Exhibit 4.1
EXHIBIT A
FORM OF COMMON STOCK PURCHASE WARRANT
OCULUS INNOVATIVE SCIENCES, INC.
Warrant
Shares: [
Initial
Exercise Date: September 28, 2008
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 181st day 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 Oculus Innovative Sciences, 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 27, 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 of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (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 Company); 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
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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 Company 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 $ 6.85, subject to adjustment hereunder (the
“ Exercise Price ”).
c) Cashless Exercise . If at
any time during the term of this Warrant there is no effective
Registration Statement registering, or no current prospectus
available for, the issuance or 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:
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(A) |
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= the VWAP on the Trading Day immediately preceding the date of
such election; |
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(B) |
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= the Exercise Price of this Warrant, as adjusted; and |
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(X) |
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= 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).
d) Holder’s Restrictions
. 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
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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)(i), 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 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 (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may
be, (y) a more recent public announcement by the Company or
(z) any other notice by the Company or the Company’s
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 outstanding
immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Beneficial
Ownership Limitation provisions of this Section 2(d) may be waived
by the Holder, at the election of the Holder, upon not less than
61 days’ prior notice to the Company to change the
Beneficial Ownership Limitation to 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,
and the provisions of this Section 2(d) shall continue to apply.
Upon such a change by a Holder of the Beneficial Ownership
Limitation from such 4.99% limitation to such 9.99% limitation, the
Beneficial Ownership Limitation may not be further waived by the
Holder. 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.
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e) |
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Mechanics of Exercise . |
i. Delivery of Certificates Upon
Exercise . Certificates for shares purchased hereunder shall be
transmitted by the transfer agent of the Company 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 a
participant in such system and either (A) there is an
effective Registration Statement for the issuance or permitting the
resale of the Warrant Shares by the Holder or this Warrant is being
exercised via cashless exercise, 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
(“ 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), $2 per Trading Day (increasing to
$4 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.
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 its transfer agent to transmit to the
Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 2(e)(i) by the Warrant Share
Delivery Date, then the Holder will have the right to rescind such
exercise.
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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 its transfer agent to transmit to the Holder
a certificate or 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
(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 times
(B) the price at which the sell order giving rise to such
purchase obligation was executed, 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. 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 (1) 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 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
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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, th
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