Exhibit 10.7

 

Warrant No. 2014-[___]

 

CDx, Inc.

(a Delaware Corporation)

 

Warrant for the Purchase of [________] Shares of Series B Preferred Stock

 

This Warrant Will Be Void After 5:00 P.M. Pacific Time On [________ ___], 2019

 

These securities have not been registered with the U.S. Securities and Exchange
Commission (the “SEC”) under the Securities Act of 1933, as amended (the
“Securities Act”), and are being offered in reliance on exemptions from
registration provided in Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder and preemption from the registration or
qualification requirements (other than notice filing and fee provisions) of
applicable state laws under the National Securities Markets Improvement Act of
1996.

 

THIS WARRANT (this “Warrant”), effective as of [________ ___], 2014 (the
“Effective Date”), certifies that, for value received, [________] or registered
assigns (the “Holder” or “Holders”), is entitled, at any time on or before 5:00
p.m. Pacific Time on [five year anniversary of Initial Closing], 2019, to
subscribe for, purchase, and receive [________] ([________]) shares (the
“Shares”) of fully paid and non-assessable Series B Preferred Stock, par value
$0.001 per share (the “Series B Preferred Stock”) of CDx, Inc., a Delaware
corporation (the “Company”). This Warrant is exercisable at a price of One
Dollar Ten Cents ($1.10) per share for an aggregate exercise price of [________]
$[________] (the “Exercise Price”). The number of Shares to be received upon
exercise of this Warrant and the Exercise Price may be adjusted on the
occurrence of certain events as described herein. If the rights represented
hereby are not exercised by 5:00 p.m. Pacific Time on [five year anniversary of
Initial Closing], 2019, this Warrant shall automatically become void and of no
further force or effect, and all rights represented hereby shall cease and
expire.

 

Subject to the terms set forth herein, this Warrant may be assigned by the
Holder in whole or in part by execution of the form of assignment attached
hereto or may be exercised by the Holder in whole or in part by execution of the
form of exercise attached hereto and payment of the Exercise Price in the manner
described herein, all subject to the terms hereof.

 

1.          Exercise of Warrants. The Holder shall have the rights of a
stockholder only with respect to Shares fully paid for by the Holder under this
Warrant. Upon the exercise of all or any portion of this Warrant in the manner
provided herein, the Holder exercising the same shall be deemed to have become a
Holder of record of the Shares as to which this Warrant is exercised for all
purposes, and certificates for the securities so purchased shall be delivered to
the Holder within a reasonable time. If this Warrant shall be exercised in
respect to only a part of the Shares covered hereby, the Holder shall be
entitled to receive a similar Warrant of like tenor and date covering the number
of Shares with respect to which this Warrant shall not have been exercised.

 

2.          Assignment of Warrants. In the event this Warrant is assigned in the
manner provided herein, the Company, upon request and upon surrender of this
Warrant by the Holder at the principal office of the Company accompanied by
payment of all transfer taxes, if any, payable in connection therewith, shall
transfer this Warrant on the books of the Company. If the assignment is in
whole, the Company shall execute and deliver a new Warrant or Warrants of like
tenor to this Warrant to the appropriate assignee expressly evidencing the right
to purchase the aggregate number of Shares purchasable hereunder; and if the
assignment is in part, the Company shall execute and deliver to the appropriate
assignee a new Warrant or Warrants of like tenor expressly evidencing the right
to purchase the portion of the aggregate number of Shares as shall be
contemplated by any such agreement, and shall concurrently execute and deliver
to the Holder a new Warrant of like tenor to this Warrant evidencing the right
to purchase the remaining portion of the Shares purchasable hereunder that have
not been transferred to the assignee.

 

 

 

 

3.           Fully Paid Shares. The Company covenants and agrees that the Shares
that may be issued on the exercise of this Warrant will, on issuance pursuant to
the terms of this Warrant, be fully paid and non-assessable, free from all
taxes, liens, and charges with respect to the issue thereof, and not issued in
violation of the preemptive or similar right of any other person. The Company
further covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will have authorized
and reserved a sufficient number of Shares of Series B Preferred Stock to
provide for the exercise of the rights represented by this Warrant.

 

4.           Adjustments.

 

(a)          Merger or Reorganization. If at any time there shall be any
reorganization, recapitalization, merger or consolidation (a “Reorganization”)
involving the Company in which shares of the Company’s stock are converted into
or exchanged for securities, cash or other property, then, as a part of such
Reorganization, lawful provision shall be made so that the Holder shall
thereafter be entitled to receive upon exercise of this Warrant, the kind and
amount of securities, cash or other property of the successor corporation
resulting from such Reorganization, equivalent in value to that which a holder
of the Shares deliverable upon exercise of this Warrant would have been entitled
in such Reorganization if the right to purchase the Shares hereunder had been
exercised immediately prior to such Reorganization. In any such case,
appropriate adjustment (as determined in good faith by the Board of Directors of
the successor corporation) shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the Holder after such
Reorganization to the end that the provisions of this Warrant shall be
applicable after the event, as near as reasonably may be, in relation to any
shares or other securities deliverable after that event upon the exercise of
this Warrant.

 

(b)          Reclassification of Shares. If the securities issuable upon
exercise of this Warrant are changed into the same or a different number of
securities of any other class or classes by reclassification, capital
reorganization, conversion of all outstanding shares of the relevant class or
series or otherwise (other than as otherwise provided for herein) (a
“Reclassification”), then, in any such event, in lieu of the number of Shares
which the Holder would otherwise have been entitled to receive, the Holder shall
have the right thereafter to exercise this Warrant for a number of shares of
such other class or classes of stock that a holder of the number of securities
deliverable upon exercise of this Warrant immediately before that change would
have been entitled to receive in such Reclassification, all subject to further
adjustment as provided herein with respect to such other shares.

 

(c)          Subdivisions and Combinations. In the event that the outstanding
shares of Series B Preferred Stock are subdivided (by stock split, by payment of
a stock dividend or otherwise) into a greater number of shares of such
securities, the number of Shares issuable upon exercise of the rights under this
Warrant immediately prior to such subdivision shall, concurrently with the
effectiveness of such subdivision, be proportionately increased, and the
Exercise Price shall be proportionately decreased, and in the event that the
outstanding shares of Series B Preferred Stock are combined (by reclassification
or otherwise) into a lesser number of shares of such securities, the number of
Shares issuable upon exercise of the rights under this Warrant immediately prior
to such combination shall, concurrently with the effectiveness of such
combination, be proportionately decreased, and the Exercise Price shall be
proportionately increased.

 

(d)          Notice of Adjustments. Upon any adjustment in accordance with this
Paragraph 4, the Company shall give notice thereof to the Holder, which notice
shall state the event giving rise to the adjustment, the Exercise Price as
adjusted and the number of securities or other property purchasable upon the
exercise of the rights under this Warrant, setting forth in reasonable detail
the method of calculation of each. The Company shall, upon the written request
of any Holder, furnish or cause to be furnished to such Holder a certificate
setting forth (i) such adjustments, (ii) the Exercise Price at the time in
effect and (iii) the number of securities and the amount, if any, of other
property that at the time would be received upon exercise of this Warrant.

 

 

 

 

5.                          Notice of Certain Events. In the event of:

 

(a)          any taking by the Company of a record of the holders of any class
of securities of the Company for the purpose of determining the holders thereof
who are entitled to receive any dividends or other distribution, or any right to
subscribe for, purchase, or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other rights;

 

(b)          any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, or any transfer of all or
substantially all of the assets of the Company to any other person, or any
consolidation, share exchange, or merger involving the Company; or

 

(c)          any voluntary or involuntary dissolution, liquidation, or winding
up of the Company,

 

the Company will mail to the Holder(s) of this Warrant, at least 20 days prior
to the earliest date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend, distribution,
or right; the amount and character of such dividend, distribution, or right; or
the date on which any such reorganization, reclassification, transfer,
consolidation, share exchange, merger, dissolution, liquidation, or winding up
of the Company will occur and the terms and conditions of such transaction or
event.

 

6.           Limitation of Transfer. Subject to the restrictions set forth in
Paragraph 8 hereof, this Warrant is transferable at the offices of the Company.
On such transfer, each Holder hereof agrees that the Company may deem and treat
the registered Holder(s) of this Warrant as the true and lawful owner(s) thereof
for all purposes, and the Company shall not be affected by any notice to the
contrary.

 

7.           Disposition of Warrants or Shares. Holder, by acceptance hereof,
agrees for itself and any subsequent owner(s) that, before any disposition is
made of any Warrants or shares of Series B Preferred Stock, Holder shall give
written notice to the Company describing briefly the manner of any such proposed
disposition. No such disposition shall be made unless and until:

 

(a)          the Company has received written assurances from the proposed
transferee confirming a factual basis for relying on exemptions from
registration under applicable federal and state securities laws for such
transfer or an opinion from counsel for the Holder(s) of the Warrants or Shares
stating that no registration under the Securities Act or applicable state
statute is required with respect to such disposition; or

 

(b)          a registration statement under the Securities Act has been filed by
the Company and declared effective by the SEC covering such proposed disposition
and the disposition has been registered or qualified, or is exempt therefrom,
under the state having jurisdiction over such disposition.

 

 

 

 

8.           Restricted Securities: Registration of Securities.

 

(a)          Restricted Securities; Rule 144. As of the original date of
issuance of this Warrant, there is no public market for the Company’s Series B
Preferred Stock, and there is no assurance that a public market will ever be
created, or if created, that it will be an active, sustainable trading market.
Moreover, the Holder acknowledges that this Warrant is, and that the Shares
issuable on exercise hereof will be, “restricted securities” as that term is
defined in Rule 144 promulgated under the Securities Act. Rule 144 requires that
securities issued by a non-reporting company in a transaction not involving a
public offering must be held for a minimum of one year from the date of full
payment for the securities purchased before such securities become eligible to
be publicly sold under Rule 144, even if all other conditions required for
resale under Rule 144 have been met. There is no assurance that the conditions
to satisfy Rule 144 will ever be satisfied. Accordingly, this Warrant must be
taken for investment and held indefinitely. Likewise, any Shares issued upon
exercise of this Warrant must be taken for investment and held indefinitely and
may not be resold unless such resale is registered under the Securities Act
and/or comparable state securities laws or unless an exemption from such
registration is available. A legend to the foregoing effect shall be placed
conspicuously on the face of all certificates for Shares issuable on exercise of
this Warrant.

 

(b)          Registration of Securities. The Company has agreed to file a resale
registration statement with the SEC covering the resale of the Shares issuable
upon exercise of this Warrant. However, there is no assurance that such
registration process will be completed by such time as the Holder desires to
sell the Shares, if ever. Even if Rule 144 or an effective registration
statement is available, the Holder may find it difficult to resell the Shares in
the public market, and therefore, investors may have to hold their Shares
indefinitely.

 

9.           Governing Law. This Warrant shall be construed under and be
governed by the laws of the state of California.

 

10.         Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.

 

11.         Non-waiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Expiration
Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

 

12.         Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

 

13.         Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders of this Warrant from the Initial Exercise Date
through the Termination Date, and shall be enforceable by any such Holder or
holder of Warrant Shares.

 

14.         Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and a majority in interest
of the Holders acquiring warrants pursuant to that certain Series B Preferred
Stock and Warrant Purchase Agreement dated October [___], 2014 between the
Company and the investors listed on Schedule I thereto.

 

15.         Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

 

 

 

 

16.         Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.

 

17.         Loss, Theft, Destruction, or Mutilation. Upon receipt by the Company
of reasonable evidence of the ownership of and the loss, theft, destruction, or
mutilation of this Warrant, the Company will execute and deliver, in lieu
thereof, a new Warrant of like tenor.

 

18.         Taxes. The Company will pay all taxes in respect of the issue of
this Warrant or the Shares issuable upon exercise thereof.

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officers thereunto duly authorized as of the date first written above.

 

  CDx, INC.         By:       Daniel Yazbeck     Chief Executive Officer

 

 

 

 

NOTICE OF EXERCISE

(to be signed only upon exercise of Warrant)

 

To:CDx, INC.

4225 Executive Square, Suite 600

La Jolla, CA 92037

Tel: (888) 710-4279

 

(1)         The undersigned, the owner of the attached Warrant, hereby
irrevocable elects to exercise the purchase rights represented by the Warrant
for, and to purchase thereunder, ____________________shares of Series B
Preferred Stock of CDx, Inc. (the “Shares”), and herewith makes payment of
$____________________ by cash, check or wire transfer of said amount as and for
the exercise price in full for the purchase of such Shares, together with all
applicable transfer taxes, if any. Please issue the Shares of Series B Preferred
Stock as to which this Warrant is exercised in accordance with the instructions
set forth below and, if the Warrant is being exercised with respect to less than
all of the Shares to which it pertains, prepare and deliver a new Warrant of
like tenor for the balance of the Shares purchasable under the attached Warrant.

 

(2)         Please issue said Shares in the name of the undersigned or in such
other name as is specified as follows:

 

 

 

SIGNATURE

 

Executed at ____________________________________________, on
___________________________, 2012.

 

      Investor:  Type or Print Name           Signature           Investor, if
Jointly Held:                               Type or Print Name          
Signature, if Jointly Held           Title, if Signed on Behalf of a  
                            Non-Individual Investor

 

 

 

 

INSTRUCTIONS FOR REGISTRATION OF STOCK

 

Name:                     ( Please Type or Print Address:           Social
Security Number or Federal Tax I.D. Number  

 

NOTICE:The signature to the form of purchase must correspond with the name as
written upon the face of the attached Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.

 

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares. Any consideration of
assignment of the Warrant should be discussed with the Company to confirm that
assignment is permissible under the circumstances.)

 

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

 

Name:         (Please Print)       Address:         (Please Print)       Social
Security Number or Federal Tax I.D.           Dated: _______________ __, 201__  
        Holder’s Signature: ____________________________           Holder’s
Address: _____________________________