Contract
Exhibit
4.2
THIS
WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF HAVE
NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES
ACT”),
OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER (A) A
REGISTRATION WITH RESPECT TO THERETO SHALL BE EFFECTIVE UNDER THE SECURITIES
ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
IS
AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS.
May
[ ], 2007
WARRANT
TO PURCHASE STOCK
OF
(A
DELAWARE CORPORATION)
INTELLECT
NEUROSCIENCES, INC.,
a
Delaware corporation (the “Company”),
for
value received, hereby certifies that
NAME
(the
“Holder”),
is
entitled, subject to the terms set forth below, to purchase from the Company,
at
any time or from time to time at or before the earlier of 5:00 p.m. New York
City time on May [ ], 2012 (the “Expiration
Date”)
and
the termination of this Warrant as provided in Section 8 hereof, up
to
[XXX]
shares
of
Common Stock, par value $0.001 per share, of the Company (the “Common
Stock”),
at a
purchase price (the “Exercise
Price”)
equal
to $1.75 per share, as adjusted upon the occurrence of certain events as set
forth in Section 3 of this Warrant. The shares of stock issuable upon exercise
of this Warrant are hereinafter referred to as the “Warrant
Stock”.
1. Exercise.
1.1 Manner
of Exercise: Payment in Cash.
This
Warrant may be exercised by the Holder, in whole or in part, by surrendering
this Warrant, with the purchase form appended hereto as Exhibit
A
duly
executed by the Holder, at the principal office of the Company, or at such
other
place as the Company may designate, accompanied by payment in full of the
Exercise Price payable in respect of the number of shares of Warrant Stock
purchased upon such exercise. Payment of the Exercise Price shall be in cash
or
by certified or official bank check payable to the order of the
Company.
1.2 Effectiveness.
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 shall have been
surrendered to the Company as provided in Section 1.1 above. At such time,
the
person or persons in whose name or names any certificates for Warrant Stock
shall be issuable upon such exercise as provided in Section 1.5 below
shall be deemed to have become the holder or holders of record of the Warrant
Stock represented by such certificates.
1.3. Delivery
of Certificates.
As soon
as practicable after the exercise of this Warrant in full or in part, and in
any
event within ten (10) business days thereafter, the Company at its sole expense
will cause to be issued in the name of, and delivered to, the Holder, or,
subject to the terms and conditions hereof, such person as such Holder (upon
payment by such Holder of any applicable transfer taxes) may
direct:
(a) A
certificate or certificates for the number of full shares of Warrant Stock
to
which such Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which such Holder would otherwise be entitled, cash in
an
amount determined pursuant to Section 2 hereof, and
(b) 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 of Warrant Stock (without giving effect to any adjustment
therein) equal to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Holder upon such
exercise as provided in Section 1.1 above.
2. Fractional
Shares.
The
Company shall not be required upon the exercise of this Warrant to issue any
fractional shares. As to any fraction of a share which the Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay
a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.
3. Certain
Adjustments.
3.1 Changes
in Common Stock.
If the
Company shall (i) combine the outstanding shares of Common Stock into a lesser
number of shares, (ii) subdivide the outstanding shares of Common Stock into
a
greater number of shares, or (iii) issue additional shares of Common Stock
as a
dividend or other distribution with respect to the Common Stock, the number
of
shares of Warrant Stock shall be equal to the number of shares which the Holder
would have been entitled to receive after the happening of any of the events
described above if such shares had been issued immediately prior to the
happening of such event, such adjustment to become effective concurrently with
the effectiveness of such event. The Exercise Price in effect immediately prior
to any such combination of Common Stock shall, upon the effectiveness of such
combination, be proportionately increased. The Exercise Price in effect
immediately prior to any such subdivision of Common Stock or at the record
date
of such dividend shall upon the effectiveness of such subdivision or immediately
after the record date of such dividend be proportionately reduced.
3.2 Reorganizations
and Reclassifications.
If
there shall occur any capital reorganization or reclassification of the Common
Stock (other than a change in par value or a subdivision or combination as
provided for in Section 3.1), then, as part of any such reorganization or
reclassification, lawful provision shall be made so that the Holder shall have
the right thereafter to receive upon the exercise hereof the kind and amount
of
shares of stock or other securities or property which such Holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, such Holder had held the number of shares of Common Stock
which were then purchasable upon the exercise of this Warrant. In any such
case,
appropriate adjustment (as reasonably determined by the Board of Directors
of
the Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Holder such that
the
provisions set forth in this Section 3 (including provisions with respect to
adjustment of the Exercise Price) shall thereafter be applicable, as nearly
as
is reasonably practicable, in relation to any shares of stock or other
securities or property thereafter deliverable upon the exercise of this
Warrant.
3.3 Merger,
Consolidation or Sale of Assets.
If
there shall be a merger or consolidation of the Company with or into another
corporation (other than a merger or reorganization involving only a change
in
the state of incorporation of the Company or the acquisition by the Company
of
other businesses where the Company survives as a going concern), or the sale
of
all or substantially all of the Company’s capital stock or assets to any other
person, then as a part of such transaction, provision shall be made so that
the
Holder shall thereafter be entitled to receive the number of shares of stock
or
other securities or property of the Company, or of the successor corporation
resulting from the merger, consolidation or sale (and at a total purchase price
not to exceed that payable upon the exercise in full of this Warrant), to which
the Holder would have been entitled if the Holder had exercised its rights
pursuant to the Warrant immediately prior thereto. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section
3
to the end that the provisions of this Section 3 shall be applicable after
that
event in as nearly equivalent a manner as may be practicable.
3.4 Certain
Anti-Dilution Adjustments.
If
during the times set forth below while any portion of this Warrant remains
outstanding, the Company shall issue shares of Common Stock (or rights,
warrants, or other securities convertible into or exchangeable for shares of
Common Stock), other than issuances covered by Sections 3.1, 3.2 or 3.3 above,
at a price per share (or having an exercise, conversion, or exchange price
per
share) less than the Exercise Price in effect as of the date of issuance of
such
shares or of such rights, warrants, or other convertible or exchangeable
securities, then, and in each such case, the Exercise Price shall be reduced
(i)
until the completion by the Company of its next round of financing, which is
expected to exceed $10,000,000, involving the issuance of shares of Common
Stock
or securities convertible into or exchangeable or exercisable for shares of
Common Stock, to a price equal to the issuance, conversion, exchange or exercise
price, as applicable, of any such securities so issued and (ii) thereafter
to a
price determined by dividing (a) an amount equal to the sum of (A) the number
of
shares of Common Stock outstanding and shares of Common Stock issuable upon
conversion or exchange of securities of the Company outstanding immediately
prior to such issue or sale multiplied by the then existing Exercise Price
and
(B) the consideration, if any, received by the Corporation upon such issue
or
sale by (b) the total number of shares of Common Stock outstanding and shares
of
Common Stock issuable upon conversion or exchange of securities of the Company
outstanding immediately after such issue or sale. Notwithstanding anything
to
the contrary in clause (i) of this Section, the dilution protection afforded
therein shall continue until the cumulative gross proceeds of such next
financing(s) reach at least $10,000,000 and shall extend to the full amount
of
the gross proceeds from any integrated offering wherein this threshold is
achieved. Notwithstanding anything contrary in this Section, there shall be
no
reduction to the Exercise Price pursuant to this Section with respect to (i)
the
issuance or sale of options to purchase shares of Common Stock to employees,
consultants and directors, (ii) the issuance of securities pursuant to the
conversion or exercise of convertible or exercisable securities as of the date
of this Warrant, (as adjusted for recapitalizations, stock splits, and the
like)
which are currently outstanding as of the date of this Warrant or (iii) the
issuance of securities as consideration for a bona fide business acquisition
of
or by the Company, whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise, which involves a third party which is not
affiliated with the Company or its current stockholders or in a strategic
allowance.
3.5 No
Impairment.
The
Company will not, by amendment of its Articles of Incorporation or any other
organizational or shareholder rights documents of the Company, or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, 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 Section 3 and in the taking
of
all such action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against impairment.
3.6 Certificate
of Adjustment.
When
any adjustment is required to be made in the Exercise Price, the Company shall
promptly mail to the Holder a certificate setting forth the Exercise Price
after
such adjustment and setting forth a brief statement of the facts requiring
such
adjustment. Delivery of such certificate shall be deemed to be a final and
binding determination with respect to such adjustment unless challenged by
the
Holder within ten (10) days of receipt thereof. Such certificate shall also
set
forth the kind and amount of stock or other securities or property into which
this Warrant shall be exercisable following the occurrence of any of the events
specified in this Section 3.
4. Compliance
with Securities Act.
4.1 Unregistered
Securities.
The
Holder acknowledges that this Warrant and the Warrant Stock have not been
registered under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any successor legislation, and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Warrant Stock in the absence of (i) an effective registration
statement under the Securities Act covering this Warrant or such Warrant Stock
and registration or qualification of this Warrant or such Warrant Stock under
any applicable “blue sky” or state securities law then in effect, or (ii) an
opinion of counsel, reasonably satisfactory to the Company, that such
registration and qualification are not required. The Company may delay issuance
of the Warrant Stock until completion of any action or obtaining of any consent,
which the Company reasonably deems necessary under any applicable law (including
without limitation state securities or “blue sky” laws); provided,
that
the Company will use reasonable best efforts to complete such action or obtain
such consent as soon as practicable.
4.2 Investment
Letter.
Without
limiting the generality of Section 4.1, unless the offer and sale of any shares
of Warrant Stock shall have been effectively registered under the Securities
Act, the Company shall be under no obligation to issue the Warrant Stock unless
and until the Holder shall have executed a customary investment letter in form
and substance reasonably satisfactory to the Company, including a warranty
at
the time of such exercise that the Holder is acquiring such shares for its
own
account, for investment and not with a view to, or for sale in connection with,
the distribution of any such shares.
4.3 Legend.
Certificates delivered to the Holder pursuant to Section 1.3 shall bear the
following legend or a legend in substantially similar form:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN TAKEN FOR INVESTMENT AND THEY
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE,
IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION IS
THEN AVAILABLE.”
5. Registration
Rights.
5.1 Certain
Definitions.
As
used in
this Section 5,
the
following terms shall have the following respective
meanings:
“Holder”
shall
mean the record owner of Registrable Securities.
The
terms
“Register”
“Registered”
and
“Registration”
refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act (“Registration
Statement”),
and the
declaration or ordering of the effectiveness of such Registration
Statement.
“Registrable
Securities”
shall
mean all Common Stock not previously sold to the public and issued to the Holder
pursuant to the exercise of this Warrant, Common Stock issued to the Holder
upon
conversion of the Promissory Note issued to the Holder concurrent with the
purchase of this Warrant or Common Stock issued with respect to such shares
pursuant to stock splits, stock dividends and similar distributions with respect
to such shares, provided, however, that shares of Common Stock which are
Registrable Securities shall cease to be Registrable Securities at such time,
and for so long as, such shares are eligible for sale pursuant to Rule 144(k)
under the Securities Act.
“Registration
Expenses”
shall
mean all expenses incurred by the Company in complying with Section
5.2 of
this
Agreement, including, without limitation, all federal and state registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and the expense of any special audits
incident to or required by any such registration, but shall not include Selling
Expenses.
“Selling
Expenses”
shall
mean all underwriting discounts and selling commissions applicable to the sale
of Registrable Securities pursuant to this Agreement and all expenses of any
special counsel for the Holder.
5.2 Piggyback
Registration.
5.2.1 Notice
of Piggyback Registration and Inclusion of Registrable
Securities.
Subject
to the terms of this Agreement, in the event the Company decides to Register
any
of its Common Stock for cash (either for its own account or the account of
a
security holder), other than pursuant to a Registration Statement which
exclusively relates to the Registration of securities under an employee stock
option, purchase, bonus or other benefit plan, then for so long as the Holder
holds Registrable Securities, the Company will: (1) promptly give the Holder
written notice thereof (which shall include a list of the jurisdictions in
which
the Company intends to attempt to qualify such securities under the applicable
Blue Sky or other state securities laws) and (2) include in such Registration
(and any related qualification under Blue Sky laws or other compliance), and
in
any underwriting involved therein, all the Registrable Securities specified
in a
written request delivered to the Company by the Holder within 10 days after
delivery of such written notice from the Company. The right of the Holder to
have Registrable Securities included in any Registration Statement shall be
conditioned upon the provision by the Holder of any information reasonably
requested by the Company within ten (10) days of such request.
5.2.2 Underwriting
in Piggyback Registration.
If the
Registration of which the Company gives notice is a Registered public offering
involving an underwriting, the Company shall so advise the Holder as a part
of
the written notice given pursuant to Subsection 5.2.1. In
such
event the right of the Holder to Registration shall be conditioned upon such
underwriting. The Holder shall, together with the Company, enter into an
underwriting agreement with the Underwriter’s Representative for such offering.
The Holder shall have no right to participate in the selection of the
underwriters for an offering pursuant to this Section.
5.2.3 Withdrawal
in Piggyback Registration.
If the
Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company and the underwriter
delivered at least seven (7) days prior to the effective date of the
Registration Statement. Any Registrable Securities or other securities excluded
or withdrawn from such underwriting shall be withdrawn from such
Registration.
5.3 Obligations
of the Company and the Holder.
5.3.1 Underwriting
Requirements.
In
connection with any offering involving an underwriting of shares pursuant to
Section 5.2, the
Company shall not be required to include any of the Holder’s Registrable
Securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by
it.
5.3.2 Expenses
of Registration.
All
Registration Expenses incurred in connection with all Registrations pursuant
to
Section 5.2 shall
be
borne by the Company. Selling Expenses to be borne by the holders of the
Registrable Securities Registered shall be borne pro rata on the basis of the
number of Registrable Securities being Registered.
5.4 Indemnification.
5.4.1 Company’s
Indemnification of the Holder.
The
Company will indemnify the Holder, and each of its directors, officers,
stockholders, partners or other beneficial owners, and each person controlling
the Holder, with respect to which Registration, qualification or compliance
of
Registrable Securities has been effected pursuant to this Warrant, and each
underwriter, if any, and each person who controls any underwriter against all
claims, losses, damages or liabilities, including reasonable legal fees and
expenses (or actions in respect thereof) to the extent such claims, losses,
damages or liabilities arise out of or are based upon any untrue statement
(or
alleged untrue statement) of a material fact contained in any prospectus or
other document (including any related Registration Statement) incident to any
such Registration, qualification or compliance, or are based on any omission
(or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
or any violation by the Company of any rule or regulation promulgated under
the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such Registration, qualification
or compliance; and the Company will reimburse the Holder, each of its directors,
officers, stockholders, partners or other beneficial owners, each such
underwriter and each person who controls the Holder or underwriter for any
legal
and any other expenses reasonably incurred in connection with investigating
or
defending any such claim, loss, damage, liability or action; provided, however,
that the indemnity contained in this Section 5.4 shall not apply to amounts
paid
in settlement of any such claim, loss, damage, liability or action if settlement
is effected without the consent of the Company (which consent shall
not
unreasonably be withheld); and provided further, that the Company will not
be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based upon any untrue statement or
omission based upon written information furnished to the Company by the Holder,
underwriter or controlling person and stated to be for use in connection with
the offering of securities of the Company.
5.4.2 The
Holder’s Indemnification of Company.
The
Holder will, if Registrable Securities held by the Holder are included in the
securities as to which such Registration, qualification or compliance is being
effected pursuant to this Warrant, indemnify the Company, each of its directors
and officers, each legal counsel and independent accountant of the Company,
each
underwriter, if any, of the Company’s securities covered by such a Registration
Statement, and each person who controls the Company or such underwriter within
the meaning of the Securities Act against all claims, losses, damages or
liabilities, including reasonable legal fees and expenses (or actions in respect
thereof), to the extent such claims, losses, damages or liabilities arise out
of
or based upon any untrue statement (or alleged untrue statement) of a material
fact furnished in writing by the Holder or on the Holder’s behalf expressly for
use in any such Registration Statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Holder of any rule or regulation promulgated
under the Securities Act applicable to the Holder and relating to action or
inaction required of the Holder in connection with any such Registration,
qualification or compliance; and will reimburse the Company, such directors,
officers, partners, persons, law and accounting firms, underwriters or control
persons for any legal and any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such Registration Statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by the Holder and stated to be specifically for use in connection
with the offering of securities of the Company; provided, however,
that
the Holders’ liability under this Section 5.4 shall
not
exceed the Holder’s proceeds from the offering of securities made in connection
with such Registration.
5.4.3 Indemnification
Procedure. Promptly after receipt by an indemnified party under this Section
5.4
of notice of the commencement of any action, such indemnified party will, if
a
claim in respect thereof is to be made against an indemnifying party under
this
Section 5.4, notify the indemnifying party in writing of the commencement
thereof and generally summarize such action. The indemnifying party shall have
the right to participate in and to assume the defense of such claim; provided,
however, that the indemnifying party shall be entitled to select counsel for
the
defense of such claim with the approval of any parties entitled to
indemnification, which approval shall not be unreasonably withheld; provided
further, however, that if either party reasonably determines that there may
be a
conflict between the position of the Company and the Holders in conducting
the
defense of such action, suit or proceeding by reason of recognized claims for
indemnity under this Section 5.4, then counsel for such party shall be entitled
to conduct the defense to the extent reasonably determined by such counsel
to be
necessary to protect the interest of such party. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
prejudicial to the ability of the indemnifying party to defend such action,
shall relieve such indemnifying party, to the extent so prejudiced, of any
liability to the indemnified party under this Section 5.4, but the omission
so
to notify the indemnifying party will not relieve such party of any liability
that such party may have to any indemnified party otherwise other than under
this Section 5.4.
5.4.4 Subsequent
Transferees.
The
provisions of this Section 5.4 applicable
to the Holder shall apply with equal force and effect to each subsequent
transferee to whom any of the Registrable Securities are transferred with the
consent of the Company.
6. Reservation
of Stock.
The
Company will at all times thereafter reserve and keep available, solely for
issuance and delivery upon the exercise of this Warrant, such shares of Warrant
Stock and other stock, securities and property, as from time to time shall
be
issuable upon the exercise of this Warrant. The Company covenants that all
shares of Warrant Stock so issuable will, when issued, be duly and validly
issued and fully paid and nonassessable.
7. Replacement
of Warrants.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company
will
issue, in lieu thereof, a new Warrant of like tenor.
8. Termination
upon Certain Events.
If
there shall be a merger or consolidation of the Company with or into another
corporation (other than a merger or reorganization involving only a change
in
the state of incorporation of the Company or the acquisition by the Company
of
other businesses where the Company survives as a going concern), or the sale
of
all or substantially all of the Company’s capital stock or assets to any other
person, or the liquidation or dissolution of the Company, then as a part of
such
transaction, at the Company’s option, either:
(a) provision
shall be made so that the Holder shall thereafter be entitled to receive the
number of shares of stock or other securities or property of the Company, or
of
the successor corporation resulting from the merger, consolidation or sale,
to
which the Holder would have been entitled if the Holder had exercised its rights
pursuant to the Warrant immediately prior thereto (and, in such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 8(a) to the end that the provisions of Section 3 shall be
applicable after that event in as nearly equivalent a manner as may be
practicable); or
(b) this
Warrant shall terminate on the effective date of such merger, consolidation
or
sale (the “Termination Date”)
and
become null and void, provided
that if
this Warrant shall not have otherwise terminated or expired, (1) the Company
shall have given the Holder written notice of such Termination Date at least
ten
(10) business days prior to the occurrence thereof and (2) the Holder shall
have
the right until 5:00 p.m., Eastern Standard Time, on the day immediately prior
to the Termination Date to exercise its rights hereunder to the extent not
previously exercised.
9. Transferability.
Without
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed, the Warrant shall not be assigned, pledged
or
hypothecated in any way (whether by operation of law or otherwise) and shall
not
be subject to execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of the Warrant or of
any
rights granted hereunder contrary to the provisions of this Section 8, or the
levy of any attachment or similar process upon the Warrant or such rights,
shall
be null and void.
10. No
Rights as Stockholder.
Until
the exercise of this Warrant, the Holder shall not have or exercise any rights
by virtue hereof as a stockholder of the Company.
11. Company’s
Representations.
As
a
material inducement to the Holder to purchase this Warrant, the Company hereby
represents and warrants that:
(a) The
Company shall have made all filings under applicable federal and state
securities laws necessary to consummate the issuance of this Warrant pursuant
to
this Agreement in compliance with such laws, except for such filings as may
be
made properly after the Grant Date.
(b) If
there
are parties to any stock purchase agreements whose consent or approval is
required prior to the execution and delivery of this Warrant, the Company and
any such parties shall have entered into an amendment to each such stock
purchase agreement to provide for such consent and any required waivers, in
such
form and substance acceptable to the Holder, and such amendment shall be in
full
force and effect as of the date hereof.
(c) If
there
are parties to any investor’s rights agreements whose consent or approval is
required prior to the execution and delivery of this Warrant, the Company and
any such parties shall have entered into an amendment to each such investor’s
rights agreement providing for such consent and any required waivers, in such
form and substance acceptable to Holder, and such amendment shall be in full
force and effect as of the date hereof.
(d) The
copies of any existing stock purchase agreements and investor’s rights
agreements and the Company’s charter documents and bylaws which have been
furnished to Holder or the Holder’s counsel reflect all amendments made thereto
at any time prior to the date hereof and are correct and
complete.
(e) As
of the
date hereof, all of the outstanding shares of the Company’s capital stock shall
be validly issued, fully paid and nonassessable.
(f) With
respect to the issuance of this Warrant or the issuance of the Common Stock
upon
exercise of the Warrant, there are no statutory or contractual stockholders
preemptive rights or rights of refusal, except for any such rights contained
in
any stock purchase agreement and/or investor’s rights agreements which have been
waived. The Company has not violated any applicable federal or state securities
laws in connection with the offer, sale or issuance of any of its capital stock,
and the offer, sale and issuance of this Warrant does not require registration
under the Securities Act or any applicable state securities laws. To the best
of
the Company’s knowledge, there are no agreements between the Company’s
stockholders with respect to the voting or transfer of the Company’s capital
stock or with respect to any other aspect of the Company’s affairs.
(g) The
execution, delivery and performance of this Warrant has been duly authorized
by
the Company. This Warrant constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms. The execution and delivery
by
the Company of this Warrant, the issuance of the Common Stock upon exercise
of
the Warrant, and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute
a
default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company’s capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental
body
or agency pursuant to, the charter or bylaws of the Company or any subsidiary,
or any law, statute, rule or regulation to which the Company or any subsidiary
is subject, or any agreement, instrument, order, judgment or decree to which
the
Company or any subsidiary is subject, except for any such filings required
under
applicable “blue sky” or state securities laws or required under Regulation D
promulgated under the Securities Act.
12. Notices.
All
notices, requests and other communications hereunder shall be in writing, shall
be (i) delivered by hand, (ii) made by telex, telecopy or facsimile
transmission, (iii) sent by overnight courier, or (iv) sent by registered mail,
postage prepaid, return receipt requested. In the case of notices from the
Company to the Holder, they shall be sent to the address furnished to the
Company in writing by the last Holder who shall have furnished an address to
the
Company in writing. All notices from the Holder to the Company shall be
delivered to the Company at its offices at 0 Xxxx 00xx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 or such other address as the Company shall so notify
the Holder. All notices, requests and other communications hereunder shall
be
deemed to have been given (i) by hand, at the time of the delivery thereof
to
the receiving party at the address of such party described above, (ii) if made
by telex, telecopy or facsimile transmission, at the time that receipt thereof
has been acknowledged by electronic confirmation or otherwise, (iii) if sent
by
overnight courier, on the next business day following the day such notices
is
delivered to the courier service, or (iv) if sent by registered mail, on the
fifth business day following the day such mailing is made.
13. Waivers
and Modifications.
Any
term or provision of this Warrant may be waived only by written document
executed by the party entitled to the benefits of such terms or provisions.
The
terms and provisions of this Warrant may be modified or amended only by written
agreement executed by the parties hereto.
14. 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.
15. Governing
Law.
This
Warrant will be governed by and construed in accordance with and governed by
the
laws of the State of New York, without giving effect to the conflict of law
principles thereof.
16. Consent
to Jurisdiction.
Each
party hereto hereby irrevocably and unconditionally submits to the jurisdiction
of any federal or state court sitting in the County of New York in the State
of
New York and irrevocably agrees that all actions or proceedings arising out
of
or relating to this Note shall be litigated exclusively in such court. Each
party hereto agrees not to commence any legal proceeding related hereto or
thereto except in such courts. Each party hereto irrevocably waives any
objection which it may now or hereafter have to the laying of the venue of
any
such proceeding in any such court and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum. Each party hereto consents to process being served
in
any such action or proceeding by mailing a copy thereof by registered or
certified mail.
17. Waiver
of Jury Trial.
Each
party hereto hereby waives, to the fullest extent permitted by applicable law,
any right it may have to a trial by jury in respect of any litigation directly
or indirectly arising out of, under or in connection with this Note. Each party
hereto (1) certifies that no representative, agent or attorney of any of the
other parties has represented, expressly or otherwise, that any of the other
parties would not, in the event of litigation, seek to enforce the foregoing
waiver and (2) acknowledges that it and the other parties hereto have been
induced to enter into this agreement, by, among other things, the mutual waivers
and certifications in this Section 17.
18. Severability.
If any
term, provision, covenant or restriction of this Warrant is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, it shall be deemed
replaced with a valid and enforceable provision that comes as close as possible
to the economic purpose of the invalid, void or unenforceable provision, and
the
remainder of the terms, provisions, covenants and restrictions of this Warrant
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
[The
remainder of this page is
intentionally
left blank.]
IN
WITNESS WHEREOF,
this
Warrant has been executed and delivered on the date first written above by
the
duly authorized representative of the Company.
By:
_________________________
Name:
Xxxxxx X. Xxxx
Title:
President
&
CFO
EXHIBIT A
PURCHASE FORM
To: INTELLECT NEUROSCIENCES,
INC.
The
undersigned pursuant to the provisions set forth in the attached Warrant (No.
)
hereby irrevocably elects to purchase shares of the Common Stock, par value
$0.01 per share, of INTELLECT NEUROSCIENCES, INC. (the “Common
Stock”),
covered by such Warrant and herewith makes payment of $_____,
representing
the full purchase price for such shares at the price per share provided for
in
such Warrant.
The
Common Stock for which the Warrant may be exercised or converted shall be known
herein as the “Warrant Stock”.
The
undersigned is aware that the Warrant Stock has not been and will not be
registered under the Securities Act of 1933, as amended (the “Securities Act”)
or
any
state securities laws. The undersigned understands that reliance by the Company
on exemptions under the Securities Act is predicated in part upon the truth
and
accuracy of the statements of the undersigned in this Purchase
Form.
The
undersigned represents and warrants that (1) it has been furnished with all
information which it deems necessary to evaluate the merits and risks of the
purchase of the Warrant Stock, (2) it has had the opportunity to ask questions
concerning the Warrant Stock and the Company and all questions posed have been
answered to its satisfaction, (3) it has been given the opportunity to obtain
any additional information it deems necessary to verify the accuracy of any
information obtained concerning the Warrant Stock and the Company and (4) it
has
such knowledge and experience in financial and business matters that it is
able
to evaluate the merits and risks of purchasing the Warrant Stock and to make
an
informed investment decision relating thereto.
The
undersigned hereby represents and warrant that it is purchasing the Warrant
Stock for its own account for investment and not with a view to the sale or
distribution of all or any part of the Warrant Stock.
The
undersigned understands that because the Warrant Stock has not been registered
under the Securities Act, it must continue to bear the economic risk of the
investment for an indefinite period of time and the Warrant Stock cannot be
sold
unless it is subsequently registered under applicable federal and state
securities laws or an exemption from such registration is
available.
The
undersigned agrees that it will in no event sell or distribute or otherwise
dispose of all or any part of the Warrant Stock unless (1) there is an effective
registration statement under the Securities Act and applicable state securities
laws covering any such transaction involving the Warrant Stock, or (2) the
Company receives an opinion satisfactory to the Company of the undersigned’s
legal counsel stating that such transaction is exempt from registration. The
undersigned consents to the placing of a legend on its certificate for the
Warrant Stock stating that the Warrant Stock has not been registered and setting
forth the restriction on transfer contemplated hereby and to the placing of
a
stop transfer order on the books of the Company and with any transfer agents
against the Warrant Stock until the Warrant Stock may be legally resold or
distributed without restriction.
The
undersigned has considered the federal and state income tax implications of
the
exercise of the Warrant and the purchase and subsequent sale of the Warrant
Stock.
By:__________________________________
Name:
Title