WARRANT TO PURCHASE COMMON STOCK OF COHBAR, INC.
Exhibit 10.7
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MUST BE SURRENDERED TO THE COMPANY AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.
WARRANT TO PURCHASE
COMMON STOCK OF COHBAR, INC.
THIS CERTIFIES THAT, for value received JON STERN, or his registered assigns, as holder hereof is entitled to purchase up to an aggregate of Seven Hundred Ninety Seven Thousand Seventy Five (797,075) shares of Common Stock (as adjusted from time to time as specified in Section 4, the Shares), of CohBar, Inc., a Delaware corporation (the Company) from the Company, at an exercise price of Twenty Six Cents ($0.26) per share (such price and such other price as shall result, from time to time, from the adjustments specified in Section 4 hereof is herein referred to as the Warrant Price), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, the term Common Stock shall mean shares of the Companys Common Stock issuable upon exercise of this Warrant pursuant to Section 2.
1. Term. This Warrant shall expire and shall no longer be exercisable upon the first to occur of:
(a) 5:00 p.m., pacific time, on April 11, 2024; or
(b) a Liquidation Event (as defined in the Companys Certificate of Incorporation, as may be amended from time to time).
2. Method of Exercise; Payment.
(a) Cash Exercise. Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised at any time by the holder hereof in whole or in part, at any time prior to the expiration of the term by surrendering to the Company at its principal office of (a) this Warrant, (b) the notice of exercise form attached hereto as Exhibit A, duly executed by the Holder and (c) payment to the Company, by check or wire transfer to an account designated by the Company, of an amount equal to the then applicable Warrant Price multiplied by the number of Shares subject to this Warrant then being purchased from the Company.
(b) Net Issue Exercise. In lieu of exercising this Warrant, the holder may elect to receive shares of Common Stock equal to the value of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following method:
X | = | Y | * | (A-B) | ||||
A | ||||||||
Where:
X The number of Shares to be issued to the Holder.
Y The number of Shares purchasable under this Warrant.
A The fair market value of one share of the Companys Common Stock on the date of the notice.
B The per share Warrant Price (as adjusted to the date of such calculations).
(c) Fair Market Value. For purposes of Section 2(b), the fair market value of a share of the Companys Common Stock shall mean the average of the closing bid and asked prices of shares of the Companys Common Stock quoted in the over-the-counter market in which such shares are traded or the closing price quoted on any exchange on which such shares are listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal (or other reputable source of quotation information) for the thirty (30) trading days prior to the date of determination of fair market value (or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Companys Common Stock is not traded on the over-the-counter market or on an exchange, the fair market value shall be determined in good faith by the Companys Board of Directors.
(d) Record Holder; Stock Certificates. The person in whose name any certificate representing shares of Common Stock shall be issuable upon exercise of this Warrant shall be deemed to have become the holder of record of, and shall be treated for all purposes as the record holder of, the shares represented thereby (and such shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. In the event of any exercise of the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered by the Company to the holder hereof as soon as reasonably practicable and in any event within thirty (30) days after such exercise.
3. Stock Fully Paid. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof.
4. Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
(a) Reclassification or Merger. In case of any reclassification, change or conversion of securities of the class issuable upon exercise of this Warrant (Warrant Stock) (including, without limitation, a merger, consolidation or similar transaction) (a Significant Event), the holder of this Warrant shall thereafter be entitled to receive, upon exercise of this Warrant, during the period specified in this Warrant and upon payment of the Warrant Price, the number of shares of stock or other securities or property of the Company or the successor entity resulting from such Significant Event, to which the holder of such Warrant Stock in such Significant Event would have received if this Warrant had been fully exercised immediately before that Significant Event. In any such case, appropriate adjustment shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder after the Significant Event to the end that the provisions of this Warrant (including
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adjustment of the Warrant Price then in effect and the number of shares of Warrant Stock and including this Section 4(a)) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.
(b) Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its outstanding shares of Common Stock, the Warrant Price shall be proportionately decreased in the case of a subdivision or increased in the case of a combination, effective at the close of business on the date the subdivision or combination becomes effective. When any adjustment is required to be made to the Warrant Price, the number of shares issuable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Warrant Price in effect immediately prior to such adjustment, by (ii) the Warrant Price in effect immediately after such adjustment, such that the aggregate purchase price payable for the total number of shares purchasable under this Warrant (as adjusted) shall remain the same.
(c) Stock Dividends and Other Distributions. If the Company at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Common Stock payable in Common Stock, or (ii) make any other distribution with respect to Common Stock (except any distribution specifically provided for in the foregoing subparagraphs (a) and (b)) then, in each case for the purpose of this Section 4(c), upon exercise of this Warrant the holder hereof shall be entitled to a proportionate share of any such distribution as though such holder was the holder of the number of shares of Common Stock of the Company into which this Warrant may be exercised as of the record date fixed for the determination of the holders of Common Stock of the Company entitled to receive such distribution.
5. Fractional Shares. No fractional shares of Common Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the Company shall make a cash payment therefor based on the fair market value of the Common Stock on the date of exercise.
6. Compliance with Securities Act.
(a) Compliance with Securities Act. The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the shares of Common Stock to be issued upon exercise hereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant, or any shares of Common Stock to be issued upon exercise hereof, except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the Act). Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act or an exemption from such registration is available, the holder hereof shall confirm in writing, by executing the form attached as Schedule 1 to Exhibit A hereto, that the shares of Common Stock so purchased are being acquired for investment and not with a view toward distribution or resale. This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY
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REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
In addition, in connection with the issuance of this Warrant, the holder specifically represents to the Company by acceptance of this Warrant as follows:
(1) The holder is aware of the Companys business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and knowledgeable decision to acquire this Warrant. The holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any distribution thereof for purposes of the Act.
(2) The holder understands that this Warrant and any securities issuable upon the exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the holders investment intent as expressed herein. In this connection, the holder understands that, in the view of the Securities and Exchange Commission (the SEC), the statutory basis for such exemption may be unavailable if the holders representation was predicated solely upon a present intention to hold the Warrant for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Warrant, or for a period of one year or any other fixed period in the future.
(3) The holder further understands that this Warrant and any securities issuable upon the exercise hereof must be held indefinitely unless subsequently registered under the Act and any applicable state securities laws, or unless exemptions from registration are otherwise available. Moreover, the holder understands that the Company is under no obligation hereunder to register this Warrant and any securities issuable upon the exercise hereof.
(b) Disposition of Warrant or Shares. With respect to any offer, sale or other disposition of this Warrant or any shares of Common Stock acquired pursuant to the exercise of this Warrant, in each case prior to registration of such Warrant or shares, the holder hereof and each subsequent holder of this Warrant agrees to give written notice to the Company prior thereto, describing in sufficient detail the manner thereof, together with a written opinion of such holders counsel (or other evidence of compliance reasonably satisfactory to the Company), if reasonably requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state law then in effect) of this Warrant or such shares of Common Stock and indicating whether or not under the Act certificates for this Warrant or such shares of Common Stock to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such laws. Promptly upon receiving such written notice and reasonably satisfactory opinion (or other evidence of compliance), if so requested, the Company, as promptly as practicable, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such shares of Common Stock all in accordance with the terms of the notice delivered to the Company. Notwithstanding the foregoing, at any time that the Common Stock is publicly traded, such Common Stock may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 under the Act, provided that the Company shall have been furnished with such information as the Company and counsel to the Company may reasonably request to provide assurance that the provisions of Rule 144 have been satisfied. Each certificate representing this Warrant or the shares of Common Stock transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
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7. No Rights as a Stockholder. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.
8. Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the Company and the registered holder of this Warrant.
9. Notices. Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to the holder at its address as shown on the books of the Company or to the Company at the Companys principal corporate address.
10. Market Stand-off Agreement. The holder of this Warrant shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any Common Stock (or other securities) of the Company held by such holder (other than those included in the registration) during the one hundred and eighty (l80) day period following the effective date of the registration statement for the Companys initial public offering filed under the Act (or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports, (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto) or (iii) rules or restrictions of any exchange on which the Companys securities are listed. The Company may impose stop-transfer instructions and may stamp each such certificate with the appropriate legend with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred and eighty (180) day (or other) period.
11. Descriptive Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.
12. Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware.
[The Remainder of this Page Intentionally left Blank.]
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This Warrant was issued by the Company and the terms hereof were accepted by the holder of this Warrant as of April , 2014.
COMPANY: | ||
COHBAR, INC., a Delaware corporation | ||
By: | ||
Jeff Biunno | ||
Chief Financial Officer |
HOLDER: | ||
JON STERN | ||
6 Underhill Road Mill Valley, CA 94941 |
[Signature Page to Warrant]
EXHIBIT A
NOTICE OF EXERCISE
CohBar, Inc.
2265 East Foothill Boulevard
Pasadena, CA 91107
Attention: Chief Executive Officer
1. The undersigned hereby elects to purchase shares of CohBar, Inc., a Delaware corporation pursuant to the terms of the attached Warrant.
2. Method of Exercise (Please initial the applicable blank):
The undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the shares being purchased, together with all applicable transfer taxes, if any. |
The undersigned elects to exercise the attached Warrant by means of the net exercise provisions of Section 2 of the Warrant. |
3. Please issue a certificate or certificates representing said Shares in the name of the undersigned or in such other name as is specified below:
(Name)
(Address)
4. The undersigned has executed, and delivers herewith, an Investment Representation Statement in the form attached hereto as Exhibit A-1.
(Signature)
| ||||
(Name)
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(Date) | (Title) |
Exhibit A
EXHIBIT A-1
INVESTMENT REPRESENTATION STATEMENT
INVESTOR: | JON STERN | |||
COMPANY: | COHBAR, INC. | |||
SECURITIES: | Common Stock Issuable under Warrant dated April , 2014 | |||
DATE: |
In connection with the purchase of the above-listed Securities, the undersigned Investor represents and warrants to, and agrees with, the Company as follows:
1. No Registration. The Investor understands that the Securities have not been, and will not be, registered under the Securities Act of 1933, as amended (the Securities Act), by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investors representations as expressed herein or otherwise made pursuant hereto.
2. Investment Intent. The Investor is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof. The Investor has no present intention of selling, granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement for the same.
3. Investment Experience. The Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests.
4. Speculative Nature of Investment. The Investor understands and acknowledges that the Company has a limited financial and operating history and that its investment in the Company is highly speculative and involves substantial risks. The Investor can bear the economic risk of its investment and is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.
5. Access to Data. The Investor has had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction. The Investor believes that it has received all the information that it considers necessary or appropriate for deciding whether to acquire the Securities. The Investor understands that any such discussions, as well as any information issued by the Company, were intended to describe certain aspects of the Companys business and prospects, but were not necessarily a thorough or exhaustive description. The Investor acknowledges that any business plans prepared by the Company have been, and continue to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results.
6. Accredited Investor. The Investor is an accredited investor within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be reasonably requested by the Company.
Exhibit A-1
7. Residency. The residency of the Investor (or, in the case of a partnership or corporation, such entitys principal place of business) is correctly set forth on the signature page hereto.
8. Brokers and Finders. The Investor has not engaged any brokers, finders or agents in connection with the Securities, and the Company has not incurred nor will incur, directly or indirectly, as a result of any action taken by the Investor, any liability for brokerage or finders fees or agents commissions or any similar charges in connection with the Securities.
The Investor is signing this Investment Representation Statement on the date first written above.
INVESTOR: |
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Print Name of Investor |
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Signature |
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(Name and Title of Signatory, if Applicable) |
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(Address) |
Exhibit A-2