Document:

Exhibit 10.3

Exhibit 10.3

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

			
	 	 	 
	Date of Issuance
	 	Void after
	July 15, 2011
	 	July 15, 2012

BIOMIMETIX PHARMACEUTICAL, INC.

WARRANT TO PURCHASE SHARES OF COMMON STOCK

This Warrant to Purchase Shares of Common Stock (this “Warrant”), is issued to Omni Bio
Pharmaceutical, Inc. or its permitted assigns (the “Holder”) by BioMimetix Pharmaceutical, Inc., a
Delaware corporation (the “Company”).

1. Purchase of Shares.

2. (a) Number of Shares. Subject to the terms and conditions set forth herein, the Holder
is entitled, upon surrender of this Warrant at the principal office of the Company (or at such
other place as the Company shall notify the Holder in writing), to purchase from the number of
shares of Common Stock such that the Subscriber will own a total of 40% of the issued and
outstanding capital stock of the Company on a Fully Diluted Basis following the exercise of the
Warrant and the payment of the full Exercise Price of $2,000,000 (the “Shares”). If the Warrant is
exercised in part, then the number of Shares to be owned by the Holder following such exercise
(including the number of shares of Common Stock of the Company purchased by the Holder as of the
date hereof) will be calculated based on the following ownership percentage of the Company on a
Fully Diluted Basis: (Exercise Price x 15%) + 25% $2,000,000

“Fully Diluted Basis” shall mean the assumption that all outstanding options, warrants or other
convertible securities or instruments or other rights to acquire Common Stock or any other existing
or future classes of capital stock have been exercised or converted, as applicable, in full,
regardless of whether any such options, warrants, convertible securities or instruments or other
rights are then vested or exercisable or convertible in accordance with their terms. For purposes
of clarity, the 250,000 shares of Common Stock issued to the Holder pursuant to that certain Stock
Purchase Agreement of even date herewith shall be included in the calculation of Holder’s equity
ownership in the Company.

(b) Exercise Price. The purchase price for all of the Shares issuable pursuant to this
Section 1 shall be $2,000,000.00 if the Warrant is exercised in whole or such lesser amount as
determined by the Holder if the Warrant is exercised in part. Such purchase price, as adjusted
from time to time, is herein referred to as the “Exercise Price.”

Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term
commencing on the date hereof and ending at 5:00 p.m. Eastern Time on July 15, 2012 (the “Exercise
Period”).

 

 

 

3. Method of Exercise.

(a) While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the
Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise
shall be effected by:

(i) the surrender of the Warrant, together with a duly executed copy of the Notice of Exercise
attached hereto, to the Secretary of the Company at its principal office (or at such other place as
the Company shall notify the Holder in writing); and

(ii) the payment to the Company of $2,000,000.00 if the Warrant is exercised in whole or such
lesser amount determined by the Holder if the Warrant is exercised in part.

(b) Each 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 is surrendered to the Company as provided in
Section 3(a) above. At such time, the person or persons in whose name or names any certificate for
the Shares shall be issuable upon such exercise as provided in Section 3(c) below shall be deemed
to have become the holder or holders of record of the Shares represented by such certificate.

(c) As soon as practicable after the exercise of this Warrant in whole or in part the Company at
its expense will cause to be issued in the name of, and delivered to, the Holder, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct:

(i) a certificate or certificates for the number of Shares to which such Holder shall be
entitled, and

(ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof)
of like tenor, calling in the aggregate on the face or faces thereof for the number of Shares equal
to the number of such Shares called for on the face of this Warrant minus the number of Shares
purchased by the Holder upon all exercises made in accordance with Section 3(a) above.

4. Covenants of the Company.

(a) Covenants as to Shares. The Company covenants and agrees that all Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon issuance in
accordance with the terms hereof, be validly issued and outstanding, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the issuance thereof.

(b) No Impairment. Except and to the extent waived or consented to by the Holder, or as
otherwise permitted under the terms hereof the Company will not, by amendment of the Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by the Company,
but will at all times in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment. During the term of this Warrant, the Company
will not issue any warrant with terms similar to the terms of this Warrant and will not authorize
or issue any capital stock with rights or preferences superior to those of the Common Stock.

(c) Reservation of Shares. A sufficient number of shares of Common Stock shall be reserved
at all time by the Company in order to effect the exercise of this Warrant, and the Company
promptly will take
all such corporate action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued Common Stock as shall be sufficient for such purpose.

 

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5. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the
Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

6. No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be
entitled to any rights of a stockholder with respect to the Shares, including (without limitation)
the right to vote such Shares, receive dividends or other distributions thereon, exercise
preemptive rights or be notified of stockholder meetings, and except as otherwise provided in this
Warrant, such Holder shall not be entitled to any stockholder notice or other communication
concerning the business or affairs of the Company.

7. Governing Law. This Warrant hall be governed by and construed in accordance with the
General Corporation Law of the State of Delaware.

8. Successors and Assigns. The terms and provisions of this Warrant shall inure to the
benefit of, and be binding upon, the Company and the holders hereof and their respective successors
and assigns.

9. Titles and Subtitles. The titles and subtitles used in this Warrant are used for
convenience only and are not to be considered in construing or interpreting this Warrant.

10. Notices. All notices and other communications given or made pursuant hereto shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business
hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days
after having been sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.

11. Severability. If any provision of this Warrant is held to be unenforceable under
applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant
shall be interpreted as if such provision were so excluded and shall be enforceable in accordance
with its terms.

 

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IN WITNESS WHEREOF, the Company has executed this Warrant effective as of the date first set
forth above.

	 	 	 	 	 
	 	BIOMIMETIX PHARMACEUTICAL, INC.

 	 
	 	By:  	 	 
	 	 	James D. Crapo, President 	 

BioMimetix, Pharmaceutical, Inc.

Warrant to Purchase Shares of Common Stock

- Signature Page -

 

 

 

NOTICE OF EXERCISE

Biomimetix Pharmaceutical, Inc.

Attention: President

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as
follows:

                     shares of Common Stock pursuant to the terms of the attached
Warrant, and tenders herewith payment in cash of $                    , together
with all applicable transfer taxes, if any.

	 	 	 	 	 
	 	HOLDER:

 	 
	Date:___________________ 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:	 	 
	 
	 	Address:	 
	 		 
	 		 

	 	 	 
	Name in which shares should be registered:Exhibit 10.4

Exhibit 10.4

July 15, 2011

Dr. James Crapo, MD

4650 S. Forest Street

Englewood, CO 80113

Subject: Employment Terms

Dear James:

On behalf of the Board of Directors of Omni Bio Pharmaceutical, Inc. (the “Board”), I would like to
clarify and further explain certain terms of your employment as outlined in your original offer
letter dated February 23, 2011. This letter outlines the terms of your employment relationship
with Omni, and supersedes and replaces the February 23rd letter in its entirety.

This letter confirms the Board’s approval of your compensation as CEO of Omni Bio Pharmaceutical,
Inc. (“Omni” or “Company”).

Below is a summary of certain other terms of your employment with Omni.

	 	 	 
	Start date:

	 	March 1, 2011
	 
	 	 
	Position:

	 	Chief Executive Officer, reporting to the Board
	 
	 	 
	Cash Compensation:

	 	$10,000 per month salary, plus $2,000 allowance
per month for health insurance and other fringe
benefits.
	 
	 	 
	Confidentiality Agreement:

	 	In connection with the execution of this
letter, as a condition of your employment with
Omni, you will sign the Confidentiality and
Inventions Assignment Agreement attached hereto
as Exhibit A (the “Confidentiality Agreement”).
	 
	 	 
	At-Will Employment:

	 	Your employment with the Company is not for a
specific period of time. Rather, your
employment with the Company is “at will,”
meaning that it could be terminated at any
time, for any or no reason, at the option of
either you or the Company. Notwithstanding the
foregoing, the Company agrees that it shall not
terminate you in bad faith in order to avoid
payment of any Incentive Bonus (as defined
below. You also should understand that the
compensation and benefits described in this
letter are subject to change during your
employment at the discretion of the Company.
	 
	 	 
	Company Policies:

	 	You are expected to follow all applicable
policies and procedures adopted by the Company
from time to time,
including without limitation policies relating to business ethics,
conflict of interest, non-discrimination, confidentiality and
protection of trade secrets.

 

 

	 	 	 
	Restricted Stock Units:

	 	300,000 restricted stock units (“RSUs”), vesting
over three years as follows: 100,000 as of March
1, 2012, 100,000 as of March 1, 2013 and 100,000
as of March 1, 2014. Automatic vesting of all
unvested RSUs upon “change of control.” Details
regarding this restricted stock unit grant will be
provided to you in a separate RSU agreement.
	 
	 	 
	Restrictions:

	 	The Board recognizes that you will also be the
chief executive officer of BioMimetix
Pharmaceutical, Inc. (“BioMimetix”) and
acknowledges that certain corporate opportunity
and conflict of interest situations may arise out
of such role. Therefore, you agree that you will
not assist or participate in raising additional
capital for BioMimetix until the earlier of: (1)
the Company raising a total of $7 million; (2) 12
months from the date of the Company’s initial
investment in BioMimetix; (3) the Company
executing an agreement with a strategic partner
resulting in payments made to the Company; or (4)
permission of the Board.
	 
	 	 
	Incentive Bonus:

	 	You will be eligible to receive an incentive bonus
(the “Incentive Bonus”) in connection with the
occurrence of a Liquidity Event (as defined
below), so long as either (i) you have been
continuously employed by the Company from your
Start Date through the effective date of the
Liquidity Event, or (ii) the Liquidity Event
occurs with one or more parties introduced by you
to the Company for purposes of a Liquidity Event
prior to 12 months from the effective date of
termination of your services other than for Cause
(as defined below) (the “Tail Period”). For the
avoidance of doubt, if (1) your employment with
the Company terminates other than for Cause prior
to the occurrence of a Liquidity Event or (2) the
Liquidity Event occurs after the expiration of the
Tail Period, you will not be entitled to receive
payment of any Incentive Bonus.

Bonus Calculation and Payment. The Incentive Bonus amount payable to you in connection with the
occurrence of a Liquidity Event will be equal to the Net Proceeds (defined below) multiplied by the
Applicable Percentage (defined below). Subject to the paragraph below dealing with escrows and
hold-backs, any Incentive Bonus payable hereunder will be paid to you in a single lump sum payment
as soon as administratively practicable after the occurrence of the Liquidity Event giving rise to
such payment, but in no event later than the 15th day of the third calendar month after
the close of the calendar year in which the Liquidity Event occurred. Payment of any Incentive
Bonus hereunder will be made from the general assets of the Company.

Definitions. The following definitions will apply for purposes of this Agreement.

 

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	(a)	 	“Applicable Percentage” means the percentage specified in the table below corresponding to
the amount of Net Proceeds received in connection with a Liquidity Event:

	 	 	 	 	 
	Applicable	 	 
	Percentage	 	Net Proceeds
	 	 	 	 	 

	 	1.0	%	 	Less than or equal to $100 million

	 	 	 	 	 

	 	1.5	%	 	Greater than $100 million, less than or equal to $200 million

	 	 	 	 	 

	 	2.0	%	 	Greater than $200 million, less than or equal to $300 million

	 	 	 	 	 

	 	3.0	%	 	Greater than $300 million

(b) “Cause” means, except to the extent specified otherwise by the Board, a finding by the Board
that the you (i) have breached the terms of your employment or service agreement with the Company,
(ii) has engaged in disloyalty to the Company, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty in the course of your employment or service,
(iii) have disclosed trade secrets or confidential information of the Company to persons not
entitled to receive such information or (iv) have engaged in such other behavior detrimental to the
interests of the Company as the Board determines.

(c) “Liquidity Event” means the consummation of:

	 	(1)	 	the sale (including in one or a series of related transactions) of all or
substantially all of the Company’s consolidated assets to a person or a group of
persons acting in concert (other than a person or group affiliated with the Company);
	 
	 	(2)	 	the sale or transfer (including in one or a series of related transactions)
to a person or a group of persons acting in concert (other than a person or group
affiliated with the Company) of Company equity securities representing more than 50%
of the combined voting power of the Company’s then outstanding equity securities
entitled to vote generally in the election of directors;
	 
	 	(3)	 	the merger or consolidation of the Company with or into another entity,
unless immediately following such transaction, all or substantially all of the persons
who were the beneficial owners of the Company’s outstanding voting securities
immediately before the transaction beneficially own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the surviving or resulting entity (or its parent
entity); or
	 
	 	(4)	 	the sale (including in one or a series of related transactions) of the
Company’s intellectual property related to the use of the FDA approved drug Alpha-1
Antitrypsin to a person or a group of persons acting in concert (other than a person
or group affiliated with the Company). Net Proceeds will be aggregated over any
series of applicable transactions, and any difference due to an increase in the
Applicable Percentage as a result of such aggregation will be paid in connection with
the most recent transaction.

 

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By way of illustration for (4), if the Company sells applicable intellectual
property in a transaction with Net Proceeds of $50 million, assuming you are
eligible to receive an Incentive Bonus for the transaction, the Applicable
Percentage would be 1% and you would receive an Incentive Bonus of $0.5 million. If
the Company subsequently sells other applicable intellectual property in a second
transaction with Net Proceeds of $75 million, then, assuming you are eligible to
receive an Incentive Bonus for this transaction, the Applicable Percentage would be
1.5% (instead of 1%) on the aggregate Net Proceeds of $125 million, and the
aggregate Incentive Bonus would be $1.875 million. Therefore, in connection with
the second transaction, you would receive an Incentive Bonus of $1.375 million.

	(d)	 	“Net Proceeds” means the fair market value, as of the date of the Liquidity Event and as
determined in good faith by the Board, of the aggregate consideration (whether cash, notes,
stock or other securities) actually received by the Company or its stockholders as a result of
the Liquidity Event, less all transaction fees and expenses incurred by the Company in
connection with such Liquidity Event, including legal, accounting and investment banking fees.

Escrow or Hold-Back. Notwithstanding the foregoing, if any portion of the proceeds from a
Liquidity Event are deposited into an escrow account (whether established by the Company or any
purchaser or acquirer) or are subject to a hold-back by the purchaser or acquirer for distribution
upon the occurrence or satisfaction of any event, that portion of the proceeds shall be included in
calculating Net Proceeds, but a comparable portion of the incentive bonus amount shall be withheld
and released to you only as and when that portion of the Liquidity Event proceeds are released from
any escrow or hold-back arrangement.

Term of Bonus Arrangement. This Incentive Bonus arrangement will remain in effect until the
earlier of (i) until your employment by the Company is terminated for Cause or (ii) until the
expiration of the Tail Period, if any. The Company may modify this Incentive Bonus arrangement if
any such modification is, in the discretion of the Company, necessary or desirable to ensure the
compliance of this arrangement with the requirements of the Internal Revenue Code, including
Section 409A thereof, or any other applicable law or regulation.

Successors. All obligations of the Company under this Incentive Bonus arrangement will be binding
upon any successor to the Company, whether the existence of such successor is the result of merger,
consolidation, purchase of all or substantially all of the business or assets of the Company, or
otherwise.

Please acknowledge and accept the terms of your employment as outlined above by countersigning
below.

The Board is extremely excited about having you join our team.

Sincerely,

Vicki Barone

Chairperson

On Behalf of the Board of Directors of Omni Bio Pharmaceutical, Inc.

Agreed to:

	 	 	 
	 

James Crapo

	 	 

 

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Exhibit A

Confidentiality and Inventions Assignment Agreement

[See attached]

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