THIS WARRANT
AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE
AGREEMENT DATED AS OF JULY 15, 2008, NEITHER THIS WARRANT NOR ANY
OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE,
CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT
TO RULE 144 OR REGULATION S UNDER SUCH ACT.
Right to
Purchase 6,000,000 Shares of Common Stock, par value $.001 per
share
STOCK PURCHASE
WARRANT
THIS CERTIFIES
THAT , for value
received, New Millennium Capital Partners II, LLC or its registered
assigns, is entitled to purchase from Igia, Inc.,
a Delaware corporation (the “Company”), at any time or
from time to time during the period specified in Paragraph 2
hereof, 6,000,000 fully paid and nonassessable shares of the
Company’s Common Stock, par value $.001 per share (the
“Common Stock”), at an exercise price per share equal
to $.0002 (the “Exercise Price”). The term
“Warrant Shares,” as used herein, refers to the shares
of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Paragraph 4
hereof. The term “Warrants” means this Warrant and the
other warrants issued pursuant to that certain Securities Purchase
Agreement, dated July 15, 2008, by and among the Company and the
Buyers listed on the execution page thereof (the “Securities
Purchase Agreement”).
This Warrant is subject to the following terms,
provisions, and conditions:
1.
Manner of Exercise;
Issuance of Certificates; Payment for Shares
.
Subject to the provisions hereof,
this Warrant may be exercised by the holder hereof, in whole or in
part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the “Exercise
Agreement”), to the Company during normal business hours on
any business day at the Company’s principal executive offices
(or such other office or agency of the Company as it may designate
by notice to the holder hereof), and upon (i) payment to the
Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for
the Warrant Shares specified in the Exercise Agreement or (ii) if
the resale of the Warrant Shares by the holder is not then
registered pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the “Securities
Act”), delivery to the Company of a written notice of an
election to effect a “Cashless Exercise” (as defined in
Section 11(c) below) for the Warrant Shares specified in the
Exercise Agreement. The Warrant Shares so purchased shall be deemed
to be issued to the holder hereof or such holder’s designee,
as the record owner of such shares, as of the close of business on
the date on which this Warrant shall have been surrendered, the
completed Exercise Agreement shall have been delivered, and payment
shall have been made for such shares as set forth above.
Certificates for the Warrant Shares so purchased, representing the
aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof within a reasonable time,
not exceeding three (3) business days, after this Warrant shall
have been so exercised. The certificates so delivered shall be in
such denominations as may be requested by the holder hereof and
shall be registered in the name of such holder or such other name
as shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the holder a new Warrant representing the
number of shares with respect to which this Warrant shall not then
have been exercised. In addition to all other available remedies at
law or in equity, if the Company fails to deliver certificates for
the Warrant Shares within three (3) business days after this
Warrant is exercised, then the Company shall pay to the holder in
cash a penalty (the “Penalty”) equal to 2% of the
number of Warrant Shares that the holder is entitled to multiplied
by the Market Price (as hereinafter defined) for each day that the
Company fails to deliver certificates for the Warrant Shares. For
example, if the holder is entitled to 100,000 Warrant Shares and
the Market Price is $2.00, then the Company shall pay to the holder
$4,000 for each day that the Company fails to deliver certificates
for the Warrant Shares. The Penalty shall be paid to the holder by
the fifth day of the month following the month in which it has
accrued.
Notwithstanding anything in this Warrant to the
contrary, in no event shall the holder of this Warrant be entitled
to exercise a number of Warrants (or portions thereof) in excess of
the number of Warrants (or portions thereof) upon exercise of which
the sum of (i) the number of shares of Common Stock beneficially
owned by the holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership
of the unexercised Warrants and the unexercised or unconverted
portion of any other securities of the Company (including the Notes
(as defined in the Securities Purchase Agreement)) subject to a
limitation on conversion or exercise analogous to the limitation
contained herein) and (ii) the number of shares of Common Stock
issuable upon exercise of the Warrants (or portions thereof) with
respect to which the determination described herein is being made,
would result in beneficial ownership by the holder and its
affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and
Regulation 13D-G thereunder, except as otherwise provided in clause
(i) of the preceding sentence. Notwithstanding anything to the
contrary contained herein, the limitation on exercise of this
Warrant set forth herein may not be amended without (i) the written
consent of the holder hereof and the Company and (ii) the approval
of a majority of shareholders of the Company.
2.
Period of
Exercise . This Warrant is exercisable at any time or from
time to time on or after the date on which this Warrant is issued
and delivered pursuant to the terms of the Securities Purchase
Agreement and before 6:00 p.m., New York, New York time on the
seventh (7 th ) anniversary of the date of issuance (the
“Exercise Period”).
3.
Certain Agreements of the
Company . The Company hereby covenants and agrees as
follows:
(a)
Shares to be Fully
Paid . All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, and charges
with respect to the issue thereof.
(b)
Reservation of
Shares . During the Exercise Period, the Company shall at
all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient number of shares of
Common Stock to provide for the exercise of this
Warrant.
(c)
Listing . The Company shall promptly secure the listing of
the shares of Common Stock issuable upon exercise of the Warrant
upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this
Warrant) and shall maintain, so long as any other shares of Common
Stock shall be so listed, such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant;
and the Company shall so list on each national securities exchange
or automated quotation system, as the case may be, and shall
maintain such listing of, any other shares of capital stock of the
Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.
(d)
Certain Actions
Prohibited . The Company will not, by amendment of its
charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed by
it hereunder, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the
holder of this Warrant in order to protect the exercise privilege
of the holder of this Warrant against dilution or other impairment,
consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (i) will not
increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant.
(e)
Successors and
Assigns . This Warrant will be binding upon any entity
succeeding to the Company by merger, consolidation, or acquisition
of all or substantially all the Company’s assets.
4.
Antidilution
Provisions . During the Exercise Period, the Exercise Price
and the number of Warrant Shares shall be subject to adjustment
from time to time as provided in this Paragraph 4.
In the event that any adjustment of the Exercise
Price as required herein results in a fraction of a cent, such
Exercise Price shall be rounded up to the nearest cent.
(a)
Adjustment of Exercise
Price and Number of Shares upon Issuance of Common
Stock . Except as otherwise provided in Paragraphs 4(c)
and 4(e) hereof, if and whenever on or after the date of issuance
of this Warrant, the Company issues or sells, or in accordance with
Paragraph 4(b) hereof is deemed to have issued or sold, any shares
of Common Stock for no consideration or for a consideration per
share (before deduction of reasonable expenses or commissions or
underwriting discounts or allowances in connection therewith) less
than the Market Price on the date of issuance (a “Dilutive
Issuance”), then immediately upon the Dilutive Issuance, the
Exercise Price will be reduced to a price determined by multiplying
the Exercise Price in effect immediately prior to the Dilutive
Issuance by a fraction, (i) the numerator of which is an amount
equal to the sum of (x) the number of shares of Common Stock
actually outstanding immediately prior to the Dilutive Issuance,
plus (y) the quotient of the aggregate consideration, calculated as
set forth in Paragraph 4(b) hereof, received by the Company upon
such Dilutive Issuance divided by the Market Price in effect
immediately prior to the Dilutive Issuance, and (ii) the
denominator of which is the total number of shares of Common Stock
Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance.
(b)
Effect on Exercise Price
of Certain Events . For purposes of determining the adjusted
Exercise Price under Paragraph 4(a) hereof, the following will be
applicable:
(i)
Issuance of Rights or
Options . If the Company in any manner issues or grants
any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock
(“Convertible Securities”) (such warrants, rights and
options to purchase Common Stock or Convertible Securities are
hereinafter referred to as “Options”) and the price per
share for which Common Stock is issuable upon the exercise of such
Options is less than the Market Price on the date of issuance or
grant of such Options, then the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options will,
as of the date of the issuance or grant of such Options, be deemed
to be outstanding and to have been issued and sold by the Company
for such price per share. For purposes of the preceding sentence,
the “price per share for which Common Stock is issuable upon
the exercise of such Options” is determined by dividing (i)
the total amount, if any, received or receivable by the Company as
consideration for the issuance or granting of all such Options,
plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the exercise of all such Options,
plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of
additional consideration payable upon the conversion or exchange
thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise of all such
Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Exercise Price will be
made upon the actual issuance of such Common Stock upon the
exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such
Options.
(ii)
Issuance of Convertible
Securities . If the Company in any manner issues or sells any
Convertible Securities, whether or not immediately convertible
(other than where the same are issuable upon the exercise of
Options) and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Market Price on
the date of issuance, then the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such
Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. For
the purposes of the preceding sentence, the “price per share
for which Common Stock is issuable upon such conversion or
exchange” is determined by dividing (i) the total amount, if
any, received or receivable by the Company as consideration for the
issuance or sale of all such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof at
the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the conversion or exchange of all such
Convertible Securities. No further adjustment to the Exercise Price
will be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.
(iii)
Change in Option Price or
Conversion Rate . If there is a change at any time in (i) the
amount of additional consideration payable to the Company upon the
exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange of any Convertible Securities; or (iii) the rate at
which any Convertible Securities are convertible into or
exchangeable for Common Stock (other than under or by reason of
provisions designed to protect against dilution), the Exercise
Price in effect at the time of such change will be readjusted to
the Exercise Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding provided
for such changed additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or
sold.
(iv)
Treatment of Expired
Options and Unexercised Convertible Securities
.
If, in any case, the total number of
shares of Common Stock issuable upon exercise of any Option or upon
conversion or exchange of any Convertible Securities is not, in
fact, issued and the rights to exercise such Option or to convert
or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to
the Exercise Price which would have been in effect at the time of
such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual
number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.
(v)
Calculation of
Consideration Received . If any Common Stock, Options or Convertible
Securities are issued, granted or sold for cash, the consideration
received therefor for purposes of this Warrant will be the amount
received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other
reasonable expenses paid or incur
