EXHIBIT 10.2
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES
LAW. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF THE ACT OR THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL IN FORM
AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION
IS NOT REQUIRED UNDER THE ACT OR APPLICABLE STATE SECURITIES
LAWS .
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
DOR BIOPHARMA,
INC.
Warrant for the Purchase of
Shares of
Common
Stock
No.
Original
Issue Date January __, 2009
FOR VALUE
RECEIVED, DOR BIOPHARMA, INC., a Delaware corporation (the "
Company "), hereby certifies that ___________________
(the “ Holder ”), is entitled to
purchase from the Company, at any time or from time to time
commencing after the Original Issue Date and expiring at 5:00 P.M.,
New York City time, on the fifth (5th) anniversary after the
Original Issue Date (as such date may be changed pursuant to
Section 2 hereof, the “ Expiration Date ” being
January __, 2014, ______________________
(________), fully paid and non-assessable shares of Common
Stock, par value $.001 per share, of the Company (the “
Warrant Shares ”) for a per share exercise price equal
to $0.14 per share (the “ Per Share Warrant
Price ”). The Per Share Warrant Price is subject to
adjustment as hereinafter provided. Capitalized terms used and not
otherwise defined in this Warrant shall have the meanings specified
in Section 9, unless the context otherwise requires.
(a) This
Warrant may be exercised, in whole at any time or in part from time
to time, commencing after the Original Issue Date and expiring at
5:00 P.M., New York City time, on the Expiration Date (with the
Exercise Notice at the end of this Warrant duly executed) at the
address set forth in Section 10 hereof, together with payment of
the Per Share Warrant Price multiplied by the number of Warrant
Shares to which such exercise relates made by delivery to the
Company of one or more types of Permitted Consideration.
(b) If
this Warrant is exercised in part, the Company will deliver to the
Holder within ten Trading Days of the date such Holder delivers to
the Company this Warrant and an Exercise Notice, together with the
payment of the aggregate Per Share Warrant Price for such exercise,
a new Warrant covering the Warrant Shares which have not been
exercised. By the expiration of the third Trading Day
following the Holder’s delivery of a Warrant, together with
an Exercise Notice and the payment of the aggregate Per Share
Warrant Price for such exercise, the Company will (i) issue a
certificate or certificates in the name of the Holder for the
largest number of whole shares of the Common Stock to which the
Holder shall be entitled and, if this Warrant is exercised in
whole, in lieu of any fractional share of the Common Stock to which
the Holder shall be entitled, pay to the Holder cash in an amount
equal to the fair value of such fractional share (determined by
reference to the closing sales price of the Common Stock on the
date of the Exercise Notice), and (ii) deliver the other securities
and properties receivable upon the exercise of this Warrant, or the
proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of this Warrant.
(c) If,
six months after the Original Issue Date, the Warrant Shares to be
issued are not registered and available for resale by the Holder
pursuant to a registration statement in accordance with the
Registration Rights Agreement entered into on the date hereof, then
the Holder may, at its election exercised in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making a
cash payment of Permitted Consideration, elect instead to receive
upon such exercise the “Net Number” of shares of Common
Stock determined according to the following formula:
Net Number =
(A x B) – (A x C)
For purposes of
the foregoing formula:
A=the total
number of Warrant Shares with respect
to which this
Warrant is then being exercised.
B=the average
of the closing sales prices for the five
Trading Days
immediately prior to (but not including)
the day that
the Holder delivers the Exercise Notice at issue.
C=the Per Share
Warrant Price;
provided,
however that Holder may not exercise this Warrant in whole or in
part pursuant to this Section 1(c) if a registration statement has
been filed but the Holder is not permitted to use the prospectus
included in such registration statement. However, the
Holder may exercise the only the first 10% of this Warrant in whole
or in part pursuant to this Section 1(c) at any time.
(d) If,
by the third Trading Day after the date that the Holder delivers an
Exercise Notice, together with the payment of the aggregate Per
Share Warrant Price for such exercise, the Company fails to deliver
the required number of Warrant Shares in the manner required
pursuant to Section 1(b), then the Holder will have the right to
rescind such exercise.
(e) If,
by the third Trading Day after the date that the Holder delivers an
Exercise Notice, together with the payment of the aggregate Per
Share Warrant Price for such exercise, the Company fails to deliver
the required number of Warrant Shares in the manner required
pursuant to Section 1(b), and if after such third Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases
(in an open market transaction or otherwise) 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 (1) 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
(A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue by
(B) the closing bid price of the Common Stock at the time of the
obligation giving rise to such purchase obligation and (2) 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. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In.
(f) Notwithstanding
anything to the contrary contained herein, the number of shares of
Common Stock that may be acquired by the Holder upon any exercise
of this Warrant shall be limited to the extent necessary to insure
that, following such exercise, the total number of shares of Common
Stock then beneficially owned by such Holder and its affiliates and
any other persons whose beneficial ownership of Common Stock would
be aggregated with the Holder’s for purposes of Section 13(d)
of the Exchange Act, does not exceed 4.999% of the total number of
issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated
thereunder. Each delivery of an Exercise Notice will
constitute a representation by the Holder that it has evaluated the
limitation set forth in this paragraph and determined that issuance
of the full number of Warrant Shares requested in such Exercise
Notice is permitted under this paragraph. This provision shall not
restrict the number of shares of Common Stock which a Holder may
receive or beneficially own in order to determine the amount of
securities or other consideration that such Holder may receive in
the event of a Fundamental Transaction as contemplated in Section
3. By written notice to the Company, the Holder may waive the
provisions of this Section but any such waiver will not be
effective until the 61st day after such notice is delivered to the
Company.
(g) Notwithstanding
anything to the contrary contained herein, the number of shares of
Common Stock that may be acquired by the Holder upon any exercise
of this Warrant (or otherwise in respect hereof) shall be limited
to the extent necessary to insure that, following such exercise (or
other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its affiliates and any other
persons whose beneficial ownership of Common Stock would be
aggregated with the Holder's for purposes of Section 13(d) of the
Exchange Act, does not exceed 9.999% of the total number of issued
and outstanding shares of Common Stock (including for such purpose
the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated
thereunder. Each delivery of an Exercise Notice will
constitute a representation by the Holder that it has evaluated the
limitation set forth in this paragraph and determined that issuance
of the full number of Warrant Shares requested in such Exercise
Notice is permitted under this paragraph. This provision
shall not restrict the number of shares of Common Stock which a
Holder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Holder may
receive in the event of a Fundamental Transaction as contemplated
in Section 3. This restriction may not be
waived.
2.
Company’s Option to Change Expiration Date
.
Notwithstanding
anything herein to the contrary, in the event that (i) the closing
sales price per share of Common Stock is in excess of 400%
of the Per Share Warrant Price (as may be
adjusted pursuant to Section 3) for any twenty (20) Trading Days
during any thirty (30) consecutive Trading Days, (ii) the Warrant
Shares are either registered for resale pursuant to an effective
registration statement naming the Holder as a selling stockholder
thereunder (and the prospectus thereunder is available for use by
the Holder as to all then available Warrant Shares) or freely
transferable without volume restrictions pursuant to Rule 144(k)
promulgated under the Securities Act, as determined by counsel to
the Company pursuant to a written opinion letter addressed and in
form and substance reasonably acceptable to the Holder and the
transfer agent for the Common Stock, during the entire twenty (20)
Trading Day period referenced in (i) above through the expiration
of the Call Date as set forth in the Company’s notice
pursuant to this Section (the “Call Condition
Period” ), and (iii) the Company shall have complied in
all material respects with its obligations under this Warrant and
under the Purchase Agreement, then, subject to the conditions set
forth in this Section, the Company may, in its sole discretion,
elect to change the Expiration Date to 5:00 P.M., New York City
time on 50% of the Holder’s warrants on the date that is
thirty (30) days after written notice thereof (a “Call
Notice” ) is received by the Holder (the “Call
Date” ) at the address last shown on the records of the
Company for the Holder or given by the Holder to the Company for
the purpose of notice; provided, that the conditions to giving such
notice must be in effect at all times during the Call Condition
Period or any such notice shall be null and void. In the
event that the closing sales price per share of Common Stock is in
excess of 600% of the Per Share Warrant Price
(as may be adjusted pursuant to Section 3) for any twenty (20)
Trading Days during any thirty (30) consecutive Trading Days, the
Company reserves the right change the Expiration Date to 5:00 P.M.,
New York City time on the remaining 50% of the Holder’s
warrants on the date that is thirty (30) days after written notice
thereof (a “Call Notice” ) is received by the
Holder (the “Call Date” ) at the address last
shown on the records of the Company for the Holder or given by the
Holder to the Company for the purpose of notice; provided, that the
conditions to giving such notice must be in effect at all times
during the Call Condition Period or any such notice shall be null
and void. The Company and the Holder agree that, if and to the
extent Section 1(f) or (g) of this Warrant would restrict the
ability of the Holder to exercise this Warrant in the event of a
delivery of a Call Notice, then notwithstanding anything to
the contrary set forth in the Call Notice, the Call Notice shall be
deemed automatically amended to apply only to such portion of
this Warrant as may be exercised by the Holder by the Call Date in
accordance
