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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.
SERIES C COMMON STOCK PURCHASE WARRANT
HEPALIFE TECHNOLOGIES, INC.
Warrant No. C-______
Warrant Shares: _________
Initial Exercise Date: ________________
THIS SERIES C 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 second year anniversary of the Initial
Exercise Date (the “ Termination Date ”) but
not thereafter, to subscribe for and purchase from HepaLife
Technologies, Inc., a Florida 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 Subscription Agreement (the “
Subscription Agreement ”), the effective date of
which is ______________ , between the Company and the
subscriber 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
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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 purchases. The Company shall deliver any
objection to any Notice of Exercise Form within 2 Business Days
of receipt of such notice. 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
$0.55, subject to adjustment hereunder (the “
Exercise Price ”).
c)
Exercise Limitations .
i.
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
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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)(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)(i)
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)(i), 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 periodic or annual report, 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 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)(i), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number
of
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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)(i) 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)(i) 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.
d)
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 there is an
effective Registration Statement permitting the resale of the
Warrant Shares by the Holder, 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), $5 per Trading Day (increasing to $10 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 its transfer agent to transmit to the Holder a
certificate or 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 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
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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: (A) 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), (B) subdivides outstanding shares of Common Stock
into a larger number of shares, (C) combines (including by way
of reverse stock split) outstanding shares of Common Stock into
a smaller number of shares, or (D) 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 date for the determination of
stockholders entitled to receive such dividend or
distribution
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and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classific
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