Document:

Exhibit 4.3

 

Form of Warrant Issued to

Johnson & Johnson Development
Corporation

dated April 3, 2002

 

 

THE TRANSFER OF THIS WARRANT IS SUBJECT TO
RESTRICTIONS CONTAINED HEREIN.  THIS
WARRANT HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATIONS OF THE HOLDER THAT
IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD THE
RESALE OR OTHER DISTRIBUTION THEREOF.

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR OTHER SECURITIES LAWS AND
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED

OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

 

April 3, 2002

 

COMMON STOCK PURCHASE WARRANT

 

To Subscribe for and Purchase

Common Stock, $.001 par value, of

 

MEDLYTE, INC.

 

Void After April 3, 2009

 

THIS CERTIFIES that, for value received, JOHNSON & JOHNSON
DEVELOPMENT CORPORATION, a New Jersey corporation (“JJDC”), or its registered and permitted assigns, is entitled
to subscribe for and purchase from MEDLYTE, INC., a Delaware corporation (the “Company”), at $0.05 (as such price may from
time to time be adjusted as hereinafter provided, the “Warrant Price”) per share, at any time on
or prior to April 3, 2009, up to THREE HUNDRED NINETY THOUSAND (390,000)
fully paid, non-assessable shares (the “Warrant
Shares”) of Common Stock, $.001 par value, of the Company (“Common Stock”), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.

 

This warrant (this “Warrant”)
is being issued pursuant to a Services Agreement, of even date herewith,
between the Company and JJDC.

 

Section 1.               Exercise
of Warrant.

 

(a)           This
Warrant may be exercised by the holder hereof, in whole or in part, by the
completion of the subscription form attached hereto and by the surrender of
this Warrant (properly endorsed) at the principal executive offices of the
Company (or at such other agency or 

 

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office of the Company as
it may designate by notice in writing to the holder hereof at the address of
such holder appearing on the books of the Company), and by payment to the
Company of the Warrant Price, at the election of such holder, (i) in cash
or by certified or official bank check, for each Warrant Share being purchased,
or (ii) by receiving from the Company the number of shares of Common Stock
equal to the number of shares of Common Stock otherwise issuable upon such
exercise less the number of shares of Common Stock having a fair market value
(as determined pursuant to paragraph (c)) on the date of exercise equal to the
Warrant Price applicable to the number of shares of Common Stock for which this
Warrant is being exercised.

 

(b)           In
the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the holder hereof, shall be delivered to such holder
within ten (10) business days after the rights represented by this Warrant
shall have been so exercised.  To the extent
the Warrant was exercised in part, the Company shall, on such date, also
deliver to the holder hereof a new warrant, in the form of this Warrant, for
the remaining Warrant Shares.  With
respect to any exercise, the holder hereof shall for all purposes be deemed to
have become the holder of record of the number of shares of Common Stock
evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.  No
fractional shares shall be issued upon exercise of this Warrant.  If any fractional interest in a share of Common
Stock would, except for the provisions of this Section 1, be delivered upon
any such exercise, the Company, in lieu of delivering the fractional share
thereof, shall pay to the holder hereof an amount in cash equal to the current
fair market value (as determined pursuant to paragraph (c)) of such fractional
interest.

 

(c)           For
purposes hereof, the “fair market value”
of a share of Common Stock on any date shall be equal to the fair market value
determined on the basis of

 

(1)           If
traded on a stock exchange, the fair market value of the Common Stock shall be
deemed to be the average of the closing selling prices of the Common Stock on
the stock exchange determined by the Board of Directors of the Company to be
the primary market for the Common Stock over the twenty (20) trading day period
(or such shorter period immediately following the closing of an initial public
offering) ending on the date prior to such date, as such prices are officially
quoted on the relevant stock exchange;

 

(2)           If
traded over-the-counter, the fair market value of the Common Stock shall be
deemed to be the average of the closing bid prices (or, if such information is
available, the closing selling prices) of the Common Stock over the twenty (20)
trading day period (or such shorter period immediately following the closing of
an initial public offering) ending on the date prior such date, as such prices
are reported by the National Association of 

 

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Securities Dealers
through its NASDAQ system, any successor system or any exchange on which it is
listed, whichever is applicable; or

 

(3)           If
there is no public market for the Common Stock, then the fair market value
shall be as determined in good faith by the Board of Directors of the Company
as of the date of the Company’s receipt of the subscription form attached hereto
(the “Board Determination”).  If the holder disagrees with the Board
Determination, such holder shall have the right, at such holder’s sole cost and
expense, to obtain a determination of the fair market value by mutually agreed
upon nationally recognized investment banking or appraisal firm (a “Third Party Determination”) and such Third
Party Determination shall be the fair market value for purposes hereof.  Notwithstanding the foregoing, in the event
the Third Party Determination and the Board Determination differ by more than
twenty percent (20%), the cost and expense of the Third Party Determination
shall be paid by the Company.

 

Section 2.               Adjustment
of Number of Shares.

 

(a)           In
case the Company shall at any time subdivide or split its outstanding shares of
Common Stock, by dividend, reclassification or otherwise, into a greater number
of shares, the number of shares of Common Stock issuable upon exercise of this
Warrant shall be proportionately increased by the same ratio as the subdivision
or split (with appropriate adjustments to the Warrant Price in effect
immediately prior to such subdivision or split).  In case the Company shall at any time combine
its outstanding shares of Common Stock, the number of shares of Common Stock
issuable upon exercise of the Warrants shall be proportionately decreased by
the same ratio as the combination (with appropriate adjustments to the Warrant
Price in effect immediately prior to such combination).

 

(b)           Upon
any adjustment of this Warrant and the Warrant Price, then and in each such
case the Company shall give written notice thereof, by first class mail,
postage prepaid, addressed to the holder hereof at the address of such holder
as shown on the books of the Company, which notice shall state the Warrant
Price resulting from such adjustment and the number of shares for which this
Warrant may be exercised, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

 

(c)           The
Company shall at all times reserve and keep available out of its authorized
Common Stock, solely for the purpose of issuance upon the exercise of this
Warrant as herein provided, such number of shares of Common Stock equal to the
number of shares of Common Stock as shall then be issuable upon the exercise of
this Warrant.  The Company covenants that
all shares of Common Stock that shall be so issued, shall be duly and validly
issued and fully paid and non-assessable and free from all taxes, liens and
charges with respect to the issue thereof. 
The Company has not granted and will not grant any right of first
refusal with respect to shares issuable upon exercise of this Warrant, and
there are no preemptive rights associated with such shares.

 

(d)           The
issuance of certificates for shares of Common Stock upon exercise of this
Warrant shall be made without charge to the holder hereof for any issuance tax
in respect thereof; provided that the Company shall not be required to
pay any tax which may be payable in 

 

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respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the holder hereof; and provided, further, that the
Company shall not be liable for any federal, state or local income or similar
tax on the holder hereof in connection with any exercise of this Warrant.

 

(e)           The
Company will at no time close its transfer books against the transfer of the
shares of Common Stock issued or issuable upon the exercise of this Warrant in
any manner which interferes with the timely exercise of this Warrant.

 

Section 3.               Notices
of Record Dates.  In the event of:

 

(a)           any
taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend 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 right to sell shares of stock of any class or any
other right; or

 

(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
the assets of the Company to or consolidation or merger of the Company with or
into any other corporation or entity; or

 

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

 

then and in each such event the Company shall give notice to the holder
of this Warrant specifying (i) the date on which any such 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, and (ii) the
date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, 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 will be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up. 
Such notice shall be given at least 10 days and not more than 60 days
prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, and
applicable state securities laws, or (y) a favorable vote of stockholders, if
either is required.

 

Section 4.               Stockholder
Rights, Etc.  This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company other than those set forth in any agreement to which the Company
and the holder hereof are a party.  No
provision hereof, in the absence of affirmative action by the holder hereof to
purchase shares of Common Stock, and no mere enumeration herein of the rights
or privileges of the holder hereof, shall give rise to any 

 

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liability of such holder
for the Warrant Price or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.

 

Section 5.               Representations
of holder.  The holder hereby
represents and acknowledges to the Company that:

 

(a)           this
Warrant, the Common Stock issuable upon exercise of this Warrant and any
securities issued with respect to any of them by way of a stock split or in
connection with a recapitalization, merger, consolidation or other
reorganization will be “restricted securities” as such term is used in the rules and
regulations under the Securities Act of 1933, as amended (the “Securities Act”)
and that such securities have not been and may not be registered under the
Securities Act or any state securities law, and that such securities must be
held indefinitely unless registration is effected or transfer can be made
pursuant to appropriate exemptions;

 

(b)           the
holder has read, and fully understands, the terms of this Warrant set forth on
its face and the attachments hereto, including the restrictions on transfer
contained herein;

 

(c)           the
holder is purchasing for investment for holder’s own account and not with a
view to or for sale in connection with any distribution of this Warrant or the
Common Stock of the Company issuable upon exercise of this Warrant and he has
no intention of selling such securities in a public distribution in violation
of the federal securities laws or any applicable state securities laws;

 

(d)           the
holder is an “accredited investor” within the meaning of paragraph (a) of Rule 501
of Regulation D promulgated by the Securities and Exchange Commission; and

 

(e)           the
Company may affix the following legend (in addition to any other legend(s), if
any, required by applicable state corporate and/or securities laws) to
certificates for Warrant Shares (or other securities) issued upon exercise of
this Warrant:

 

“These
securities have not been registered under the Securities Act of 1933, as amended.  They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act.”

 

Section 6.               Limitations
on Disposition.

 

(a)           The holder of this
Warrant, by acceptance hereof, agrees to comply in all respects with the
provisions of this Section 6. 
Without in any way limiting the representations set forth above, the
holder of this Warrant agrees not to make any disposition of this Warrant or
any Warrant Shares, unless and until the transferee has agreed in writing for
the benefit of the Company to be bound by this Section 6 and the other
provisions of this Warrant as if such transferee were the original holder
hereof, provided and to the extent such provisions are then applicable, and:

 

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(1)           There
is then in effect a Registration Statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
Registration Statement; or

 

(2)           (A) the
holder shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and the Company has given its prior
written consent, and (B) if reasonably requested by the Company, the
holder shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of the Warrant and/or the Warrant Shares under the Securities
Act.  It is agreed that the Company will
not require opinions of counsel for transactions made pursuant to Rule 144
except in unusual circumstances.

 

(b)           Notwithstanding
the provisions of paragraph (a) above, (i) no such Registration
Statement, prior consent or opinion of counsel shall be necessary for a
transfer (A) by a holder which is a partnership to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or to the
transfer by gift, will or intestate succession of any partner to such partner’s
spouse or to the siblings, lineal descendants or ancestors of such partner or
such partner’s spouse, or (B) to an “affiliate” of the holder as that term
is defined in Rule 405 promulgated by the Securities and Exchange
Commission under the Securities Act, if the transferee agrees in writing to be
subject to the terms hereof to the same extent as if he were an original holder
hereunder, and (ii) no transferee shall be required, as a condition to any
transfer of the Warrant or the Warrant Shares by the holder, to agree to be
bound by this Section 6, if the transferee is acquiring the Warrant and/or
Warrant Shares pursuant to a Registration Statement under the Securities Act or
in a transaction made pursuant to Rule 144.  Each new certificate evidencing the Warrant
and/or Warrant Shares so transferred shall bear the appropriate restrictive
legends set forth in Section 5(f) above, except that such certificate
shall not bear such restrictive legend if, in the opinion of counsel for the
Company, such legend is not required in order to establish or assist in
compliance with any provisions of the Securities Act or any applicable state
securities laws.

 

Section 7.               Lock-Up
Agreements.  If and whenever the
Company proposes to register any of its equity securities under the Securities
Act, whether or not for its own account (other than pursuant to a registration
of shares of equity securities and/or options or other rights in respect
thereof to be offered solely to directors, members of management, employees,
consultants or sales agents, distributors or similar representatives of the
Company or its direct or indirect Subsidiaries, solely on Form S-8 or any
successor form), the holder, if required by the managing underwriter in an
underwritten offering, agrees not to effect (other than pursuant to such
registration) any public sale or distribution, including, but not limited to,
any sale pursuant to Rule 144, of any Warrant Shares, during the 10 days
prior to, and for 90 days (or 180 days in the case of an initial public
offering) after, the effective date of such registration, to the extent timely
notified in writing by the Company or the managing underwriter; provided each
director or officer of the Company or any holder of 5% or more of its voting
equity securities purchased 

 

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from the Company at any
time other than in a public offering also enters into a similar agreement with
the Company.

 

Section 8.               Lost,
Stolen, Mutilated or Destroyed Warrant. 
If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall, on such terms as to indemnity or otherwise as it may in its discretion
reasonably impose (which shall, in the case of a mutilated Warrant, include the
surrender thereof), issue a new warrant of like denomination and tenor as this
Warrant.  Any such new warrant shall
constitute an original contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time
enforceable by anyone.

 

Section 9.               Notices.  All notices, requests and other
communications required or permitted to be given or delivered hereunder shall
be in writing, and shall be delivered, or shall be sent by national overnight
courier service or by certified or registered mail, postage prepaid and
addressed, if to the holder, to such holder at the address shown on the records
of the Company or at such other address as shall have been furnished to the
Company by notice from such holder and, if to the Company, addressed to the
Company at 5500 Campanile Drive, San Diego, California 92182 or at such other
address as shall have been furnished to the holder by notice from the Company.

 

Section 10.             Waivers
and Modifications.  Any term or
provision of this Warrant may be waived only by written document executed by
the party entitled to the benefit of such terms or provisions.  The terms and provisions of this Warrant may
be modified or amended only by written agreement executed by the Company and
the holder hereof.

 

Section 11.             Headings.  The headings in this Warrant are for
convenience of reference only and shall in no way modify or affect the meaning
or construction of any of the terms or provisions of this Warrant.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, MEDLYTE, INC., has executed this Warrant on and as
of the day and year first above written.

 

	
   

  	
  MEDLYTE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

9

 

SUBSCRIPTION FORM TO BE EXECUTED

UPON EXERCISE OF THE WARRANT

 

	
   

  	
  Date:

  	
   

  	
   

  

 

To Medlyte, Inc.:

 

The undersigned, pursuant to the provisions
set forth in the within Warrant, hereby agrees to subscribe for and purchase                                 shares
of Common Stock covered by such Warrant, and herewith tenders $                                 
in full payment of the Warrant Price for such shares.

 

 

	
   

  	
  Name of

  
	
   

  	
  holder: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

10Exhibit 4.4

 

Form of
Warrant Issued to Purchasers of

Convertible
Secured Promissory Notes

as
amended by the Omnibus Amendment

to
Convertible Secured Promissory Notes and Warrants

dated
November 30, 2005

 

 

THE SECURITIES
REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT.

 

No.  3

 

ISSUED:  October 31, 2002

 

MEDLYTE, INC.

 

SHARE PURCHASE WARRANT

 

This Share
Purchase Warrant (this “Warrant”) certifies that Johnson &
Johnson Development Corporation, A New Jersey corporation, or its assigns (the “Registered
Holder”), for value received, is entitled to purchase from Medlyte
Diagnostics, Inc., a Delaware corporation (the “Company”), the
number and character of fully paid and nonassessable shares of the Company’s
capital stock (the “Warrant Shares”) as determined in Section 2
below.  The number and character of the
Warrant Shares issuable upon exercise hereof and the purchase price therefor
are subject to adjustment as provided herein. 
This Warrant is being issued pursuant to that certain Note and Warrant
Purchase Agreement, dated as October 31, 2002, by and among the Company,
the Donald R. Swortwood Trust Dated July 7, 1995; the Letitia H. Swortwood
Revocable Trust #1 Dated September 16, 1992; and the Registered Holder (as
the same may be amended, supplemented or otherwise modified from time to time,
the “Purchase Agreement”). 
Capitalized terms not otherwise defined herein shall have the respective
meanings set forth in Section 1 hereof.

 

1.     Definitions.  As used in this Warrant, the following terms
have the  respective
meanings set forth below:

 

“Equity Financing”
shall mean a cash investment in the Company of at least $2,000,000 in exchange
for a series of Company preferred stock having a liquidation preference senior
to the Company’s existing series of preferred stock.

 

“Equity Financing
Securities” shall mean those shares of the series of preferred stock issued
pursuant to an Equity Financing.

 

 “Liquidity Event” shall mean (i) a
merger, consolidation, recapitalization, reorganization share exchange or any
similar event in which the holders of the voting stock of the Company
immediately prior to such event will not own 50% or more of the voting stock of
the continuing or surviving corporation or other entity, or the parent company
of such corporation or other entity, immediately after such event, (ii) the
sale, 

 

2

 

assignment, conveyance, transfer, lease or other
disposition (other than the grant of a security interest) of more than 50% of
the Company’s assets to any person or group, (iii) any sale or other disposition
of the voting stock of the Company representing 50% or more of the total voting
power of the Company’s outstanding capital stock in a single transaction or
series of related transactions, (iv) any voluntary or involuntary
liquidation, winding up of, dissolution or bankruptcy filing of or by the
Company, or (v) an underwritten public offering of the Company’s common
stock pursuant to a registration statement declared effective under the
Securities Act of 1933, as amended.

 

2.     Warrant Shares.

 

(a)   Number of Warrant Shares.  This Warrant shall evidence the right of the
Registered Holder to purchase up to a number of Warrant Shares determined by
the following formula:

 

	
  W = 

  	
  P x C

  	
   

  
	
   

  	
  M

  	
   

  

 

where:

 

W =
The number of Warrant Shares issuable upon exercise of this Warrant;

 

P = a
percentage equal to:

 

(i)    20%, if an Equity Financing or Liquidity
Event occurs between the date hereof and December 31, 2002;

 

(ii)   40%, if an Equity Financing or Liquidity
Event occurs after December 31, 2002.

 

C =  the balance of the Principal Amount and
interest accrued under the Convertible Secured Promissory Note issued in
conjunction herewith at the date of its conversion

 

M = the per share price of the Equity Financing
Securities, in the event this Warrant is exercised for Equity Financing
Securities.

 

(b)   Exercise Price.  The per Warrant Share exercise price (the “Exercise
Price”) shall be an amount equal to 10% of the per share price of the
Equity Financing Securities.

 

3

 

3.     Exercise Period.

 

(a)   This Warrant may be
exercised by the Registered Holder at any time or from time to time between the
date hereof and the tenth anniversary of the date hereof by surrendering this
Warrant at the principal office of the Company (or at such other office or
agency as the Company may designate by notice in writing to the Registered
Holder pursuant to Section 15 hereto) with the Form of Subscription
attached hereto as Exhibit A duly executed by such Registered
Holder, accompanied by payment in full by cash, check or wire transfer in the
amount equal to (i) the number of Warrant Shares for which this Warrant is
being exercised multiplied by (ii) the applicable Exercise Price (the “Purchase
Price”).  This Warrant may be
exercised for less than the full number of Warrant Shares at the time called
for hereby, except that the number of shares receivable upon the exercise of
this Warrant as a whole, and the sum payable upon the exercise of this Warrant
as a whole, shall be proportionately reduced. 
Upon a partial exercise of this Warrant in accordance with the terms
hereof, this Warrant shall be surrendered, and a new Warrant of the same tenor
and for the purchase of the number of such shares not purchased upon such
exercise shall be issued by the Company to the Registered Holder without any
charge therefor.

 

(b)   The exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of
business on the day on which this Warrant shall have been surrendered to the
Company as provided in Section 3(a) above.  At such time, the person or persons in whose
name or names any certificates for Warrant Shares shall be issuable upon such
exercise as provided in Section 3(d) below shall be deemed to have
become the Registered Holder or Registered Holders of record of the Warrant
Shares represented by such certificates.

 

(c)   Issuance of Certificates.  The Company agrees that the Warrant Shares
purchased under this Warrant shall be and are deemed to be issued to the
Registered Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for such shares. 
Certificates for the Warrant Shares so purchased, together with any
other securities or property to which the Registered Holder hereof is entitled
upon such exercise, shall be delivered to the Registered Holder hereof by the
Company at the Company’s expense within a reasonable time after the rights
represented by this Warrant have been so exercised.  In case of a purchase of less than all the
Warrant Shares, the Company shall cancel this Warrant and execute and deliver a
new Warrant or Warrants of like tenor for the balance of the Warrant Shares
purchasable under the Warrant surrendered upon such purchase to the Registered
Holder hereof within a reasonable time, not exceeding fifteen (15) days after
the date of such surrender.  Each stock
certificate so delivered shall be in such denominations as may be requested by
the Registered Holder hereof and shall be registered in the name of such
Registered Holder or such other name as shall be designated by such Registered
Holder.

 

4.     Shares to be Fully Paid; Reservation of
Shares.  The Company covenants and agrees that all
Warrant Shares which may be issued upon the exercise or conversion 

 

4

 

of the rights represented by this
Warrant will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable and free from all preemptive rights of any shareholder and free
of all taxes, liens and charges with respect to the issue thereof.  The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised or converted, the Company will use its best efforts to cause a
sufficient number of shares of authorized but unissued Common Stock to be
authorized when and as required to provide for the exercise or conversion of
the rights represented by this Warrant.  The
Company will take all such action as may be necessary to assure that such
shares of capital stock may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the stock may be listed.

 

5.     Adjustment of Exercise Price and Number
of Shares.

 

(a)   Subdivision or
Combination of Shares.  In case the
Company shall at any time subdivide any of its outstanding shares into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately reduced and the number of shares
issuable upon exercise hereof shall be proportionately increased, and
conversely, in case any outstanding shares of the Company shall be combined
into a smaller number of shares, the Exercise Price in effect immediately prior
to such combination shall be proportionately increased and the number of share
issuable upon exercise hereof shall be proportionately decreased.

 

(b)   Dividends,
Reclassification.  If at any time or
from time to time any holders of the Company’s capital stock shall have
received or become entitled to receive, without payment thereof,

 

(i)         any Common Stock or any shares or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution;

 

(ii)        any cash paid or payable otherwise than
as a regular periodic cash dividend at a rate which is substantially consistent
with past practice (or, in the case of an initial dividend, at a rate which is
substantially consistent with industry practice); or

 

(iii)       any securities of the Company or other
property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement or merger,
consolidation or sale of substantially all of the assets of the Company;

 

then and in each such
case, the Registered Holder hereof shall, upon the exercise or conversion of this
Warrant, be entitled to receive, in addition to the number of shares of such
capital stock receivable thereupon, and without payment of any additional 

 

5

 

consideration thereof, the amount of stock and other
securities and property (including cash in the cases referred to in clauses (a) through
(c) above) which such Registered Holder would hold on the date of such
exercise or conversion had the Registered Holder been the Registered Holder of
record of such capital stock as of the date on which holders of such capital
stock received or became entitled to receive such shares and/or all other
additional stock and other securities and property.

 

(c)           Certain Events.  If any event occurs of the type contemplated
by the provisions of this Section 5 but not expressly provided for by such
provisions, then the Company’s board of directors in its reasonable judgment
shall make an appropriate adjustment to the Exercise Price and the number of
Warrant Shares obtainable upon exercise of this Warrant so as to protect the
rights of the holders of the Warrant.

 

6.     Conversion or Redemption.  Should all
of the Company’s capital stock of the same class and series as the Warrant
Shares be, or if outstanding would be, at any time prior to or upon the
expiration of this Warrant or any portion thereof, redeemed or converted into
Common Stock, then this Warrant shall immediately become exercisable or
convertible for that number of shares of Common Stock equal to the number of
shares of Common Stock that would have been received if this Warrant had been
exercised in full and the capital stock received thereupon had been
simultaneously converted immediately prior to such event, and the Exercise
Price shall be immediately adjusted to equal the quotient obtained by dividing
(x) the aggregate Exercise Price of the maximum number of shares of
capital stock for which this Warrant was exercisable or convertible immediately
prior to such conversion or redemption, by (y) the number of shares of Common
Stock for which this Warrant is exercisable or convertible immediately after
such conversion or redemption.

 

7.     Notices.  If at any
time:

 

(a)           there shall be a
Liquidity Event; or

 

(b)           the Company shall
take or propose to take any other action, notice of which is actually provided
to or is required to be provided, pursuant to any written agreement, to holders
of shares of the Company’s capital stock, then the Company shall give, by first
class mail, postage prepaid, addressed to the Registered Holder of this Warrant
at the address of such Registered Holder as shown of the books of the Company,
notice of such Liquidity Event or other event at least 10 days prior to the
commencement thereof.

 

The Company shall not
effect any consolidation, merger or sale, unless prior to the consummation
thereof, the successor entity (if other than the Company) resulting from such
consolidation or merger or the entity purchasing such assets assumes by written
instrument the obligation to deliver to each such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire.

 

6

 

8.     Issue Tax.  The issuance
of certificates for the Warrant Shares shall be made without charge to the
Registered Holder for any issue tax in respect thereof, provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the then Registered Holder of the Warrant being
transferred.

 

9.     No Voting or Dividend Rights; Limitation
of Liability.  Prior to the exercise hereof, nothing herein
shall be construed as conferring upon the Registered Holder the right to vote
or to consent to any action requiring shareholder approval with respect to the
Warrant Shares issuable upon exercise hereof. 
Except as provided in Section 5, no dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented
hereby or the shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised or converted.  No provisions hereof, in the absence of
affirmative action by the Registered Holder to purchase shares of capital
stock, and no mere enumeration herein of the rights or privileges of the
Registered Holder hereof, shall give rise to any liability of such Registered
Holder for the Exercise Price or as a stockholder of the Company, whether such
liability is asserted by the Company or by its creditors.

 

10.  Modification and Waiver.  This Warrant
and any provision hereof may only be amended by an instrument in writing signed
by both parties.

 

11.  Notice.  Any notice,
request or other document required or permitted to be given or delivered to the
Registered Holder hereof or the Company shall be delivered or shall be sent by
certified or registered mail, postage prepaid, by facsimile transmission or by
overnight courier, to the Registered Holder at its address and facsimile number
as shown on the books of the Company or to the Company at the address indicated
on the execution page of this Warrant.

 

12.  Descriptive Headings.  The
descriptive headings of the several sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant.

 

13.  Lost Warrants of Stock Certificates.  The Company
represents and warrants to the Registered Holder hereof that upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of any Warrant or stock certificate and, in the case
of any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon surrender
and cancellation of such Warrant or stock certificate, the Company at its
expense will make and deliver a new Warrant or stock certificate, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.

 

14.  Remedies.  The Company
stipulates that the remedies at law of the Registered Holder of this Warrant in
the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are 

 

7

 

not adequate and may be enforced by
a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.

 

15.  Fractional
Shares. 
No fractional shares shall be issued upon exercise of this Warrant.  The Company shall, in lieu of issuing any
fractional share, pay the Registered Holder entitled to such fraction a sum in
cash equal to such fraction multiplied by the then effective Exercise Price.

 

16.  Governing Law; Consent to Jurisdiction;
Waiver to Jury Trial.  THE PARTIES HEREBY CONSENT TO THE EXCLUSIVE
JURISDICTION OF A FEDERAL COURT LOCATED WITHIN THE COUNTY OF SAN DIEGO IN THE
STATE OF CALIFORNIA, AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS
RELATING TO OR ARISING OUT OF THIS WARRANT SHALL BE TRIED AND LITIGATED ONLY IN
SUCH COURT.  THE PARTIES HEREBY WAIVE TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, AND AGREE NOT TO ASSERT, BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION, SUIT, OR PROCEEDING, ANY
CLAIM THAT THEY ARE NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE
ABOVE-NAMED COURT, THAT THEY ARE IMMUNE FROM EXTRATERRITORIAL INJUNCTIVE RELIEF
OR OTHER INJUNCTIVE RELIEF, THAT THEIR PROPERTY IS EXEMPT OR IMMUNE FROM
ATTACHMENT OR EXECUTION, THAT ANY SUCH ACTION, SUIT, OR PROCEEDING MAY NOT
BE BROUGHT OR MAINTAINED IN THE ABOVE-NAMED COURT, THAT ANY SUCH ACTION, SUIT
OR PROCEEDING BROUGHT OR MAINTAINED IN THE ABOVE-NAMED COURT SHOULD BE
DISMISSED ON THE GROUNDS OF FORUM NON CONVENIENS, SHOULD BE TRANSFERRED
TO ANY COURT OTHER THAN THE ABOVE-NAMED COURT, OR THAT THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY THE ABOVE-NAMED
COURT.  THE PARTIES HEREBY CONSENT TO
SERVICE OF PROCESS IN ANY SUCH ACTION, SUIT, OR PROCEEDING IN ANY MANNER
PERMITTED  BY THE LAWS OF THE STATE OF
CALIFORNIA.

 

8

 

IN
WITNESS WHEREOF, the undersigned have executed this Warrant
as of the date first written above.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  Medlyte, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: William Gerhart, CEO

  
	
   

  	
   

  
	
   

  	
  Address for
  notice:

  
	
   

  	
   

  
	
   

  	
  5500 Campanile
  Drive

  
	
   

  	
  San Diego, CA
  92182

  

 

 

	
  ACKNOLWEDGED AND
  AGREED:

  
	
   

  
	
  REGISTERED
  HOLDER:

  
	
  Johnson &
  Johnson Development Corporation

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name: Roy Cosan, Vice President

  
	
   

  
	
  Address for
  Notices:

  
	
   

  
	
  Johnson &
  Johnson Development Corporation

  
	
  One
  Johnson & Johnson Plaza

  
	
  New Brunswick,
  NJ 08933

  

 

9

 

Appendix A

 

FORM OF
SUBSCRIPTION

 

[To be executed only upon
exercise of Warrant]

 

To Medlyte, Inc.:

 

The undersigned
registered holder of the within Warrant hereby irrevocably exercises such
Warrant for, and purchases thereunder, [        ]
shares of Medlyte, Inc. and herewith makes payment of $              and
requests that the certificates for such shares be issued in the name of, and
delivered to, whose address is set forth below.

 

	
  Date:

  	
   

  
	
   

  	
  (Signature must conform in all respects to

  name of holder as specified on the face of

  Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (City) (State) (Zip Code)

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