WARRANT         NO. _ CYTOMEDIX, INC. [_] Shares      

 

WARRANT TO PURCHASE COMMON STOCK

 

VOID AFTER 5:30 P.M., EASTERN
TIME, ON THE EXPIRATION DATE

 

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. FOR
VALUE RECEIVED, Cytomedix, Inc., a Delaware corporation (the “Company”), hereby
agrees to sell upon the terms, subject to limitations and on the conditions
hereinafter set forth, but no later than 5:30 p.m., Eastern Time on the
Expiration Date (as hereinafter defined) to [_] or registered assigns (the
“Holder”), under the terms as hereinafter set forth, up to a total of [_]
(“Total Warrant Stock”) fully paid and non-assessable shares of the Company's
Common Stock, par value $0.0001 per share (the “Warrant Stock”), at a purchase
price of $[_] per share (the “Warrant Price”), exercisable as follows: (i)
commencing on the date hereof, for up to [_] (representing thirty (30%) percent
of the Total Warrant Stock) fully paid and non-assessable shares of the Warrant
Stock at the Warrant Price (the “Initial Exercise Period”), and (ii) upon
issuance of the Third Post-Closing Consideration to the Selling Equity Holder
(as the term defined therein) in accordance with and pursuant to the
satisfaction of conditions set forth in Section 2.4 of the Exchange and Purchase
Agreement by and among the Company, Aldagen, Inc. and Aldagen Holdings, LLC,
dated as of February 8, 2012, for the remaining balance of up to [_]
(representing seventy (70%) percent of the Total Warrant Stock) fully paid and
non-assessable shares of the Warrant Stock at the Warrant Price, pursuant to
this warrant (this “Warrant”). The number of shares of Warrant Stock to be so
issued and the Warrant Price are subject to adjustment in certain events as
hereinafter set forth. The term “Common Stock” shall mean, when used herein,
unless the context otherwise requires, the stock and other securities and
property at the time receivable upon the exercise of this Warrant. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Warrant Exercise Agreement (the “Warrant Exercise Agreement”),
dated as of the date hereof, entered into by the Company and the Holder.

 

 

 

 

1.           Exercise of Warrant.

 

a.           The Holder may exercise this Warrant according to its terms by
surrendering this Warrant to the Company at the address set forth in Section 11,
the Notice of Exercise attached hereto having then been duly executed by the
Holder, accompanied by cash, certified check or bank draft in payment of the
purchase price, in lawful money of the United States of America, for the number
of shares of the Warrant Stock specified in the Notice of Exercise, or as
otherwise provided in this Warrant, prior to 5:30 p.m., Eastern Time, December
31, 2014 (the “Expiration Date”).

 

b.           This Warrant may also be exercised at such time by means of a
“cashless exercise” in which the Holder shall be entitled to receive a
certificate for the number of shares of Warrant Stock equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:

 

  (A) = the VWAP on the Trading Day immediately preceding the date of such
election;

 

  (B) = the Warrant Price of this Warrant, as adjusted; and

 

  (X) = the number of shares of Warrant Stock issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means of a cash exercise
rather than a cashless exercise.

 

For purposes of this Warrant, (i) “VWAP” means, for any date, the price
determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as
reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. New York City
time to 4:02 p.m. New York City time); (b) if the OTC Bulletin Board is not a
Trading Market, the volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the
Common Stock is not then listed or quoted for trading on the OTC Bulletin Board
and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value of a
share of Common Stock as determined by the Board of Directors of the Company,
(ii) “Trading Market” means any of the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: the
NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or
any successors to any of the foregoing), and (iii) “Trading Day” means a day on
which the principal Trading Market is open for trading.

 

c.           No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. The Company shall pay cash in lieu
of fractions with respect to the Warrants based upon the fair market value of
such fractional shares of Common Stock (which shall be the closing price of such
shares on the exchange or market on which the Common Stock is then traded or
quoted) at the time of exercise of this Warrant.

 

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d.           In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Stock so purchased,
registered in the name of the Holder, shall be delivered to the Holder within
seven (7) Trading Days after such rights shall have been so exercised (such
date, the “Warrant Stock Delivery Date”). The person or entity in whose name any
certificate for the Warrant Stock is issued upon exercise of the rights
represented by this Warrant shall for all purposes be deemed to have become the
holder of record of such shares immediately prior to the close of business on
the date on which the Warrant was surrendered and payment of the Warrant Price
and any applicable taxes was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the opening of business on
the next succeeding date on which the stock transfer books are open. The Company
shall pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.

 

2.           Disposition of Warrant Stock and Warrant.

 

a.           The Holder hereby acknowledges that this Warrant and any Warrant
Stock purchased pursuant hereto are, as of the date hereof, not registered: (i)
under the Securities Act of 1933, as amended (the “Act”), on the ground that the
issuance of this Warrant is exempt from registration under Section 4(2) of the
Act as not involving any public offering or (ii) under any applicable state
securities law because the issuance of this Warrant does not involve any public
offering; and that the Company's reliance on the Section 4(2) exemption of the
Act, as the case may be, and under applicable state securities laws is
predicated in part on the representations hereby made to the Company by the
Holder that it is acquiring this Warrant and will acquire the Warrant Stock for
investment for its own account, with no present intention of dividing its
participation with others or reselling or otherwise distributing the same,
subject, nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control.

 

The Holder hereby agrees that it will not sell or transfer all or any part of
this Warrant and/or Warrant Stock unless and until it shall first have given
notice to the Company describing such sale or transfer and furnished to the
Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.

 

b.           If, at the time of issuance of the shares issuable upon exercise of
this Warrant, no registration statement is in effect with respect to such shares
under applicable provisions of the Act, the Company may at its election require
that the Holder provide the Company with written reconfirmation of the Holder's
investment intent and that any stock certificate delivered to the Holder of a
surrendered Warrant shall bear legends reading substantially as follows:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR
OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAW OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.”

 

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In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.

 

3.            Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance upon the exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the exercise
price (if exercised by cash exercise), be validly issued, fully paid and non
assessable, free from all taxes, liens, charges and preemptive rights with
respect to the issuance thereof, other than taxes, if any, in respect of any
transfer occurring contemporaneously with such issuance and other than transfer
restrictions imposed by federal and state securities laws.

 

4.            Exchange, Transfer or Assignment of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.

 

5.            Capital Adjustments. This Warrant is subject to the following
further provisions:

 

 a.           Stock Dividends and Distributions. If the Company, at any time on
or after the date of the Warrant Exercise Agreement, (i) pays a stock dividend
on one or more classes of its then outstanding shares of Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its then outstanding
shares of Common Stock into a larger number of shares or (iii) combines (by
combination, reverse stock split or otherwise) one or more classes of its then
outstanding shares of Common Stock into a smaller number of shares, then in each
such case the Warrant Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock 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 Warrant Price of this Warrant shall remain unchanged. Any
adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution, and any adjustment pursuant to clause
(ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. If any event requiring an
adjustment under this paragraph occurs during the period that a Warrant Price is
calculated hereunder, then the calculation of such Warrant Price shall be
adjusted appropriately to reflect such event.

 

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b.           Certain Shares Excluded. The number of shares of Common Stock
outstanding at any given time for purposes of the adjustments set forth in this
Section 5 shall exclude any shares then directly or indirectly held in the
treasury of the Company.

 

c.           Deferral and Cumulation of De Minimis Adjustments. The Company
shall not be required to make any adjustment pursuant to this Section 5 if the
amount of such adjustment would be less than one percent (1%) of the Warrant
Price in effect immediately before the event that would otherwise have given
rise to such adjustment. In such case, however, any adjustment that would
otherwise have been required to be made shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
or adjustments so carried forward, shall amount to not less than one percent
(1%) of the Warrant Price in effect immediately before the event giving rise to
such next subsequent adjustment.

 

d.           Duration of Adjustment. Following each computation or readjustment
as provided in this Section 5, the new adjusted Warrant Price and number of
shares of Warrant Stock purchasable upon exercise of this Warrant shall remain
in effect until a further computation or readjustment thereof is required.

 

6.            Call Provision. Subject to the provisions of this Section 6, if,
after the effective date of this Warrant, (i) any fifteen (15) trading day
cumulative VWAP (the “Measurement Period,” which fifteen (15) consecutive
Trading Day period shall not have commenced until after the effective date of
this Warrant) exceeds $3.00 per share (subject to adjustment for forward and
reverse stock splits, stock dividends and the like after the effective date of
this Warrant), and (ii) the Holder is not in possession of any information that
constitutes, or might constitute, material non-public information which was
provided by the Company (conditions set forth in (i) and (ii) above referred
collectively as the “Call Conditions”), then the Company may, within one (1)
Trading Day of the end of such Measurement Period, call for cancellation of all
or any portion of this Warrant for which a Notice of Exercise has not yet been
delivered (such right, a “Call”) for consideration equal to $0.01 per Share. To
exercise this right, the Company must deliver to the Holder an irrevocable
written notice (a “Call Notice”), indicating therein the portion of unexercised
portion of this Warrant to which such notice applies. To the extent that any
portion of this Warrant to which a Call Notice applies is not fully vested and
exercisable on the date of issuance of the Call Notice, such portion of the
Warrant and the related Warrant Stock shall automatically, without any further
action on the part of the Company, the Holder or any other person or entity,
immediately become vested and exercisable in full. If the conditions set forth
below for such Call are satisfied from the period from the date of the Call
Notice through and including the Call Date (as defined below), then any portion
of this Warrant subject to such Call Notice for which a Notice of Exercise shall
not have been received by the Call Date will be cancelled at 6:30 p.m. (New York
City time) on the tenth (10) Trading Day after the date on which the Call Notice
is received by the Holder (such date and time, the “Call Date”). Any unexercised
portion of this Warrant to which the Call Notice does not pertain will be
unaffected by such Call Notice. In furtherance thereof, the Company covenants
and agrees that it will honor all Notices of Exercise with respect to Warrant
Stock subject to a Call Notice that are tendered through 6:30 p.m. (New York
City time) on the Call Date. Subject again to the provisions of this Section,
the Company may deliver subsequent Call Notices for any portion of this Warrant
for which the Holder shall not have delivered a Notice of Exercise. The
Company's right to call the Warrants under this Section shall be exercised
ratably among the Holders based on each Holder's initial purchase of Warrants.
Notwithstanding anything to the contrary, in the event that the Company
determines that the Call Conditions are present at any time during the Initial
Exercise Period (as defined hereinabove), then the Holder may, but shall not be
required to, exercise any or all of this Warrant (including as to any Warrant
Stock that has not yet become exercisable pursuant to the terms of this Warrant,
which Warrant Stock shall automatically, without any further action on the part
of the Company, the Holder or any other person or entity, immediately become
vested and exercisable in full) according to its terms by surrendering this
Warrant to the Company as set forth hereinabove.

 

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7.           Notice to Holders.

 

a.           Notice of Record Date. In case:

 

(i)          the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any dividend (other than a
cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right; or

 

(ii)         of any voluntary dissolution, liquidation or winding-up of the
Company; then, and in each such case, the Company will mail or cause to be
mailed to the Holder hereof at the time outstanding a notice specifying, as the
case may be, (i) the date on which a record is to be taken for the purpose of
such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, or (ii) the date on which such
dissolution, liquidation or winding-up is to take place, and the time, if any,
is to be fixed, as of which the holders of record of Common Stock (or such stock
or securities at the time receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such dissolution
or winding-up. Such notice shall be mailed at least thirty (30) days prior to
the record date therein specified, or if no record date shall have been
specified therein, at least thirty (30) days prior to such specified date,
provided, however, failure to provide any such notice shall not affect the
validity of such transaction.

 

b.           Certificate of Adjustment. Whenever any adjustment shall be made
pursuant to Section 5 hereof, the Company shall promptly make a certificate
signed by its Chairman, Chief Executive Officer, President, Vice President,
Chief Financial Officer or Treasurer, setting forth in reasonable detail the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Warrant Price and number of shares
of Warrant Stock purchasable upon exercise of this Warrant after giving effect
to such adjustment, and shall promptly cause copies of such certificates to be
mailed (by first class mail, postage prepaid) to the Holder of this Warrant.

 

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8.          Registration Rights.  The Holder shall have registration rights with
respect to the Warrant and the Warrant Stock issued and held of record by such
Holder, as set forth in the Warrant Agreement dated as of the date hereof.

 

9.          Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
of evidence satisfactory to it, in the exercise of its reasonable discretion, of
the ownership and the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like tenor dated the date
hereof.

 

10.         Warrant Holder Not a Stockholder. The Holder of this Warrant, as
such, shall not be entitled by reason of this Warrant to any rights whatsoever
as a stockholder of the Company.

 

11.         Notices. Any notice required or contemplated by this Warrant shall
be deemed to have been duly given if transmitted by registered or certified
mail, return receipt requested, or nationally recognized overnight delivery
service, to the Company at its principal executive offices located at 209 Perry
Parkway, Suite 7, Gaithersburg, MD 20877, Attn: Andrew Maslan, Chief Financial
Officer, or to the Holder at the name and address set forth in the Warrant
Register maintained by the Company.

 

12.         Governing Law. The validity, construction and enforcement of this
Warrant shall be governed by the laws of the State of Delaware and jurisdiction
is hereby vested in the Courts of said State in the event of the institution of
any legal action under this Warrant.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
behalf, in its corporate name and by its duly authorized officers, as of this
8th day of February, 2012.

 

  CYTOMEDIX, INC.         By:       Name:  Martin P. Rosendale     Title:  Chief
Executive Officer

 

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NOTICE OF EXERCISE

 

TO: Cytomedix, Inc.

_________________

Attn: Chief Executive Officer

Tel: (___) ___-____

Fax: (___) ___-____

 

(1)         The undersigned hereby elects to purchase ______________ shares of
Warrant Stock of the Company pursuant to the terms of the attached Warrant to
Purchase Common Stock, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.

 

(2)         Payment shall take the form of (check applicable box):

 

£     in lawful money of the United States; or

 

  £ the cancellation of such number of shares of Warrant Stock as is necessary,
in accordance with the formula set forth in subsection 1(b), to exercise this
Warrant with respect to the maximum number of shares of Warrant Stock
purchasable pursuant to the cashless exercise procedure set forth in subsection
1(b).

 

(3)         Please issue a certificate or certificates representing said shares
of Warrant Stock in the name of the undersigned or in such other name as is
specified below:

 

 

The shares of Warrant Stock shall be delivered to the following DWAC Account
Number, if permitted, or by physical delivery of a certificate to: 

     

 

(4)         Accredited Investor. The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as amended
or the undersigned satisfies the requirements under Regulation D promulgated
under the Securities Act of 1933, as amended.

 

 

 

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:   Signature of Authorized Signatory of Investing
Entity:   Name and Title of Authorized Signatory:   Date:  

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ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, all of or _________________ shares of the foregoing Warrant
and all rights evidenced thereby are hereby assigned to

 

_____________________________________whose address is 

       

 

Dated: __________________,         

 

Holder’s Name:   Holder’s Signature:   Name and Title of Signatory:   Holder’s
Address:   Signature Guaranteed:  

 

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.