EXHIBIT
4.2
THIS WARRANT AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH AN AVAILABLE
EXEMPTION FROM REGISTRATION. THE COMPANY MAY REFUSE TO
AUTHORIZE ANY TRANSFER OF THE SECURITIES IN RELIANCE ON AN
EXEMPTION FROM REGISTRATION UNTIL IT HAS RECEIVED AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE COMPANY IS AUTHORIZED TO ISSUE
MORE THAN ONE CLASS OF STOCK OR MORE THAN ONE SERIES OF ANY CLASS
OF STOCK. THE DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF THE SHARES OF
EACH CLASS OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH RIGHTS, ARE SET FORTH IN THE ARTICLES OF
INCORPORATION OF THE COMPANY. A COPY OF SAID ARTICLES OF
INCORPORATION WILL BE FURNISHED FREE OF CHARGE TO THE HOLDER OF
THIS CERTIFICATE UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY.
THIS WARRANT AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND
THE HOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
BIOFORCE NANOSCIENCES HOLDINGS,
INC.
Expires July 21, 2013
Date of Issuance: July 21,
2008
Number of Shares:
900,000
FOR VALUE RECEIVED, the undersigned,
BioForce Nanosciences Holdings, Inc., a Nevada corporation
(together with its successors and assigns, the " Issuer "),
hereby certifies that FCPR SGAM AI Biotechnology Fund or its
registered assigns is entitled to subscribe for and purchase,
during the Term (as hereinafter defined), up to Nine Hundred
Thousand (900,000) shares (subject to adjustment as hereinafter
provided, the “ Warrant Share Number ”) of the
duly authorized, validly issued, fully paid and non-assessable
Common Stock of the Issuer, at an exercise price per share equal to
the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Capitalized terms used in this Warrant and not otherwise
defined herein shall have the respective meanings specified in
Section 8 hereof.
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1.
Term . The term of this Warrant shall commence on
July 21, 2008 and shall expire at 6:00 p.m., eastern time, on July
21, 2013 (such period being the " Term ").
2.
Method of Exercise; Payment; Issuance
of New Warrant; Transfer and Exchange .
(a)
Time of Exercise
. The purchase rights represented
by this Warrant may be exercised in whole or in part during the
Term.
(b)
Method of Exercise
. The Holder hereof may exercise
this Warrant, in whole or in part, by the surrender of this Warrant
(with the exercise form attached hereto duly executed) at the
principal office of the Issuer, and by the payment to the Issuer of
an amount of consideration therefor equal to the Warrant Price in
effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then
being exercised (the “ Exercise Price ”),
payable at Holder’s election (i) by certified or official
bank check or by wire transfer to an account designated by the
Issuer, (ii) by "cashless exercise" in accordance with the
provisions of subsection (c) of this Section 2, but only when a
registration statement under the Securities Act providing for the
resale of the Warrant Stock is not then in effect, or (iii) by a
combination of the foregoing methods of payment selected by the
Holder of this Warrant.
(c)
Voluntary Cashless Exercise
. Commencing one (1) year following
the Original Issue Date if (i) the Per Share Market Value of one
share of Common Stock is greater than the Warrant Price (at the
date of calculation as set forth below) and (ii) a registration
statement under the Securities Act providing for the resale of the
Warrant Stock is not in effect, in lieu of exercising this Warrant
by payment of cash, the Holder may exercise this Warrant by a
cashless exercise and shall receive the number of restricted shares
of Common Stock equal to an amount (as determined below) by
surrender of this Warrant at the principal office of the Issuer
together with the properly endorsed Notice of Exercise in which
event the Issuer shall issue to the Holder a number of restricted
shares of Common Stock computed using the following
formula:
X = Y - (A)(Y)
B
Where
X =
the number of restricted shares of Common
Stock to be issued to the
Holder.
Y =
the number of shares of Common Stock
purchasable upon exercise of all of the Warrant or, if only a
portion of the Warrant is being exercised, the portion of the
Warrant being exercised.
A =
the Warrant Price.
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B =
the Per Share Market Value of one share
of Common Stock.
(c)
Issuance of Stock
Certificates . In the
event of any exercise of this Warrant in accordance with and
subject to the terms and conditions hereof, certificates for the
shares of Warrant Stock so purchased shall be dated the date of
such exercise and delivered to the Holder hereof within a
reasonable time, not exceeding three (3) Trading Days after the
Issuer and its transfer agent have received from the Holder this
Warrant, a duly executed exercise form, the Exercise Price and all
fees and expenses required hereby in support of such exercise (the
“ Delivery Date ”) or, at the request of the
Holder (provided that a registration statement under the Securities
Act providing for the resale of the Warrant Stock is then in
effect), issued and delivered to the Depository Trust Company
(“ DTC ”) account on the Holder’s behalf
via the Deposit Withdrawal Agent Commission System (“
DWAC ”) no later than the Delivery Date, and the
Holder hereof shall be deemed for all purposes to be the holder of
the shares of Warrant Stock so purchased as of the date of such
exercise. Notwithstanding the foregoing to the contrary, the
Issuer or its transfer agent shall only be obligated to issue and
deliver the shares to the DTC on the Holder’s behalf via DWAC
if such exercise is in connection with a sale and the Issuer and
its transfer agent are participating with DTC through the DWAC
system. The Holder shall deliver this original Warrant (or an
indemnification undertaking with respect to such Warrant in the
case of its loss, theft or destruction), along with a duly executed
exercise form, the Exercise Price and all fees and expenses
required hereby in support of such exercise, at such time that this
Warrant is exercised. If this Warrant shall have been
exercised in part, the Issuer shall deliver to the Holder by the
Delivery Date 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.
(d) Transferability of Warrant .
Subject to Section 2(e) hereof, this Warrant may be
transferred by a Holder, in whole or in part, without the consent
of the Issuer. If transferred pursuant to this paragraph,
this Warrant may be transferred on the books of the Issuer by the
Holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant at the principal office of the Issuer,
properly endorsed (by the Holder executing an assignment in the
form attached hereto) and upon payment of any necessary transfer
tax or other governmental charge imposed upon such transfer.
This Warrant is exchangeable at the principal office of the
Issuer for new Warrants to purchase the same aggregate number of
shares of Warrant Stock, each new Warrant to represent the right to
purchase such number of shares of Warrant Stock as the Holder shall
designate at the time of such exchange. All Warrants issued
on transfers or exchanges shall be dated the Original Issue Date
and shall be identical with this Warrant except as to the number of
shares of Warrant Stock issuable pursuant thereto.
(e)
Compliance with Securities
Laws.
(i)
The Holder of this Warrant, by acceptance
hereof, acknowledges that this Warrant and the shares of Warrant
Stock to be issued upon exercise hereof are being acquired solely
for the Holder's own account and not as a nominee for any other
party, and for investment, and that the Holder will not offer, sell
or otherwise dispose of this Warrant or any shares of Warrant Stock
to be issued upon exercise hereof except pursuant to an effective
registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities
laws.
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(ii)
Except as provided in paragraph (iii)
below, this Warrant and all certificates representing shares of
Warrant Stock issued upon exercise hereof shall be stamped or
imprinted with a legend in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM REGISTRATION. THE
COMPANY MAY REFUSE TO AUTHORIZE ANY TRANSFER OF THE SECURITIES IN
RELIANCE ON AN EXEMPTION FROM REGISTRATION UNTIL IT HAS RECEIVED AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED.
THE COMPANY IS AUTHORIZED TO ISSUE MORE
THAN ONE CLASS OF STOCK OR MORE THAN ONE SERIES OF ANY CLASS OF
STOCK. THE DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF THE SHARES OF
EACH CLASS OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH RIGHTS, ARE SET FORTH IN THE ARTICLES OF
INCORPORATION OF THE COMPANY. A COPY OF SAID ARTICLES OF
INCORPORATION WILL BE FURNISHED FREE OF CHARGE TO THE HOLDER OF
THIS CERTIFICATE UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY.
THE SECURITIES REPRESENTED HEREBY MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT
BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.
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(iii)
The Issuer agrees to reissue this Warrant
or certificates representing any shares of the Warrant Stock
without the legend set forth above, if at such time, prior to
making any transfer of any such securities, the Holder shall give
written notice to the Issuer describing the manner and terms of
such transfer. Such proposed transfer will not be effected
until: (a) either (i) the Issuer has received an opinion of counsel
reasonably satisfactory to the Issuer, to the effect that the
registration of such securities under the Securities Act is not
required in connection with such proposed transfer, (ii) a
registration statement under the Securities Act covering such
proposed disposition has been filed by the Issuer with the
Securities and Exchange Commission and has become effective under
the Securities Act and the Holder has represented that the shares
of Warrant Stock have been or will be sold, (iii) the Issuer has
received other evidence reasonably satisfactory to the Issuer that
such registration and qualification under the Securities Act and
state securities laws are not required, or (iv) the Holder provides
the Issuer with reasonable assurances that such security can be
sold pursuant to Rule 144 under the Securities Act; and (b) either
(i) the Issuer has received an opinion of counsel, reasonably
satisfactory to the Issuer, to the effect that registration or
qualification under the securities or "blue sky" laws of any state
is not required in connection with such proposed disposition, or
(ii) compliance with applicable state securities or "blue sky" laws
has been effected or a valid exemption exists with respect thereto.
The Issuer will respond to any such notice from the Holder
within three (3) Trading Days. In the case of any proposed
transfer under this Section 2(e), the Issuer will use reasonable
efforts to comply with any such applicable state securities or
"blue sky" laws, but shall in no event be required, (x) to qualify
to do business in any state where it is not then qualified, (y) to
take any action that would subject it to tax or to the general
service of process in any state where it is not then subject, or
(z) to comply with state securities or “blue sky” laws
of any state for which registration by coordination is unavailable
to the Issuer. The restrictions on transfer contained in this
Section 2(e) shall be in addition to, and not by way of limitation
of, any other restrictions on transfer contained in any other
section of this Warrant. Whenever a certificate representing
the shares of Warrant Stock is required to be issued to a the
Holder without a legend, in lieu of delivering physical
certificates representing the shares of Warrant Stock, the Issuer
shall use its reasonable best efforts to cause its transfer agent
to electronically transmit the shares of Warrant Stock to the
Holder by crediting the account of the Holder's prime broker with
DTC through its DWAC system (to the extent not inconsistent with
any provisions of this Warrant or the Purchase Agreement).
Notwithstanding the foregoing to the contrary, the Issuer or
its transfer agent shall only be obligated to issue and deliver the
shares to the DTC on the Holder’s behalf via DWAC if such
exercise is in connection with a sale and the Issuer and its
transfer agent are participating in DTC through the DWAC
system.
(f)
Accredited Investor Status
. In no event may the Holder
exercise this Warrant in whole or in part unless the Holder is an
“accredited investor” as defined in Regulation D under
the Securities Act.
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3.
Stock Fully Paid; Reservation and
Listing of Shares; Covenants .
(a)
Stock Fully Paid
. The Issuer represents, warrants,
covenants and agrees that all shares of Warrant Stock which may be
issued upon the exercise of this Warrant or otherwise hereunder
will, when issued in accordance with the terms of this Warrant, be
duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges created by or through the
Issuer. The Issuer further covenants and agrees that during
the period within which this Warrant may be exercised, the Issuer
will 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.
(b)
Listing . The Issuer shall list the shares of Warrant
Stock on the OTC Bulletin Board (or any other securities exchange,
quotation system or market, if any, on which shares of Common Stock
issued by the Company are then listed or traded).
(c)
Covenants . The Issuer shall not by any action including,
without limitation, amending the Articles of Incorporation or the
by-laws of the Issuer, or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holder hereof
against dilution (to the extent specifically provided herein) or
impairment. Without limiting the generality of the foregoing,
the Issuer will (i) not permit the par value, if any, of its Common
Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Articles of Incorporation or by-laws of
the Issuer in any manner that would adversely affect the rights of
the Holders of the Warrants, (iii) take all such action as may be
reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock,
free and clear of any liens, claims, encumbrances and restrictions
(other than as provided herein) upon the exercise of this Warrant,
and (iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having
jurisdiction thereof as may be reasonably necessary to enable the
Issuer to perform its obligations under this Warrant.
(d)
Loss, Theft, Destruction of
Warrants . Upon receipt
of evidence satisfactory to the Issuer of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and, in the
case of any such loss, theft or destruction, upon receipt of
indemnity or security satisfactory to the Issuer or, in the case of
any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost,
stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same number of shares of
Common Stock.
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4.
Adjustment of Warrant Price and Number
of Shares Issuable Upon Exercise . The Warrant Price and the Warrant Share
Number shall be subject to adjustment from time to time as set
forth in this Section 4. The Issuer shall give the Holder notice of
any event described below which requires an adjustment pursuant to
this Section 4 in accordance with the notice provisions set forth
in Section 5.
(a)
Recapitalization, Reorganization,
Reclassification, Consolidation, Merger or Sale
.
(i) In case the Issuer after the
Original Issue Date shall do any of the following (each, a "
Triggering Event "): (a) consolidate or merge with or into
any other Person and the Issuer shall not be the continuing or
surviving corporation of such consolidation or merger, or (b)
permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person
but, in connection with such consolidation or merger, any Capital
Stock of the Issuer shall be changed into or exchanged for
Securities of any other Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets
to any other Person, or (d) effect a capital reorganization or
reclassification of its Capital Stock, then, and in the case of
each such Triggering Event, proper provision shall be made to the
Warrant Price and the Warrant Share Number so that, upon the basis
and the terms and in the manner provided in this Warrant, the
Holder of this Warrant shall be entitled, upon the exercise hereof
at any time after the consummation of such Triggering Event (to the
extent this Warrant is not exercised prior to such Triggering
Event), to receive at the Warrant Price (as adjusted to take into
account the consummation of such Triggering Event), in lieu of the
Common Stock issuable upon such exercise of this Warrant prior to
such Triggering Event, the Securities, cash and property to which
such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights
represented by this Warrant immediately prior thereto (including
the right, if any, of a shareholder to elect the type of
consideration it will receive in connection with the Triggering
Event), subject to adjustments (subsequent to such corporate
action) as nearly equivalent as possible to the adjustments
provided for elsewhere in this Section 4. Immediately upon
the occurrence of a Triggering Event, the Issuer shall notify the
Holder in writing of such Triggering Event and provide the
calculations in determining the number of shares of Warrant Stock,
if any, issuable upon exercise of the new warrant and the adjusted
Warrant Price. Upon the Holder’s request, the
continuing or surviving corporation as a result of such Triggering
Event shall issue to the Holder a new warrant of like tenor, if
any, evidencing the right to purchase the adjusted number of shares
of Warrant Stock and the adjusted Warrant Price pursuant to the
terms and provisions of this Section 4(a)(i). Notwithstanding
the foregoing to the contrary, this Section 4(a)(i) shall only
apply if the surviving entity pursuant to any such Triggering Event
is a company that has a class of equity securities registered
pursuant to the Securities Exchange Act of 1934, as amended, and
its common stock is listed or quoted on a national securities
exchange, national automated quotation system or the OTC Bulletin
Board.
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(ii)
In the event that the Holder has elected
not to exercise this Warrant prior to the consummation of a
Triggering Event, so long as the surviving entity pursuant to any
Triggering Event is a company that has a class of equity securities
registered pursuant to the Securities Exchange Act of 1934, as
amended, and its common stock is listed or quoted on a national
securities exchange, national automated quotation system or the OTC
Bulletin Board, the surviving entity and/or each Person (other than
the Issuer) which may be required to deliver any Securities, cash
or property upon the exercise of this Warrant as provided herein
shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of
the Issuer under this Warrant (and if the Issuer shall survive the
consummation of such Triggering Event, such assumption shall be in
addition to, and shall not release the Issuer from, any continuing
obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to the Holder such Securities, cash or
property as, in accordance with the foregoing provisions of this
subsection (a), the Holder shall be entitled to receive; and the
surviving entity and/or each such Person shall have similarly
delivered to the Holder an opinion of counsel for the surviving
entity and/or each such Person, which counsel shall be reasonably
satisfactory to such Holder, or in the alternative, a written
acknowledgement executed by the President or Chief Financial
Officer of the Issuer, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including,
without limitation, all of the provisions of this subsection (a))
shall be applicable to the Securities, cash or property which the
surviving entity and/or each such Person may be required to deliver
upon any exercise of this Warrant or the exercise of any rights
pursuant hereto.
(b)
Stock Dividends, Subdivisions and
Combinations . If at any
time the Issuer shall:
(i)
make or issue or set a record date for
the holders of the Common Stock for the purpose of entitling them
to receive a dividend payable in, or other distribution of, shares
of Common Stock,
(ii)
subdivide its outstanding shares of
Common Stock into a larger number of shares of Common Stock,
or
(iii)
combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock,
then (1) the Warrant Share Number
immediately after the occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock which a
record holder of the same number of shares of Common Stock for
which this Warrant is exercisable immediately prior to the
occurrence of such event would own or be entitled to receive after
the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in
effect multiplied by (B) the Warrant Share Number immediately prior
to the adjustment divided by (B) the Warrant Share Number
immediately after such adjustment.
(c)
Certain Other Distributions
. If at any time the Issuer shall
make or issue or set a record date for the holders of the Common
Stock for the purpose of entitling them to receive any
dividend or other distribution of:
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(i)
cash (other than a cash dividend payable
out of earnings or earned surplus legally available for the payment
of dividends under the laws of the jurisdiction of incorporation of
the Issuer),
(ii)
any evidences of its indebtedness, any
shares of stock of any class or any other securities or property of
any nature whatsoever (other than cash, Common Stock Equivalents or
Additional Shares of Common Stock), or
(iii)
any warrants or other rights to subscribe
for or purchase any evidences of its indebtedness, any shares of
stock of any class or any other securities or property of any
nature whatsoever (other than cash, Common Stock Equivalents or
Additional Shares of Common Stock),
then (1) the number of shares of Common
Stock for which this Warrant is exercisable shall be adjusted to
equal the product of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such adjustment
multiplied by a fraction (A) the numerator of which shall be the
Per Share Market Value of Common Stock at the date of taking such
record and (B) the denominator of which shall be such Per Share
Market Value minus the amount allocable to one share of Common
Stock of any such cash so distributable and of the fair value (as
determined in good faith by the Board and supported by an opinion
from an investment banking firm mutually agreed upon by the Issuer
and the Holder) of any and all such evidences of indebtedness,
shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the
Warrant Price then in effect shall be adjusted to equal (A) the
Warrant Price then in effect multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of
Common Stock for which this Warrant is exercisable immediately
after such adjustment. A reclassification of the Common Stock
(other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common
Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Common Stock of
such shares of such other class of stock within the meaning of this
Section 4(c) and, if the outstanding shares of Common Stock
shall
