Document:

f10k2012ex4v_caldera.htm

Exhibit 4.5

 

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE ON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY OTHER SECURITIES LAWS (THE “ACTS”).  NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER MAY BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THIS WARRANT OR COMMON STOCK PURCHASABLE HEREUNDER, AS APPLICABLE, UNDER THE ACTS, OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACTS.

CALDERA PHARMACEUTICALS, INC.

WARRANT AGREEMENT

 

VOID AFTER 5:00 P.M. NEW YORK TIME, __________, 201_

 

Issue Date: December __, 2012

1.   Basic Terms.  This Warrant Agreement (the “Warrant”) certifies that, for value received, the registered holder specified below or its registered assigns (“Holder”) is the owner of a warrant of Caldera Pharmaceuticals, Inc., a Delaware corporation having its principal place of business at 278 DP Road, Suite D, Los Alamos, New Mexico 87544 (the “Corporation”), subject to adjustments as provided herein, to purchase ___________ shares of the Common Stock, $.001 par value, of the Corporation (the “Common Stock”) from the Corporation at the price per share shown below (the “Exercise Price”).

 

Holder:

_____________

Exercise Price per share:                                                                $3.00

Except as specifically provided otherwise, all references in this Warrant to the Exercise Price and the number of shares of Common Stock purchasable hereunder shall be to the Exercise Price and number of shares after any adjustments are made thereto pursuant to this Warrant.

2.   Corporation’s Representations/Covenants.  The Corporation represents and covenants that the shares of Common Stock issuable upon the exercise of this Warrant shall at delivery be fully paid and non-assessable and free from taxes, liens, encumbrances and charges with respect to their purchase. The Corporation shall take any necessary actions to assure that the par value per share of the Common Stock is at all times equal to or less than the then current Exercise Price per share of Common Stock issuable pursuant to this Warrant.  The Corporation shall at all times reserve and hold available sufficient shares of Common Stock to satisfy all conversion and purchase rights of outstanding convertible securities, options and warrants of the Corporation, including this Warrant.

 

3.   Method of Exercise; Fractional Shares.

 

(a) This Warrant is exercisable at the option of the Holder at any time by surrendering this Warrant, on any business day during the period (the “Exercise Period”) beginning the business day after the issue date of this Warrant specified above and ending at 5:00 p.m. (New York time) ____ (_) years after the issue date.  To exercise this Warrant, the Holder shall surrender this Warrant at the principal office of the Corporation or that of the duly authorized and acting transfer agent for its Common Stock, together with the executed exercise form (substantially in the form of that attached hereto) and together with payment for the Common Stock purchased under this Warrant The principal office of the Corporation is located at the address specified in Section 1 of this Warrant; provided, however, that the Corporation may change its principal office upon notice to the Holder.  Payment shall be made by check payable to the order of the Corporation or by wire transfer.  This Warrant is not exercisable with respect to a fraction of a share of Common Stock.  In lieu of issuing a fraction of a share remaining after exercise of this Warrant as to all full shares covered by this Warrant, the Corporation shall either at its option (a) pay for the fractional share cash equal to the same fraction at the fair market price for such share; or (b) issue scrip for the fraction in the registered or bearer form which shall entitle the Holder to receive a certificate for a full share of Common Stock on surrender of scrip aggregating a full share.

 

(b) In lieu of cash exercising this Warrant, the Holder may elect to receive Common Stock equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Corporation together with notice of such election, in which event the Corporation shall issue to the Holder a number of shares of Common Stock computed using the following formula:

 

Y (A - B)

X =                   A

Where:

X --           The number of shares of Common Stock to be issued to the Holder under this Section 3(b).

 

Y --           The number of shares of Common Stock purchasable under this Warrant (at the date of such calculation).

 

A --          The closing price of a share of Common Stock on the immediately preceding trading day.

 

B --           The Exercise Price (as adjusted to the date of such calculations).

 

For purposes of this Section 3(b), the fair market value of a share of Common Stock shall mean the average of the closing price of the Common Stock (or equivalent shares of capital stock for which this Warrant is exercisable (“Capital Stock”) underlying the Common Stock) quoted in the over-the-counter market in which the Common Stock (or equivalent shares of Capital Stock underlying the Common Stock) are traded or the closing price quoted on any exchange or electronic securities market on which the Common Stock (or equivalent shares of Capital Stock underlying the Common Stock) are listed, whichever is applicable, as published in The Wall Street Journal for the thirty (30) trading days prior to the date of determination of fair market value (or such shorter period of time during which such Common Stock were traded over-the-counter or on such exchange).  If the Common Stock (or equivalent shares of Capital Stock underlying the Common Stock) are not traded on the over-the-counter market, an exchange or an electronic securities market, the fair market value shall be the price per Common Stock, as determined in good faith by the Corporation’s Board of Directors.

 

  

  

  

 

4.   Protection Against Dilution.

 

(a) If the Corporation, with respect to the Common Stock, (1) pays a dividend or makes a distribution on shares of common stock that is paid in shares of common stock or in securities convertible into or exchangeable for Common Stock (in which latter event the number of shares of common stock initially issuable upon the conversion or exchange of such securities shall be deemed to have been distributed), (2) subdivides outstanding shares of Common Stock, (3) combines outstanding shares of Common Stock into a smaller number of shares, or (4) issues by reclassification of common stock any shares of capital stock of the Corporation, the Exercise Price in effect immediately prior thereto shall be adjusted so that each Holder thereafter shall be entitled to receive the number and kind of shares of Common Stock or other capital stock of the Corporation that it would have owned or been entitled to receive in respect of this Warrant immediately after the happening of any of the events described above had this Warrant been converted immediately prior to the happening of that event. An adjustment made in accordance with this section shall become effective immediately after the record date, in the case of a dividend, and shall become effective immediately after the effective date, in the case of a subdivision, combination, or reclassification. If, as a result of an adjustment made in accordance with this Section 4, the Holder becomes entitled to receive shares of two or more classes of capital stock or shares of common stock and other capital stock of the Corporation, the board of directors (whose determination shall be conclusive) shall determine the allocation of the adjusted Exercise Rate between or among shares of such classes of capital stock or shares of Common Stock and other capital stock.

 

(b) If and whenever after the issuance of this Warrant the Corporation shall first issue or sell, or first enter into any agreement to issue or sell, any shares of its Common Stock, or any securities exercisable or convertible into shares of Common Stock (“Common Stock Equivalents”), in a transaction or series of transactions providing for a consideration, exercise price, conversion price or other applicable price per share less than the Exercise Price in effect immediately prior to the time of such issue or sale, the Exercise Price shall be  multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Common Stock or such Common Stock Equivalents plus the number of shares of common stock which the offering price for such shares of Common Stock or Common Stock Equivalents would purchase at the Exercise Price, and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of  shares of Common Stock so issued or issuable, provided, that for purposes hereof, all shares of Common Stock that are issuable upon conversion, exercise or exchange of Common Stock Equivalents shall be deemed outstanding immediately after the issuance of such Common Stock Equivalents.  Such adjustment shall be 

 

  

  

  

 

made whenever such Common Stock or Common Stock Equivalents are issued.  However, upon the expiration of any Common Stock Equivalents the issuance of which resulted in an adjustment in the Conversion Price pursuant to this Section, if any such Common Stock Equivalents shall expire and shall not have been exercised, the Conversion Price shall immediately upon such expiration be recomputed and effective immediately upon such expiration be increased to the price which it would have been (but reflecting any other adjustments in the Conversion Price made pursuant to the provisions of this Section after the issuance of such Common Stock Equivalents) had the adjustment of the Conversion Price made upon the issuance of such Common Stock Equivalents been made on the basis of offering for subscription or purchase only that number of shares of the Common Stock actually purchased upon the exercise of such Common Stock Equivalents actually exercised. Notwithstanding anything herein to the contrary, the following shall not be subject to the provisions of this Section: (i) issuance or sale of Common Stock or options or other awards under the Company’s equity incentive plans or programs (ii) issuance or sale of preferred stock or Common Stock issuable upon conversion of the Series A Preferred Stock or any other outstanding convertible securities; (iii) issuance of equity securities or rights to purchase equity securities issued in connection with credit agreements, debt financings, commercial property, or  lease transactions approved by the Board of Directors, including a majority of the Series A Directors; (iv) issuance of equity securities or rights to purchase equity securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition or similar business combination approved by the Board of Directors; (v) issuance of securities to an entity as a component of any business relationship with such entity primarily for the purpose of (A) joint venture, technology or licensing development activities, (B) distribution, supply or manufacture of the Company’s products or services or (C) any other arrangements involving corporate partners primarily for purposes other than raising capital, the terms of which business relationship with such entity are approved by the Board of Directors; and (vi) issuance of stock pursuant to a  stock dividend or stock split.

 

5.   Adjustment for Reorganization, Consolidation, Merger.

 

(a) In the event of any consolidation or merger to which the Corporation is a party other than a consolidation or merger in which the Corporation is the continuing corporation, or the sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety or any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Corporation) (each such transaction referred to herein as “Reorganization”), no adjustment of exercise rights or the Exercise Price shall be made; provided, however, the Holder shall thereupon be entitled to receive and provision shall be made therefor in any agreement relating to a Reorganization, the kind and number of securities or property (including cash) of the corporation  resulting from such consolidation or surviving such merger or to which such properties and assets shall have been sold or otherwise transferred or with whom securities have been exchanged, which the Holder would have owned or been entitled to receive as a result of such Reorganization had this Warrant been exercised immediately prior to such Reorganization (and assuming the Holder failed to make an election, if any was available, as to the kind or amount of securities, property or cash receivable by reason of such Reorganization; provided that if the kind or amount of securities, property or cash receivable upon such Reorganization is not the same for each share of common stock in respect of which such rights of election shall not have been exercised (“non electing share”) then for the purpose of this section the kind and amount of securities, property or cash receivable upon such Reorganization for each non electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non electing shares). In any case, appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder, to the end that the provisions set forth herein (including the specified changes and other adjustments to the conversion rate) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares, other securities or property thereafter receivable upon exercise of this Warrant. The provisions of this section similarly apply to successive Reorganizations.

 

  

  

  

 

6.   Notice of Adjustment.  On the happening of an event requiring an adjustment of the Exercise Price or the shares purchasable under this Warrant, the Corporation shall, within fifteen (15) business days, give written notice to the Holder stating the adjusted Exercise Price and the adjusted number and kind of securities or other property purchasable under this Warrant resulting from the event and setting forth in reasonable detail the method of calculation and the facts upon which the calculation is based.

 

7.   Dissolution, Liquidation.  In case of the voluntary or involuntary dissolution, liquidation or winding up of the Corporation (other than in connection with reorganization, consolidation, merger, or other transaction covered by paragraph 5 above) is at any time proposed; the Corporation shall give at least thirty days prior written notice to the Holder.  Such notice shall contain:  (a) the date on which the transaction is to take place; (b) the record date (which shall be at least thirty (30) days after the giving of the notice) as of which holders of Common Stock will be entitled to receive distributions as a result of the transaction; (c) a brief description of the transaction, (d) a brief description of the distributions to be made to holders of Common Stock as a result of the transaction; and (d) an estimate of the fair value of the distributions.  On the date of the transaction, if it actually occurs, this Warrant and all rights under this Warrant shall terminate.

 

8.   Rights of Holder.  The Corporation shall deliver to the Holder all notices and other information provided to its holders of shares of Common Stock or other securities which may be issuable hereunder concurrently with the delivery of such information to the holders.  This Warrant does not entitle the Holder to any voting rights or, except for the foregoing notice provisions, any other rights as a shareholder of the Corporation.  No dividends are payable or will accrue on this Warrant or the shares of Common Stock purchasable under this Warrant until, and except to the extent that, this Warrant is exercised.  Upon the surrender of this Warrant and payment of the Exercise Price as provided above, the person or entity entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the record holder of such shares as of the close of business on the date of the surrender of this Warrant for exercise as provided above.  Upon the exercise of this Warrant, the Holder shall have all of the rights of a shareholder in the Corporation.

 

9.   Exchange for Other Denominations. This Warrant is exchangeable, on its surrender by the Holder to the Corporation, for a new Warrant of like tenor and date representing in the aggregate the right to purchase the balance of the number of shares purchasable under this Warrant in denominations and subject to restrictions on transfer contained herein, in the names designated by the Holder at the time of surrender.

 

  

  

  

 

10.   Substitution.  Upon receipt by the Corporation of evidence satisfactory (in the exercise of reasonable discretion) to it of the ownership of and the loss, theft or destruction or mutilation of the Warrant, and (in the case or loss, theft or destruction) of indemnity satisfactory (in the exercise of reasonable discretion) to it, and (in the case of mutilation) upon the surrender and cancellation thereof, the Corporation will issue and deliver, in lieu thereof, a new Warrant of like tenor.

 

11.   Restrictions on Transfer.  Neither this Warrant nor the shares of Common Stock issuable on exercise of this Warrant have been registered under the Securities Act or any other securities laws (the “Acts”).  Neither this Warrant nor the shares of Common Stock purchasable hereunder may be sold, transferred, pledged or hypothecated in the absence of (a) an effective registration statement for this Warrant or Common Stock purchasable hereunder, as applicable, under the Acts, or (b) an opinion of counsel reasonably satisfactory to the Corporation that registration is not required under such Acts.  If the Holder seeks an opinion as to transfer without registration from Holder’s counsel, the Corporation shall provide such factual information to Holder’s counsel as Holder’s counsel reasonably requests for the purpose of rendering such opinion.  Each certificate evidencing shares of Common Stock purchased hereunder will bear a legend describing the restrictions on transfer contained in this paragraph unless, in the opinion of counsel reasonably acceptable to the Corporation, the shares need no longer to be subject to the transfer restrictions.

 

12.   Transfer.  Except as otherwise provided in this Warrant, this Warrant is transferable only on the books of the Corporation by the Holder in person or by attorney, on surrender of this Warrant, properly endorsed.

 

13.   Recognition of Holder.  Prior to due presentment for registration of transfer of this Warrant, the Corporation shall treat the Holder as the person exclusively entitled to receive notices and otherwise to exercise rights under this Warrant.  All notices required or permitted to be given to the Holder shall be in writing and shall be given by first class mail, postage prepaid, addressed to the Holder at the address of the Holder appearing in the records of the Corporation.

 

14.   Payment of Taxes.  The Corporation shall pay all taxes and other governmental charges, other than applicable income taxes, that may be imposed with respect to the issuance of shares of Common Stock pursuant to the exercise of this Warrant.

 

15.   Headings.  The headings in this Warrant are for purposes of convenience in reference only, shall not be deemed to constitute a part of this Warrant and shall not affect the meaning or construction of any of the provisions of this Warrant.

 

16.   Miscellaneous.  This Warrant may not be changed, waived, discharged or terminated except by an instrument in writing signed by the Corporation and the Holder.  This Warrant shall inure to the benefit of and shall be binding upon the successors and assigns of the Corporation.  Under no circumstances may this Warrant be assigned by the Holder.

 

17.   Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of New Mexico without giving effect to its principles governing conflicts of law.

 

 

	 	CALDERA PHARMACEUTICALS, INC.	 
	 	 	 	 
	 	
By: 

	 	 
	 	Benjamin Warner	 
	 	President	 
	 	 	 	 

 

 

  

  

  

CALDERA PHARMACEUTICALS, INC.

Form of Transfer

 

(To be executed by the Holder to transfer the Warrant)

 

For value received the undersigned registered holder of the attached Warrant hereby sells, assigns, and transfers the Warrant to the Assignee(s) named below:

 

	
Names of Assignee

	
Address

	
Taxpayer ID No.

	
Number of Shares subject to transferred Warrant

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

The undersigned registered holder further irrevocably appoints ____________________ _______________________________ attorney (with full power of substitution) to transfer this Warrant as aforesaid on the books of the Corporation.

 

 

 

	 	Date:	 	 	 	 
	 	 	 	 	Signature	 

 

  

  

  

 

CALDERA PHARMACEUTICALS, INC.

Exercise Form

 

(To be executed by the Holder to purchase Common Stock pursuant to the Warrant)

 

The undersigned holder of the attached Warrant hereby irrevocably elects to exercise purchase rights represented by such Warrant for, and to purchase, ___________ shares of Common Stock of Caldera Pharmaceuticals, Inc., a Delaware corporation.

________   The undersigned tenders cash payment for those shares.

________   The undersigned is exercising this Warrant as a cashless exercise pursuant to Section 3(b) of the Warrant.

The undersigned requests that (1) a certificate for the shares be issued in the name of the undersigned and (2) if the number of shares with respect to which the undersigned holder has exercised purchase rights is not all of the shares purchasable under this Warrant, that a new Warrant of like tenor for the balance of the remaining shares purchasable under this Warrant be issued.

 

 

	 	Date:	 	 	 	 
	 	 	 	 	Signaturef10k2012ex4vi_caldera.htm

Exhibit 4.6

 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THIS PROMISSORY NOTE WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

10% BRIDGE NOTE

 

 

	$_______	Los Alamos, New Mexico
	 	December __, 2012

 

FOR VALUE RECEIVED, Caldera Pharmaceuticals, Inc., a Delaware corporation (the “Company”), with its principal place of business at 278 DP Road, Suite D, Los Alamos, New Mexico 87544, its successors and assigns (the “Company”), promises to pay to the order of _______________________________(“Payee”), having an address at ________________ ___________________________, on the earliest to occur of (a) December 31, 2013, (b) the closing of the Subsequent Financing (as defined below), or (c) the acceleration of this Note by Payee upon the occurrence of a Default (as defined below) (the “Maturity Date”), or at such other place as the Payee may hereafter specify in writing, the principal sum of __________________ Dollars ($___________).

 

1.   This Note is one of a series of up to Five Hundred Thousand Dollars $500,000 of notes being issued by and among the Company and certain bridge note investors (the “Investors”) as part of a unit offering which includes the issuance to the Investors of a warrant to purchase six hundred (600) shares of the Company’s Common Stock (“Common Stock”), at an exercise price of $3.00 per share, for every $1,000 in principal amount of Notes purchased.

 

2.    In the event the Company receives or is entitled to receive net proceeds (gross proceeds less out-of-pocket legal fees and expenses) of at least Three Million Dollars ($3,000,000) from its various litigation proceedings against the Managers of Los Alamos National Laboratory and other parties, Payee shall receive a premium, which shall be added to the original outstanding principal amount of this Note, equal to 30% of such principal amount; provided, however, that in the event that such payment would violate any applicable usury law, the amount of such payment shall be the highest lawful amount permitted under such law.

 

3.   The unpaid principal amount hereof shall bear compounded interest from the date hereof at the rate of 10% per annum until the Maturity Date (or until the earlier date of payment if this Note is prepaid or converted into equity of the Company as provided herein). Except if this Note is converted as provided herein, payments on both principal and interest are to be made in lawful money of the United States of America unless Payee agrees to another form of payment.  The Company reserves the right to pay interest quarterly at its option.

 

  

  

  

 

4.   As used herein, a “Default” means a material default by the Company of this Note, the Securities Purchase Agreement dated the date hereof between the Company and Payee, or the Warrant issued by the Company to Payee on the date hereof.

 

5.   Amounts not paid when due hereunder shall bear interest from the due date until such amounts are paid at the rate of fifteen percent (15%) per annum; provided, however, that in the event such interest rate would violate any applicable usury law, the default rate shall be the highest lawful interest rate permitted under such usury law.  Upon the occurrence of a Default and receipt of written notice by the Company from Payee of such Default, the principal and interest due hereunder shall be immediately due and payable by the Company to Payee.

 

6.   The Company contemplates that it will issue and sell to some or all of the Investors and certain third parties (if any) shares of a newly designated series or class of the Company’s Series B preferred stock and Common Stock warrants (collectively, the “Subsequent Financing Securities”) for an aggregate sale price, including conversion of this Note and the other notes issued to the investors in connection herewith, of up to $3,000,000 or more (the “Subsequent Financing”).  Each Note outstanding on the date of such issuance (the “Financing Date”) shall automatically convert all of the principal of and interest due on the Note into Units of the Subsequent Financing Securities (each Unit consisting of one share of Series B preferred stock and a warrant to purchase one share of Common Stock) at a conversion price equal to the per unit purchase price of the Subsequent Financing Securities (the “Subsequent Financing Price”), anticipated to be $2.50 per Unit, and on the additional terms and conditions applicable generally to such Subsequent Financing.  Notwithstanding the foregoing, in the event that Payee is not a stockholder of the Company as of the date of issuance of this Note and (a) the terms and conditions of the Subsequent Financing differ in any material respect that is adverse to Payee from the terms set forth in the draft Summary of Proposed Terms of a Private Placement in effect as of the date of issuance of this Note, or (b) the Financing Date occurs after February 28, 2013, or (c) the aggregate sale price of the Subsequent Financing is less than $1,250,000, then such conversion shall be at the option and discretion of Payee.  At any time after the date of issuance of this Note, the Payee may, at its option and discretion, elect to convert some or all of the principal of and interest due on this Note into shares of the Company’s Common Stock at a conversion price of $2.50 per share; provided, however, if a Default has occurred and is continuing, the conversion price during such default period shall be reduced to $1.50 (retroactive to the date of issuance of this Note and subject to adjustment as provided herein) until the Default (and all Defaults) are cured.

 

7.   It is understood that the Subsequent Financing Securities will bear a restrictive legend if they are issued within six (6) months of the date hereof.

 

8.   With respect to conversion of this Note into Common Stock, if applicable:

 

  

  

  

 

(a)   If while the Note is outstanding the Company: (1) pays a dividend or makes a distribution on shares of Common Stock that is paid in shares of Common Stock or in securities convertible into or exchangeable for its Common Stock (in which latter event the number of shares of Common Stock initially issuable upon the conversion or exchange of such securities shall be deemed to have been distributed); (2) subdivides its outstanding shares of Common Stock; (3) combines outstanding shares of Common Stock into a smaller number of shares; or (4) issues by reclassification of Common Stock any shares of capital stock of the Company, the conversion price in effect immediately prior thereto shall be adjusted so that the Payee thereafter shall be entitled to receive the number and kind of shares of Common Stock or other capital stock of the Company that it would have owned or been entitled to receive in respect of this Note immediately after the happening of any of the events described above had this Note been converted immediately prior to the happening of that event. An adjustment made in accordance with this section shall become effective immediately after the record date, in the case of a dividend, and shall become effective immediately after the effective date, in the case of a subdivision, combination, or reclassification. If, as a result of an adjustment made in accordance with this Section 8 the Payee becomes entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the board of directors (whose reasonable determination shall be conclusive) shall determine the allocation of the adjusted conversion price between or among shares of such classes of capital stock or shares of Common Stock and other capital stock.

 

(b)   If while the Note is outstanding, the Company shall first issue or sell, or first enter into any agreement to issue or sell, any shares of Common Stock, or any securities exercisable or convertible into shares of Common Stock (“Common Stock Equivalents”),, in a transaction or series of transactions providing for a consideration, exercise price, conversion price or other applicable price per share less than the conversion price with respect to Common Stock in effect immediately prior to the time of such issue or sale, the conversion price shall be, multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Common Stock or such Common Stock Equivalents plus the number of shares of Common Stock which the offering price for such shares of Common Stock or Common Stock Equivalents would purchase at the Conversion Price, and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of  shares of Common Stock so issued or issuable, provided, that for purposes hereof, all shares of Common Stock that are issuable upon conversion, exercise or exchange of Common Stock Equivalents shall be deemed outstanding immediately after the issuance of such Common Stock Equivalents.  Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.  However, upon the expiration of any Common Stock Equivalents the issuance of which resulted in an adjustment in the Conversion Price pursuant to this Section, if any such Common Stock Equivalents shall expire and shall not have been exercised, the Conversion Price shall immediately upon such expiration be recomputed and effective immediately upon such expiration be increased to the price which it would have been (but reflecting any other adjustments in the Conversion Price made pursuant to the provisions of this Section after the issuance of such Common Stock Equivalents) had the adjustment of the Conversion Price made upon the issuance of such Common Stock Equivalents been made on the basis of offering for subscription or purchase only that number of shares of the Common Stock actually purchased upon the exercise of such Common Stock Equivalents actually exercised. Notwithstanding anything herein to the contrary, the following shall not be subject to the provisions of this Section: (i) issuance or sale of Common Stock or options or other awards under the Company’s equity incentive plans or programs (ii) issuance or sale of preferred stock or Common Stock issuable upon conversion of the Series A Preferred Stock or any other outstanding convertible securities; (iii) issuance of equity securities or rights to purchase equity securities issued in connection with credit agreements, debt financings, commercial property, or  lease transactions approved by the Board of Directors, including a majority of the Series A Directors; (iv) issuance of equity securities or rights to purchase equity securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition or similar business combination approved by the Board of Directors; (v) issuance of securities to an entity as a component of any business relationship with such entity primarily for the purpose of (A) joint venture, technology or licensing development activities, (B) distribution, supply or manufacture of the Company’s products or services or (C) any other arrangements involving corporate partners primarily for purposes other than raising capital, the terms of which business relationship with such entity are approved by the Board of Directors; and (vi) issuance of stock pursuant to a  stock dividend or stock split.

 

  

  

  

 

(c)   On the happening of an event requiring an adjustment pursuant to this Section 8, the Company shall, within fifteen  (15) business days, give written notice to Payee stating the adjustment and setting forth in reasonable detail the method of calculation and the facts upon which the calculation is based.

 

9.   Presentment, demand, protest or notice of any kind are hereby waived by the Company.  The Company may not set off against any amounts due to Payee hereunder any claims against Payee or other amounts owed by Payee to the Company.

 

10.   All rights and remedies of Payee under this Note are cumulative and in addition to all other rights and remedies available at law or in equity, and all such rights and remedies may be exercised singly, successively and/or concurrently.  Failure to exercise any right or remedy shall not be deemed a waiver of such right or remedy.

 

11.   The Company agrees to pay all reasonable costs of collection, including attorneys' fees which may be incurred in the collection of this Note or any portion thereof and, in case an action is instituted for such purposes, the amount of all attorneys' fees shall be such amount as the court shall adjudge reasonable.

 

12.   This Note is made and delivered in, and shall be governed, construed and enforced under the laws of the State of New Mexico.

 

13.   This Note shall be subject to prepayment, at the option of the Company, in whole or in part, at any time and from time to time, without premium or penalty.

 

14.   This Note or any benefits or obligations hereunder may not be assigned or transferred by the Company.

 

15.   All debt for borrowed money issued by the Company after the date hereof shall provide that it is subordinate in right of payment and otherwise to the debt evidenced by this Note and the other notes being issued to the Investors in connection herewith.  So long as this Note is outstanding, the Company shall operate its business in the ordinary course of business consistent with past practice and shall not take any action, or omit to take any action, which has or is reasonably likely to have a material adverse effect on the Company or its business, properties, assets, financial condition or prospects.

 

 

	 	CALDERA PHARMACEUTICALS, INC.	 
	 	 	 	 
	 	
By: 

	 	 
	 	 	Benjamin Warner, President

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