THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAW OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AMDL, INC. THAT
SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON
STOCK
1.
Issuance . In consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged by AMDL, Inc., a Delaware corporation (the “
Company ”), St. George Investments, LLC, an Illinois
limited liability company, or registered assigns (the “
Holder ”), is hereby granted the right to purchase at
any time on or after the Issue Date (as defined below) until the
date which is the last calendar day of the month in which the fifth
anniversary of the Issue Date occurs (the “ Expiration
Date ”), five hundred thousand (500,000) fully paid and
nonassessable shares of the Company’s Common Stock, $0.001
par value per share (the “ Common Stock ”), at
an initial exercise price of $0.65 per share (the “
Exercise Price ”), subject to further adjustment as
set forth herein. This Warrant is being issued pursuant to the
terms of that certain Note and Warrant Purchase Agreement of even
date herewith (the “ Purchase Agreement ”), to
which the Company and the Holder (or the Holder’s predecessor
in interest) are parties.
Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Purchase
Agreement.
This Warrant was originally issued to the Holder
or the Holder’s predecessor in interest on September 15, 2009
(the “ Issue Date ”).
2.
Exercise of Warrants .
(a) This
Warrant is exercisable in whole or in part at any time and from
time to time commencing on the Issue Date. Such exercise shall be
effectuated by submitting to the Company (either by delivery to the
Company or by facsimile transmission) a completed and duly executed
Notice of Exercise (substantially in the form attached to this
Warrant as EXHIBIT A). The date such Notice of Exercise is either
faxed, emailed or delivered to the Company shall be the “
Exercise Date ,” provided that, if such exercise
represents the full exercise of the outstanding balance of the
Warrant, the Holder of this Warrant shall tender this Warrant to
the Company within five (5) Trading Days (as defined below)
thereafter. The Notice of Exercise shall be executed by the Holder
of this Warrant and shall indicate (i) the number of shares then
being purchased pursuant to such exercise and (ii) if applicable
(as provided below), whether the exercise is a cashless
exercise.
For purposes of this Warrant, the term “
Trading Day ” means any day during which the Principal
Market (as defined below) shall be open for business.
(b) Notwithstanding any other provision
contained herein to the contrary, if at any time from the period
beginning on November 15, 2009 and ending on the Expiration Date,
if all of the shares of Common Stock underlying this Warrant are
not registered for resale in an effective Registration Statement,
the Holder may elect a “cashless” exercise of this
Warrant for any Warrant Shares not registered in an effective
Registration Statement. Whereby, the Holder shall be entitled to
receive a number of shares of Common Stock equal to (x) the excess
of the Current Market Value (as defined below) over the total cash
exercise price of the portion of the Warrant then being exercised,
divided by (y) the Market Price of the Common Stock.
For the
purposes of this Warrant, the following terms shall have the
following meanings:
“ Current Market Value ”
shall mean an amount equal to the Market Price of the Common Stock,
multiplied by the number of shares of Common Stock specified in the
applicable Notice of Exercise.
“ Market Price of the Common Stock
” shall mean the lower of: (i) the Closing Price (as defined
below) of the Company’s common stock on the principal market
where Common Stock is traded (the “ Principal Market
”) for the prior business day; or (ii) the volume weighted
average sales prices of the Common Stock on such market for the
prior ten (10) business days, in each case as recorded by
Bloomberg, LP (or if that service is not then reporting the
relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by the Holder and
reasonably acceptable to the Company).
“ Closing Price ” means the
4:00 P.M. closing bid price of the Common Stock on the Principal
Market on the relevant trading day(s), as reported by Bloomberg LP
(or if that service is not then reporting the relevant information
regarding the Common Stock, a comparable reporting service of
national reputation selected by the Holder and reasonably
acceptable to the Company) for the relevant date.
(c) If the Notice of Exercise form elects a
“cash” exercise (or if the cashless exercise referred
to in the immediately preceding paragraph (b) is not available in
accordance with the terms hereof), the Exercise Price per share of
Common Stock for the shares then being exercised shall be payable,
at the election of the Holder, in cash or by certified or official
bank check or by wire transfer in accordance with instructions
provided by the Company at the request of the Holder.
(d) Upon the appropriate payment to the Company,
if any, of the Exercise Price for the shares of Common Stock
purchased, together with the surrender of this Warrant (if
required), the Company shall immediately deliver the shares of
Common Stock electronically via Deposit/Withdrawal at Custodian
(DWAC) or Depository Trust Company (DTC) to the account designated
by Holder on the Notice of Exercise. If for any reason
the Company is not able to deliver the shares via DWAC or DTC,
notwithstanding its best efforts to do so, the Company shall
deliver certificates representing the Warrant Shares to the Holder
as provided in the Notice of Exercise (the certificates delivered
in such manner, the “ Warrant Share Certificates
”) within three (3) Trading Days (such third Trading Day, a
“ Delivery Date ”) of (i) with respect to a
“cashless exercise,” the Exercise Date as the case may
be, or, (ii) with respect to a “cash” exercise, the
later of the Exercise Date or the date the payment of the Exercise
Price for the relevant Warrant Shares is received by the
Company.
(e) The Company understands that a delay in the
electronic delivery of shares or the delivery of the Warrant Share
Certificates, as the case may be, beyond the Delivery Date
(assuming electronic delivery is not available) could result in
economic loss to the Holder. As compensation to the Holder for such
loss, the Company agrees to pay late payment fees (as liquidated
damages and not as a penalty) to the Holder for late delivery of
Warrant Share Certificates in the amount of $100 per Trading Day
after the Delivery Date for each $10,000 of Exercise Price of the
Warrant Shares subject to the delivery default. The Company shall
pay any payments incurred under this Section in immediately
available funds upon demand. Furthermore, in addition to any other
remedies which may be available to the Holder, in the event that
the Company fails for any reason to effect delivery of the Warrant
Share Certificates by the Delivery Date, the Holder may revoke all
or part of the relevant Warrant exercise by delivery of a notice to
such effect to the Company, whereupon the Company and the Holder
shall each be restored to their respective positions immediately
prior to the exercise of the relevant portion of this Warrant,
except that the liquidated damages described above shall be payable
through the date notice of revocation or rescission is given to the
Company.
(f) The Holder shall be deemed to be the holder
of the shares issuable to it in accordance with the provisions of
this Section 2.1 on the Exercise Date.
2.2
Ownership Limitation . Notwithstanding the provisions of
this Warrant, in no event shall the this Warrant be exercisable to
the extent that the issuance of Common Stock upon the exercise
thereof, after taking into account the Common Stock then owned by
the Holder and its affiliates, would result in the beneficial
ownership by the Holder and its affiliates of more than 9.99% of
the outstanding Common Stock (the “ Percentage Cap
”) of the Company. For purposes this paragraph,
beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as
amended.
2.3
Trustee for Warrant Holders . In the event that a qualified
bank or trust company shall have been appointed as trustee for the
Holder pursuant to Subsection 6.2, such bank or trust company shall
have all the powers and duties of a warrant agent (as hereinafter
described) and shall accept, in its own name for the account of the
Company or such successor person as may be entitled thereto, all
amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to Section
2.1.
3.
Reservation of Shares . The Company hereby agrees that, at
all times during the term of this Warrant, there shall be reserved
for issuance upon exercise of this Warrant, one hundred percent
(100%) of the number of shares of its Common Stock as shall be
required for issuance of the Warrant Shares for the then
unexercised portion of this Warrant. For the purposes of such
calculations, the Company should assume that the outstanding
portion of this Warrant was exercisable in full at any time,
without regard to any restrictions which
