a new
Warrant issued. Prior to due presentment for registration of
transfer thereof, the Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof
(notwithstanding any notations of ownership or writing thereon 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. All Warrants issued upon any assignment of Warrants
shall be the valid obligations of the Company, evidencing the same
rights and entitled to the same benefits as the Warrants
surrendered upon such registration of transfer or exchange.
The foregoing notwithstanding, no portion of this Warrant shall be
transferred or assigned (except to an affiliate of ComVest Capital,
LLC) prior to the Commencement Date.
2.2.
Stock
Certificates . Certificates for the Warrant Shares
shall be delivered to the Holder within five (5) business days
after the rights represented by this Warrant shall have been
exercised pursuant to Section 1, and a new Warrant
representing the right to purchase the Common Shares, if any, with
respect to which this Warrant shall not then have been exercised
shall also be issued to the Holder within such time. The
issuance of certificates for Warrant Shares upon the exercise of
this Warrant shall be made without charge to the Holder hereof
including, without limitation, any documentary, stamp or similar
tax that may be payable in respect thereof; provided ,
however , that the Company shall not be required to pay any
income tax to which the Holder hereof may be subject in connection
with the issuance of this Warrant or the Warrant Shares.
2.3.
Restrictive Legend
. Except as otherwise
provided in this Section 2, each certificate for Warrant
Shares initially issued upon the exercise of this Warrant and each
certificate for Warrant Shares issued to any subsequent transferee
of any such certificate, shall be stamped or otherwise imprinted
with a legend in substantially the following form:
“THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER SUCH ACT OR AN OPINION IN FORM AND FROM
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.”
Notwithstanding the foregoing, the legend
requirement of this Section 2.3 shall terminate as to any
particular Warrant Shares when (i) such Warrant Shares are
transferred pursuant to an
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effective resale registration statement, as
contemplated in the Amended and Restated Registration Rights
Agreement between the Company and the Holder dated as of
June 30, 2008, or (ii) the Company shall have received
from the Holder thereof an opinion of counsel in form and substance
reasonably acceptable to the Company that such legend is not
required in order to ensure compliance with the Securities
Act. Whenever the restrictions imposed by this
Section 2.3 shall terminate, the Holder or subsequent
transferee, as the case may be, shall be entitled to receive from
the Company without cost to such Holder or transferee a certificate
for the Warrant Shares without such restrictive legend.
3.
Adjustment of Number of
Shares; Exercise Price; Nature of Securities Issuable Upon Exercise
of Warrants.
3.1.
Exercise Price; Adjustment of
Number of Shares . The Exercise Price and the number of
shares purchasable hereunder shall be subject to adjustment from
time to time as hereinafter provided; provided ,
however , that, notwithstanding the below, in no case shall
the Exercise Price be reduced to below the par value per share of
the class of stock for which this Warrant is exercisable at such
time.
3.2.
Adjustments Upon Distribution,
Subdivision or Combination . If the Company, at any time or from
time to time after the issuance of this Warrant, shall
(a) make a
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